Citizens Property Insurance Corp., the state-backed insurer of last resort in Florida, has lost its position as the state’s largest property insurance provider. Analysts view this as a major milestone in the move toward a more stable, market-driven insurance market.

Late last week, Citizens reported that October takeouts and policy assumptions by private insurers lowered its total policies to roughly 560,000 — a level last seen in spring 2021, before a surge in litigation and multiple insurer failures expanded the company’s exposure.

With this decline, Universal Property & Casualty Insurance and State Farm Florida Insurance are now the state’s top property carriers. Universal reported 561,546 policies in Florida at the end of September, while State Farm had 646,429 policies as of the end of August, according to Florida regulators.

Citizens’ current policy total is about 40% below its peak of 1.3 million policies in September 2023, just before Florida enacted reforms limiting one-way attorney fees and reducing incentives for excessive claims litigation. The smaller Citizens footprint indicates more policyholders are returning to private insurers as premiums drop, reflecting the impact of legislative changes and the state’s depopulation program. Officials say these trends point to a stabilizing market.

A Citizens spokesperson called the numbers “significant,” noting that roughly 199,000 policies were transferred through takeouts in October.

Participation in takeout programs has increased in recent months. In the first half of the year, the Florida Office of Insurance Regulation (OIR) approved takeout offers for about 1.2 million Citizens policies, though only 200,000 were accepted. This fall, nine insurers were approved for 368,947 takeouts, with over half completed in October. The largest shares went to Slide Insurance and Manatee Insurance Exchange.

These changes come amid broader signs of improvement in Florida’s insurance market. Security First Insurance recently announced one of the largest statewide homeowners rate reductions in three years, while auto insurers are also benefiting: State Farm reported a 10% average cut in personal auto premiums in Florida, continuing a trend of rate decreases this year.

Overall, the data show Florida’s property insurance market is stabilizing, with Citizens shrinking and private insurers gaining strength.