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The market share of Louisiana’s property insurer of last resort — Louisiana Citizens Property Å˽ðÁ«´«Ã½Ó³»­ Corp.— has declined from 9.8 percent to 1.8 percent in the 10 years after back-to-back Hurricanes Katrina and Rita devastated the state and its property insurance market.

That is just one of the findings in a report on Louisiana’s insurance market released by Å˽ðÁ«´«Ã½Ó³»­ Commissioner Jim Donelon that details the effects of two of the most costly disasters in United States history and how the Louisiana insurance market has grown over the past 10 years.

Donelon released the report at the State of Å˽ðÁ«´«Ã½Ó³»­ Markets Ten Years Post-Hurricanes Katrina and Rita Summit hosted by the Louisiana Department of Å˽ðÁ«´«Ã½Ó³»­ at the University of New Orleans.

“Through the efforts of so many in the public and private sectors and the resiliency of our residents, Louisiana has weathered the challenges that were left in the wake of Hurricanes Katrina and Rita. Our insurance market has come back stronger and more diverse ten years later and our consumers have more options, more competition and more reasons to expect a bright future,” Donelon said in a release announcing the report.

Donelon was joined by Mississippi Commissioner of Å˽ðÁ«´«Ã½Ó³»­ Mike Chaney at the event, along with business leaders and representatives of the property and casualty insurance.

Among other facts shared in the report are:

• Louisiana now has 22 new insurers operating that were not here in 2005, an outcome attributable in part to strategies including legislative reforms, active recruitment of companies and the Citizens Property Å˽ðÁ«´«Ã½Ó³»­ Depopulation program.
• From 2008 to 2015, Citizens moved from the third largest insurer in the state to the ninth largest insurer in Louisiana, a move that means more consumers are able to secure policies through private insurers at lower premiums.
• In 2014 Louisiana homeowners’ rates rose 2.8 percent on average which is the lowest statewide average rate increase since 2005.

Donelon credits many factors for the recovery of the private insurance market including the creation of a mandatory statewide building code in 2005 and the incentives passed by the Legislature in 2007 to encourage homeowners to strengthen their properties against storms. Å˽ðÁ«´«Ã½Ó³»­ premium discounts offered to those who comply with the Louisiana State Uniform Construction Code apply to new and retrofitted, one or two-family, owner-occupied and modular homes and are generally up to 20 percent in coastal areas.

The Legislature also passed legislation tripling the safety net of the Louisiana Å˽ðÁ«´«Ã½Ó³»­ Guaranty Association by increasing the coverage provided homeowners from $150,000 to $500,000 per claim, allowing for consumers to be confident when purchasing coverage from a company that is not a household name.

Panelists for the event included Jeff Albright, Independent Å˽ðÁ«´«Ã½Ó³»­ Agents and Brokers of Louisiana; Richard Clements, Professional Å˽ðÁ«´«Ã½Ó³»­ Agents; Blythe Lamonica, Coalition to Insure Louisiana; Vijay Ramachandran, Louisiana Citizens Property Å˽ðÁ«´«Ã½Ó³»­ Corporation; Caitlin Berni, Greater New Orleans, Inc.; Michael Hunnicutt, Louisiana Floodplain Management Association; Tony Hake, Federal Emergency Management Agency (FEMA); Mark Lujan (FEMA); David McKey, National Association of Realtors; Chuck McMains, Property and Casualty Insurers Association of America; Kevin Cunningham, American Å˽ðÁ«´«Ã½Ó³»­ Association; James Lynch, Å˽ðÁ«´«Ã½Ó³»­ Information Institute; and Bonnie Steen, Louisiana Surplus Lines Association.

The full report is available at www.ldi.la.gov/katrinasummit.

Topics Louisiana Market Property