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The California Earthquake Authority’s (CEA) risk transfer tower increased in size after the organisation renewed slightly more reinsurance protection at April 1st than was maturing, leaving it with almost $7.8 billion of risk transfer in-force.

When we last reported on the CEA’s risk transfer arrangements, the insurer had just over $7.72 billion in-force, at February 28th 2025.

With almost $1.124 billion of traditional reinsurance set to expire at March 31st this year, the latest disclosure from the earthquake insurer shows that it renewed $1.2 billion of limit at the April renewal.

As a result, traditional and collateralized or fronted reinsurance limit grew to just over $5.34 billion, up from the February figure of almost $5.27 billion.

The catastrophe bond component of the CEA’s risk transfer remained stable at $2.455 billion as of April 2025.

Which left the cat bond component of the risk transfer tower at approximately 31.5% in April, just slightly down from the almost 32% as of late February.

The CEA has $245 million of its outstanding catastrophe bonds that mature next week.

But, as we’ve been reporting, the insurer is back in the cat bond market with a new Ursa Re II Ltd. (Series 2025-1) issuance, the latest target for which is to secure between $300 million and $400 million of additional reinsurance limit.

Which will increase the amount of cat bond risk capital the CEA has outstanding in the coming days, presumably to between $2.51 billion and as much as $2.61 billion (based on the latest projection), when the new Ursa Re II issuance settles.

But, it is as yet unknown how the CEA has renewed additional reinsurance coverage that expired at May 31st, which amounted to $185.5 million.

While, also at the mid-year renewals, the CEA has a further $120 million of traditional reinsurance that expires after June 21st and a larger $580.75 million that expires at July 31st 2025.

The one thing that is clear, is that the catastrophe bond protection will grow, with no more cat bond maturities to come until the end of November.

Notably though, with the CEA’s risk transfer tower now smaller than it used to be, having at one stage reached just over $9.15 billion of limit as recently as following the June 2024 reinsurance renewal season, the smaller tower is resulting in lower risk transfer expenses for the insurer, as you’d expect.

As of January 31st 2025, the CEA’s risk transfer expenses had fallen by $14 million, a figure that has likely increased with the passage of time and the tower was still slightly bigger at that date than it is today.

Also helping the CEA on risk transfer expenses are the slightly softer property catastrophe reinsurance market conditions and the fact its new Ursa Re II cat bond may come in with a spread multiple lower than issuances completed a year or two ago.

The CEA has $2.455 billion of outstanding catastrophe bond coverage still in-force at this time, but in recent months it has fallen from 3rd to 6th in our cat bond sponsors leaderboard as other sponsors grew their cat bond protection.

View details of every catastrophe bond sponsored by the CEA in the Artemis Deal Directory.

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Reinsurers’ probable maximum loss (PML) exposures as a percentage of equity capital have remained relatively flat year-over-year at January 1, 2025, even as property catastrophe reinsurance pricing begins to decline, according to a new report from Moody’s Ratings.

The report shows that modeled PMLs for U.S. wind, U.S. earthquake, and European wind perils were broadly stable compared with the prior year. In contrast, PML exposures declined modestly in Japan, reflecting growth in shareholders’ equity excluding accumulated other comprehensive income (AOCI).

PMLs represent the largest modeled loss a reinsurer could incur from a single catastrophic event based on scenario analyses and assumptions.

As per Moody’s report, on a nominal basis, aggregate PMLs have increased year-over-year at January 1, 2025, and have grown significantly since the January 1, 2018 renewals, which marked the end of the previous soft market for property catastrophe reinsurance pricing.

“Despite a moderate pullback in pricing this year, reinsurers are generally still eager to deploy capital in property catastrophe reinsurance (particularly US wind) given the favourable expected returns,” Moody’s said.

The report also highlights varying risk appetites among reinsurers. “Although the weighted average sector US wind PMLs were similar to last year’s, viewing PML trends on an individual company basis highlights the different catastrophe risk appetites and capital allocation priorities among reinsurers,” Moody’s added.

During the January 2025 renewals, property catastrophe pricing remained largely flat for lower-attaching layers but saw some downward pressure on more risk-remote layers.

“Although the heavy losses sustained by reinsurers from the California wildfires earlier this year could provide some support to pricing, the upcoming midyear renewals in the United States are likely to see continued price decreases at higher return periods as more capacity enters the market,” Moody’s noted.

Despite these pricing pressures, demand for reinsurance remains robust, with terms and conditions generally firm and primary insurers retaining more risk at lower return periods.

