Florida Citizens raises 2024 risk transfer budget to $750m

Florida’s Citizens Property Insurance Corporation, the state’s insurer of last resort, is still targeting as much as $5.5 billion of reinsurance coverage for 2024 but has increased the budget for the entire program to up to $750 million.

Documents show that across traditional reinsurance and capital markets risk transfer, Citizens is aiming to secure around $5.5 billion of reinsurance for the 2024 wind season.

This includes a per-occurrence sliver layer sized at $630 million, and then a main layer sized at $4.4 billion, which provides coverage from the capital and traditional markets, and also its $500 million Lightning Re (Series 2023-1) catastrophe bond transaction.

As we wrote previously, as recently as April, Citizens had budgeted premiums of approximately $700 million, but materials from a recent Board of Governors meeting, shows that Citizens has raised this by $50 million.

Citizens staff have recommended that the Board “Approve the recommendation to purchase traditional and capital markets risk transfer for the entire 2024 program, not to exceed the amount of $750 million.”

As a reminder, the proposed 2024 risk transfer program includes the sliver layer that will sit alongside the FHCF.

This layer provides approximately $630 million of coverage, in excess of $3.5 billion, of annual, per occurrence reinsurance which covers personal residential and commercial residential losses. This layer, placed in the traditional market, would work in tandem with the mandatory coverage provided by the FHCF.

Layer 1, the main layer of the program, will sit above the sliver layer and the FHCF. This layer will provide $4.9 billion of coverage for personal residential and commercial residential losses from the capital and traditional reinsurance markets. This includes roughly $4.4 billion of occurrence and annual aggregate coverage from the
traditional and capital markets, and a capital markets renewal risk transfer placement of $500 million through Lightning Re.

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