Citizens Property Insurance Corp., Florida’s state-backed insurer of last resort, has lost its position as the state’s largest property insurance provider. This milestone is seen as a sign of progress toward a more stable, market-driven insurance environment.

Citizens announced late last week that October takeouts and policy assumptions by private insurers reduced its total policies to roughly 560,000 — a level last seen in spring 2021, before the state faced a litigation surge and multiple insurer failures increased Citizens’ exposure.

With this decline, Universal Property & Casualty Insurance and State Farm Florida Insurance now hold the largest share of the market. 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 regulatory data.

Citizens’ current policy count is about 40% lower than its peak of 1.3 million policies in September 2023, just before Florida lawmakers passed reforms limiting one-way attorney fees and discouraging excessive claims litigation. A smaller Citizens footprint indicates that more policyholders are returning to private insurers as premiums fall, showing that legislative changes and the state’s depopulation program are having an effect. Officials say these trends point to a stabilizing market.

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

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

The trend coincides with broader signs of market improvement. Security First Insurance recently announced one of the largest statewide homeowners rate cuts in three years, while auto insurers are also lowering rates: State Farm reported a 10% average reduction in personal auto premiums in Florida, continuing a series of cuts throughout the year.

These developments underscore a strengthening Florida property insurance market, with Citizens shrinking and private carriers regaining ground.