After taking a $1 billion slice in 2023, it’s notable that Berkshire Hathaway did not participate in Florida Citizens Property Insurance Corporation’s 2024 catastrophe reinsurance renewal, which was dominated by Bermuda-based and collateralised reinsurers.
As we reported previously, Florida’s property insurer of last resort secured a cost-effective risk transfer program of approximately $3.564 billion at its recent renewal, which included $3.064 billion of new placement and $500 million of existing coverage from its Lightning Re (Series 2023-1) catastrophe bond.
Citizens revealed that of the total, roughly $1.964 billion came from the traditional reinsurance markets and around $1.6 billion from the capital markets.
A look at the final lines of the insurer’s 2024 property cat excess-of-loss reinsurance program, reveals a broad panel of participants from across the traditional and ILS market, but one notable absentee this year is Berkshire Hathaway.
In 2023, Berkshire took a more than $1 billion slice of the $2.98 billion of new protection Citizens secured from the traditional market. Berkshire actually participated in the Citizens personal lines account layer, which in total Citizens secured $1.644 billion of new protection for at the mid-year 2023 renewals, meaning Berkshire took 60% of this account having not participated at all in 2022.
Of course, ahead of the 2024 renewal Citizens merged its coastal account, personal lines account, and commercial lines account into a single Citizens account, essentially transitioning its reinsurance structure into a single tower. But regardless of the structure, it’s interesting that such a large participant in the 2023 program was not involved this year.
But while Berkshire was absent, numerous other reinsurers participated in this year’s Citizens renewal, including a range of Bermuda-based carriers, which together account for more than $842 million, or 43% of the $1.964 billion secured.
Of the Bermuda firms, and overall, insurance-linked securities (ILS) investment manager, Nephila Capital, is the largest market overall for Florida Citizens traditional reinsurance program, taking almost 30%, or roughly $587 million.
Other participants in Bermuda include Ariel Re, Lancashire, Pillar Capital, PartnerRe, and SiriusPoint.
After Bermuda firms, the next largest slice of coverage was provided by collateralised reinsurers, including Aeolus Re, One William Street, Stone Ridge Asset Management, and D. E. Shaw Re, which together underwrote almost $558 million.
In terms of domestic US reinsurers, participants include American Family Connect P&C, Cincinnati Insurance, Everest Re, Munich Re America, Odyssey Re, Quantedge, Swiss Re America, and TransRe. Combined, these firms underwrote more than $489 million of the Citizens program, with Swiss Re America taking the largest slice of this at over $147 million.
International reinsurers also participated this year, including Korean Re, Leadenhall Capital Partners, and LGT Capital, together providing almost $48 million of reinsurance.
Finally, roughly $27 million of the total was accessed via Gallagher UK and came from the likes of Eskatos Capital Management, Ascot Bermuda limited, and Lloyd’s syndicates 1414 (Ascot) and 2791 (MAP).
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