FEMA Announces Reinsurance Plan for Flood Risk
January 08, 2024
The Federal Emergency Management Agency (FEMA) recently announced its traditional 2024 catastrophic flood loss risk management reinsurance placement plan for the National Flood Insurance Program (NFIP). This placement insures portions of NFIP claims that exceed $7 billion resulting from a single qualifying flood event.
On behalf of NFIP, FEMA will pay a total premium of $121.1 million for the coverage. The agency has transferred an additional $619.5 million of NFIP's financial risk to the private reinsurers.
The NFIP agreement is structured to cover 8.9125 percent of losses between $7 billion and $9 billion and 22.0625 percent of losses between $9 billion and $11 billion. From 2021 to 2023, FEMA transferred $1.9195 billion of NFIP's flood risk to the private sector.
"With continued difficult market conditions this year, FEMA remains committed to long-term use of private sector reinsurance," said David Maurstad, assistant administrator for the Federal Insurance Directorate and senior executive of NFIP. "However, the program will adjust NFIP reinsurance investments whenever necessary to reflect market conditions as we did again this year."
January 08, 2024
