Citizens Property Insurance Corporation (Citizens), Florida’s insurer of last resort, has announced that it has incurred losses of $1.81 billion from Hurricane Irma, and that it expects to recover $126.4 million from the private reinsurance market and a further $534.7 million from the Florida Hurricane Catastrophe Fund (FHCF).
Not long after the storm struck the state in 2017, Citizens said that it expected its surplus to be sufficient to handle an estimated $1.23 billion of insured losses related to Irma, noting that it expected to claim approximately $193 million from the FHCF.
However, the loss creep associated with the event and assignment of benefit (AOB) related issues, an ongoing problem for the Floridian marketplace, might have led the insurer of last resort to now expect a reinsurance recovery of more than $126 million to help it pay Irma related claims.
The expected claim burden has continued to increase, and a report to the Audit Committee from Citizens’ Chief Financial Officer (CFO), Jennifer Montero, has revealed that gross losses and loss adjustment expenses (LAE) from Irma stand at $1.81 billion as of June 30th 2018, which, is relatively unchanged from the $1.8 billion estimate by May of this year.
Citizens revealed that its estimated recoveries from the FHCF now stands at $534.7 million, of which $193.8 million are within the PLA, $6.2 million within the CLA, and $334.7 million within the Coastal Account.
This means that within the Coastal Account, estimated recoveries from the private reinsurance sector, which could also include some alternative reinsurance capital and insurance-linked securities (ILS), now stands at $126.4 million. According to Citizens, this is from a total estimated 70,800 Irma related claims.
