Researchers predict the 2015 Hurricane Season will be a mild one. They are predicting only 7 storms, compared with the 30-year average of 12. It is also predicted that three of these storms will reach hurricane strength of at least 74 miles (119 kilometers) per hour. The season starts on June 1st and lasts through Nov. 30. Citizens Property Insurance Corp., known for providing coverage when other insurers won’t take the risk, is selling as much as $1 billion of municipal debt. It would be the insurer’s first bond sale in three years. In 2012, Citizens told investors that it writes policies in areas that “appear to be at the highest risk” of hurricanes and sinkholes. If a storm produces enough claims to consume reserves, Citizens can ask for a surcharge on property-insurance policies sold statewide, including those from other companies, to repay its bonds.
One risk is that regulators don’t grant the surcharge. With storms bypassing the state, the company earned net income of more than $1 billion the past two years, raising its surplus to $7.4 billion at year-end, compared with a deficit of $1.8 billion at the end of 2005, according to financial statements.