Moody’s report also referenced broader trends, including rising insured catastrophe losses in recent years driven by growing property exposures and inflation-related cost increases, reinforcing the importance of careful risk management as pricing begins to ease.

Furthermore, as the 2025 Atlantic hurricane season begins, the rating agency also referenced the financial impact of recent elevated storm activity on insurers and reinsurers,

“Insurers and reinsurers have borne the financial impact of elevated levels of storm activity in recent years. In five of the past six years, there have been at least 18 named storms, including a record-breaking 30 named storms in 2020,” Moody’s noted.

“According to Swiss Re, natural catastrophes resulted in $137 billion of insured losses during 2024, which marked the fifth consecutive year that insured natural catastrophe losses have been higher than $100 billion,” the agency continued.

Moody’s also noted that Swiss Re estimates that growing property exposures, particularly in catastrophe-prone areas, will drive insured catastrophe losses higher by 5% to 7% annually over the long term, underscoring the ongoing risk challenges the reinsurance sector faces.

However, while reinsurance pricing has begun to ease, with the Guy Carpenter US Property Catastrophe Rate-On-Line Index declining by 6.2% at January 1, 2025 from the record levels reached a year earlier, Moody’s affirms that property catastrophe reinsurance “remains attractively priced on a risk-adjusted basis.”

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A former China Construction Bank employee is facing bribery charges in Hong Kong, accused of accepting payments in a crypto currency amounting to US $470,000 from a Vesttoo employee, to authenticate false letters of credit and collateral documentation.

While a number of court cases remain ongoing, although not moving at any meaningful pace, in relation to the Vesttoo reinsurance letter of credit (LOC) collateral fraud, criminal cases have been absent from the saga until now when a Hong Kong bribery case has taken aim at a former China Construction Bank employee.

Recall that, China Construction Bank was the financial entity that purportedly issued billions of dollars of letters of credit (LOC) that were used to collateralize reinsurance agreements in transactions involving the now bankrupt Israeli insurtech Vesttoo.

More traditional reinsurance than ILS, those agreements turned out to be supported by thin air as the letters of credit (LOCs) turned out to be forged.

As the bankruptcy of Vesttoo moved forward, details emerged of a relatively unsophisticated web of fraud, with international tentacles reaching to the Chinese state supported bank and a number of lawsuits launched against China Construction Bank by reinsurance market participants, some ongoing.

In total, almost $3.36 billion of standby letters of credit (LOC) are presumed to have been fraudulently created under the Vesttoo scheme and of that amount, figures Artemis had seen towards the end of 2023 suggested that at least $2.81 billion of those were linked to China Construction Bank.

Emails that emerged during Vesttoo’s bankruptcy case showed that a China Construction Bank (CCB) employee, Chun-Yin Lam, used an official bank email address to communicate with some of the Vesttoo employees that had been accused of perpetrating the fraud.

While this CCB employee, Lam, was also said to have identified the Chinese investor implicated in the fraud, Yu Po Holdings, as a client of the bank (Yu Po Holdings was the name of the primary investor in reinsurance transactions involving fraudulent LOCs issued by CCB for Vesttoo reinsurance deals), questions remained over whether Yu Po actually existed as an investor, or was merely a shell used for the fraud. Many continue to believe the latter was the more likely scenario.

This same, now former CCB bank employee is at the heart of a new bribery and corruption case in the Eastern Magistrates’ Courts of Hong Kong.

The Independent Commission Against Corruption (ICAC) of the Hong Kong Special Administrative Region has now charged two former bank managers, one being the aforementioned Lam, for “allegedly conspiring with an employee of a fintech company to use various false standby letters of credit (L/Cs) and collateral letters.”

That fintech was, of course, Vesttoo.

The ICAC explained, “Pursuant to the further legal advice of the Department of Justice upon completion of investigation by the ICAC, an additional bribery charge was laid against one of the duo while the indictment in relation to the two counts of conspiracy to use false instruments were amended when the case was brought to the Eastern Magistrates’ Courts for mention today (June 5).

“The additional charge alleged that the defendant had accepted cryptocurrency worth over US$470,000 from the fintech company employee, a middleman and others for authenticating false instruments. The case will be transferred to the District Court.”

Lam, a former relationship manager of China Construction Bank (Asia) Corporation Limited (CCB (Asia)), has been charged with an additional count of conspiracy for “an agent to accept advantages, contrary to section 9(1)(a) of the Prevention of Bribery Ordinance and section 159A of the Crimes Ordinance,” the ICAC said.

