FL - Citizens targets $2.6bn in reinsurance as policy count swells
Florida’s Citizens Property Insurance Corporation is seeking approximately $2.6 billion of fresh reinsurance protection from its 2021 reinsurance renewal, as the firm prepares to accept almost 150,000 additional policyholders by the end of the year.
Citizens’ Chief Financial Officer (CFO), Jennifer Montero and others are entering into negotiations with both the traditional reinsurance market and the capital markets to ready a proposal prior to the start of the 2021 Atlantic Hurricane Season.
The proposed 2021 risk transfer program includes both Coastal Account and Personal Lines Account (PLA) layers, which, combined, provides Citizens with the ability to absorb a 1-in-100 year storm with no risk of levying assessments while protecting 60% of coastal account reserves, and 32% of PLA reserves.
For the Coastal Account, Citizens intends to transfer roughly $1.715 billion of risk to the global traditional reinsurance markets and the capital markets in 2021. Based on the 2021 program, the total amount of surplus exposed for a 1-in-100 year event in the Coastal Account would be around 40%, or $1.163 billion, explains the firm.
Within the Coastal Account renewal proposal, a Silver Layer would sit alongside the company’s 90% participation in the Florida Hurricane Catastrophe Fund (FHCF) reimbursement program, covering personal residential and commercial residential losses. This layer provides $133 million of annual, per-occurrence coverage in excess of $582 million, and will be placed in the traditional market.
Sitting above the Silver Layer and the FHCF, is annual, per-occurrence layer providing $100 million of protection for personal residential and commercial residential losses. This layer attaches after $715 million of losses and will also be placed in the traditional market.