Admitted Assets: Liabilities and membersʹ surplus:

Transcription

1 COASTAL ACCOUNT (Formerly the High Risk Account or HRA) SELECTED FINANCIAL INFORMATION STATUTORY ACCOUNTING PRINCIPLES Years Ended December 31, (In Thousands audited) Statement of Admitted Assets, Liabilities and Accumulated Surplus: Admitted Assets: Cash and short term investments 934,528 $1,020,160 $1,283,700 $2,555,062 $3,026,829 $2,971,977 $4,280,513 $1,996,953 Bonds 6,538,417 6,887,398 6,452,999 4,519,054 1,605,517 1,027,156 1,556,537 3,571,840 Investment income due and accrued 51,351 57,543 52,912 31,761 7,129 5,391 16,017 30,877 Interaccount receivable (payable) 28,171 71,608 19,712 16,829 15,654 63,426 45, ,529 Due from investment broker 10 Assessments receivable 164, , , , , , ,985 Reinsurance recoverable 6,212 2, ,792 11,460 18,195 77,311 82,723 Electric data processing equipment (at cost) Deferred income taxes Other assets (1) 76,637 79,240 72,242 65,894 60, ,103 23, ,085 Total admitted assets 7,743,438 $8,309,308 $8,320,077 $7,832,947 $5,093,311 $4,733,248 $6,694,935 $6,576,934 Liabilities and membersʹ surplus: Liabilities: Loss Reserves $121,774 $153,121 $155,995 $119,633 $141,480 $219,619 $194,986 $301,704 Loss adjustment expenses 47,855 37,636 41,348 25,304 19,956 35,020 37,606 25,004 Unearned premiums (net of unearned ceded) 499, , , , , , , ,942 Unearned assessment income 43,602 85, , ,034 Due to investment broker 10,121 Accounts payable and other liabilities 203, , ,487 78,446 56,886 92,282 51,879 80,107 Interest payable 21,059 24,333 27,479 34,938 33,682 51,627 26,675 39,527 Notes payable (net of discount) 3,603,495 4,298,600 4,643,316 4,597,000 2,864,493 2,814,793 4,914,674 5,095,593 Taxes and fees payable ,871 3,522 Federal income taxes payable 0 Total liabilities 4,540,975 5,366,396 5,633,855 5,501,032 3,562,956 3,727,453 5,810,514 6,124,399 Accumulated Surplus (Deficit) Restricted 15,339 11,112 11,276 13,651 14,409 24,044 70,585 Unrestricted 3,187,124 2,931,800 2,674,946 2,318,264 1,515, , , ,535 Total Accumulated Surplus (Deficit) 3,202,463 2,942,912 2,686,222 2,331,915 1,530,355 1,005, , ,535 Total liabilities and accumulated surplus 7,743,438 $8,309,308 $7,832,946 $7,832,947 $5,093,311 $4,733,248 $6,694,935 $6,576,934 (1) Includes, but not limited to, premiums receivable, other receivables under reinsurance contracts, and other admitted assets. Source: Citizens Property Insurance Corporation COASTAL ACCOUNT (Formerly the High Risk Account or HRA) SELECTED FINANCIAL INFORMATION STATUTORY ACCOUNTING PRINCIPLES Years Ended December 31 (In Thousands) Statement of Operations Data: PREMIUMS Premiums earned $1,180,761 $1,187,577 $1,148,733 $1,084,141 $1,103,194 $1,228,132 $1,307,501 $1,122,007 Reinsurance ceded 604, , , , , , , ,652 Premiums earned (net) 575, , , , , ,682 1,005, ,355 LOSSES AND EXPENSES INCURRED: Losses incurred, net of reinsurance 73, , ,534 76,025 25, ,134 73, ,299 Loss adjustment expenses income 51,880 49,860 54,567 40,176 11,411 23,843 39,231 5,629 Other underwriting expenses incurred (2) 191, , , , , , , ,466 Total losses and expenses incurred 316, , , , , , , ,394 UNDERWRITING (LOSS) INCOME 259, , , , , , , ,961 Net investment income 70, ,591 75,003 42,905 62,277 7,509 16, ,067 Interest expense, net 161, , , , , , , ,664 LOC fees & notes issued cost 0 6,008 15,463 13,308 8,020 13,766 46,162 Assessment income 26,166 42,352 35,321 43,387 17,901 1,673,836 Takeout bonus expense (net) and other income (expenses) 28,040 2, ,832 3, ,704 Gain (Loss) before federal income taxes 223, , , , , , ,136 1,915,334 Income taxes 2, ,459 NET (LOSS) INCOME: 223, , , , , , ,880 2,135,793 Surplus (deficit), beginning of period 2,942,912 2,686,222 2,331,915 1,530,355 1,005, , ,535 1,685,803 Prior Period adjustment 301,482 Assessments (net of distributions) Change in net deferred income tax Additional pension liability Change in other comprehensive income 16, ,925 Change in non admitted assets 20,118 33,221 26,580 38,975 37, ,524 7,994 2,470 Surplus (deficit), end of period 3,202,460 $2,942,912 $2,686,222 $2,331,915 $1,530,355 $1,005,795 $884,421 $452,535 (2) The largest portion of underwriting and operating expenses is premium taxes and commissions which increase in proportion with premiums. Source: Citizens Property Insurance Corporation