Lee Ka-man, a former senior relationship manager of Standard Chartered Bank (Hong Kong) Limited (Standard Chartered HK), which was another bank named as having been identified on some of the fraudulent letters of credit that Vesttoo had used for its reinsurance transactions, as well as Lam now each face one count of conspiracy to use false instruments as well.

After a hearing today, the defendants have been granted bail and the prosecution are seeking to transfer the case to the District Court for plea.

The ICAC said that its investigation into the allegations against the bank employees stemmed from a corruption complaint.

The ICAC further explained, “The bribery charge alleged that Lam had accepted bribes, namely Tether, a cryptocurrency, worth totalling over US$470,000, from an employee of Vesttoo Udi Ginati, a middleman Wan Cheuk-lun and others for authenticating standby L/Cs and collateral letters which were purportedly issued or endorsed by China Construction Bank Corporation (CCB). CCB had, in fact, never issued or endorsed those documents.”

Ginati was cited as an alleged participant in the fraud by Vesttoo itself, after an internal investigation it undertook back in 2023.

It’s perhaps worth noting that in early 2024 an attempt by Vesttoo to recover damages from those alleged former employees it believed participated in the fraud, including Ginati, failed in a Tel Aviv court.

Hong Kong’s ICAC continued, “The amended charges of conspiracy to use false instruments alleged that Lam had conspired together with the said Vesttoo employee, middleman and others to use 88 false standby L/Cs and two false collateral letters purportedly issued or endorsed by CCB, with the intention of inducing others to accept them as genuine. It was alleged that Lee had conspired together with others to use four false standby L/Cs purportedly issued by Standard Chartered HK with intent to induce others to accept them as genuine.”

The ICAC said that CCB (Asia) and Standard Chartered HK rendered full assistance to the Commission during its investigation into this case.

The Vesttoo saga is the story that keeps on giving.

Given the backdrop to the saga, and all the information that came out about how the web of fraud is alleged to have been committed, none of the allegations made by Hong Kong’s Independent Commission Against Corruption are all that surprising to read.

It is good to see authorities seeking to make progress on getting to the bottom of what happened and potentially bringing those accused of perpetrating the fraud to account. Or at the least, establishing what illegalities may have taken place throughout the saga.

That said, none of this appears to get the industry participants that in some cases lost hundreds of millions of dollars any closer to making meaningful recoveries for the damages suffered.

Read all of our coverage of the alleged fraudulent or forged letter-of-credit (LOC) collateral linked to Vesttoo deals.

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Investor appetite for insurance-linked securities (ILS) continues to grow, but the asset class must evolve structurally to sustain momentum, address friction points like trapped capital, and engage a broader investor base, according to Rudy D’Cunha, Global Head of Insurance Services at Apex Group.

During a recent interview with Artemis, D’Cunha shared his perspective on how the market is maturing, where innovation is focused, and what it will take to unlock the next wave of capital.

“What ILS has done extremely well is the marriage of capital markets and insurance risk,” says D’Cunha, who has observed a healthy uptick in ILS growth and investor diversification over the past three years.

“The ILS market has seen healthy growth over the past three years, gaining more investor attention and capital inflows. There’s a mix of traditional investors who remain committed and optimistic, and new entrants, particularly family offices, attracted by the diversification benefits. Despite earlier volatility, the market has proven resilient, offering solid returns and presenting an attractive alternative in today’s uncertain macroeconomic climate.”

As capital flows broaden, so too does the appetite for more customised investment vehicles.

According to D’Cunha, structures like sidecars, quota shares, and managed accounts are gaining relevance as institutional investors seek greater control and alignment with their risk preferences.

“Yes, all of these structures continue to be relevant and are actively used. Traditional structures like funds and sidecars remain the standard and reliable mechanisms for capital deployment. However, managed accounts are seeing increased interest, particularly from larger investors seeking bespoke portfolios and more control over exposures.

“There is also a growing curiosity around digital assets as a potential capital source, though this remains largely untapped. While digital asset-backed structures haven’t yet gained meaningful traction in ILS, many industry participants are monitoring developments closely, recognizing that as use cases mature, this could represent a significant pool of alternative capital.”

D’Cunha also notes that the expansion of the asset class beyond property catastrophe risk is a key trend, with areas such as casualty, cyber, life, MGAs, parametric covers, and Lloyd’s syndicates gaining traction

“In addition to new sources of capital there are additional exposure segments being added to the existing Property Cat offerings namely Casualty, Cyber, MGAs, Life, Parametric, Lloyds Syndicates etc. all gaining substantial interest in recent years,” he explained.

