FHCF Projects $17 Billion in Single Season Capacity
The Florida Hurricane Catastrophe Fund (FHCF) projects that will be able to satisfy its $17 billion in single-season reimbursement obligations if called upon. The FHCF releases its estimated claims-paying capacity in May and October of each year. In its October estimate, the FHCF anticipates it would reach the $17 billion single season cap through $11.3 billion in cash on hand, $3.5 billion in pre-event notes already issued, and $2.2 billion in estimated bonding that would take place following an event.
The estimated bonding need is up slightly from the $1.6 billion in bonding included in the May 2021. The difference is attributable to the FHCF’s continuing obligations with respect to Hurricane Irma. As the residential property insurance market continues to deal with Irma claims, the FHCF likewise continues to feel Irma’s effects.
The $2.2 billion in projected bonding is well within the total amount of bonds the FHCF believes it could issue. Given its large assessment base, the FHCF anticipates it could issue up to $9.2 billion in bonds if needed.
If the FHCF suffers an initial-season event exhausting its $17 billion in claims-paying capacity, it anticipates being $6.6 billion short of being able to satisfy the full $17 billion in reimbursement obligations in a subsequent season.