The Louisiana Property and Casualty Insurance Commission is a panel created by statute and made up of members from varied backgrounds representing authorities, shoppers, and members of the insurance coverage trade. The panel exists to counsel modifications and enhance the State’s insurance coverage market. To that finish, the Commission opinions and examines points affecting the supply and affordability of property and casualty insurance coverage and creates a report masking its findings. I used to be reviewing the latest report, which covers 2019 and 2020, and I believed it was fascinating simply how a lot has modified because the final report was launched.
The bullet factors concerning home-owner’s insurance coverage famous the state of the market as of December 2019. The factors had been as follows:
- The voluntary market stays aggressive after its re-establishment after 2005.
- The market is secure with 28 new insurers writing in Louisiana since 2005.
- Citizens’ residual market share for the owners’ market decreased from 9.8% to 0.4% since 2008—a 95% lower within the owners’ market share since 2008.
- Statewide common market-wide home-owner insurance coverage premium improve of just one.6% in 2019, following 0.7% in 2018.
- Louisiana ranked first within the common value of house owners’ insurance coverage in 2017 at $1,968; Florida ranked second at $1,951; Texas ranked third at $1,893, in accordance with the latest NAIC information.
- Homeowners’ fee will increase from 2008-2017 had been at a barely decrease fee (40.1%) than the nationwide common (45.9%) throughout that interval.
Obviously, we’re sitting in a really totally different place in the present day. December 2019 was earlier than Hurricanes Laura, Delta, Zeta, and Ida, and the devastating losses they created had not but occurred. A brand new report masking 2021 and 2022 has not been launched, however we will anticipate among the pretty drastic modifications that it’ll present.
First, there’s presently a paucity of insurers writing insurance policies in Louisiana. Louisiana misplaced 9 insurers to insolvency and lots of extra determined to cease writing new insurance policies within the State or pull out altogether. That means Louisiana Citizen’s market share will definitely have gone up. The statewide common premium improve will little question have gone up as nicely. We know that LA Citizen’s has already been authorized to extend their home-owner’s property insurance coverage charges by 63% starting January 1, 2023. As for the place Louisiana ranks nationally by way of common value, it’s exhausting to think about why we might have dropped out of first place in 2021 and 2022, even with the storms this yr in Florida.
So, what’s the purpose of this train? 2019 was a special time for the Louisiana property insurance coverage market. Plenty of persons are utilizing the phrase ‘crisis’ to explain the present state of property insurance coverage in Louisiana. Personally, I discover it helpful to be reminded that issues weren’t at all times the way in which they’re now. Circumstances change, new alternatives are created, and the market will look totally different once more.
The Louisiana Department of Insurance issued Regulation 125, the Insure Louisiana Incentive Program, on November ninth. The program gives incentives within the type of money grants to certified property insurers with the purpose of encouraging extra insurers to put in writing within the State, improve competitors, and take among the strain off Louisiana Citizens. The program isn’t excellent, however it’s a step in the fitting course, and Commissioner Donelon needs to be applauded for his efforts.