Citizens Property Insurance Corporation has updated its Hurricane Ian estimates to reflect additional costs expected from litigation and other claims-related expenses.

Citizens estimates that direct losses and loss adjustment expenses will total $3.8 billion from the Category 4 storm that slammed into Southwest Florida on September 28, 2022. This represents a significant increase over the preliminary estimate of $2.3 billion to $2.6 billion, which was based strictly on the results of a single hurricane model.

The revised projection of $3.8 billion incorporates the results of a second hurricane model, considers the actual claims activity to date, and includes additional provisions for litigation costs and inflation. 

Of the $3.8 billion direct losses and loss adjustment expenses, the revised projection anticipates that $1.4 billion will be ceded to the Florida Hurricane Catastrophe Fund (FHCF) and private reinsurance. The catastrophe bonds Citizens has in place are not expected to be triggered. After the consideration of this reinsurance, the net impact to Citizens’ surplus is $2.4 billion.