“Innovation in capital structures is currently focused on extending and adapting these established models to meet the needs of a broader and more diverse investor base. Rather than reinventing the wheel, the market is working to refine and scale tried-and-tested formats to improve access, customization, and efficiency,” D’Cunha continued.

“Ultimately, the flexibility of these structures, particularly managed accounts, offers investors the ability to allocate capital in a way that aligns more closely with their individual risk appetite and strategic objectives, which is critical in today’s market environment.”

When asked what structural changes are needed to help make ILS capital more efficient, particularly in regards to trapped capital, D’Cunha stated: “Trapped capital remains a persistent issue in ILS. While some solutions are being explored like multi year contracts, accelerated contract commutations, fronting, etc. completely eliminating trapped capital is unlikely due to the fundamental nature of reinsurance contracts.

“The key is to better manage the timing of loss evaluations and payouts without altering core contract mechanics.”

To unlock more consistent capital inflows, D’Cunha stresses the need for education, transparency, and risk management.

“Greater awareness and education are essential, especially among younger investors as well as intermediaries who might overlook ILS in favour of flashier assets like crypto. Diversification should be a key component for portfolios and ILS as an asset class can offer just that. Industry events help, but more proactive outreach and transparency are needed,” D’Cunha said.

“As a service provider, at Apex we continue to significantly invest in newer technology to provide our clients and their clients greater transparency and efficiency. Risk management is also crucial; protecting downside risk, even at the expense of some returns, will build trust and encourage long-term investment,” he further explained.

New tools like blockchain-based smart contracts and tokenization may also play a role.

“Using blockchain for smart contracts, thoughtful ESG and impact investing alignment, and allowing for fractional ownership via tokenization can also be a step in the right direction,” D’Cunha added.

Lastly, D’Cunha explains how he see’s ILS managers adapting to a more complex landscape through data, infrastructure, and collaboration, especially in global ILS hubs.

“Managers are becoming more sophisticated, with better data and tools for risk modelling and capital deployment. Larger, established managers benefit from scale and infrastructure, while emerging managers need support, often provided by ecosystems like Bermuda, Cayman Islands and Luxembourg.

“Newer managers are trying to compete with larger managers, they have to understand that they’re competing with people who have years of operational history, infrastructure, and technology. One of the things Bermuda has been really good at is supporting a lot of the new managers in that space, having the right professionals, a wide support group.”

“Established managers are often locked into how they’ve been doing things, while new entrants can spot gaps and move quickly. However, it really depends on the stage the manager is at, whether they’re new or traditional, but in both cases, the investment in time, infrastructure, and identifying market gaps is what really makes the difference,” D’Cunha concludes.

Read all of our interviews with ILS market and reinsurance sector professionals here.

Rather than reinventing the wheel, ILS must refine and scale: Apex’s D’Cunha was published by: www.Artemis.bm
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New Zealand’s Natural Hazards Commission Toka Tū Ake (NHC), formerly known as New Zealand’s Earthquake Commission (EQC) Toka Tū Ake, has added more limit to its reinsurance tower, lifting the top by $1.15 billion for 2025, in a renewal securing $10.3 billion of cover for disaster losses in the country.

The organisation has been growing New Zealand’s disaster reinsurance protection over recent years, from a nearly $7 billion reinsurance tower in 2021, to $7.2 billion for 2022, to $8.2 billion for 2023, and then $9.2 billion in 2024.

As readers are aware, typically, a number of insurance-linked securities (ILS) funds participate, taking a small share of the reinsurance program on a fronted basis in recent years.

Of course, the NHC also made its debut into the catastrophe bond market in 2023 and that NZ $225 million Totara Re Pte. Ltd. (Series 2023-1) catastrophe bond is still in-force and part of the reinsurance tower this year.

NHC Chief Executive Tina Mitchell, commented: “One way we ensure there is funding available to pay claims for natural hazards damage is by purchasing reinsurance – insurance for insurers.”

She continued: “All insured homeowners across New Zealand contribute levies to the scheme. We use a proportion of those levies to purchase reinsurance cover at a national level.

“If a significant natural disaster should happen and costs exceed $2.2 billion, the scheme can then access up to an additional $10.3 billion for settling homeowners’ claims.”

Last year, the reinsurance tower attached at $2.1 billion of losses, so slightly lower down.

Mitchell also added: “The scheme is held in very high regard globally. Our long-term investment in research and modelling means we can give reinsurers a transparent understanding of the risks they are insuring. We are pleased to secure this level of reinsurance for New Zealand.”

“International markets also value the scheme’s commitment to community resilience,” she says.

