Florida’s Citizens Property Insurance Corporation has completed the placement of its 2023 risk transfer program, securing just over $2.98 billion of protection from a mix of traditional and collateralised reinsurers for its Coastal and Personal Lines (PLA) accounts, of which more than $1 billion was secured from Berkshire Hathaway.
As well as the $2.98 billion of reinsurance from the traditional market, Citizens also has roughly $2.4 billion of catastrophe bond protection in place, meaning the firm has secured approximately $5.38 billion of risk transfer for 2023.
This year’s placement came at a cost of roughly $650 million. Previously, the Board approved Citizens to seek a total of $5.644 billion of coverage at a cost of no more than $675 million, so the insurer has secured slightly less protection than it was authorised to, but at a spend $25 million below the top-end of the budget.
Citizens explains that the $5.38 billion of protection it secured includes $4.23 billion of new placement and $1.150 billion of existing, multi-year coverage from 2021 and 2022.
What’s notable about this year’s renewal is that of the $2.98 billion of new protection secured from the traditional market, a significant $1 billion, so more than a third, is from Berkshire Hathaway. This is for the Citizens PLA layer, which in total Citizens secured $1.644 billion of new protection for at the mid-year renewals, meaning Berkshire took the lion’s share (60%) of this account having not participated at all in 2022.
Other reinsurers to participate in this layer include Everest Re, Odyssey Re, TransRe, Swiss Re America, Lancashire, PartnerRe, Hannover Re, and SiriusPoint. Via Gallagher Re, Ascot Bermuda, Eskatos, Lloyds Syndicate 1414 – Ascot, and Lloyds Syndicate 2791 – MAP also participated.
Collateralised reinsurers also participated in this layer, including Aeolus Capital Management Ltd., D.E. Shaw Re (Bermuda) Ltd., Leadenhall Capital Partners, LGT Capital (obo Lumen Re Ltd., Longtail Re (Stoneridge), and Nephila Capital.
In fact, after the domestic reinsurers, which again was dominated by Berkshire but overall placed roughly $1.15 billion of the PLA layer, the collateralised reinsurers placed the most at $418.7 million.
In terms of the Coastal Account layer of the 2023 renewal, the collateralised reinsurers led the way with placement of $772.9 million out of the total of $1.336 billion for the account. Here, Nephila led the way taking a giant $634 million, taking the firm’s total placement to $756 million.
Berkshire Hathaway didn’t participate in this layer, with Munich Re taking the largest slice of the program outside of Nephila, at roughly $119 million.
