Florida Citizens Property Insurance Corp. is seeking $2.94 billion in new private risk transfer as part of its $4.54 billion private reinsurance coverage plan for 2025, according to board and committee meeting documents for March 12.
The total reinsurance program includes $1.6 billion in existing private risk transfer carried over from 2023 and 2024. The budgeted premiums for 2025 are estimated at $650 million.
Under the proposed structure, Citizens would expose all of its surplus and implement a partial policyholder surcharge of $559 million in the event of a 1-in-100-year catastrophe.
The 2025 reinsurance plan features a "sliver layer" of approximately $394 million, which would sit above $2.55 billion in annual, per occurrence coverage and alongside coverage provided by the Florida Hurricane Catastrophe Fund.
Above the sliver layer, the next level of coverage includes $4.15 billion, incorporating $2.55 billion in occurrence and annual aggregate coverage sourced from both traditional and capital markets.
Additionally, the program includes $500 million in renewal risk transfer through Lightning Re, marking the third year of the multiyear notes first issued in 2023, which provide aggregate coverage.
Citizens also plans to renew $1.1 billion in capital markets risk transfer through Everglades Re II, entering its second year. The multiyear note similarly offers aggregate coverage. A final decision on the 2025 risk transfer program is expected in April.
For the 2024 reinsurance program, Citizens’ board approved $3.5 billion in coverage, which included more than $3 billion in new placements and $500 million in existing, multiyear coverage.
However, despite these placements, the Florida auditor general reported in August that the state insurer needed improvements in the underwriting and eligibility controls.
The report, which reviewed various aspects of the carrier's operations – including customer service, claims handling, internal audits, and information technology – found that Citizens needs to strengthen its processes to ensure policies adhere to statutory coverage limits.
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