Everglades Re II Ltd

Florida’s Citizens Property Insurance Corporation withdrew one layer of its latest issuance from the catastrophe bond market at the mid-year renewal, as it found that capital market investors are looking for “irrational returns” and wasn’t willing to lock in pricing over a multi-year basis at those rates, CFO Jennifer Montero explained to us.

Florida’s Citizens Property Insurance Corporation has now pulled the largest $200 million tranche of Coastal Account linked notes from its Everglades Re II Ltd. (Series 2020-1 & 2020-2) catastrophe bond issuance, leaving just a $100 million tranche being marketed.

Florida’s Citizens Property Insurance Corporation has increased its budget for catastrophe bond and reinsurance risk transfer spend for the 2020 wind season, with part of this increase set to support the higher rates seen in the Florida market.

In a clear sign of ILS fund demands for higher returns from underwriting catastrophe risks in the Florida reinsurance market, pricing for Florida Citizens’ new $300 million Everglades Re II Ltd. (Series 2020-1 & 2020-2) catastrophe bond has leapt significantly above the top-end of guidance.

Florida Citizens, the state-supported insurer of last resort, is back in the catastrophe bond market for what will be its seventh issuance, seeking support for a $300 million or greater Everglades Re II Ltd. (Series 2020-1 & 2020-2) deal that will also expand coverage to the Citizens personal lines account for the first time.

The insurance-linked securities (ILS) fund market and other collateralized reinsurance sources took a roughly 42% chunk of the latest renewal placed by Florida’s Citizens Property Insurance Corporation at June 1st this year.

Florida’s Citizens Property Insurance Corporation settled on a slightly smaller reinsurance tower at its recent 2019 renewal as it only partially placed some layers. But the end result for its coastal account was a reduced average rate-on-line, compared to the previous year.

The risk transfer planning at Florida’s Citizens Property Insurance Corporation is underway after a board meeting that approved a $110 million budget to secure $703 million of fresh reinsurance coverage for 2019.

Florida’s Citizens Property Insurance Corporation is set to buy a larger reinsurance program for 2019 as it adds $200 million of coverage for non-coastal residential properties its covers following increasing losses from hurricanes, non-weather water-loss claims, litigation and assignment of benefits abuse.

The board of governors of Florida’s Citizens Property Insurance Corporation has approved the purchase of a $1.42 billion reinsurance program for 2018, which is a 7% increase on the total limit of risk transfer secured last year and with more of the coverage from the capital markets via Everglades Re cat bonds.