FLORIDA
Florida Citizens Finalizes $3.5 Billion 2024 Reinsurance Program

• By Steve Hallo
• July 10, 2024 04:37 PM (EDT)

    

TALLAHASSEE, Fla. //BestWire// - Florida’s Citizens Property Insurance Corp. said it secured a $3.56 billion reinsurance program for 2024, which includes slightly more than $3 million in new placement and $500 million in existing, multiyear coverage from 2023.

The reinsurance will cost approximately $482 million, according to a summary of the program. The program has average gross rate on line, the ratio of premium paid to losses recoverable, of 14.07% and a net ROL of 13.44%. The gross and net ROL for 2024 are lower than those in 2023’s program, Citizens said.

Markets softened some this year, which helped the carrier secure a reinsurance program that was 7.9% cheaper than similar coverage in 2023 would have cost. The softening can be attributed to additional capital in the reinsurance market, which is seeing better ROI than other asset classes, according to Citizens.

Additionally, the impact from insurance litigation reforms is driving optimism among reinsurers, Citizens said, adding the affects from those changes are only just staring to be realized. Backing this up, research from the Insurance Information Institute found home insurance premiums were 80% lower than initial projections in 2023 largely due to the legal system reforms (BestWire, June 27, 2024).

During a meeting in May of this year, Citizens board authorized a $5.5 billion reinsurance package, with a cost that couldn’t surpass $750 million. The state-backed insurer did not indicate why a lower package amount was secured, but did say it worked with its reinsurance partners to market its risk transfer program through "roadshows and one-on-one meetings with reinsurers and investors."

In 2023, Citizens was the largest homeowners multi-peril insurer in Florida, based on direct premiums written, with a 18.75% market share, according to BestLink. The other leading carriers in the state were Universal Insurance Holdings Group, 8.47%; State Farm Group, 6.88%; Florida Peninsula Group, 4.88%; and Tower Hill Group, 4.35%.

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