Cat bond market’s role growing within Florida’s reinsurance sector: Fuller, Guy Carpenter

The catastrophe bond market is playing an increasingly important role in the Florida reinsurance landscape, as growing investor appetite drives competitive pricing and offers much-needed capacity relief for carriers, according to Randy Fuller, Managing Director at Guy Carpenter.

Speaking during an AM Best webinar held last week on the state of the Florida property insurance market, Fuller pointed to strong investor participation in the cat bond space and its growing role as a complement to traditional reinsurance.

“Investor appetite in the cat bond market is very strong right now; it has been for the last several years,” said Fuller.

“So, we are seeing abundant capacity and really competitive pricing, is what I would say for this year.”

“Given the overall increase in capacity needs, the cat bond market is really proving to be a valuable source of additional capacity to complement the traditional market, and it’s helping to relieve some of that supply and demand pressure,” Fuller continued.

This growing role has been evident in 2025’s issuance calendar. Florida-linked risk has been a prominent theme in the cat bond market so far this year.

Readers will recall, that Florida’s Citizens Property Insurance Corporation secured a landmark $1.525 billion Everglades Re II (Series 2025-1) transaction earlier this month, which at the time, was the largest cat bond on record.

Other notable Florida-exposed deals that we’ve seen across the cat bond market so far this year include, Security First Insurance Company’s $250 million First Coast Re IV Ltd. (Series 2025-1) issuance, as well as Heritage Insurance’s $200 million Citrus Re Ltd. (Series 2025-1) deal, both of which are structured to provide multi-year protection ahead of the Atlantic hurricane season.

There are plenty of others as well, so check out our Deal Directory for details of every catastrophe bond issuance.

According to Fuller, much of the competitive impact from this capital influx is occurring higher up in reinsurance towers.

“Risk appetites in the cat bond market tend to be more remote in the upper parts of programs, so the increased competition in upper parts of the program will continue to have an influence on rates, both in Florida and elsewhere,” he explained.

Still, Fuller underscored that traditional reinsurance retains certain strategic advantages, especially in covering broader exposures and event frequency.

“Reinsurers have a competitive advantage because traditional reinsurance coverage is generally broader, provides coverage for multiple events, risk appetite generally meets a broader range.

“So, there tends to be a ceiling on how much cat bond capacity carriers can really incorporate into their programs.”

“But the cat bond market is definitely growing in terms of its role in the Florida reinsurance market,” Fuller concludes.

As a reminder, you can read about every catastrophe bond transaction ever issued, in the extensive Artemis Deal Directory.