Citizens Property Insurance Company of Florida revealed that it has invested $2.82 billion in its 2026 private risk transfer plan.
Among them, the traditional reinsurance market is approximately US$691 million, the capital market is approximately US$2.13 billion, and the overall weighted average net interest rate (ROL) is 9.52%.
The plan includes $1.29 billion in new placements in 2026 and $1.53 billion in multi-year coverage carried forward from 2025.
The new placement includes US$691 million in traditional reinsurance and US$600 million in capital markets, resulting in a ROE of 8.46%, down 29.2% from the 11.95% new placement in 2025.
“For the entire plan, including existing coverage, the price is approximately 20% lower than the 2025 plan, and for new coverage in 2026, the price is approximately 30% lower than the cost of similar coverage in 2025,” Citizens explained.
According to Citizens, cost savings from the 2026 program are attributable to the early redemption of three tranches of notes through the 2024 Everglades Re II issuance.
“This option is available as Citizens’ exposure has fallen by more than 75% in two years, and as prices have fallen significantly, coverage can be replaced in favorable market conditions,” Citizens said.
The company continued, “Nonetheless, the cost savings are significant, even after paying the $5.5 million optional redemption premium.
“The cost of retaining the third and final year of coverage through the Everglades 2024-1 note will be $124.8 million compared to the cost of $46.6 million for Everglades 2026-1, resulting in a net savings of $72.7 million. The cost savings are the result of reduced coverage as well as a reduced ROL.”
Citizens returned to the catastrophe bond market in May with $600 million in reinsurance protection through the Everglades Re II Ltd. (Series 2026-1) offering, our sister publication Artemis reported.
That brings its outstanding catastrophe bond coverage to $2.125 billion, which currently stands at $2.125 billion, according to Artemis’ Cat Bond Sponsor Ranking.
Read more about the above and explore complete details on every cat bond issued by Florida Citizens in the Artemis Catastrophe Bond and Insurance-Related Securities Exchange Directory.
As previously stated, the 2026 risk transfer plan builds on the structure of previous years and incorporates key strategic elements.
These include coordinating with the FHCF to transfer risks, as well as waiving individual risks and annual aggregate risks.
The purpose is to protect a portion of the surplus from the worst events and, in the process, eliminate the possibility of policyholder surcharges or emergency assessments for Florida residents in the event of a once-in-100-year disaster.
The image below shows Citizens’ preliminary risk transfer tower.
According to the Citizen. The Sliver Layer will be located next to the FHCF. It provides $160 million per year (more than $1.05 billion) in per-occurrence coverage covering losses to personal residences and commercial residences. This tier is located in traditional markets and will work in conjunction with the mandatory coverage provided by the FHCF.
Tier 1 will be on top of the Sliver layer and FHCF. This layer is a $225 million capital markets update risk transfer placement for personal residential and commercial residential losses through Everglades Re II. This is the second year of the multi-year note (originally issued in 2025), which provides overall coverage.
Layer 2 provides $850 million in coverage for personal residential and commercial residential losses in the capital and traditional reinsurance markets. It features $250 million in event coverage from traditional markets, as well as $225 million in new multi-year annual gross coverage from capital markets placed through Everglades Re II in 2026, and $375 million from Everglades Re II catastrophe bonds in 2025.
Layer 3 also provides $850 million in cat bond and reinsurance underwriting, with $175 million in event underwriting coming from traditional markets, $200 million in new Everglades Re II 2026 cat bonds and $475 million in 2025 cat bond sponsorship.
Layer 4 offers $731 million in coverage from reinsurance and capital markets, including $106 million in casualty coverage from traditional markets, $175 million from new 2026 catastrophe bonds and $450 million from 2025 catastrophe bonds.
In addition to this, Citizens also provides a market overview, highlighting how 2026 will further solidify the impact of litigation reforms in 2022 and 2023 on the Florida risk transfer market.
“After a year of hurricanes Helen and Milton, and the first time in a decade without a Florida hurricane making landfall, reinsurers enter 2026 hoping to build on the price declines seen in 2025,” the report said.
“There is ample capacity in both the catastrophe bond market and the traditional reinsurance market due to increased capital, improved yields and renewed confidence in the Florida market.
“This is reflected in Citizens’ new placements in 2026, about half of which are in capital markets and the other half in traditional markets. Depending on placements and carve-outs, Florida’s overall rate reduction for tiers above the FHCF will be approximately 15-20% at renewal on June 1.”
Gallagher Re serves as Citizens’ traditional reinsurance broker, with its capital markets co-underwriting team consisting of Aon Securities and GC Securities, with Raymond James acting as financial advisor.
