By Lyle Adriano
Florida’s Citizens Property Insurance has shed nearly a million policies in the last four years, from 1.5 million customers to about 585,000. The state-run insurer plans to shed another 130,000 policies by the end of next year, but not without reinventing how it deals with its current customers.
Despite the reduction, more than half of Citizens’ customers are declining offers to transfer to private insurers. While many customers with standard home policies have moved on to private insurers offering similar policies at similar prices, those with coastal, wind-only, and mobile home policies have yet to find private insurers whose prices are more competitive than Citizens’.
Starting this month, Citizens plans to overhaul its opt-out letters to better treat its customers instead of scaring them away.
The letters will include cost premium estimates for both the private insurer interested in taking the policy and its own—information not included in past letters.
Additionally, the letters have also been reworded to sound less intimidating; threats of a 45% surcharge to cover hurricane claims have been reworked. This is notable, as the insurer had opportunities to build up its formerly-deficient surplus throughout a nine-year dearth of major hurricanes in Florida.
Citizens CEO Barry Gilway will personally encourage customers to switch to another carrier via mail. In the past, “warning” letters were sent by private carriers, informing policyholders that they were being switched unless they properly opted out; these letters were often written off as junk mail and ignored.
Although Citizens hopes to reinvent itself as “an insurer of last resort,” many customers still cling to their policies. The state insurer says it is ready to accommodate the calls and inquiries of consumers, and is willing to share information on the premiums of private carriers.
The time seems ripe for private insurers to garner new business in Florida.
