The market share of Citizens Property Insurance Corporation,Louisiana's insurer of last resort, is estimated to shrink to under3% for the first time in six years following a seventhround of depopulation in 2014.

According to the Louisiana Department of Insurance, thecompany's share will drop to 2.7%, reducing it to ninth place inthe market by year's end.

Overall commercial and personal policies will number below95,000, including 90,000 residential policies. 

The insurer of last resort decreased its market share fromalmost 10% in 2008 to 6.4% in 2009, 5.3% in 2010, 4.1% in 2011 and3% in 2012.

"What is important to realize is that it's not just Citizens'policyholders who benefit from depopulation," said Louisianainsurance Commissioner James Donelon in a statement. "AllLouisiana property owners benefit from this reduction of Citizenspolicies as it reduces the need for future assessments charged toproperty insurance consumers in the event of another Katrina-levelevent."

Citizens' policy count ballooned following the historichurricane season in 2005, reaching an all-time high of about 10% ofinsurance market share in 2008, when it was the third-largesthomeowners group in Louisiana following State Farm andAllstate.

The insurer has been aggressive with its depopulating programsince 2008 by asking private companies to review Citizens' policiesat the year's end and offer to take on a portion of hand-pickedvoluntary customers.

Generally, fewer than 2% of customers choose to remain withCitizens, which must legally keep its premiums above that ofprivate insurers.

Jeff Albright, CEO of the Independent Insurance and Brokers(IIAB) of Louisiana, attributes the "healthy" market rebound to aninflux of new, non-traditional players in the marketplace, whosought to grow their business while State Farm and Allstate "tooksignificant losses as a result of Katrina and Rita and had theirown depopulation strategies to shrink their market share."

Louisiana has added 18 new carrier groups since 2005, 12 ofwhich have been utilized by Citizens' depopulation program.

The three companies being utilized in next year's transfer areAccess Home Insurance Co, Maison Insurance Co., and LighthouseProperty Insurance Corp. Customers have 60 days to decide whetherthey prefer to remain with Citizens upon receiving a letter ofrequest in early December 2013.

"Younger companies are equipped to handle risks along the statecoast because they are heavily reinsured," says Albright. "If amajor natural catastrophe causes the reinsurance market tocontract, then small homeowners' carriers will have a hard timemanaging their business, and will have significant price increasesor capacity reduction. But they're in great shape now with ahealthy reinsurance market."