Florida’s state insurer of last resort, Citizens Property Insurance Corporation, has revealed that new reinsurance coverage it purchased this year cost nearly 30 per cent less than last year.

Citizens said it had finalised its private risk transfer programme for 2026 at $2.82 billion, of which $691 million was traditional coverage purchased from reinsurers at the June 1 renewals, adding to $2.125 billion of outstanding catastrophe bond protection.

The Bermuda reinsurance market plays a major role in providing coverage to the Sunshine State, notably through the Everglades series of catastrophe bonds, listed on the Bermuda Stock Exchange.

“For the total programme including existing coverage, the price is approximately 20 per cent lower than the 2025 programme and for new coverage placed in 2026, the price is approximately 30 per cent lower than it would have cost for similar coverage in 2025,” Citizens said.

The huge reduction achieved by a major reinsurance buyer reflects the softening of the property-catastrophe reinsurance market and the continuing impact of state reforms that have vastly reduced the cost of runaway litigation and stabilised Florida’s insurance market.

Citizens has reduced its exposure by about 75 per cent over the past year by offloading hundreds of thousands of policyholders to the private market, as insurers have returned to Florida in response to the reforms, bringing an increase in insurance availability and affordability.

Early redemption of three tranches of notes issued through Everglades Re II, issued in 2024 — and the purchase of replacement coverage in this year’s more favourable market conditions — played a key role in Citizens’ reinsurance cost reductions.

“Even after paying an optional redemption premium of $5.5 million, the resulting savings are significant,” Citizens stated.

“The cost to retain the coverage through Everglades 2024-1 notes for the third and final year would have been $124.8 million as compared to the Everglades 2026-1 cost of $46.6 million for net savings of $72.7 million.”

It added that the savings were a result of Citizens’ lower exposures, as well as comparable coverage costing around 30 per cent less.

John Huff, the chief executive officer of the Association of Bermuda Insurers and Reinsurers, described in recent commentary, published by some media outlets in Florida, how the state’s reforms, enacted in 2023, had begun to improve confidence in the re/insurance marketplace.

“Reforms addressing excessive litigation, assignment of benefits abuse and one-way attorney fees have helped create greater predictability for insurers and reinsurers evaluating Florida risk,” Mr Huff wrote.

“Industry observers noted these reforms improved reinsurers’ willingness to continue deploying capacity into the state and reduced fears of major shortages during critical renewal periods.

“While these reforms will not lower costs overnight, they represent an important step towards restoring long-term market stability. A more predictable legal and regulatory environment encourages global reinsurers to continue supporting Florida insurers with the claims-paying capital needed after major hurricanes.”