After a six-year term as Chief Financial Officer of Florida’s Citizens Property Insurance, during which time Florida’s windstorm insurer of last resort has embraced the private risk transfer and reinsurance markets leaving it in the best financial shape in its history, Sharon Binnun is to return to the private sector.
In the role of CFO, Binnun has led efforts to transfer more of the peak Florida windstorm risk to the reinsurance and also the capital markets for the insurer. The results of this campaign to transfer risk has seen the insurer with the most private risk transfer it has ever had and with the best rates it’s ever achieved.
A highlight of Binnun’s time with Florida Citizens has to be the highly successful $1 billion worth of catastrophe bonds issued under the Everglades Re mantle.
First the Everglades Re Ltd. (Series 2012-1) deal which saw $750m of risk from the insurers coastal account transferred to the capital markets. It is the largest single tranche of cat bond notes ever issued and was the first time that Citizens had issued a cat bond. The insurer said that by placing this risk in the capital markets with a cat bond it had saved $18m over using traditional reinsurance cover.
The deal was repeated in 2013 with Everglades Re Ltd. (Series 2013-1). Only $250m of risk was transferred this time but the pricing achieved was considerably less than the 2012 issuance, but at a significantly reduced cost to the insurer. Citizens said that the 2013 cat bond notes came in at a final cost to the insurer of 11.08%, a 40% saving over the 2012 transaction which cost the insurer 19.07% all-in.
Sharon Binnun has accepted a position in the private sector with a Florida based insurer that has not been involved in depopulation business with Citizens and will resign her post effective July 5th.
In a memo to staff, Citizens President and CEO Gilway said the departure of Binnun left him with feelings of “pride and regret.” He acknowledged her leadership in the wake of the loss heavy 2004/2005 hurricane seasons that tested the Florida insurance market and put increased demands on Citizens.
“Sharon’s well-earned reputation within the international financial world as an ethical, knowledgeable and honest representative has been instrumental in helping to establish Citizens as a global leader in risk transfer,” Gilway commented. “There truly can be no doubt that no one has made a more significant or beneficial contribution to Citizens or the Florida insurance market.”
As well as the successful risk transfer programme, Binnun has also been instrumental in Citizens depopulation efforts. Between the risk transfer and offloading policies to the private insurance market Citizens stands in the best financial shape it has ever been in, with a 47% decrease in the amount of potential assessments that would be levelled on Florida residents after a devastating storm.
“Those of you who know me are aware that I have truly enjoyed my role as CFO at Citizens for the last six years,” Binnun wrote. “I simply love the work and the wonderful people I work with.”
We wish Sharon well in her new role and hope to see her bring a new Florida sponsor to the catastrophe bond market in the future.
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