Florida is considered ground-zero for global property catastrophe risk given its exposure to hurricanes and the significant insured values-at-risk.
As a result, the Florida market is effectively ground-zero for the catastrophe bond and insurance-linked securities (ILS) market, with a significant proportion of ILS market exposure linked to catastrophes that might occur in the state.
Florida’s property insurance marketplace is also known to have faced significant challenges, not just from losses, but with the just as real threat and impact of social inflation and litigation that have driven claims costs higher and ultimately raised insurance pricing. This has had a knock-on effect on reinsurance and ILS pricing for risks in Florida.
Growth in the portfolio of property insurance player HCI Group Inc. has resulted in a need for significantly more reinsurance at the 2025 renewals, with the company securing over $3.5 billion of limit across its towers, up 30% from the $2.7 billion secured a year ago.
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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.
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Florida’s specialist personal property insurers entered the key 2025 mid-year reinsurance renewals from a position of relative strength, following improved profitability and more favourable operating conditions, according to a new report from credit ratings agency AM Best.
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Universal Insurance Holdings, Inc. has bought $110 million more in reinsurance limit at its 2025 renewal, taking the top of the reinsurance tower for its subsidiaries to $2.526 billion, with ILS manager Nephila Capital once again cited as a key counterpart.
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US primary insurer Allstate has secured its targeted $150 million of multi-peril and fully-collateralized reinsurance protection for Florida from its latest catastrophe bond, as the new Sanders Re II Ltd. (Series 2025-2) issuance has been priced at the low-end of guidance, Artemis can report.
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Losses to the Florida Hurricane Catastrophe Fund (FHCF) from hurricanes Helene and Milton in 2024 are set to come in lower than estimates, as its administrators now put the 2024 hurricane season loss at just $3.01 billion for the Cat Fund that provides a reinsurance-like reimbursement for a portion of a residential property insurers’ loss.
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US primary insurer Allstate is back in the catastrophe bond market for the second time this year, this time seeking multi-peril Florida collateralized reinsurance protection from a $150 million or greater Sanders Re II Ltd. (Series 2025-2) issuance.
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Arch Capital Group CEO Nicolas Papadopoulo says downward repricing in the catastrophe bond market is creating pressure at the top of reinsurance programs, even as structural supply constraints in peak zones like Florida could temper broader softening across the mid-year renewals.
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According to Former Florida Senator Jeff Brandes, the implementation of a quota share model could effectively phase out Florida’s Citizens Property Insurance Corporation as an insurer, and transform the firm into a manager and distributor of risk, achieving the goal of “Citizen Zero.”
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Tenax Capital, the London based asset manager that operates a UCITS cat bond strategy, considers Florida exposed catastrophe bonds more attractive now, seeing improvements in the insurance environment there and an excess spread available for its allocations, compared to cat bonds for certain other regions.
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