Despite Storms, Moody’s Upgrades Florida Tax Bonds for Cat Fund, Citizens, FIGA

Despite four hurricanes in just over a year and significant payouts by the Florida Cat Fund, three special tax bonds have seen their ratings upgraded, the state’s insurance commissioner announced Monday.

“These recent upgrades continue to show that Florida’s insurance market is maintaining stability,” Commissioner Mike Yaworsky said in a bulletin. “Even with Florida’s unpredictable weather, a major bond rating agency agrees that several of Florida’s tax bonds are strong and have ample capacity to cover claims.”

Moody’s upgraded ratings for bonds issued for the Florida Hurricane Catastrophe Fund, for Citizens Property Insurance Corp., and for the Florida Insurance Guaranty Association, or FIGA.

For the Cat Fund’s assessment revenue bonds, issued by the State Board of Administration, the rating was enhanced from Aa3 to Aa2. This came a month after the Board estimated that the fund will have to pay out almost $5 billion in reinsurance proceeds to Florida property insurers after Hurricanes Helene and Milton. But the fund has more than $7 billion in cash and another $3.25 billion in in pre-event bonds available to cover the cost.

For Citizens’ Coastal Account assessment revenue bonds, Moody’s raised the rating from A1 to Aa2. Citizens has reported more than 54,300 claims due to Hurricane Milton. About 38,300 have been closed and about half of those have been closed without payment. Officials and adjusters have said many claims were below insureds’ deductibles or the loss was due to flooding.

For FIGA, assessment revenue bonds were upgraded from A2 to Aa2, Moody’s said.

Florida property insurers may be better able to handle repeat storm events due, in part, to manageable reinsurance costs, Yaworsky said. The average cost for reinsurance this year dropped slightly, by 0.7%, compared to an increase of 27% for the previous year.