FHCF Maintains $17 Billion Single-Season Capacity
The Florida Hurricane Catastrophe Fund (FHCF) continues to anticipate it will be able to meet its $17 billion in contracted single-season capacity if the need arises. The FHCF projects its year-end 2019 fund balance will be $12.4 billion. Adding $1.7 billion in pre-event notes and an expected $1.0 billion in risk transfer (reinsurance), the FHCF projects having $15.1 billion in liquid claims-paying resources. Therefore, it would need to raise the remaining $1.9 billion through post-event bonding.
According to FHCF estimates, it would take a hurricane causing ground-up losses of $24.2 billion to exhaust the $15.1 billion in liquid claims-paying resources. The FHCF’s expected bonding capacity within the first 12 months following an event is $8.6 billion, so reaching the full $17 billion single-season limit is well within the estimates. The FHCF also projects to be able to issue $7.5 billion in bonds between 12-24 months following an event. The excess bonding capacity beyond amounts needed to reach $17 billion in a single year could be used to provide capacity for a subsequent season. The FHCF estimates it would have $9.8 billion in capacity available for a subsequent season, which would be $7.2 billion short of that season’s $17 billion in aggregate limit.
The FHCF has loss reserves of $3.75 billion from Hurricane Irma and $1.45 billion from Hurricane Michael.