By Chris Munro

June 24 - (The Insurer) - Citizens Property Insurance Corporation has secured the $4.49 billion of reinsurance coverage that its board approved back in April, with the cost of the protection approximately $530.6 million.

As previously reported, the board of Florida’s insurer of last resort had approved management to go to market and source $4.49 billion of coverage at a cost of no more than $550 million.

And in an update, Citizens said that it managed to achieve that goal thanks to favorable market conditions, with the newly placed program comprising $2.89 billion of new coverage and $1.60 billion of multiyear coverage from 2023 and 2024.

Citizens’ newly placed reinsurance program had a gross rate on line $(ROL)$ of 11.89%, and a net ROL of 11.74%.

“The new risk transfer program for 2025 of $2.89 billion includes $1.369 billion in the traditional market and $1.525 billion in the capital markets, and has a net ROL of 11.95%, which is 13.5% lower than the net ROL line for the new risk transfer program in 2024 of 13.81%,” said Citizens.

“The 2025 risk adjusted price reflects substantial improvement in market conditions,” Citizens noted.

“For coverage placed in 2025, the price is approximately 13.5% lower than it would have cost for similar coverage in 2024,” it added.

Completing the placement comes after Citizens said its staff “worked extensively” with its traditional reinsurance broker Gallagher Re and its capital markets co-underwriting team of Aon Securities and GC Securities, along with financial advisor Raymond James, to market its traditional and capital markets risk transfer program via roadshows and one-on-one meetings with reinsurers and investors.

As Citizens noted, its 2025 risk transfer program incorporates strategic elements from prior years.

Those include transferring risk alongside the Florida Hurricane Catastrophe Fund (FHCF) along with single occurrence and annual aggregate risk to protect a portion of surplus for most catastrophic events.

Citizens said that eliminates the probability of emergency assessments for a 1-in-100-year event to the citizens of Florida, while it also reduces the probability of a policyholder surcharge to a 1-in-96-year return time.

In the update, Citizens said “there is ample capacity from reinsurers due to healthy capital levels and the catastrophe bond market has seen significant capital inflows outpacing the traditional reinsurance market”.

“Depending on the placement and cedant, overall rate reductions in Florida at the June 1 renewal are in the range of approximately 10% for layers above the FHCF”.