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Final lines for Florida Citizens Property Insurance Corporation’s 2026 risk transfer program reveal that insurance-linked securities (ILS), catastrophe bonds and collateralised markets continue to dominate the insurer’s protection purchases, with identifiable third-party capital backing more than half of the traditional reinsurance placement and almost 90% of the overall tower.
Two days ago, we reported that Citizens, Florida’s insurer of last resort, had successfully secured its targeted $2.82 billion private risk transfer program for the 2026 hurricane season, comprising $1.29 billion of new protection and $1.53 billion of multi-year coverage carried forward from prior years.
As recently covered, of the $1.29 billion of new protection, approximately $691 million was secured from the traditional reinsurance market and $600 million from the capital markets through the Everglades Re II Ltd. (Series 2026-1) catastrophe bond issuance.
A review of the signed lines shows participation from a mix of US, Bermuda-based and international reinsurers, alongside a number of Lloyd’s syndicates and fronted structures used by ILS managers and collateralised reinsurers.
The final lines also reveal the continued importance of ILS managers and third-party investor capital within the traditional placement itself.
Adding together the participations that can be clearly identified as backed by ILS managers, collateralised reinsurers, or third-party investor capital shows that these sources account for approximately $360 million of the $691 million traditional reinsurance placement, or roughly 52%.
When combined with Citizens’ $2.125 billion of outstanding catastrophe bond protection, identifiable capital markets capacity totals almost $2.485 billion of the insurer’s $2.82 billion risk transfer program, meaning approximately 88% of the entire tower is backed by catastrophe bonds, ILS funds, collateralised reinsurance or other third-party investor capital.
That represents a slight increase from 2025, when around 87% of Citizens’ larger risk transfer tower was ultimately supported by capital markets sources.
Nephila Capital was the largest overall participant in the traditional renewal. Through Markel Bermuda Limited, Nautical Management’s Lloyd’s Syndicates 2357 and 2359, and additional participation through Cavello Bay Reinsurance Limited, the ILS manager supported approximately $251.5 million of the placement, representing more than 36% of the traditional program.
The next largest identifiable capital markets-backed participant was Pillar Capital Management, accessing the program through Hannover Rück SE with approximately $39.5 million of capacity.
Investment firm Quantedge followed with around $18.1 million through participations fronted by Arch Reinsurance Ltd. and Hannover Rück SE, while D.E. Shaw Re (Bermuda) Ltd. assumed $17 million through segregated accounts.
LGT ILS Partners also participated through Lumen Re Ltd. with $16.65 million, while Leadenhall Capital Partners accessed the program through Nectaris Re Ltd. with $5.86 million.
Euler ILS Partners participated via Bernina Re Ltd., fronted by Hannover Rück SE, with just over $5 million, while Aeolus Capital Management and Eskatos Capital Management assumed approximately $3.9 million and $2.1 million, respectively, also through Hannover Rück SE.
Among the traditional reinsurance participants, Ariel Re’s Lloyd’s Syndicate 1910 wrote $73.1 million, followed by Partner Reinsurance Company Ltd. at $53.1 million, Transatlantic Reinsurance Company at $52.8 million, Everest Reinsurance Company at $41.8 million, Swiss Reinsurance America Corporation at $37.3 million, Odyssey Reinsurance Company at $25 million and Munich Reinsurance America, Inc. at $18.8 million.
Other participants included American Family Connect Property and Casualty Insurance Company, The Cincinnati Insurance Company, Ascot Bermuda Limited, Lancashire Insurance Company Limited, Korean Reinsurance Company, Lloyd’s Syndicate 1414 – Ascot and Lloyd’s Syndicate 2791 – MAP.
As covered by our sister publication, Artemis, the proportion of capital markets support is likely to be even higher in practice, as a number of the participating traditional reinsurers are expected to retrocede portions of their lines into third-party capital vehicles or ILS structures.
Tim Cerio, Citizens President/CEO and Executive Director, commented, “It seems that we are really at an all-time low for probable maximum loss for Citizens policy insurance. This is great news and attributable to the reforms and our small PIF (policies in force) count.”
Jennifer Montero, Citizens CFO, added, “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.”
The post Ample capacity drives Florida Citizens’ 2026 risk transfer program amid strong cat bond demand appeared first on ReinsuranceNe.ws.
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