The Citizens Property Insurance board approved the May 2026 depopulation order on April 9, with the policyholder opt-out window running April 25 through May 23. Eleven private carriers submitted winning bids on 184,212 policies across personal lines residential, commercial residential and wind-only programs.
That is more than double the 87,000-policy May 2025 round and the largest single offering since the 2013 peak. The scale is not the interesting part. The capital structure of the carriers absorbing it is.
Key Takeaways
- 184,212 policies cleared the April 9 board action across three buckets: roughly 144,000 personal lines residential, 29,000 commercial residential and 11,000 wind-only, the last concentrated in tri-county and Gulf Coast barrier island territories.
- Three of the eleven bidders are 2023 to 2025-vintage Florida domestics capitalized at $20 million to $40 million of surplus, ceding 55 to 70 percent of gross written premium to quota share treaties for their solvency margin.
- 96 to 103 combined is the base-case steady-state range on the takeout book net of reinsurance. The same book runs 104 to 114 if half the HB 837 tort reform savings mean-revert.
- 74 percent of the May 2025 converted policies were still in force by April 2026, but assumption commissions and Citizens incentive payments accounted for substantially all of the reported first-year underwriting profit.
- 8 to 12 percent is how far the Citizens book prices above private comparables per dollar of insured value, and also roughly the HB 837 pass-through the bid economics assume.
What the April 9 Order Covers
The order is a competitive assumption process rather than a transfer of a single block. Carriers bid on named policies through the Office of Insurance Regulation, with terms covering assumption reinsurance commissions, policyholder notification, and the standard 20-month retention covenant binding the assuming carrier to renewal offers at no more than 110 percent of the corresponding Citizens rate.
The 184,212 policies split three ways. Personal lines residential is the bulk at roughly 144,000, in HO-3 homeowners and DP-1 and DP-3 dwelling fire forms. Commercial residential covers about 29,000 condominium association and apartment risks. The wind-only bucket of about 11,000 is the most geographically concentrated, sitting in territories where Citizens has historically been the only willing writer.
Participation is concentrated at the top. Slide Insurance filed the largest request at roughly 42,000 policies, American Integrity followed at about 28,000, and Loggerhead Reciprocal Interinsurance Exchange took roughly 21,000. Ovation Home Insurance, which received its certificate of authority in late 2025, bid about 18,000 in its first major depopulation. Orange Insurance Exchange took roughly 15,000 and Safepoint about 14,000, with five smaller carriers splitting the balance in the 6,000 to 12,000 range.
Citizens carried roughly 0.82 million policies in force at its March 2026 monthly report, down from the 1.4 million peak in 2023. The depopulation program is the statutory mechanism behind that decline, and this is its largest single execution in thirteen years.
Rebuilding the Takeout Economics
The bid price is not disclosed, but the economics can be bounded from filed rate indications, treaty summaries and rating-agency capital disclosures.
The Citizens book on this offering carries an implied gross premium-to-total-insured-value ratio of 0.72 to 0.94 percent depending on territory mix, roughly 8 to 12 percent above private-market comparables for the same territory set. Quota share cessions among the three startup domestics run 55 to 70 percent with ceding commissions of 28 to 33 percent. Property catastrophe excess-of-loss attaches at the 1-in-50 to 1-in-75 year probable maximum loss, with 1.5 to 2.0 average reinstatements on the first layer. Attritional loss ratio assumptions in the treaties run 42 to 48 percent.
Those inputs put the steady-state net combined ratio on the takeout book at 96 to 103 under base-case losses. Viable, and thin. The scenario spread is where the pricing question actually sits.
| Scenario | Steady-state combined ratio (net) | Primary driver |
|---|---|---|
| Base case: HB 837 savings hold, wind mitigation credits survive inspection | 96 to 103 | Quota share and cat XL economics as filed |
| Bonus-adjusted: includes amortized assumption bonuses and Citizens incentives | 92 to 98 | Front-loaded bonus recognition masks underlying economics |
| Stress: half of HB 837 savings mean-revert by 2027 to 2028 | 104 to 114 | Litigation volume partial recovery, plaintiff bar adaptation |
| Cat-year stress: single 1-in-50 event with full reinstatement cost | 110 to 125 | Retained loss plus reinsurance reinstatement premium |
| Mitigation credit disallowance: 4 to 6 percent premium erosion on reinspection | 101 to 109 | Wind mitigation credit re-underwriting tightens loss ratio |
The May 2025 round is the closest comparable and now carries twelve months of data. Roughly 59,000 of the 87,000 offered policies converted, and about 44,000 remained in force in April 2026, a 74 percent twelve-month persistency on the converted book. Loss experience tracked the pre-assumption Citizens experience on a rate-adjusted basis, which supports the base case rather than the stress case.
