More private insurers are selling wind coverage to South Carolina coastal property owners, leading to a decline in the population of the state’s windpool.

The South Carolina Wind and Hail Underwriting Association (SCWHUA) reports that it is seeing a moderate decline in its population, which signals that private insurers are gradually adding to their books of business.

SCWHUA Executive Director Smitty Harrison said most of the reductions are in the coastal counties of Beaufort, Charleston and Colleton counties, which include the state’s barrier islands.

In August 2011, when the windpool was at its peak, it had 47,366 policies in force, representing $97 million in premiums and $17 billion in exposure.

As of May 15, those numbers had dropped to 40,625 policies, representing $89 million in premiums and $14 billion in exposure. That represents a 6,700 decline in policies and about $8 million in premiums.

Harrison said there are a number of reasons for the increased interest by the private market, including the belief that hurricane losses in the area are unlikely.

While the windpool covers only wind and hail damage, some large insurers including State Farm have begun expanding their coverage to multiperil coverage that includes wind.

The soft reinsurance market is also having an effect. The windpool recently secured enough catastrophic coverage so it should be able to withstand up to a one-in-two-hundred-year storm.

“That reduces the chance we will send those insurers a large assessment,” said Harrison.

Oyango Snell, state counsel for the Property Casualty Insurers Association of America (PCI), said that in addition to the reduced possibility of windpool assessments, the use of computer models has made it possible for insurers to better underwrite in the coastal region.

“There is not a smoking gun [to explain] why carriers are coming into the state,” said Snell. “But consumers are finding better coverage at better prices.”

Snell said that the state regulatory environment is also helping.

“The regulators are working with the industry so they have an understanding of the industry’s needs,” said Snell. “While they have always been consumer-based, now they are also customer-based, meaning the industry.”

Still, Harrison cautioned that although the windpool has stabilized, it is not going to go out of business.

Director of Insurance Ray Farmer said the reduction in the windpool is good news and bears out the state’s attempt to be friendly to insurers.

“I think this is a good thing to have the independent market back in South Carolina,” said Farmer. “We’ve made a concentrated effort to recruit homeowners insurers to write across the coast.”

Farmer also had positive words for the administration of the windpool.

“The windpool is one of the best run in the country,” said Farmer.