JLT Reinsurance has teamed up with Florida-based Weston Insurance Company to help depopulate Citizens Property Insurance Company through the removal of wind-only policies.
Citizens is a not-for-profit alternative insurer that provides insurance to property owners who cannot find coverage in the private insurance market.
The Citizens board of governors approved the wind-only takeout, which will lead to a nearly 15 percent reduction in exposure in Citizens’ coastal account, on 11 February following the Office of Insurance Regulation’s approval of the agreement on 31 January.
JLT Re (North America) as reinsurance broker, and JLT Advisory as strategic capital and analytics advisors, have worked with the JLT analytics practice to support the depopulation.
The depopulation will see Weston remove approximately 31,000 personal residential, commercial residential and commercial non-residential wind-only policies totalling $30 billion in exposure from Citizens's coastal account.
It is the first takeout of its kind, although Weston will also take on personal and commercial residential policies as part of the depopulation.
Alastair Speare-Cole, head of JLT Re’s global operations, said: “We are proud to be able to help create more capacity to help Citizens reduce their exposures.”
“Craig Darling of our North American operation and Kevin Timmons of our advisory team, along with their colleagues have worked hard to bring this project to a successful launch. JLT Re’s involvement in this deal underlines our on-going commitment in building a US platform.”
In a statement, Barry Gilway, president and CEO of Citizens, said: “[The company] is very excited about this first ever depopulation and commercial wind-only policies from our coastal account.”
“In listening to our policyholders, we’ve learned that one of their main concerns in evaluating a takeout offer is the worry that their rates will increase dramatically or their policies will be cancelled at renewal. The price and renewal provisions of the Weston takeout agreement give policyholders the certainty needed to accept the benefits of private-market coverage secure in the knowledge that they will have continuity of coverage and rates.”