What that base case does not settle is where the first-year profit came from. Assumption reinsurance commissions and Citizens incentive payments accounted for substantially all of the reported underwriting profit on the May 2025 converted book. Those payments reach surplus immediately and are not a function of policy economics. Doubling the offered count spreads them thinner per carrier: a carrier assuming 20,000-plus policies cannot lean on them at the per-policy rate a 5,000-policy assumption allowed.
The HB 837 Assumption Underneath the Bid
Every bid in this round rests on a loss cost baseline that assumes Florida's 2023 tort reform holds.
House Bill 837 ended one-way attorney fee awards against property insurers and restricted assignment of benefits practices. It applied prospectively, so savings phased in through 2023 to 2025 as pre-reform policies rolled off. Estimates of the effect run 5 to 15 percent of total loss costs by line and geography, and bidders typically assume 8 to 12 percent pass-through, which is roughly the same margin as the gap between the Citizens indicated rate and a standalone private indication.
Two things keep that baseline contingent. Plaintiff firms have been testing recovery theories outside the HB 837 scope, including bad faith and statutory actions, and industry defense and cost containment expense trends began reversing modestly upward in late 2025. Separately, the 2025 and 2026 legislative sessions each produced bills proposing to narrow the fee-shifting changes. None passed, but durability over a multi-year horizon is a political variable rather than a fixed input. A partial reversion would put upward pressure on accident year 2024 and 2025 reserves, the same lag problem the Q1 2026 severe convective storm signal raised on short-tail lines.
That lands hardest on the startup domestics. On a gross basis their risk-based capital ratios sit below 300 percent and sometimes below 200 percent; net of reinsurance the same ratios can exceed 600 percent, but only for as long as the Demotech review accepts the panel's creditworthiness and the treaties' enforceability. Surplus of $20 million to $40 million against 15,000 to 42,000 assumed policies leaves nothing for a stress-range combined ratio. California's cat-model-driven rate reset sits in a different regulatory frame but poses the same capital question.
The residual exposure lands on carriers that did not bid. Florida Insurance Guaranty Association assessments on admitted Florida property insurers fund the claims of insolvent domestics, so concentrating this much capacity in thinly capitalized startups raises assessment probability across the admitted market. Softening cat pricing through the record Q1 2026 cat bond issuance is what made these bids pencil in the first place.
Further Reading
- California Court Upholds FAIR Plan Assessment Recoupment Surcharge – how California's carrier-specific recoupment fee compares with Citizens' statewide emergency assessment structure.
- California FAIR Plan's 35.8% Wildfire Rate Hike – Parallel residual-market-driven rate reset in the other megastate homeowners market, with territory dispersion and cat-model ratemaking parallels to Florida.
- Cat Bond Market Hits $63.9B as Pension Funds Scale Up – ILS capital inflows and Florida wind cat bond pricing that shapes the reinsurance stack supporting Florida domestic takeout carriers.
- Allstate's $925M March Cat Bill Signals a Severe Convective Q1 – Short-tail reserving and cat-loss recognition under ASOP No. 36 that carry over to Florida attritional and cat loss picks.
- Gallagher Re April 2026 First View: Cyber Off 32%, Property Cat Off 20% – The April 1 broker read that sets the pricing base case for June 1 Florida, including the Citizens $1.1 billion cat bond call replacement dynamics.
- Reinsurance Market 2026 – 1/1 renewal dynamics, rate-on-line trends, and capacity backdrop for the June 1 Florida property-cat treaty negotiations.
- Social Inflation and Litigation Trends 2026 – Plaintiff bar adaptation patterns and litigation volume dynamics relevant to HB 837 durability assessment.
- Florida Citizens Shrinks 73%: Reform, Depopulation, and Replicability – Complete synthesis of the reform-to-recovery cycle with Guy Carpenter June 2026 data, five-state replicability assessment, and benign hurricane complacency risk analysis.
Sources
- Citizens Property Insurance Corporation: Depopulation Program
- Citizens Property Insurance Corporation: Monthly Policy Count Reports
- Florida Office of Insurance Regulation: Filings Database
- Florida Office of Insurance Regulation: Citizens Depopulation Oversight
- Florida Legislature: House Bill 837 (2023) Tort Reform Legislation
- Demotech: Financial Stability Ratings Methodology
- AM Best: Florida Domestic Property Insurer Ratings
- Florida Hurricane Catastrophe Fund
- Florida Insurance Guaranty Association
- NAIC: Risk-Based Capital and Property Insurer Solvency Guidance
- Casualty Actuarial Society: Research on Florida Property Ratemaking
- American Academy of Actuaries: ASOP No. 36 on Statements of Actuarial Opinion on P&C Loss Reserves
- Artemis: Florida Cat Bond and ILS Market Data
- Insurance Information Institute: Florida Homeowners Market Data