NEW YORK, June 7, 2016 — High-risk coastal property owners in the United States are increasingly able to buy coverage from private-sector insurers, thereby reducing the exposure of state-run residual property insurers, according to the Insurance Information Institute (I.I.I.)
The I.I.I.’s just-released Residual Market Property Plans: From Markets of Last Resort to Markets of First Choice, shows that the insured value of the residual property market in hurricane exposed states continues to decline. Between 2011 and 2014, total exposure to loss in the plans fell cumulatively by 30 percent. The paper examines state plans in Alabama, Florida, Louisiana, Massachusetts, Mississippi, New York, North Carolina, South Carolina, and Texas.
State-run residual property insurers nationally had 2.77 million residential and commercial policies in-force as of year-end 2014, a 14 percent decrease from the 3.22 million policies in-force only a year earlier (2013). The U.S. residual property insurance policy count reductions have been led by the state-run Florida Citizens Property Insurance Corp., which had about 660,000 policies in-force at the end of 2014. This was down from 1.5 million residential and commercial policyholders statewide in 2012.