2 COASTAL ACCOUNT (Formerly the High Risk Account or HRA) SELECTED FINANCIAL INFORMATION GENERALLY ACCEPTED ACCOUNTING PRINCIPLES Year Ended December 31, (In Thousands) ASSETS: Cash and cash equivalents $698,100 $829,711 $1,039,222 $1,314,987 $1,956,191 $89,013 $2,459,061 1,300,971 Short and long term investments 6,904,008 7,252,996 6,852,885 5,895,102 2,805,271 4,088,343 3,370,434 4,258,585 Investment income due and accrued 51,350 57,543 52,912 31,761 7,129 5,391 16,017 30,877 Deferred policy acquisition costs 53,115 58,482 57,273 56,366 49,559 57,377 63,940 58,237 Deferred financing costs 62,341 83, , , ,334 Income taxes receivable Premiums receivable and other assets (1) 257, , , , , , , ,202 Total Assets 8,026,261 8,691,917 8,642,803 8,150,075 5,427,842 4,981,178 6,759,768 6,637,872 LIABILITIES AND NET ASSETS Loss reserves 121, , , , , , , ,704 Loss adjustment expense reserves 47,855 37,636 41,348 25,304 19,956 35,020 37,606 25,004 Unearned premiums 541, , , , , , , ,251 Unearned assessment income 67, , , ,531 Long term debt 3,603,495 4,298,600 4,643,316 4,597,000 2,864,493 2,667,748 4,700,942 5,028,131 Other Liabilities (2) 203, , ,237 88,435 56,732 92,176 48,775 80,106 Taxes and fees payable ,871 3,522 Interest payable 21,059 24,333 27,479 34,938 33,682 51,627 26,675 39,527 Federal income taxes payable 0 Deferred tax liability Total liabilities 4,606,752 5,464,832 5,676,921 5,562,936 3,569,510 3,591,297 5,593,678 6,057,245 NET ASSETS: Restricted 15,339 11,112 11,276 13,651 14,409 24,044 1,164, ,459 Unrestricted net assets 3,404,170 3,215,973 2,954,156 2,573,488 1,843,923 1,365,837 1, ,168 Total Net Assets 3,419,509 3,227,085 2,965,882 2,587,139 1,858,332 1,389,881 1,166, ,627 Total liabilities and net assets (deficit 8,026,261 $8,691,917 $8,642,803 $8,150,075 $5,427,842 $4,981,178 $6,759,768 $6,637,872 (1) Including producer commissions (net), taxes and fees, other underwriting expenses, takeout bonus expense and line of credit fees and note issuance costs. (2) Includes prepaid reinsurance premiums, premiums receivable (net), premiums receivable from assuming companyʹs assessment receivables, deferred takeout bonds, other assets, and inter account receivable (payable). Source: Citizens Property Insurance Corporation Citizens Property Insurance Corporation COASTAL ACCOUNT (Formerly the High Risk Account or HRA) SELECTED FINANCIAL INFORMATION GENERALLY ACCEPTED ACCOUNTING PRINCIPLES Year Ended December 31 (In Thousands) REVENUES: Premiums Earned $1,199,384 $1,187,577 $1,148,733 $1,084,141 $1,103,194 $1,228,132 $1,307,501 $1,122,007 Less premiums ceded 623, , , , , , , ,652 Premiums earned (net) 575, , , , , ,682 1,005, ,355 Net investment income 73, , ,830 75,008 65,523 13, , ,051 Assessment Income 47,182 48,880 56,941 64,570 17,901 1,673,836 Total revenues 696, , , , , ,406 1,222,396 2,669,242 EXPENSES: Losses incurred 73, , ,534 76,025 25, ,134 73, ,299 Loss adjustment expenses incurred 51,880 49,860 54,567 40,176 11,411 23,843 39,231 5,629 Policy acquisition & other underwriting expenses (1) 196, , , , , , , ,689 Interest expense 183, , , , , , , ,664 Total expenses 504, , , , , , , ,281 Change in net assets (deficit) 191, , , , , , ,646 1,994,961 PROVISION FOR INCOME TAXES 2, ,459 Net income $191,465 $261,539 $378,862 $510,093 $468,186 $222,724 $587,390 $2,215,420 (1) Including producer commissions (net), taxes and fees, other underwriting expenses, takeout bonus expense and line of credit fees and note issuance costs. Source: Citizens Property Insurance Corporation