“By funding science and research, then translating that into insights that can be used by decision-makers, we are supporting better building standards, decisions on where new homes are built and government planning.”

The 2025 renewal highlights the continued confidence international markets have in New Zealand’s disaster risk framework, the credibility of the NHC, and the growing importance of diversified capital in supporting national resilience.

The NHC last called on its reinsurance programme in the wake of the Canterbury earthquakes in September 2010 and February 2011, with reinsurers covering approximately $5 billion of the total claim costs. The scheme’s role is to ensure that financial support is available to settle claims efficiently after major disasters, while also helping to keep residential insurance premiums affordable.

“We can’t change the natural hazards we live with, but we can be prepared,” Mitchell said.

“Ensuring we have access to the right financial support provides peace of mind for New Zealand homeowners.”

Read all of our reinsurance renewal news coverage.

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Growth in the portfolio of property insurance player HCI Group Inc. has resulted in a need for significantly more reinsurance at the 2025 renewals, with the company securing over $3.5 billion of limit across its towers, up 30% from the $2.7 billion secured a year ago.

HCI Group has been growing steadily, both through expansion in its home state of Florida, as well as in broadening its multi-state underwriting reach.

Alongside natural expansion of the insurance business, HCI has also been a meaningful participant in the Florida Citizens depopulation program over the last year, resulting in the assumption of thousands more homeowners policies in the state.

All resulting in more exposure and so a need to protect it, through various sources of reinsurance capital, some of which includes collateralized and ILS fund markets, we understand.

A year ago, HCI renewed its catastrophe reinsurance programs for the 2024-2025 treaty year with total aggregate limit of $2.7 billion.

Now, for the 2025-2026 treaty year running from June 1st 2025 through May 31st 2026, HCI’s catastrophe reinsurance programs now comprise total aggregate limit of more than $3.5 billion, which is an increase of 30%.

“We are grateful for the strong support from our global reinsurance partners, whose continued confidence in HCI underscores the quality of our underwriting and our disciplined approach to risk,” explained Paresh Patel, HCI’s chairman and chief executive officer. “We believe our reinsurance programs are prudently structured to protect the long-term financial stability of our insurance companies. With the reinsurance placement now finalized, we are well-positioned to pursue strategic initiatives aimed at delivering sustained value to our shareholders.”

Three reinsurance towers have been renewed this year, up from two a year ago.

The first reinsurance tower covers Homeowners Choice Property & Casualty Insurance Company, and HCI sponsored reciprocal insurance company, Tailrow Insurance Exchange, and for all policies issued in Florida. This tower provides coverage of up to $1.28 billion for catastrophic losses from a single event in Florida and total coverage for all occurrences of $1.86 billion.

A second reinsurance tower covers all policies of subsidiary TypTap Insurance Company both in and outside Florida, as well as all Homeowners Choice policies issued outside of Florida. This tower provides coverage up to $925 million for catastrophic losses from a single event in Florida, and coverage of up to $506 million for catastrophic losses from a single event outside that state.

The third reinsurance tower HCI’s other sponsored reciprocal exchange, Condo Owners Reciprocal Exchange, for all of its policies issued in Florida. This tower provides coverage of up to $181 million for catastrophic losses from a single event in Florida, and total coverage for all occurrences of $245 million.

Across the three towers HCI has secured the $3.5 billion in excess of loss aggregate limit and full reinstatement premium protection, while its Bermuda based reinsurance entity Claddaugh Casualty Insurance Company Ltd. also participates to some degree in each.

HCI said that all of the reinsurance counterparts it has transacted with this year come with AM Best ratings of ‘A-’ (Excellent) or better, or have fully collateralized their obligations to the insurer.

There is an $18 million retention for the first two reinsurance towers, and $3 million for the third, while Claddaugh’s estimated maximum retained loss is around $117 million for a first event and $35 million for a second event.

The retentions are higher than a year ago, but given the growth in exposure and the size of the towers, that is to be expected.

HCI said that it anticipates net consolidated reinsurance premiums ceded to third parties, excluding Claddaugh, of around $422 million for the renewal year, based on exposure projections and subject to true up at September 30th 2025.

The renewed reinsurance towers will mitigate HCI Group subsidiaries risk from hurricanes, tornados, severe thunderstorms, wildfires, hailstorms, and other large catastrophes, the company explained.

Each of the reinsurance towers have been fully placed for the coming year, which Florida Hurricane Catastrophe Fund (FHCF) coverage is included for that state.

