President s Report. Board of Governors December 10, 2014

Transcription

1 President s Report Board of Governors December 10, 2014

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4 NOTES: 1. Storm Risk is as measured by 100-year probable maximum loss (PML) plus estimated loss adjustment expenses using the Florida Hurricane Catastrophe Fund (FHCF) account allocation where PLA and CLA are combined. PLA/CLA combined PMLs are added to the Coastal PMLs to be consistent for surplus distribution. 2. Surplus, Florida Hurricane Catastrophe Fund (FHCF) & Assessments are as projected at beginning of storm season. Not all PLA/CLA surplus is needed to fund storm risk in 2014; total projected surplus is shown above Depopulation PML data is as of 12/31/13; therefore, 2014 information is not included. Depopulation PMLs are not included in storm risk totals FHCF projections are preliminary and actual amounts may differ significantly from these projections. VALUES ARE NOT TO SCALE

5 Citizens Property Insurance Clearinghouse has been recognized by Insurance Networking News (INN) and Celent as one of the best programs in the insurance industry for implementing information technology solutions, with a first-place award presented at a ceremony at the Insurance Analytics Symposium last month in New Orleans. Bolt Solutions Inc., the vendor for the clearinghouse software, nominated Citizens for the award for the clearinghouse rollout earlier this year.

6 Implementation Dates Commercial Claims - May 5, 2013 Commercial Policy/Billing - Nov 4, 2013 for new and renewal business policies, effective 1/1/2014 for Commercial Multi-peril and 2/1/2014 for Commercial Wind Personal Claims March 24, 2014 Personal Policy/Billing Dec 8, 2014 for policies effective 2/1/2015 all lines

7 Citizens 2015 Budget Presentation

8 Five Year Trending of Key Metrics * Dec-15 Dec-14 Dec-13 Dec-12 Policies In-Force 689, ,870 1,021,694 1,314,811 Depopulation Counts 75, , , ,002 Policies Serviced 737,918 1,046,198 1,387,461 1,591,813 Non-CAT Claim Counts 32,200 36,000 50,452 75,994 Written Premium $1,668,995,411 $2,057,270,680 $2,761,637,564 $3,180,754,795 Net Premiums Earned $926,111,799 $1,344,182,643 $1,880,761,247 $2,248,095,335 Losses Incurred $315,937,932 $397,579,461 $502,375,403 $815,507,485 Loss Ratio % of Net Earned Premiums 34.11% 29.58% 26.71% 36.28% Loss Adjustment Expenses $131,670,019 $177,489,661 $248,050,125 $258,109,329 LAE % of Net Earned Premiums 14.22% 13.20% 13.19% 11.48% LAE % of Losses 41.68% 44.64% 49.38% 31.65% Total Underwriting Expenses less losses & LAE Incurred $334,837,048 $389,851,567 $461,682,684 $562,565,426 Expenses Ratio - % of Direct Written Premiums 20.06% 18.95% 16.72% 17.69% * The items and amount presented above for 2015 and 2014 are projected For comparative purposes, gross other underwriting expense ratios of selected other carriers provided by KPMG during their organizational review, were as follows: Select other Florida Carriers average: 23.83% Select residual market carriers average: 24.31% Select large national carriers average: 23.69%

9 Composition of Total Underwriting Expenses 2015 % of 2014 % of Underwriting Expenses Budget Total Projections Total Lossess Incurred $315,937,932 40% $397,579,461 41% Loss Adjustment Expense Incurred $131,670,019 17% $177,489,661 18% Producer Commissions $137,799,510 18% $168,403,493 17% Taxes & Assessments $24,755,933 3% $32,814,045 3% Administrative & Other Underwriting $172,281,605 22% $188,634,029 20% Total Underwriting Expenses $782,444, % $964,920, % Citizens 2015

