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Florida’s Citizens Property Insurance Corporation has confirmed that it has successfully completed its reinsurance renewal for the 2025 hurricane season, securing the targeted traditional and catastrophe bond coverage for less than the budget that had been set.
Recall that, for 2025, Florida Citizens had a target to secure $4.49 billion of total risk transfer, across cat bonds and reinsurance, with $2.89 billion of new reinsurance and/or cat bonds required, alongside the $1.6 billion of still in-force cat bond deals from prior years.
Citizens staff aimed to secure the proposed risk transfer, reinsurance and cat bond tower for 2025 with budgeted premiums of up to $550 million, an amount approved by its Board.
Now, Florida Citizens has revealed that it secured all of its targeted reinsurance protection, across both traditional and alternative capital sources, for less than that budget it had set.
Citizens explained, “Thanks to favorable market conditions, Citizens was able to place its target risk transfer program of $4.49 billion which includes $2.89 billion of new placement and $1.60 billion of multi-year coverage from 2023 and 2024; at a gross rate-on-line (ROL) of 11.89%, a net ROL of 11.74%, and total cost of approximately $530.6 million.”
$1.369 billion of newly placed risk transfer was secured in reinsurance form, from both traditional and some collateralized markets.
While the remaining $1.525 billion of new placement came from Citizens latest catastrophe bond, the Everglades Re II Ltd. (Series 2025-1) issuance that was finalised in May.
That cat bond came to market with a significant initial target to secure $975 million of fully-collateralized and multi-year reinsurance protection against named storm and hurricane risks in Florida.
Thanks to strong investor demand and attractive pricing that came in in the lower-half and mid-point of guidance, depending on the tranche of notes offered, Florida Citizens eventually upsized the issuance by 56% to provide the $1.525 billion slice of its reinsurance tower.
As we reported last week, Citizens CFO Jennifer Montero explained in an Artemis Live webinar that investor appetite and pricing in the capital markets was “very positive” and as a result of sponsoring its largest cat bond ever, some 70% of Citizen’s overall reinsurance and risk transfer tower is now provided by the catastrophe bond market.
Impressively, Citizens has revealed that, for the newly placed components of the 2025 risk transfer program, the net rate-on-line (ROL) is 11.95%, which it noted is 13.5% lower than the net ROL was for the 2024 program at the time of its placement, which was 13.81%.
“The 2025 risk transfer program incorporates strategic elements from prior risk transfer programs, which include: transferring risk alongside the FHCF and transferring single occurrence and annual aggregate risk to protect a portion of surplus for most catastrophic events and thereby eliminates the probability of emergency assessments for a 1-in-100-year-year event to the citizens of Florida and reduces the probability of a Citizens’ policyholders surcharge to a 1-in-96-year return time,” Citizens further explained.
Citizens also stated, “The 2025 risk adjusted price reflects substantial improvement in market conditions. For coverage placed in 2025, the price is approximately 13.5% lower than it would have cost for similar coverage in 2024.”
Read about every one of Florida Citizens catastrophe bonds in our extensive Deal Directory.
Read all of our reinsurance renewal news coverage.
Florida Citizens 2025 reinsurance and cat bond renewal comes in under budget was published by: www.Artemis.bm
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