Insurance Journal

Louisiana Citizens Drops Nearly 11K Policies in 5th Round of Depopulation

November 18 2011

Nearly 11,000 homeowners polices once held by Louisiana’s property insurer of last resort have been absorbed into the private insurance market, state regulators say.

Louisiana Insurance Commissioner Jim Donelon announced that in a recently completed fifth annual round of depopulation from the Louisiana Citizens Property Insurance Corporation (Citizens), 10,890 homeowners policies were transitioned into the private insurance market. Citizens total policy count has dropped to 105,000 policies with the removal of these additional policies.

Citizens’ market share in the homeowners market is expected to have dropped to 4.3 percent — and rank 6th in terms of market share — with the recent round of depopulation. Citizens’ share of the homeowners market at the end of 2010 was 5.3 percent.

Citizens experienced significant growth in the aftermath of Hurricanes Katrina and Rita in 2005 with its policy count spiking to 174,000 policies in September of 2008. In 2009, when Citizens homeowners market share dropped to 6.4 percent of the market, Citizens for the first time saw its market share move lower than the Citizens market share in 2004 prior to Hurricane Katrina.

In this round of depopulation, five companies including Occidental, Lighthouse, Capitol Preferred, Access Home and Centauri Specialty successfully made offers to write homeowners policies previously written by Citizens.

Altogether, 31,458 unique policies were requested by these companies and 10,890 policies were authorized to be moved.

Citizens collaborated with independent agents as well as agents at Allstate, State Farm and Louisiana Farm Bureau who authorized the move of policies requested of them.

In the four previous rounds of Citizens depopulation, Citizens saw the following reduction in policy counts: Round one — 26,595 policies on June 1, 2008, round two — 13,343 policies on Dec. 1, 2008, round three — 3,368 policies on April 1, 2009 and round four — 3,466 policies on Dec. 1, 2010. Including round 5, a total of 67,660 policies have been taken out of Citizens by private insurers.