Florida’s Citizens Property Insurance Corp. increased its new catastrophe bond issue by 10%, which brings it to $110 million.
The increase protects Citizens personal lines account against named storm losses through aggregate reinsurance, Artemis reported.
Florida’s home insurer of last resort’s increased reinsurance from its personal lines account coverage was a bit more than anticipated, according to Artemis. The deal was about 22% more than the initial guidance range’s mid-point, ending with the pricing for this layer of notes reaching 6.25%.
The carrier initially wanted to cover part of its coastal account and personal lines account towers with collateralized reinsurance of $300 million or more, Artemis reported. But at investors’ insistence, the insurer raised marketing pricing with reinsurance renewal rates greatly increasing.
That led to Florida Citizens keeping a $100 million layer for personal lines but withdrawing the $200 million coastal account layer of its catastrophe bond issuance. CFO Jennifer Montero told Artemis irrational pricing made a better option for Citizens to stick with single-year traditional reinsurance at the 2020 renewal.
Artemis said it was encouraged to learn that the cat bond tranche was upsized.