HCI explained that counterparties involved included: Arch Reinsurance Ltd., Chubb Tempest Reinsurance Ltd., Endurance Specialty Insurance Ltd., Everest Reinsurance Company, Hannover Ruck SE, Markel Bermuda Limited, Renaissance Reinsurance Ltd. and its affiliates, Transatlantic Reinsurance Company, and various Lloyd’s syndicates.

Given the names above, it’s reasonable to assume a perhaps meaningful proportion of the risk underwritten by some of these companies will have been shared with their third-party capital partnership vehicles, or affiliated ILS funds.

Read all of our reinsurance renewal news coverage.

HCI renews $3.5bn of reinsurance limit at June 1st, 30% increase on last year was published by: www.Artemis.bm
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The catastrophe bond market is playing an increasingly important role in the Florida reinsurance landscape, as growing investor appetite drives competitive pricing and offers much-needed capacity relief for carriers, according to Randy Fuller, Managing Director at Guy Carpenter.

Speaking during an AM Best webinar held last week on the state of the Florida property insurance market, Fuller pointed to strong investor participation in the cat bond space and its growing role as a complement to traditional reinsurance.

“Investor appetite in the cat bond market is very strong right now; it has been for the last several years,” said Fuller.

“So, we are seeing abundant capacity and really competitive pricing, is what I would say for this year.”

“Given the overall increase in capacity needs, the cat bond market is really proving to be a valuable source of additional capacity to complement the traditional market, and it’s helping to relieve some of that supply and demand pressure,” Fuller continued.

This growing role has been evident in 2025’s issuance calendar. Florida-linked risk has been a prominent theme in the cat bond market so far this year.

Readers will recall, that Florida’s Citizens Property Insurance Corporation secured a landmark $1.525 billion Everglades Re II (Series 2025-1) transaction earlier this month, which at the time, was the largest cat bond on record.

Other notable Florida-exposed deals that we’ve seen across the cat bond market so far this year include, Security First Insurance Company’s $250 million First Coast Re IV Ltd. (Series 2025-1) issuance, as well as Heritage Insurance’s $200 million Citrus Re Ltd. (Series 2025-1) deal, both of which are structured to provide multi-year protection ahead of the Atlantic hurricane season.

There are plenty of others as well, so check out our Deal Directory for details of every catastrophe bond issuance.

According to Fuller, much of the competitive impact from this capital influx is occurring higher up in reinsurance towers.

“Risk appetites in the cat bond market tend to be more remote in the upper parts of programs, so the increased competition in upper parts of the program will continue to have an influence on rates, both in Florida and elsewhere,” he explained.

Still, Fuller underscored that traditional reinsurance retains certain strategic advantages, especially in covering broader exposures and event frequency.

“Reinsurers have a competitive advantage because traditional reinsurance coverage is generally broader, provides coverage for multiple events, risk appetite generally meets a broader range.

“So, there tends to be a ceiling on how much cat bond capacity carriers can really incorporate into their programs.”

“But the cat bond market is definitely growing in terms of its role in the Florida reinsurance market,” Fuller concludes.

As a reminder, you can read about every catastrophe bond transaction ever issued, in the extensive Artemis Deal Directory.

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American Coastal Insurance Company (AmCoastal) has successfully renewed its core catastrophe reinsurance program for 2025/26 with first event limit now extending to an estimated higher $1.33 billion, as it secured 4% more in coverage for roughly $1.676 billion of occurrence-based limit in the aggregate.

First-event limit of $1.33 billion is now 5.4% or $68.4 million higher than a year ago, while total occurrence reinsurance limit rose by $62.4 million at the 2025 renewal season.

The core catastrophe program is designed for hurricane coverage in Florida, while American Coastal had renewed its all-other perils catastrophe reinsurance back at the January renewal this year, adding a new $40 million catastrophe aggregate excess of loss agreement.

Within the first-event hurricane reinsurance tower, AmCoastal has two outstanding catastrophe bonds under its Armor Re II Ltd. program.

Recall that, AmCoastal secured an upsized $200 million Armor Re II Ltd. (Series 2024-1) Florida named storm cat bond in April 2024, after which it returned to the market in December and sponsored another $200 million cat bond, Armor Re II Ltd. (Series 2024-2).

Read about all of American Coastal’s cat bonds by filtering our Deal Directory and you can see where the insurer ranks by cat bond risk capital outstanding in our catastrophe bond sponsor leaderboard.

With its new reinsurance tower now in place for the coming hurricane season, AmCoastal said it has sufficient coverage for approximately a 1-in-201-year event; and in excess of a 1-in-100-year event followed by a 1-in-50-year event in the same year.

