Florida Citizens entered 2026 with 67% less exposure, sees $3bn reinsurance / cat bond need

Florida’s property insurer of last resort Citizens Property Insurance Corporation began 2026 with 67% less exposure, while the firm also projects it will need $3 billion of traditional reinsurance and / or catastrophe bonds for the 2026 hurricane season.

We reported last year that Florida’s Citizens was anticipating lower reinsurance costs in 2026, as the firm’s policy count and exposure-base continued to decrease meaning less limit was likely to be needed this year.

The catastrophe bond market provides $3.125 billion of reinsurance limit to support Florida Citizens for the hurricane season in 2026, however the company’s $500 million Lightning Re Ltd. (Series 2023-1) industry loss triggered cat bond is scheduled to mature later this month.

Therefore, this means the insurer will still have $2.625 billion of indemnity cat bonds from the Everglades Re series of deals available to it to run through this year’s hurricane season.

Currently, prior to the Lightning Re maturity, Florida Citizens is positioned second in our cat bond sponsor leaderboard

For the 2026 hurricane season, in addition to its surplus of approximately $5.4 billion, Citizens is projected to have approximately $1.5 billion in FHCF reimbursement and is planning for approximately $3 billion of private risk transfer, meaning Citizens projects to have total claims‐paying sources of $9.9 billion for the year.

“Despite the impact of Hurricane Ian and Hurricane Milton, Citizens’ financial strength is stable primarily due to the consolidation of accounts, reduction in exposure due to depopulation, and projected 2026 risk transfer. The overall effect is a reduction in the risk of potential assessments,” Florida Citizens said.

Adding: “In 2025 Citizens successfully depopulated 585,432 policies with $235.6 billion in exposure removed. Coupled with a continued strengthening of the Florida property insurance marketplace, Citizens’ policy count and exposure are expected to remain steady or decrease marginally, further enhancing its financial position.

“For catastrophic losses which exceed Citizens’ available surplus and risk transfer program Citizens will rely on its policyholder surcharge and emergency assessment securing post event bonds in order to meet liquidity demands. Repayment of these post‐event bonds would be funded through the collection of the associated emergency assessment. Citizens is projected to have no policyholder surcharge burden and no emergency assessments for up to a 1‐275 year single event.”

At the mid-year 2025 reinsurance renewals, Florida Citizens secured a tower providing $4.49 billion of reinsurance risk transfer, with around 87% of the total backed by catastrophe bonds, collateralized reinsurance markets and ILS fund managers.

It looks like the risk transfer need is down considerably for 2026, at the projected $3 billion.

But, it’s worth remembering that the reduction in exposure at Citizens is largely achieved through depopulation and through the private insurance market taking on policies. Which means the reinsurance need is still there, just it might be spread out across faster growing exposure at private property insurers this year.

Update: Florida Citizens published new board documents after this article was written, that explained a plan to call a $1.1 billion 2024 catastrophe bond issuance early and perhaps only replace it with a fresh $600 million issuance, to take advantage of current market conditions and potential savings on its risk transfer.

Read about every one of Florida Citizens catastrophe bonds in our extensive Deal Directory.