Florida’s Citizens Readies $1.5 Billion Catastrophe Bond Deal

Florida’s largest property insurer is preparing to transfer $3.1 billion in risk through a combination of reinsurance catastrophe bonds, including a $1.5 billion deal that is the largest of its kind on record. The Citizens Property Insurance Corp. board of governors last week approved the plan that officials say will protect taxpayers from paying large assessments in the event of a hurricane. In the 2014 storm season, if Citizens suffers the effects of a one-in-100 year storm, policyholders would face assessments totaling $2.4 billion. In the event of up to a one-in-70 year storm, Citizens would have enough funds to pay all claims without needing assessments.