Florida’s property insurer of last resort Citizens Property Insurance Corporation is anticipating lower reinsurance costs in 2026, as its policy count and exposure-base has continued to decrease meaning less limit is likely to be needed, while there is an expectation of improved market conditions due to softening that may persist.
We reported back in June that Florida Citizens has reduced its exposure meaningfully already and that this trend is expected to persist through the second-half of 2025.
At today’s meetings, the executives heard that the depopulation process has continued to deliver significant exposure reduction, with the policy-in-force count standing at 768,926 as of September 19th 2025.
Back in June, Florida Citizens’ best-estimate was that it would have reduced further to around 700,585 policies in force by the end of 2025, although projections ranged from as low as 635,348.
Now, based on the latest exposure data and including recent rounds of depopulation and estimates for further depop during the final quarter of this year, the best-estimate is for a policy count of just under 635,000 by the end of 2025 (so below the previous low-end estimate), with an estimate range now standing from as low as 575,434 to 702,545.
2024 saw around 478,000 policies taken out through the depopulation program, the highest annual figure ever, and in 2025 Citizens staff project it could reach around 460,000 more by the end of the year.
Another metric from today’s meetings that demonstrates the progress being made, is the fact that as recently as the fourth-quarter of 2023 Citizens was around 15% of the residential property insurance market in Florida, but that market share figure had fallen to just 7% by the end of the second-quarter of 2025.
Which shows considerable progress being made in exposure reduction, as the private insurance market in Florida continues to return to health and the appetite to take-out policies from Citizens continuing to grow.
The reduced exposure means that Florida Citizens 1-in-100 year probable maximum loss metric has also fallen considerably.
After completing its reinsurance and catastrophe bond renewals for the 2025 hurricane season back in June, Florida Citizens measured its 100-year PML as $12.859 billion based on exposure as measured at the end of 2024.
But now, with more up to date exposure information available and depopulation having accelerated in the intervening period, the 100-year PML at June 30th 2025 has fallen meaningfully to $11.143 billion.
While the $4.49 billion of risk transfer in the 2025 program, consisting of catastrophe bonds, collateralized and traditional reinsurance, remains the same, the reduction in exposure means that Florida Citizens has now significantly reduced the amount of surplus that would be exposed to a 100-year catastrophe loss event (from $5bn to $3.87bn), while also lifting any policy holder surcharge up to a return period higher up and above that 100-year metric.
Citizens also reduced the amount of coverage it needed from the Florida Hurricane Catastrophe Fund as well, from a projected $3.548 billion down to $3.216 billion, thanks to the reduction in exposure base.
All of which means a lower exposure base that is expected to decline more through the rest of this year, which could now result in some premium adjustment on the traditional reinsurance later in the year, if trends persist, the Citizens meetings today heard.
Overall, Florida Citizens is in a stronger and healthier position and now with hurricane season so far a non-event for Florida in 2025, there is a growing chance its strength continues to rise.
Which would put Citizens in a stronger position for managing the costs of its 2026 reinsurance needs as well, given the reduced policy-count and exposure base it now looks set to enter next year with, as long as there are no major hurricane impacts through the final weeks of this year’s season.
In fact, with the reduction in exposure seen and that expected to continue, one speaker during the meetings today said that Citizens may have purchased more reinsurance than it really needed at the 2025 renewals, with the benefit of hindsight of the latest exposure information.
Hence the expectation that some premium adjustments may flow to the benefit of the insurer in the coming months, as they get calculated based on September 30th exposure information later in the year.
With exposure likely to fall further, if depopulation continues at the rates anticipated, in 2026 Citizens may require even less new reinsurance.
In addition, the Florida Citizens executive team heard that if the hurricane season passes without meaningful loss activity, there is an expectation that reinsurance pricing could decline a further roughly 10%, based on market commentary and insights.
Which would further assist Citizens in managing its reinsurance costs in 2026, with a reduced amount of limit likely to be required and improved market price conditions thanks to a chance of continued softening.
All of which means that the multi-year reinsurance protection provided by the catastrophe bond market may once again prove an additional benefit to Florida Citizens in 2026.
The catastrophe bond market provides $3.125 billion of reinsurance limit to support Florida Citizens for the hurricane season in 2025, which places the insurer third in our cat bond sponsor leaderboard.
The $500 million Lightning Re Ltd. (Series 2023-1) industry loss triggered cat bond is scheduled to mature in 2026 prior to the next reinsurance renewals for Citizens, meaning the insurer will still have $2.625 billion of indemnity cat bonds from the Everglades Re series of deals available to it to run through next year’s hurricane season.
Of course, Citizens could redeem some of that early if it elected to, although there would be costs attached to that as well. But, as it stands, if the reinsurance and risk transfer needs of the insurer fall’s as meaningfully as it appears it might, these multi-year cat bonds could once again become the lion’s share of the Florida Citizens reinsurance tower in 2026.
The big story though is the continued improvement in the health of the Florida property insurance market and how that is benefiting Citizens in its mission to reduce exposure and return policies to the private marketplace.
That continues to be a true success story and while it means Citizens reinsurance and cat bond purchases may reduce, the private market will likely more than make up for that as participants look to protect their growing portfolios of property risk.
Read about every one of Florida Citizens catastrophe bonds in our extensive Deal Directory.
