Florida Citizens Property Insurance Corp. is seeking $2.94 billion in new private risk transfer as part of its $4.54 billion reinsurance program for 2025, according to documents from the March 12 board and committee meetings. The total reinsurance program includes $1.6 billion in existing private risk transfer from 2023 and 2024.
Citizens estimates budgeted premiums for 2025 at $650 million. The proposed structure would expose all of its surplus and implement a partial policyholder surcharge of $559 million in the event of a 1-in-100-year catastrophe.
The 2025 reinsurance plan features a “sliver layer” of approximately $394 million, positioned above $2.55 billion in annual, per-occurrence coverage and alongside coverage from the Florida Hurricane Catastrophe Fund. Above that, the next coverage level includes $4.15 billion, incorporating $2.55 billion in occurrence and annual aggregate coverage from both traditional and capital markets. In addition, the plan includes $500 million in renewal risk transfer through Lightning Re, marking the third year of the multiyear notes first issued in 2023, which provide aggregate coverage. Citizens also plans to renew $1.1 billion in capital markets risk transfer through Everglades Re II, entering its second year. The multiyear note also offers aggregate coverage.
A final decision on the 2025 risk transfer program is expected in April.
2024 Reinsurance Program
In 2024, the board approved $3.5 billion in coverage, including more than $3 billion in new placements and $500 million in existing multiyear coverage. However, a Florida auditor general report in August identified a need for improvements in underwriting and eligibility controls. The report, which reviewed various aspects of the carrier’s operations, including customer service, claims handling, internal audits, and information technology, found that Citizens needs to strengthen its processes to ensure policies adhere to statutory coverage limits.