3 Adjusted GAAP for the Coastal Lines Account (in thousands) 31 Dec Dec Dec Dec Dec Dec Dec 07 (Audited) (Audited) (Audited) (Audited) (Audited) (Audited) (Audited) Retained surplus GAAP basis $3,419,509 $3,227,085 $2,965,881 $2,587,139 $1,858,333 $1,389,881 $1,166,090 Deferred financing costs 62,341 83, , , , , ,732 Restricted cash FSLSO account 15,339 11,112 11,726 13,651 14,409 24,044 Unamortized take out bonuses _ 4,748 Net assets related to pre event notes 105,614 _ Adjusted Surplus $3,236,215 $3,132,188 $2,847,575 $2,449,280 $1,709,590 $1,218,791 $947,610

4 Coastal Investments As of Investments Amounts Bond Proceeds Tax Exempt Money Market Funds $ 507,269,500 Tax Exempt Fixed Rate Municipal Bonds 2,844,000,000 Tax Exempt VRDNʹs Municipal Bonds 24,785,000 Total Pre Event Bond Proceeds $ 3,376,054,500 Operating Funds Money Market Funds $ 299,400,860 Corporates 1,481,012,041 Commercial Paper and CDʹs 15,520,716 Treasury & Agency Securities 1,239,255,174 Municipals 74,097,884 Legacy Securities 154,875,675 Total Operating Funds $ 3,264,162,349 Total Invested Assets $ 6,640,216,848

5 As of May 12, 2014, the in force policies and exposure for each category of business are as follows: Policies Total Premium Account Product Line Inforce Exposure with Surch COASTAL Personal Residential Wind Only (epas PR W) 213,531 72,697,617, ,957,487 COASTAL Personal Residential Multi Peril (PR M) 133,317 25,024,761, ,767,717 COASTAL Commercial Residential Wind Only (CR W) 8,999 37,187,436, ,095,063 COASTAL Commercial Residential Multi Peril (CR M) ,895,156,620 77,325,441 COASTAL Commercial Non Residential Wind Only (CNR W) 18,808 11,662,655,611 80,932,751 COASTAL Commercial Non Residential Multi Peril (CNR M) ,784,400 1,615,108 Total 375, ,718,411,349 1,049,693,567

6 Coastal Account Total Policies In Force and Total Insured Value Total Insured Date Total Policies In Force Value (millions) 12/31/2013 (2) 386,688 $166, Dec ,163 $205, Dec ,161 $228, Dec ,679 $231, Dec ,436 $232, Dec ,200 $240, Dec ,181 $273,663 December 31, 2006 (1) 403,509 $178,314 December 31, 2005 (1) 399,418 $139,106 (1) Total Insured Value increased despite a reduction or marginal increase in total Policies in force due to rate increases implemented in spring of 2005 and spring of 2006 and due to the increase in large commercial residential accounts in Builderʹs risk and commercial residential policies typically have a significantly higher average exposure per policy than a personal residential policy. (2) The total policies in force and insured value declined in 2013 largely due to depopulation efforts.

7 $161.7 million in Emergency Assessments were collected in 2013 for the 2005 EA levied in No Emergency Assessments were levied in 2013.

8 Total Coastal Policies in Force, DWP and Total Insured Value Period Ending DWP Total Insured Value 31 Dec Total Policies in Force (in thousands) (in millions) ,688 $1,174,669 $166, ,163 $1,230,985 $205, ,161 $1,197,823 $228, ,679 $1,115,368 $231, (2) 410,436 $1,031,378 $232, (2) 445,200 $1,125,290 $240, (1) 446,181 $1,219,300 $233, (1) 403,509 $1,274,742 $178,314 (1) DWP and Total Insured Value increased despite a reduction or marginal increase in total Policies in force due to rate increases implemented in spring of 2005 and spring of 2006 and due to the increase in large commercial residential accounts in Builder's risk and commercial residential policies typically have a significantly higher average exposure per policy than a personal residential policy. (2) As of December 31, 2008, Citizens had approximately 68,114 multi-peril policies in force in the HRA with approximately $164.2 million in direct written premium and total insured value of approximately $24.1 billion.

