Fla. Insurance Companies Ranked By Policy Count

Out of 126 regulated property insurers. Fla.-operated Citizens is the state’s largest, followed by No. 2 Universal Property and Casualty, and No. 3 State Farm.

TALLAHASSEE, Fla. – State Farm Florida is the third-largest property insurance company in Florida, by policy count. It’s a fact that the Florida offshoot of the national insurer hasn’t wanted you to know over the past eight years.

State-owned Citizens Property Insurance Corp., the so-called “insurer of last resort,” is once again the largest property insurer in Florida. And Fort Lauderdale-based Universal Property and Casualty is number two.

The three companies’ Florida market shares were revealed in the recent release by the Florida Office of Insurance Regulation of policy counts of all 126 state-regulated property insurers – the first complete list made public since 2014.

Public release of the market share list was mandated in a package of insurance reforms enacted during a special legislative session last May. The reform bill eliminated a “trade secret” exemption that State Farm Florida and other major insurers had been invoking since 2014 that prevented the public from seeing a complete picture of how Florida insurers are sharing the state’s residential marketplace.

Under the new law, insurers can still block release of their policy counts for each of Florida’s 67 counties. But they are required to provide quarterly updates for the total numbers of policies covered, added, canceled, and nonrenewed statewide. In December, the Office of Insurance Regulation posted those details on its website for the third quarter of 2022. Data for the fourth quarter will be posted around mid-March, according to an office spokeswoman.

Release of the list makes it possible to compare market shares in 2022 with a decade ago, when policy counts for each company were still being publicly released.

A comparison by the South Florida Sun Sentinel shows that the latest list is much different than in 2012, a year when the industry was dealing with high costs of sinkhole claims, when the private market was still recovering from a barrage of hurricanes that struck Florida in 2004 and 2005, and when the state was just beginning its effort to move policies out of Citizens and into newly created “takeout companies.”

Notably, the 2022 list is missing 32 companies that were on the 2012 list, but it includes 42 companies that were not doing business in the state in 2012.

Still, some rankings remain the same, including Citizens, Universal Property & Casualty, and State Farm Florida as the state’s top three insurers.

Lawmakers ordered public release

Lawmakers decided to require public release of the complete data because the number of companies asserting “trade secret” made it difficult for even the Legislature to analyze the private market during debates over insurance bills, said Paul Handerhan, president of the Florida-based Federal Association for Insurance Reform (FAIR).

“Every year there would be presentations by the Office [of Insurance Regulation] to the Legislature that would be incomplete,” Handerhan said.

Requiring release of the full list is “a good thing,” he said, even if it mainly benefits analysts and groups like FAIR that can use the data to make policy recommendations.

Consumers can use the data to determine which companies are adding policies – typically an indicator that they are financially stable enough to take on more risk, he said. On the other hand, if the data shows that a company has significantly reduced its policy count, that could indicate that the company was forced to reduce its exposure because its available claims-paying capital is diminishing, he said.

Mark Friedlander, corporate communications director for the nonprofit Insurance Information Institute, which is funded by national insurance companies, cautioned against drawing conclusions about companies solely by comparing changes in their policy counts 10 years apart.

“I have seen many insurers grow their policy count year-over-year but generate an underwriting loss and negative net income,” Friedlander said by email. “Positive premium growth does not necessarily equal financial stability. It’s one of many measures of a company’s health. You also have to look at a company’s combined ratio (measure of underwriting profit), surplus (capital) growth and loss ratio.”

He cited the decade-apart comparison of Citizens’ policy count. Unlike private-market companies, when Citizens’ policy count grows, it’s a sign that the overall insurance market is weakening because customers can only qualify if they cannot find an affordably priced private-market insurer.

But just comparing the decade-apart numbers shows that Citizens had 363,695 fewer policies in 2022 compared to 1.43 million a decade earlier – which at first glance could be considered a positive sign.

What the comparison does not show is that Citizens had reduced its policy count by more than 1 million after 2012 and was down to about 420,000 in 2019 – dropping it below Universal – before ballooning back to 1.07 million policies by the third quarter of 2022.

Citizens’ recent growth has come under scrutiny by lawmakers and industry watchdogs who are concerned that insurance consumers statewide will be forced to pay special assessments if an outsized Citizens is unable to pay claims after a series of catastrophic storms. Several reforms have been enacted over the past year to increase premiums and make the company less attractive than private-market competitors.

