TALLAHASSEE, Fla. — Amid long-running efforts to shift customers into the private market, the number of homeowners insured by the state’s Citizens Property Insurance Corp. plunged last week.

Citizens posted data online Monday showing that as of Friday, it had 1,035,534 policies, down from 1,271,907 policies a week earlier and 1,268,738 policies two weeks earlier.

The drop coincided with nine private insurers having approval to assume up to 410,008 Citizens policies last week as part of what is known as a “depopulation” program. Private insurers also have received approval from regulators to assume as many as 549,307 additional policies before the end of the year through the program.

Those are maximum numbers, with the actual shifts of policies into the private market smaller. But the depopulation program is a key strategy as state leaders try to shrink Citizens, which in recent years became Florida’s largest property insurer because of financial problems in the private market.

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As an example of how the process works, Tampa-based HCI Group said its subsidiaries, Homeowners Choice Property & Casualty Insurance Co. and TypTap Insurance Co., assumed a combined total of 42,000 policies last week. The subsidiaries had been approved to assume a combined maximum of 50,000 policies.

The two companies also have been approved to assume as many as 50,000 policies in November, according to the state Office of Insurance Regulation. But an HCI news release last week indicated that it does not play to pick up those policies.

“We successfully navigated a highly competitive Citizens’ depopulation process and exceeded our fourth quarter new business goal through the October assumption alone,” Paresh Patel, HCI’s chairman and chief executive officer, said in a prepared statement. “Our technology, which enables us to select policies that best fit our underwriting and profitability criteria, combined with our strong rate of policyholder adoption, allows us to forgo additional assumptions for the balance of the year.”

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Citizens reached as many as 1.412 million policies last year before seeing the number reduced because of earlier depopulation rounds. Still, Citizens has dwarfed other insurers. For instance, as of June 30, Citizens had slightly more than 1.2 million policies, while the next-largest insurer, State Farm Florida, had 641,565, according to an Office of Insurance Regulation report.

Pointing to the depopulation efforts, Citizens President and CEO Tim Cerio said last month that the policy count is projected to total 891,184 at the end of the year. Cerio and other officials have said the private market has improved, resulting in carriers looking for policies that they consider good risks.

A potential downside for Citizens customers, however, is that they can see rate increases if their policies are assumed by private insurers. Trying to spur depopulation, lawmakers in 2022 approved a change that required Citizens customers to accept offers of coverage from private insurers if the offers are within 20 percent of the cost of Citizens premiums.

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State leaders want to minimize the number of policies in Citizens, at least in part because of financial risks if the state gets hit by a major hurricane or multiple hurricanes. If Citizens wouldn’t have enough money to pay claims, policyholders throughout the state — including possibly non-Citizens policyholders — could have to pay what are known as “assessments” to cover the costs.

Insurers seek approval from the Office of Insurance Regulation to take part in depopulation rounds. Along with TypTap Insurance Co. and Homeowners Choice Property & Casualty, insurers that were approved to assume policies last week were American Integrity Insurance Company of Florida; Slide Insurance Co.; Monarch National Insurance Co.; Southern Oak Insurance Co.; Orion180 Select Insurance Co.; Manatee Insurance Exchange; and Florida Peninsula Insurance Exchange, according to information on the Office of Insurance Regulation website.

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