Retentions have risen, but the company has continued to use its own reinsurance captive to assist with that, with a first-event retention of $29.75 million, with $14 million retained by AmCoastal and $15.75 million retained by its captive, an increase of $9.25 million from the $20.5 million retention in force a year ago.

Second event retention has also risen, to $18.5 million assuming a 1-in-100-year event followed by a 1-in-50-year event in the same season, up $5.5 million from $13 million a year ago.

AmCoastal also placed a 15% quota share coverage, which a recent disclosure of the tower cited as the “Arch Q/S”.

The quota share arrangement is with an unaffiliated reinsurer holding an AM Best rating of A+, AmCoastal said, explaining that it covers all catastrophe perils and attritional losses, subject to defined occurrence and aggregate limitations.

The cost of the renewed reinsurance program for 2025/26 was approximately $201.85 million, which AmCoastal said reflects a “risk-adjusted open market rate decrease of (12.2)% from the 2024/25 Core CAT program.”

AmCoastal disclosed its reinsurance tower while it was still being constructed earlier in May, with the diagram showing where the catastrophe bonds will attach for this coming hurricane season (see below).

As you can see in the diagram above, the Armor Re II catastrophe bonds sit on top of one another, occupying shares of the layers from $834 million up to $1.284 billion.

At the time of the disclosure of the tower earlier in May, the reinsurance renewal was still being finalised for AmCoastal, hence the top-layer was not detailed. But the FHCF coverage has not changed from this diagram to the renewal completion at June 1st and the rest of it seems to remain as projected at that time.

Read all of our reinsurance renewal news coverage.

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Florida’s specialist personal property insurers entered the key 2025 mid-year reinsurance renewals from a position of relative strength, following improved profitability and more favourable operating conditions, according to a new report from credit ratings agency AM Best.

“Looking ahead to midyear renewals, the balance of power appears to be shifting toward primary carriers,” said Chris Draghi, director at AM Best.

“Given that loss activity has been more moderate in recent years and profitability has stabilized, Florida composite companies are now in a better position to manage risk accumulation and potentially negotiate more favorable terms with reinsurers,” Draghi added.

The comments stem from the agency’s latest Best’s Market Segment Report, which outlines how Florida’s personal property insurance market recorded an underwriting profit of $206.7 million in 2024, a sharp turnaround from the $174.4 million underwriting loss reported the year before.

As well as this, pre-tax operating income reached $492.3 million, up from near breakeven in 2023. While the composite’s combined ratio improved to 93.1% for the year continuing a five-year trend of year-over-year gains driven by tighter underwriting, better exposure management, and legislative reforms.

The report also noted the significant impact of 2024’s hurricane season, including Hurricane Milton, with estimated insured losses of $17.2 billion; Hurricane Helene, under $2 billion; and Hurricane Debbie, at $121 million.

Despite these events, the Florida personal property composite turned a profit, “demonstrating the resilience of the marketplace,” AM Best wrote, adding: “Florida’s property insurance and reinsurance markets have been navigating a complex landscape in recent years shaped by hurricanes, legislative reforms, and evolving market dynamics.”

“How the improvement in performance translates into potential cost savings and capacity availability at the upcoming mid-year renewal season remains to be seen.”

Furthermore, for insurance-linked securities (ILS) and catastrophe bond market participants, the improved underwriting fundamentals present a clearer picture of risk and potentially greater predictability around future issuance and loss performance.

Several Florida-focused catastrophe bonds have already come to market in 2025, led by the $1.525 billion Everglades Re II (Series 2025-1) placement by Citizens Property Insurance Corporation in early May, which at the time was the largest cat bond issuance on record.

The report also underscores just how heavily Florida carriers rely on reinsurance. AM Best cites a ceded reinsurance leverage ratio of 519.4% for active Florida property insurers in 2024, which is far above the 62.2% U.S. composite average, highlighting the continued importance of third-party capital to support underwriting across the state.

“Florida’s legislative reforms acted as a material tailwind for longstanding participants but also improved the environment to attract new entrants, effectively increasing capacity,” said Josie Novak, senior financial analyst at AM Best.

This includes more recent 2025 session measures that aim to expand access to the E&S market, particularly for seasonal homes insured by highly rated carriers.

Novak added: “Additionally, the retreat of certain carriers—whether through reduced market participation or the suspension of new business—has created space for new companies to establish a foothold, further reshaping the competitive landscape.”

Despite the improved conditions, the exposure profile for Florida specialists remains materially higher than national averages. Insurers reported a direct premiums written-to-surplus ratio of 3.2x, versus a U.S. average of 1.7x, underscoring the state’s outsized catastrophe risk and structural reinsurance dependence.

