Governor Scolds State-backed Insurer: If The Partying Stopped, Why Is The Bill So High?
Citizens Property Insurance CEO Barry Gilway is grounded. Gilway got a scolding from members of the Florida cabinet Tuesday who say the state-backed insurance company is spending too much money on overseas travel.
Gilway says he understands the state’s largest property insurer suffers from a damaged reputation. But he says since he came on board he’s turned things around.
“You haven’t heard any stories about dancing on tables or ruckus behavior in public for the last 24 months. You just haven’t. Why? Because it hasn’t existed," Gilway says. "There has been a huge change in the underlying culture at Citizens, and we have an unbelievably committed team.”
Gilway says when the state hired him to run Citizens Property Insurance the governor and cabinet asked him to reduce the risk Floridians shoulder for the company. Every Floridian who has any kind of insurance policy faces the possibility of paying assessments if a hurricane hits the state and Citizens Property Insurance needs more money to cover the claims its homeowners file. Gilway says he’s reducing the number of policies Citizens Property Insurance holds and transferring risk into the global marketplace through reinsurance – a kind of backup insurance for the company. But he says doing that sometimes requires an overseas trip.
“This may sound a little old school, but I’ve been in the business for 44 years, and 35 of those years I’ve been traveling to London and Bermuda for these kinds of negotiations. I know first-hand that face-to-face discussions with the individuals making the decisions, both the investors and the reinsurers, is absolutely essential,” Gilway says.
Gilway says Citizen Property Insurance spent about $48,000 to send a team including the board’s chairman, Chris Gardner, on overseas trips. But Gilway says the cost was worth it because it saved the state millions.
Meanwhile, Gov. Rick Scott doesn’t deny Gilway has worked hard, but he says Gilway needs to work more carefully.
“You’re doing a good job. This is not an issue of whether Citizens overall-- as a CEO you’re doing a good job. It’s an issue of people say, 'Look, I want my property insurance to be as low as possible.' This is a state-organized entity. It’s just like with all of us. Every dime of travel, we get questioned," Scott said. "And you’re in the same position, and, look, it’s especially when you have international travel that people question it. And because of the past, it’s easy to question Citizens, right?"
Gilway says the company employs strict policies for all travel expenditures and always strives to keep costs as low as possible. He says nobody is bringing their golf clubs on the trips and everybody rides coach.
Scott previously pushed Gilway to cut all international travel for board members. He called Gilway before the cabinet after reports about board chairman Gardner staying at a resort during one of his trips with a nightly rate above the state’s standard approved amount. Gilway says Gardner has paid the difference out of his own pocket.