Insurers today are in a highly competitive market. To receive greater market share, expansion to new locations and new business strategies may be required. Insurance takeouts are one such strategy in the state of Florida that can give insurers a new customer base.
WaterStreet Company empowers insurers to leverage next-generation technology for rapid growth and greater market share.Learn More About Insurance Takeouts
What are Insurance Takeouts?
A “takeout” is when a private insurance company receives business from a nonprofit insurance company.
The nonprofit insurer selects policyholders to be taken out of the nonprofit’s coverage and into the private insurer’s coverage. The private insurer is referred to as the “takeout company” and the nonprofit insurance entity is Citizens Property Insurance Corporation, based in Florida.
The purpose of Citizens, founded in 2002, is to offer windstorm and general property insurance to Floridians who are not able to receive coverage by private insurance companies. Overtime, it is the obligation of Citizens to transition policyholders back into private insurance.
Private insurers may participate in a “Citizens takeout” for strategic purposes, as it can help to increase their market share, diversify their portfolio, and access new customers.
5 Steps to Insurance Takeouts
The process for insurers completing a Citizen’s takeout involves several steps, which typically include:
1. Notifications from Citizens
Citizens Property Insurance Corporation will notify private insurance companies when policies are eligible for takeout. This notification will include details about the policies that are available for takeout, such as the policy type, coverage limits, and policyholder information.
2. Submissions of Bids
Private insurance companies that are interested in participating in the takeout process will submit bids to Citizens, outlining the rates and coverage terms they are willing to offer for the policies. Bids are typically evaluated based on a number of factors, including the company’s financial stability, claims handling practices, and ability to provide quality customer service.
3. Policyholder Notification
Once the bids have been evaluated and the takeout companies have been selected, Citizens will notify the policyholders whose policies are being taken out. Policyholders will have the option to accept or decline the new coverage offered by the takeout company.
4. Transfer of Policies
If the policyholders choose to accept the new coverage, their policies will be transferred from Citizens to the takeout company. The takeout company will be responsible for managing the policies, handling claims, and providing customer service to the policyholders.
5. Ongoing Monitoring
After the policies have been transferred, Citizens will continue to monitor the takeout companies to ensure that they are meeting the state’s insurance regulations as well as providing quality coverage and customer service to policyholders.
WaterStreet & Florida Insurance Takeouts
Whether you’re just getting started in Florida or preparing for a takeout, WaterStreet has you covered with nearly 20 years of experience working with Florida insurers. We have successfully supported our clients in over 15 Citizens takeouts since 2005.
Reach out to WaterStreet Company today to request a consultation and demo.