Successfully reported this slideshow.
Your SlideShare is downloading. ×

Louisiana Citizens Property Insurance Company

Louisiana Citizens Property Insurance Company

Download to read offline

Louisiana Citizens Property Insurance Company is the state’s residual market providing property insurance to homeowners and businesses that have been unable to procure insurance in the private market. Louisiana Citizens came out of the 2005 hurricane season nearly $1 billion in debt from Hurricane Katrina and Rita losses.
As reflected in the attached graphic, Louisiana Citizens appears to have transformed itself into a leaner, financially disciplined, and well governed organization. While it has yet to publish estimated losses from Hurricane Ida, there appears little chance of a similar financial hole opening in Louisiana Citizens’ balance sheet this year.
A graphic overview of this article is available here.

Louisiana Citizens Property Insurance Company is the state’s residual market providing property insurance to homeowners and businesses that have been unable to procure insurance in the private market. Louisiana Citizens came out of the 2005 hurricane season nearly $1 billion in debt from Hurricane Katrina and Rita losses.
As reflected in the attached graphic, Louisiana Citizens appears to have transformed itself into a leaner, financially disciplined, and well governed organization. While it has yet to publish estimated losses from Hurricane Ida, there appears little chance of a similar financial hole opening in Louisiana Citizens’ balance sheet this year.
A graphic overview of this article is available here.

Advertisement
Advertisement

More Related Content

Advertisement

Louisiana Citizens Property Insurance Company

  1. 1. © Centers for Better Insurance, LLC 2021 Version 1.0 Centers for Better Insurance (CBI) is an independent organization focused on supporting the insurance industry to optimize the value it delivers to all stakeholders (including policyholders, employees and society at large). CBI does so by making available unbiased analysis and insights about key regulatory issues facing the industry for use by insurance professionals, regulators and policymakers. THE MATERIAL AS WELL AS ANY OTHER INFORMATION PROVIDED BY CBI IS PROVIDED ON AN "AS IS" AND "AS AVAILABLE" BASIS. CBI does not guarantee the accuracy or completeness of this material or any other information and may add, remove, discontinue, change, improve, or update this material or any other information without notice. Under no circumstances shall CBI be liable for any loss, damage, liability or expense claimed to result from use of this material or any other information. Centers for Better Insurance Policyholders Employees Shareholders Society Supporting value creation for all stakeholders through beneficial purpose, sound governance and effective controls www.betterins.org Resources to Finance 2021 Catastrophe Losses Louisiana Citizens Property Insurance Company CBI
  2. 2. © Centers for Better Insurance, LLC 2021 Version 1.0 2 www.betterins.org Centers for Better Insurance Policyholders Employees Shareholders Society Louisiana Citizens Property Insurance Company 2021 Claims Paying Capabilities Before Hurricane Ida struck, Louisiana Citizens Insurance Company had about $162 million of policyholder surplus (capital). Policyholder surplus represents the ability to pay future claims including support for continued insurance operations. Louisiana Citizens issued $978.2 million in bonds in 2006 to pay Hurricane Katrina claims. 15 years later $336 million remains outstanding. The State has dramatically reduced the surcharge burden on Louisiana policyholders through a series of offsetting income tax credits. Emergency Assessments (up to $267 million annually) $35 million Retention Includes $200 million in catastrophe bond capacity Catahoula Re Pte. Ltd. (Singapore) Pelican Re IV Ltd. (Bermuda) Pelican Re IV Ltd. (Bermuda) $260 million One-Time Regular Assessment $560 million Reinsurance Program Repayment of Principal with Interest Proceeds of Sale of Bonds Louisiana Licensed Property Insurers Private Market Policyholders Assessment-Backed Revenue Bond Policy Surcharges Annual Assessment of Surcharge Collections Immediate Assessment with Recovery by Surcharge Louisiana Citizens Policyholders Policy Premiums Market Equalization Charges ensure Louisiana Citizens policyholders pay the same surcharges as private market policyholders At the time of Hurricane Katrina, Louisiana Citizens insured 135,000 policyholders and was the third largest property insurer in the state. It carried about $300 million in reinsurance. Today, Louisiana Citizens insures about 36,000 policyholders backed by more than $500 million in reinsurance and representing less than 1.5% of Louisiana’s property insurance market.

×