Ongoing tumult in Florida's property market has turned Citizens Property Insurance Corp. into one of the largest writers of homeowners insurers in the country.
The Sunshine State's insurer of last resort recorded direct written premiums of $646.1 million in the first quarter, good enough for a 2% share of the entire US homeowners market, according to an S&P Global Market Intelligence analysis. The total represented a 65.6% year-over-year increase.
Citizens' move up the charts knocked The Progressive Corp. out of the top 10. The Mayfield, Ohio-based insurer recorded $638.8 million in direct premiums written in the period.
State Farm Mutual Automobile Insurance Co. maintained its market share lead at 18%, having written $5.64 billion in direct premiums in the quarter. The Allstate Corp. was second, followed by Liberty Mutual Holding Co. Inc., Farmers Insurance Group of Cos. and United Services Automobile Association.
Last resort morphs into lifeline
Created in 2002 by the state legislature to provide insurance for homeowners unable to obtain coverage in Florida's admitted market, Citizens has undergone massive growth in the last four years as the private market has shrunk. Citizens' first-quarter direct written premiums have more than quadrupled since the first three months of 2019, when it wrote $114.2 million of business.
Citizens' policy boom has been fueled by homeowners left without an insurer when companies in the market either went into receivership, left the market or stopped selling policies in the Sunshine State. The latest company to join the latter category is Farmers, which announced on June 16 that it would halt sales of homeowners policies in Florida, blaming the move on higher costs.
While changes like legislative reforms will help the market in Florida, policies will continue to flow to Citizens, according to J. Powell Brown, CEO of insurance broker Brown & Brown Inc.
"Citizens was created to be the market of last resort for residential homes, condominiums and apartments," Brown said during a first-quarter conference call. "Right now, it's one of the most competitive and at times, one of the only solutions for insureds."
Catastrophes across the country
Outside of the Florida market, a series of damaging wind events in March helped drive up loss ratios for the homeowners industry during the first quarter. The industrywide direct incurred loss ratio jumped to 71.2% from 53.7% in the prior-year quarter.
Those wind events included a tornado outbreak in Kentucky and southern Indiana on March 3 and a series of winter storms that pummeled the Southern US between March 24 and 28.
Three companies in this analysis had loss ratios in excess of 80% in the quarter. Nationwide Mutual Insurance Co. topped the list at 88.7%, Allstate had an 87.4% loss ratio, and USAA was third at 80.6%.
State Farm's position unchallenged in 2022
State Farm maintained its dominance of the US homeowners market in 2022 with an 18.3% market share and $24.43 billion in direct premiums written for the year, a 10.8% improvement from 2021. Those figures more than doubled those of second-place Allstate, which had a 9.0% market share and $12.01 billion in direct premiums written.
Direct premiums written by the industry in 2022 rose 11.7% to $133.79 billion from $119.79 billion in 2021, while the net combined ratio was 104%, up from 103.3% in the previous year.