9 Balance in the Emergency Assessment Stabilization Account at 12/31/2013: $178,351, Use of Proceeds from Emergency Assessment for Year Ended 12/31/2013: principal payment 4/25/2013 $724,485 Total $724,485

10 Market Share of Citizens Property Insurance Corporation Relative to Other Florida Insurers Dec. 31, 2013 Company Name Market Share Citizens Property Insurance Corporation 20% Universal Property & Casualty Insurance Company 7% State Farm Florida Insurance Company 6% United Property & Casualty Insurance Company 3% St. Johns Insurance Company, Inc. 3% Note: market share calculations are based on residential property written premiums for admitted carriers only. Surplus lines carriers are not included.

11 Coastal Probable Maximum Losses as of December 31, 2013 (1) Estimated Average Single Event ʺPMLʺ Return Period (billions) 250 years $ years $ years $ years $ years $1.429 (1) The PMLs in this table were calculated using AIR, CLASIC Rv15.0, Historical (long term) and Stochastic (mid term) event sets, weighted, including demand surge and excluding storm surge. Citizens prepares its PML with a weighted rate comprised of 2/3 Stochastic rate and 1/3 Historical rate. Citizens unweighted Stochastic rate using AIR, CLASIC R v15.0 for the 100 year PML as of December 31, 2013 equals $ billion.

12 Coastal Regular Assessment Base Regular Assessment Base Year (millions) 2013 Regular Assessment Base/2012 DWP $35, Regular Assessment Base/2011 DWP $32, Regular Assessment Base/2010 DWP $30, Regular Assessment Base/2009DWP $30, Regular Assessment Base/2008 DWP $31, Regular Assessment Base/2007 DWP $33, Regular Assessment Base/2006 DWP $34, Regular Assessment Base/2005 DWP $9, Regular Assessment Base/2004 DWP $7,863

13 Coastal Emergency Assessment Base Emergency Assessment Base Year (millions) 2013 Emergency Assessment Base/2012 DWP $37, Emergency Assessment Base/2011 DWP $36, Emergency Assessment Base/2010 DWP $32, Emergency Assessment Base/2009 DWP $33, Emergency Assessment Base/2008 DWP $34, Emergency Assessment Base/2007 DWP $36, Emergency Assessment Base/2006 DWP $37, Emergency Assessment Base/2005 DWP $11, Emergency Assessment Base/2004 DWP $9,683

14 Reconciliation of SAP to GAAP for Coastal (in thousands) 31 Dec Dec Dec 11 (Audited) (Audited) (Audited) Net income Statutory basis $ 223,119 $223,661 $327,962 Adjustments: Policy acquisition costs (5,367) 1, Line of credit fees & note issuance costs (4,723) 6, Other financing costs (16,721) 16,721 16,721 Takeout Bonuses Allowance for doubtful accounts and Other income 1, Change in unearned assessment income 14,230 17,218 21,620 Change in 2012 FIGA Assessment income 6,785 10,690 Unrealized gain (loss) on Investments (26,994) 53,916 45,827 Change in net assets GAAP basis $ 191,464 $261,541 $378,861 Accumulated surplus (deficit) Statutory basis $ 3,202,463 $2,942,912 $2,686,222 Adjustments: Policy acquisition costs 53,115 58,482 57,273 Nonadmitted assets, net 49,416 68, ,599 Line of credit fee and note issuance costs 9,391 14,114 20,188 Takeout bonuses Other financing costs 52,950 69,671 86,392 Unearned assessment income change (23,712) 22,658 39,877 GAAP 2012 FIGA Assessment receivable (3,905) 10,690 Provision for Reinsurance Sch. F. Penalty Cumulated unrealized (loss) gain on investments 79, ,751 52,835 Total (deficit) net assets GAAP basis $ 3,419,509 $3,227,087 $2,965,881

15 Adjusted GAAP for Coastal (in thousands) 31 Dec Dec Dec 11 (Audited) (Audited) (Audited) Retained surplus GAAP basis $3,419,509 $3,227,085 $2,965,882 Deferred financing costs 62,341 83, ,580 Restricted cash FSLSO account 15,339 11,112 11,726 Unamortized take out bonuses 0 Net assets related to pre event notes 105,614 Adjusted Surplus 3,236,215 $3,132,188 $2,847,576