Florida’s Citizens Property Insurance Corporation has revealed that it aims to secure private reinsurance coverage of approximately $2.98 billion for its 2026 risk transfer program.
According to the firm, coverage would be comprised of $1.53 billion of existing private risk transfer remaining from 2025, and $1.45 billion of new private risk transfer, with budgeted premiums of approximately $350 million.
Under this scenario, Citizens explained it would expose 26% of its surplus for a 1-in-100-year event.
The insurer said that a central element of its strategy to reduce exposure, and thereby limit or eliminate the likelihood and scale of potential assessments on Florida policyholders, is the transfer of risk through reinsurance.
This is typically achieved through a combination of participation in the Florida Hurricane Catastrophe Fund (FHCF), the traditional reinsurance market, and the capital markets.
By accessing private reinsurance capacity, Citizens noted that it reduces the probability that losses would erode or exhaust its surplus and FHCF recoveries to the point where policyholder assessments would be required.
With this in mind, Citizens outlined the proposed structure of its 2026 risk transfer tower.
The Sliver Layer would sit alongside the FHCF, providing approximately $170 million of annual, per-occurrence coverage in excess of $1.14 billion for personal residential and commercial residential losses.
To be placed in the traditional market, this layer is designed to operate in tandem with the mandatory coverage provided by the FHCF.
Above both the Sliver Layer and the FHCF sits Layer 1, which would deliver $2.81 billion of coverage for personal residential and commercial residential losses sourced from both the traditional and capital markets.
Of this amount, approximately $1.28 billion would be provided as occurrence and annual aggregate coverage from a combination of traditional reinsurers and capital markets participants.
The remaining $1.53 billion represents a renewal capital markets risk transfer placement through Everglades Re II.
This marks the second year of the multi-year notes, originally issued in 2025, which provide aggregate coverage.
Readers can find further details on this development at our sister publication, Artemis, the longest-running news, analysis and data service dedicated to the catastrophe bond and insurance-linked securities (ILS) market, as well as non-traditional reinsurance capital, insurance-linked investments and the broader alternative risk transfer sector.
Looking ahead, Citizens said its staff will work closely with the organisation’s traditional and capital markets teams, as well as its financial advisor, to assess available options for the structure, terms and pricing of the 2026 risk transfer program, along with other relevant considerations.
Management is expected to present its recommendations to the Board in May, when final approval of the 2026 risk transfer strategy will be sought.
