Floridas Big Insurance Problem
August 10, 2008
BusinessWeek - 09/11/08
By Nanette Byrnes
When Hurricane Ike took a left on Sept. 8, heading away from Florida, locals breathed a sigh of relief. Not only are their homes on the line with each burst of violent weather but their pocketbooks are increasingly at risk, too. Over the past four years, Florida taxpayers' vulnerability to a major weather catastrophe has grown.
The quasi-governmental company that was conceived as an insurer of last resort, Citizens Property Insurance, has become Florida's top underwriter of homeowners' insurance. Citizens now has more than $433 billion of property exposure on its books, and Florida has exacerbated that risk by getting into the reinsurance business as well. "It's a disaster," says Brian P. Sullivan, editor of Property Insurance Report. "This is not something the public should be dabbling with."