Florida Citizen taps ILS market for third of 2018-19 cover
State-backed insurer Florida Citizens bought one third of its reinsurance cover for 2018-2019 from the ILS market, which was slightly down on the 38 percent purchased last year.
The share of cover it bought from the ILS markets was slightly down on last year, as Nephila Capital’s line on the programme shrank.
The state-backed insurer secured private reinsurance cover amounting to $873.0mn in the renewal, of which $277.5mn was placed with ILS managers, either on a collateralised or rated basis, and $595.4mn with traditional reinsurers.
The total included $180mn of multi-year cover that rolled over from last year.
While Citizens has more overall limit this year – at $1.4bn compared with $1.3bn in 2017 – its traditional reinsurance placement slimmed down as it issued a new Everglades Re cat bond.
Including the cat bonds, the ILS share of the overall placement rose to 58 percent, from 52 percent in 2017.
Among the notable changes on this year’s programme, cat bond specialist Fermat Capital signed up to the Citizens’ traditional programme for the first time, putting down $25.0mn via Horseshoe Re.
Nephila more than halved its participation from $286mn in 2017 to $114.1mn this year, taken via various vehicles including its Lloyds Syndicate 2537, Poseidon Re and Allianz Risk Transfer.
LGT lifted its limit to $71.3mn from $47.3mn last year, while Credit Suisse Asset Management put down $28.2mn, via the Kelvin Re and Humboldt Re vehicles, up from $20.2mn last year.
Validus subsidiary AlphaCat more than halved its participation, from $65.1mn in 2017 to $31.8mn this year.
On the traditional front, Munich expanded its participation to $80.8mn up from $70.0mn last year, while Renaissance Re’s participation reached $91.4mn, up from $61.2mn in 2017.
Everest Re decreased its line from $159.3mn to $101.7mn, while Swiss Re dropped its pledge from $25.3mn last year to $21.1mn.
The new cover includes $183mn of single-event traditional reinsurance attaching at $435mn, which will wrap around the $1.117bn of limit Citizens is set to buy from state-backed reinsurer the Florida Hurricane Catastrophe Fund (FHCF).
Above the FHCF layer, the carrier has $330mn of traditional aggregate multi-year coverage, followed by its two aggregate cat bonds, with a $300mn top layer made up of aggregate traditional one-year cover.