Citizens Eyes $450M Cat Bond

Florida’s insurer of last resort is back in the catastrophe-bond market, seeking about $450 million in new hurricane reinsurance for 2026. (artemis.bm) Citizens Property Insurance Corp. is using its Bermuda vehicle, Everglades Re II Ltd., to issue a 2026-1 bond after telling its board in March that it expected to buy roughly $2.98 billion of private risk transfer for the 2026 season. That plan included $1.53 billion carried over from 2025 and about $1.45 billion of new protection. (citizensfla.com) A catastrophe bond works like storm insurance for an insurer: investors put up money, collect interest if no qualifying disaster hits, and can lose principal if losses cross the trigger written into the deal. Citizens has used the Everglades Re structure for years to shift part of Florida hurricane risk to capital-markets investors instead of relying only on traditional reinsurers. (artemis.bm) (reinsurancene.ws) The 2026 deal is smaller than earlier plans discussed by Citizens. In March, staff said the company could call $1.1 billion of Everglades Re II Series 2024-1 bonds on May 13, 2026 and replace them with about $600 million of new 2026-1 bonds at a gross rate on line about 30% lower, saving roughly $67 million. (citizensfla.com) Citizens’ own explanation for the smaller need is that its exposure has shrunk fast. The insurer told its board that exposure had fallen more than 75% since 2024, with total insured value at $104.61 billion on Feb. 27, 2026, far below the threshold that let it redeem the 2024-1 bonds early. (citizensfla.com) That drop reflects Florida’s push to move policies out of Citizens and back into private insurers after the state’s property-insurance crunch. Citizens said in March that 2026 homeowners multiperil rates would fall by an average 8.8% statewide, with at least a 2% cut for all personal-lines policyholders. (citizensfla.com) The reinsurance buying still matters because Citizens remains a backstop for owners who cannot find private coverage. The corporation said Florida law created Citizens in 2002 as a not-for-profit insurer to serve property owners unable to obtain insurance in the private market. (citizensfla.com) Citizens’ annual probable-maximum-loss report shows why it keeps buying outside protection even after shedding policies. For 2026, it projected $9.9 billion of claims-paying resources, including about $5.4 billion of surplus, $1.5 billion from the Florida Hurricane Catastrophe Fund and about $3.0 billion of private risk transfer. (citizensfla.com) The new Everglades Re II sale is the next test of how much cheaper storm protection has become for Florida’s biggest residual insurer. If Citizens can replace expiring coverage at lower cost, that eases one of the expenses that ultimately feeds into premiums and post-storm assessment risk. (citizensfla.com) (artemis.bm)