Top companies added policies

Universal added 76,681 policies compared to 2012, and with 629,229 is back in second place behind Citizens. Asked to comment on the reason for the net increase, spokesman Travis Miller said by email, “It is difficult to make generalizations about data points that are 10 years apart, especially when many significant factors have influenced the Florida residential property market at various points during that period.”

Nonetheless, Miller said, “the information does reflect the consistency of [Universal’s] efforts in being a primary choice of consumers and agents for their residential insurance needs.”

State Farm Florida, a company spun off by parent State Farm after Hurricane Andrew struck in 1992, increased by 160,152 policies since 2012 to remain firmly in third place with 558,604 policies.

In 2014, State Farm Florida was the first major insurer to claim a “trade secret” exemption to prevent release of its county-level policy data via a searchable database available on the Office of Insurance Regulation’s website. In court filings, the company said the data gave competitors an unfair advantage by revealing where State Farm Florida’s business was concentrated.

The company’s right to invoke a trade secret over the data was affirmed in 2017 following a three-year court battle with the Office of Insurance Regulation. After State Farm’s victory, 21 other insurers followed suit by declaring their own data a trade secret.

In addition to blocking those companies’ county-level data from public release, the Office of Insurance Regulation also omitted their state-level data from market share reports posted on its website.

Commenting on its number three ranking as shown in the newly released statewide data, State Farm Florida spokeswoman Roszell Gadson said, “State Farm continues to maintain the financial strength to be there for our Florida customers. We are proud to be able to keep the promises we have made to be there when they need us most.”

New companies added, 32 disappeared

The comparison shows that 32 companies have exited Florida’s market since 2012, either through bankruptcy, a merger with another company, acquisitions, or a loss of appetitive for insuring Florida risks. Among the notable failures were St. Johns Insurance Co., the fourth-largest provider of personal residential policies in 2012, with 175,279 policies. It went into liquidation in February 2022.

Other failed companies not on the 2022 list are Southern Fidelity (76,624 policies in 2012), Universal Insurance Company of North America (70,393), and FedNat (57,637).

But the comparison also shows that 42 companies have entered the state since 2012, and not all of them started before the industry’s fortunes began to sour in 2017.

Companies on the 2022 list that weren’t doing business in 2012 include Heritage Property & Casualty (No. 9), a publicly traded company that was seeded with Citizens take-out customers beginning in 2013. Heritage grew to 247,000 policies by 2015, but scaled down to 175,869 by 2022.

Other newcomers include No. 16 Kin Interinsurance Network, a company started by tech entrepreneurs that relies on publicly available data to set pricing for homes in risky states such as Florida, Georgia, North Carolina and Oklahoma. After debuting in Florida in 2017, Kin had 102,998 policies in 2022 and was the state’s 16th largest home insurer.

Likewise, Slide insurance Company, a Tampa-based company founded in February 2022 by former Heritage CEO Bruce Lucas, shot to 17th place after the company agreed to acquire up to 147,000 policies left stranded by St. Johns’ failure.

A decade without hurricanes enabled many private-market companies to build profits and market share, but that trend ended for the most part beginning in 2017. That was the year Hurricane Irma entered southern Florida and swept north, affecting all 67 counties and causing around $50 billion in damage.

It was also the year after a Florida Supreme Court ruling made it easier for policyholders to sue and collect damages from their insurers. The ruling and the return of destructive hurricanes in the years since have resulted in many insurance companies going bankrupt or leaving the state since 2017.

In some instances, policy-count increases evident in the comparison between 2012 and 2022 mostly occurred prior to 2017. Some companies reached a peak prior to 2017 and have declined or held steady since then, and that turn of fortune isn’t apparent in the 10-year comparison.

“I think it’s important to consider the last 10 years and when growth, if applicable, occurred,” says Robert Ritchie, CEO of American Integrity Insurance, which added 170,742 policies between 2012 and 2022 but only 20,405 since 2017. “The legal crisis began in early 2017, after the December 2016 [Supreme Court] ruling. For American Integrity, we have been basically flat from that point forward. Our growth occurred from 2012 to 2016, which was a time of profitability and surplus growth.”

Since 2017, “No profits means no surplus growth, which means flat or declining policy count for most carriers,” Ritchie said.

© 2023 South Florida Sun-Sentinel. Distributed by Tribune Content Agency, LLC.

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