John Wortman, CEO of Louisiana Citizens Property Insurance Corp. (Citizens), the state’s property insurance of last resort, has announced plans to retire.
“John Wortman has been a tremendous asset to Louisiana during our recovery from the catastrophic hurricanes of 2005. He came to Citizens in a time of great turmoil within the organization and worked tirelessly to set Citizens on a course for future efficiency and professionalism. I am grateful to him for his extraordinary contributions and I wish him well in his much deserved retirement,” said Insurance Commissioner Jim Donelon.
Donelon hired Wortman as the CEO of Louisiana Citizens in April of 2007 in the wake of financial and administrative problems following the upheaval in the Louisiana property insurance market brought on by hurricanes Katrina and Rita.
Wortman and his management team introduced new computer systems, new applications and underwriting procedures, catastrophe management plans, and comprehensive depopulation programs. The goals of producing reliable financial statements, improving services to policyholders and agents, and decreasing the size of Citizens were achieved and the end result is a residual market that is a model for coastal states with similar catastrophe exposure.
Following Katrina and Rita, the Citizens book of business had ballooned to 170,000 policies. Since that time, Citizens has held three depopulation offerings to the insurance industry and succeeded in reducing their total policies by 43,000 with 15 companies participating in the three offerings.
Citizens now has 127,000 policies, which is approaching the number held before Hurricane Katrina, and continues on the downward trend.
As evidence of the reforms implemented under Wortman’s leadership, the bond market responded last year to an offering of $300 million of auction rate bonds that enabled Citizens to save approximately $15 million per year as a result of that refinancing.
During the crisis facing Citizens as a result of a class-action lawsuit filed in Jefferson Parish, Wortman was able to access a bond that allowed Citizens to pursue its pending appeal largely due to his reputation earned over a 40 year career in the insurance industry.
The offer to write that bond was communicated to Citizens from Warren Buffet’s Berkshire Hathaway Company by Ajit Jain, who is Buffett’s right hand man, and knew Wortman from their years working in the insurance industry.
Donelon cited that as one of the most important contributions Wortman has made to Louisiana’s ongoing recovery from the hurricanes of 2005 as it avoided the need to do an assessment on every property insurance policy in Louisiana.
“John Wortman stated in his initial interview for the Citizens CEO position that he wanted to contribute back to the industry he had worked in throughout his career in the aftermath of the worst catastrophic event in the history of insurance, and he certainly fulfilled that goal. The people of Louisiana owe a great debt to John Wortman who has made as important a contribution as anyone to our state’s recovery,” Donelon said.
Source: Louisiana Department of Insurance
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