R Street applauds reinsurance package from Citizens Property Insurance Corp.
The program capitalizes on favorable market conditions to increase reinsurance coverage at a lower price.
“The Citizens board deserves credit for taking advantage of historically-low global reinsurance rates to transfer some of its enormous hurricane risk to the private market, thereby reducing the likelihood or severity of post-hurricane assessments,” said Christian Cámara, R Street Florida director.
The new risk transfer transactions will leave Citizens with approximately $3.1 billion in reinsurance available in the event of a major storm or series of storms this hurricane season. The package also includes a $1.5 billion catastrophe bond offering from Everglades Re. The offering is twice the size of the previous Everglades Re issuance, and is believed to be the largest cat bond in history.
This package and similar programs further reduce the burden on all Florida policyholders who may be assessed if Citizens exhausts its ability to pay claims.
“The Florida Hurricane Catastrophe Fund would do well in following Citizens’ example to further protect Florida taxpayers,” said Cámara.