Citizens: Insurer focusing on PR effort

TALLAHASSEE, Fla. -- Aug. 15, 2006 -- Citizens Property Insurance Corp. is hoping to set the record straight.



Board members of Florida's insurer of last resort voted Monday to move forward with a public information effort to educate the public about its financial status and the types of properties it insures.



Jay Odom, a member of Citizens' board of governors, said the initiative was needed to counteract misconceptions about the quasi-state agency, such as the notion that the company only insures expensive property in coastal areas.



"There is an immense amount of misinformation and misperception about Citizens," Odom said during the meeting held by teleconference. "I think we need to have a message directly from Citizens itself just stating some of the conditions that we're in."



Among the information Odom suggested to be included in potential newspaper advertisements was:



• Citizens currently insures more than 1.2 million property owners in the state, making it Florida's largest residential property insurer.



• Citizens insures more than 180,000 mobile homes in the state, and that number increases by 10,000 each month. "We're virtually the only mobile home insurer in the state," Odom said.



• Fifty percent of Citizens' single-family home portfolio is residences with an insured value of $150,000 or less.



The company also insures more than 150,000 homes in Pasco, Pinellas, Hernando and Hillsborough counties because sinkhole litigation has driven away many private insurers.



• Citizens currently has the resources to pay $10 billion in claims and is writing about $4.5 billion in annual premiums.



Such information, Odom said, would help put the public's mind at ease.



"That way the people that do have Citizens will have some direct knowledge that we're financially sound -- what we do, what we cover," Odom said. "That we are obligated to provide homeowners insurance to anyone in the state of Florida that owns property. I think it's gotten to the point where a lot of people think that all Citizens does is high-risk hurricane insurance."



However, Citizens board member Richard DeChene questioned the wisdom of advertising Citizens' $4.5 billion in annual premiums in newspapers.



"Our purpose here is to tell the policyholders of Citizens that we're able to manage the insurance program for them," DeChene said. "Here's one thing that I would be very, very concerned about, and that is putting in the newspaper that Citizens is getting $4.5 billion a year -- that we have all this money. I've just got to ask one question: How would you ever expect us to get to rate adequacy when you're telling people we have all this money?"



But Citizens Board Chairman Bruce Douglas pointed out that much of that premium money would go to pay debt service on a recent $3 billion bond sale that is helping the insurance company be able to pay claims.



DeChene suggested the financial information relayed to the public be limited to Citizens having a successful bond sale and enough capital to cover a significant number of claims.



"I think when you get into more than that, I just don't know how the press or anybody else -- the legislators -- how they would take it or how they would feel," DeChene said. "And I only say that because we're still facing an uphill battle to obtain rate adequacy."



Citizens President Bob Ricker disagreed.



"I think telling the amount that we have is very important because that is a very large, credible number," Ricker said. "I think that is an issue that we face in the perception with people."



Copyright © 2006 The Bradenton Herald, Fla., Brian Neill. Distributed by McClatchy-Tribune Business News.