Citizens Property Insurance Forum

[Jinc]

I was at a forum last night for informing Floridians regarding Citizens & rising rates in Hallandale. It seems the politicians are alright with Citizens making a profit, they just think private insurance companies shouldn't. One said that private insurers should pass the cost of lower reinsurance rates to the public, yet nothing about Citizens and the record profits that they are making. Why is Citizens not lower their rates with all these record profits and no taxes?

 

[Accelerated]

I was at a forum last night for informing Floridians regarding Citizens & rising rates in Hallandale. It seems the politicians are alright with Citizens making a profit, they just think private insurance companies shouldn't. One said that private insurers should pass the cost of lower reinsurance rates to the public, yet nothing about Citizens and the record profits that they are making. Why is Citizens not lower their rates with all these record profits and no taxes?

It could be because those profits will rapidly disappear when they get hit again.

Here is a link that may give some insight into why, so long as Citizens is banking those profits away for a major event (which, to my understanding, they are), it seems reasonable to not get upset about them squirreling money away during the slow years:
TCFAQ E19) How many direct hits by hurricanes of various categories

The last major hurricane to hit Florida was Wilma in 2005, which caused an estimated $20,600,000,000.00 in property damage.

Ultimately, even with the rate raise, Citizens might make a billion a year in "profit" during the slow years. Even if we say that they made that much every year since losing 20.6 billion 7 years ago, I would not really consider it a profitable enterprise, but then I have a reasonable grasp of basic arithmetic. Currently, Citizens has about 6 billion in surplus reserves, not including bonds. Hardly enough to sustain a direct hit. Citizens has $500,000,000,000 in exposure, and if the US takes a hit this year, they have the best chance (twice as high as the rest of the nation) of taking the brunt of the damage. Beaing able to bank away a billion a year when you could get hit for 10x that number in a decent event (once every 10 years or so for FL, less often for the rest of the nation) is break even at best.

 

[Jinc]

It could be because those profits will rapidly disappear when they get hit again.

Here is a link that may give some insight into why, so long as Citizens is banking those profits away for a major event (which, to my understanding, they are), it seems reasonable to not get upset about them squirreling money away during the slow years:
TCFAQ E19) How many direct hits by hurricanes of various categories

The last major hurricane to hit Florida was Wilma in 2005, which caused an estimated $20,600,000,000.00 in property damage.

Ultimately, even with the rate raise, Citizens might make a billion a year in "profit" during the slow years. Even if we say that they made that much every year since losing 20.6 billion 7 years ago, I would not really consider it a profitable enterprise, but then I have a reasonable grasp of basic arithmetic. Currently, Citizens has about 6 billion in surplus reserves, not including bonds. Hardly enough to sustain a direct hit. Citizens has $500,000,000,000 in exposure, and if the US takes a hit this year, they have the best chance (twice as high as the rest of the nation) of taking the brunt of the damage. Beaing able to bank away a billion a year when you could get hit for 10x that number in a decent event (once every 10 years or so for FL, less often for the rest of the nation) is break even at best.

Thanks for the info... Not sure if the link is working!

 

[Jon Nickolas]

hi i need to know about one thing

What are the average starting salaries, bonuses, benefits and travel requirements like at Citizens Property Insurance Corporation?
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[USF3983]

Probably not very much. They are a state-backed company that provides insurance as a last resort and they are struggling to keep to make sure that all of the homes in Florida are guaranteed through another major hurricane season.