Florida’s Citizens Property Insurance Corporation has now finalised its reinsurance risk transfer tower of almost $2.82 billion for 2026, securing $691 million of traditional reinsurance at the June 1 renewals, to add to its $2.125 billion of outstanding catastrophe bond protection.
Over the entire risk transfer tower of almost $2.82 billion, which includes its still in-force cat bonds from prior years, Florida Citizens said the total program cost if approximately 20% lower than it was to place its risk transfer and reinsurance in 2025.
Florida Citizens also noted that by opting to redeem a number of catastrophe bonds early this year it has made significant savings, even after paying the early redemption costs.
Recall that, back in March we reported that Citizens was planning call its $1.1 billion of Everglades Re II Ltd. (Series 2024-1) catastrophe bonds in advance of its renewal, to enable it to take advantage of current market conditions, while it also suggested around $600 million of new cat bonds may be placed this year.
Florida Citizens intended to have $1.525 billion of cat bond protection from its 2025 issuances in-force for 2026 as well, so $2.125 billion of total cat bond coverage was anticipated.
Then, Citizens came back to market and secured that $600 million of new reinsurance protection from the Everglades Re II Ltd. (Series 2026-1) catastrophe bond sponsorship in May.
Which took its outstanding cat bond coverage to that $2.125 billion level, which is where it sits today according to our catastrophe bond sponsor leaderboard.
As a result, Citizens projected reinsurance need, from cat bonds and the traditional market, looked to be around $2.8 billion back in March.
Now, the residual market insurer has disclosed that it purchased $691 million of traditional reinsurance at its June 1st renewal, which takes the private market risk transfer component of its funding tower to almost $2.82 billion ($2.816bn to be precise).
Commenting on reinsurance market conditions at the renewals, Florida Citizens explained, “2026 further solidified the impact of the 2022 and 2023 litigation reforms on the Florida risk transfer marketplace. After a year of development from Hurricanes Helene and Milton, and no Florida hurricane landfall for the first time in a decade, reinsurers entered 2026 with a desire to build on the 2025 price decreases.”
Citizens also said, “Both the catastrophe bond market and the traditional reinsurance market have ample capacity due to increased capital, improved earnings, and renewed confidence in the Florida market. This is reflected in Citizens’ new 2026 placement of approximately half in capital markets and the other half in traditional markets. Depending on the placement and cedent, overall rate reductions in Florida at the June 1 renewal are in the range of approximately 15-20% for layers above the FHCF.”
However, in disclosing the results of its own renewals, Florida Citizens noted that, “for new coverage placed in 2026, the price is approximately 30% lower than it would have cost for similar coverage in 2025.”
While, “for the total program including existing coverage, the price is approximately 20% lower than the 2025 program.”
These are meaningful savings for the insurer, with an overall weighted average net rate-on-line (ROL) of 9.52% and cost of $276.5 million for the total $2.82 billion program, $691 million coming from the traditional reinsurance market and $2.125 billion from its catastrophe bonds.
On the new placements in 2026, the $600 million of new cat bonds and the $691 million of new reinsurance, Florida Citizens said that it came with a a net ROL of 8.46%, some 29.2% lower than the net ROL for the new risk transfer program placed in 2025 of 11.95%.
It’s worth noting that within that traditional reinsurance is likely to be a meaningful participation from the insurance-linked securities (ILS) market as well, given ILS investment managers and other reinsurance investors typically take a relatively meaningful share of Citizens traditional placements each year at the renewals.
Which means, even though almost 76% of the nearly $2.82 billion of risk transfer comes from the catastrophe bond market, the total capital markets participation is expected to be higher.
On the early redemptions of catastrophe bonds that were issued in 2024, when pricing was far higher than now, Citizens noted, “The cost to retain the coverage through Everglades 2024-1 notes for the third and final year would have been $124.8 million as compared to the Everglades 2026-1 cost of $46.6 million for net savings of $72.7 million. The savings are a result of reduced coverage as well as reduced rate-on-line.”
The reason coverage has reduced is the meaningful reduction in exposure at Citizens, as it has shed a significant number of insurance policies to the private market through its depopulation program.
In fact, Citizens policy count has fallen to just over 293,000 in June 2026, which is down over 779,500 at June 30th 2025.
Florida Citizens has disclosed its preliminary risk transfer tower, which is all but finalised now after the renewals it seems (seen below and we break it down below the image).
Above the surplus, the lowest layer of the tower houses Citizens typical Sliver Layer that sits alongside and works in tandem with the FHCF. It provides $160 million, in excess of $1.05 billion, of annual per occurrence reinsurance coverage for personal residential and commercial residential losses and was placed in the traditional market.
Layer 1 above that incorporates $225 million of coverage for personal residential and commercial residential losses from an Everglades Re II 2025 cat bond issuance.
Layer 2 provides $850 million of coverage for personal residential and commercial residential losses from the capital and traditional reinsurance markets. It features $250 million of occurrence coverage from the traditional market, as well as $225 million of new multi-year, annual aggregate coverage from the capital markets placed through Everglades Re II in 2026 and $375 million from the 2025 Everglades Re II cat bonds.
Layer 3 provides another $850 million of coverage from cat bonds and reinsurance, with $175 million of occurrence coverage from the traditional market, $200 million from the new Everglades Re II 2026 cat bonds and $475 million from the 2025 cat bond sponsorship.
Layer 4 provides $731 million of cover from reinsurance and capital markets, including $106 million of occurrence coverage from the traditional market, $175 million from the new 2026 cat bonds and $450 million from the 2025 cat bonds.
Read about every one of Florida Citizens catastrophe bonds in our extensive Deal Directory.
