Fair Insurance Rates in Monroe Releases Florida Keys Hurricane Risk Exposure Study Report
Aug 24, 2017
As part of his presentation at yesterday’s Florida Office of Insurance Regulation public hearing on rates filed by Citizens Property Insurance Corporation (“Citizens”), Citizens’ President and CEO Barry Gilway noted a study on hurricane risk exposure recently completed by the grass roots organization Fair Insurance Rates in Monroe (“FIRM”).
To view the FIRM study, click here.
Mr. Gilway said that 35 percent of Citizens’ wind-only policyholders in Monroe County will receive rate decreases according to the State-run insurer’s proposed indications. However, the FIRM study indicates lower annual average losses than Citizens uses in its indications.
“That said, if we were to use these lower loss estimates in developing this year’s rates, the rate indication in Monroe County would decrease from 32 percent to 27 percent, which is still much greater than our recommended rate increase of only four percent,” Mr. Gilway added. “As required by law, Citizens bases its rate indication on approved hurricane models. As you know, there is, and has been-and should be-variability between the different approved models. Each year, our actuaries assess the best way to use catastrophe model results.”
FAIR’s news release on its study is reprinted in part below:
“A total of 699 structures across 32 defined categories (style, age, location, value) were inspected. This data was exceedingly difficult to obtain, as it required owners to permit trained inspectors to have access to the property. Additionally, where documentation verifying wind mitigation features was not available, the structures were not credited with having the feature. Nevertheless, the data, when entered into three state recognized and approved risk models (RMS, Florida Public, and AIR) showed significant loss reduction in all three models. However, the data did not show a reduction from Citizens recorded building characteristics.
“It is important to note that FIRM learned that there are significant, unexplained (the models are proprietary and confidential) differences among all models utilized by Citizens when applied to Monroe County. Additionally, the models fail to recognize storm surge damage covered by flood insurance as in any way reducing wind insurance loss exposure. FIRM would like to see Citizens and OIR address the significant variations in model results, wind versus surge damage, and Monroe County’s unique geography as an integral part of the rate setting process. For a detailed narrative and accompanying data, please click on the document link below.”
Should you have any questions or comments, please contact Colodny Fass.
To unsubscribe from this newsletter, please send an e-mail to firstname.lastname@example.org.