10 Citizens Property Insurance Corporation Statement of Operations - CONSOLIDATED Version 2015 Budget 2014 Projection Versus 2015 Budget 2014 Budget Versus 2015 Budget 2013 Actual Versus 2015 Budget Income Statement Total Year Total Year $ Var % Var Total Year $ Var % Var Total Year Var $ % Var Premiums Budgeted Statement of Operations Premiums Written - Direct $ 1,668,995,411 $ 2,057,270,680 $ (388,275,268) % $ 2,424,038,015 $ (755,042,604) % $ 2,761,637,564 $ (1,092,642,153) % Change in Direct UPR 159,375, ,138,768 (132,762,889) % 318,459,962 (159,084,083) % 192,942,329 (33,566,451) % Premiums Ceded (676,901,683) (938,845,043) 261,943, % (676,118,975) (782,708) -0.12% (1,059,530,102) 382,628, % Change in Ceded UPR (225,357,808) (66,381,762) (158,976,046) % (151,821,238) (73,536,570) % (14,288,544) (211,069,264) % Net Premiums Earned 926,111,799 1,344,182,643 ($418,070,844) % 1,914,557,763 ($988,445,965) % 1,880,761,247 ($954,649,448) % Underwriting Expenses Losses Incurred 315,937, ,579,461 (81,641,529) % 584,130,014 (268,192,082) % 502,375,403 (186,437,471) % Loss Adjustment Expense Incurred 131,670, ,489,661 (45,819,642) % 185,246,520 (53,576,501) % 248,050,125 (116,380,106) % Producer Commissions 137,799, ,403,493 (30,603,983) % 199,152,198 (61,352,689) % 224,041,553 (86,242,043) % Ceded Commissions % % % Taxes and Assessments 24,755,933 32,814,045 (8,058,112) % 38,770,612 (14,014,679) % 41,322,658 (16,566,724) % Administrative and Other Underwriting 172,281, ,634,029 (16,352,424) -8.67% 189,892,396 (17,610,791) -9.27% 196,318,473 (24,036,869) % Total Underwriting Expenses $782,444,999 $964,920,689 ($182,475,690) % $1,197,191,740 ($414,746,741) % $1,212,108,212 ($429,663,213) % Net Underwriting Income $143,666,800 $379,261,954 ($235,595,154) % $717,366,024 ($573,699,224) % $668,653,035 ($524,986,236) % Other Income (Expense) Investment Income 203,900, ,237,682 17,663, % 134,617,286 69,283, % 181,268,348 22,632, % Interest Expense (172,803,666) (181,816,720) 9,013, % (181,916,885) 9,113, % (200,711,211) 27,907, % Financing Costs (5,432,560) - (5,432,560) 0.00% - (5,432,560) 0.00% - (5,432,560) 0.00% Take - out Bonuses % % % Assessment Income 23,228,190 19,503,652 3,724, % 20,373,395 2,854, % 26,166,347 (2,938,157) % Other Income and Expenses (14,659,682) 5,295,527 (19,955,209) % 4,851,456 (19,511,138) % (10,030,029) (4,629,653) % Total Other Income (Expense) $34,232,978 $29,220,140 $5,012, % ($22,074,748) $56,307, % ($3,306,545) $37,539, % Net Income (Loss) $177,899,778 $408,482,093 ($230,582,316) % $695,291,276 ($517,391,498) % $665,346,490 ($487,446,713) % Policies In-Force 689, ,870 (32,792) -4.54% 922,136 (233,058) % 1,021,694 (332,616) %

11 Account - Product Line Policies Inforce Inforce Policies excluding Takeout 11/31/ /31/ /28/2014 Total Exposure Policies Inforce Total Exposure Policies Inforce Total Exposure PLA-Personal Residential Multi-Peril(PR-M) 1,011,337 $243,608,870, ,546 $93,498,041, ,736 $70,173,290,755 PLA Total 1,011,337 $243,608,870, ,546 $93,498,041, ,736 $70,173,290,755 COASTAL-Personal Residential Wind-Only (epas) (PR-W) 246,073 $104,522,700, ,337 $67,950,777, ,749 $67,774,828,841 COASTAL-Personal Residential Multi-Peril(PR-M) 175,804 $40,892,648, ,990 $22,670,364, ,375 $18,575,283,548 COASTAL-Commercial Residential Wind-Only(CR-W) 13,062 $55,988,944,303 8,437 $32,400,413,030 8,410 $32,226,671,786 COASTAL-Commercial Residential Multi-Peril(CR-M) 845 $14,725,703, $8,617,740, $7,608,935,152 COASTAL-Commercial Non-Residential Wind-Only(CNR-W) 27,007 $14,942,456,175 18,212 $11,554,287,040 18,082 $11,479,465,522 COASTAL-Commercial Non-Residential Multi-Peril(CNR-M) 242 $413,435, $223,605, $211,466,296 Coastal Total 463,033 $231,485,888, ,825 $143,417,189, ,417 $137,876,651,145 CLA-Commercial Residential Multi-Peril (CR-M) 6,972 $38,751,329,422 3,707 $21,465,262,256 3,447 $19,533,804,930 CLA-Commercial Non-Residential Multi-Peril(CNR-M) 1,365 $1,576,669,000 1,533 $1,674,551,614 1,525 $1,658,213,094 CLA Total 8,337 $40,327,998,422 5,240 $23,139,813,870 4,972 $21,192,018,024 Total 1,482,707 $515,422,757, ,611 $260,055,044, ,125 $229,241,959, % -55.5% Reduction in Policy Count and Exposure over three years