Everglades Re II Ltd

Florida’s insurer of last resort, Citizens Property Insurance Corporation, has tightened its estimated range of losses from hurricane Ian, now saying it expects them to fall at between $2.3 billion and $2.6 billion, at which level its private reinsurance recoveries would be small, if any, while its Everglades Re catastrophe bonds could be safe.

Florida’s Citizens Property Insurance Corporation looks set to continue rapidly growing its exposure, with its policy count likely to near record levels again in 2023, according to President and CEO Barry Gilway.

Once again, third-party sources of reinsurance capital, largely from the insurance-linked securities (ILS) market, have dominated the reinsurance renewal of Florida’s Citizens Property Insurance Corporation in 2022, with ILS investment manager Nephila Capital again taking the largest share.

Florida’s Citizens Property Insurance Corporation has now secured its latest catastrophe bond that will provide it $200 million of reinsurance protection, but pricing for the Everglades Re II Ltd. (Series 2022-1) transaction eventually settled above the initial guidance.

Florida’s Citizens Property Insurance Corporation had originally been seeking more catastrophe bond backed reinsurance for 2022, specifically to fill out layers of its Coastal Account reinsurance tower, but pricing feedback from investors caused the insurer to change plans and these cat bond tranches never made it to market.

The CFO of Florida’s Citizens Property Insurance Corporation said today that the reinsurance risk transfer markets are in “disarray”, meaning the insurer won’t be able to buy its targeted program within budget with the June renewals fast-approaching.

For 2022, the staff of Florida’s Citizens Property Insurance Corporation are seeking approval to buy roughly $3.64 billion of new risk transfer, across traditional reinsurance and catastrophe bonds, which added to still in-force cat bonds from prior years will take the Citizens program to roughly $4.7 billion for the coming hurricane season.

Florida’s Citizens Property Insurance Corporation’s target for its new catastrophe bond now stands at up to $200 million, while pricing for the Everglades Re II Ltd. (Series 2022-1) transaction has risen to above the initial guidance, Artemis has learned.

Florida’s Citizens Property Insurance Corporation is back in the catastrophe bond market to sponsor a $100 million or greater Everglades Re II Ltd. (Series 2022-1) transaction, from which it is seeking named storm reinsurance protection for its Personal Lines Account book of business.

Florida’s Citizens Property Insurance Corporation added on average 32,000 new policies to its portfolios every month through 2021, with projections for the end of 2022 suggesting it may have almost 1.1 million policies in-force, driving the need for more catastrophe bonds and reinsurance risk transfer.