Still, with reinsurance markets softening and capital market solutions playing a growing role, Florida carriers may find themselves with more room to manoeuvre in 2025, particularly as they look to optimise program structure, manage retention levels, and secure cost-effective tail protection via the cat bond market.

Two insurers with significant Florida presence reported on the outcomes of their reinsurance renewals recently, with American Integrity Insurance Company securing a meaningful $799 million increase in reinsurance limit this year, while Universal Insurance Holdings, Inc. bought $110 million more in reinsurance limit at its 2025 renewal, both with the ILS market playing significant roles as counterparties.

Separately, Howden Re reported that risk-adjusted property catastrophe reinsurance rates ranged from flat to down 20% at the June 1 renewal.

Read all of our news and analysis on the Florida insurance and reinsurance market.

Florida carriers entered mid-year 2025 renewals from stronger footing: AM Best was published by: www.Artemis.bm
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Since launching its Risk Exchange platform in 2023, Accelerant Holdings has positioned itself as a conduit between institutional capital and specialty insurance risk, offering what CEO Jeff Radke describes as one of the few opportunities for investors to gain “a fair slice of the whole book of business.”

In a recent interview with Artemis, Radke outlined how the Risk Exchange, initially unveiled as part of Accelerant’s broader capital strategy, continues to evolve as a core mechanism for connecting investor capital with underwriting-led portfolios, while maintaining transparency and balance in risk sharing.

Unlike traditional models that cede only volatile layers, Accelerant’s Risk Exchange is built on pro-rata participation, allowing capital providers access to the full range of risks across its member MGAs.

“From the very beginning, Accelerant had this notion of the risk exchange where instead of acting like normal insurance companies, what we were going to be is this platform where capital can access the risk. From the very beginning that was the case,” Radke told Artemis.

Accelerant’s Capital Markets team was deliberately built to support this model, with a deep bench of structuring and insurance-linked securities (ILS) experience.

“So, we built our team around that theory. So, speaking for myself, I’ve been involved in a number of insurance securitizations, a number of cat bonds and a number of cat swaps,” Radke explained.

He pointed to the backgrounds of CFO Jay Green, formerly a senior figure on Goldman Sachs’ insurance-linked securities team, and Capital Markets lead Peter Shen, as key to Accelerant’s capital strategy.

“Why the Capital Markets team? Why did we build it that way? Because we believe that institutional investors participate in innovative ways, whether they be sidecars, which aren’t very innovative, they’re pretty inefficient, but we’re working on much better ways to do it,” Radke said.

He continued: “London Bridge is probably an improvement over a standard side car. But we’ve done a number of sidecars. We think London Bridge is in our future, and we’re working on other structures where institutional capital can come in and access that zero beta underwriting risk that is so valuable.

“And I guess what I would say is, Accelerant is one of the few spots, the Risk Exchange is one of the few places where the institutional investor is getting a fair slice of the whole book of business.”

What sets Accelerant apart, Radke argues, is its commitment to fairness and transparency in how risk is shared. “We’re not trying to cut off our volatility and just send the excess of loss exposure out,” he said.

“We’re not trying to just cede our most volatile business. What we’ve said to all of our risk capital partners, but especially the institutional investors, is you’re going to be offered an opportunity to participate across the whole book of business. A fair slice.

“And I don’t know of another place where institutional investors can get a fair slice of this low volatility speciality business. And that’s what makes it so unique, and that’s what makes it so valuable to the institutional investors,” he continued.

To further facilitate institutional investor participation, Accelerant launched Flywheel Re in August 2022, a $175 million reinsurance sidecar designed to provide multi-year risk capital to its underwriting-led specialist members.

Flywheel Re represents Accelerant’s first move to bring capital markets into its capacity provision, with institutional investors backing the sidecar.

“Flywheel is, in the vernacular, one of the sidecar reinsurance companies that we’ve created,” Radke explained.

Concluding: “Institutional investors can’t reinsure directly of course because they don’t have a license. So, what you have to do is you have to create a reinsurance company that can ensure various insurance companies, and you fund that with those institutional investors’ monthly funds. So, the capital from institutional investors comes into Flywheel, and then Flywheel supports the Risk Exchange.”

Find details of numerous reinsurance sidecar investments and transactions in our directory of collateralized reinsurance sidecars transactions.

Institutional investors get ‘fair slice’ of specialty risk via Accelerant’s Risk Exchange: CEO was published by: www.Artemis.bm
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