US flood programme NFIP tops up reinsurance above $7bn
The US National Flood Insurance Program (NFIP) took an additional $619.5 million in its 2024 reinsurance coverage, covering portion of NFIP loses above $7 billion for a single qualifying flood event for total premium of $121.1 million, the government's emergency management agency FEMA has said.
The agreement is structured to cover 8.9125% of losses between $7 billion and $9 billion and 22.0625% of losses between $9 billion and $11 billion.
Combined with the three capital markets reinsurance placements in 2021-23, FEMA has transferred $1.9195 billion of the NFIP’s flood risk to the private sector. If a named storm flood event is large enough to trigger all reinsurance agreements, FEMA will receive qualifying payments, the agency said.
“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 the National Flood Insurance Program.
“However, the program will adjust NFIP reinsurance investments whenever necessary to reflect market conditions as we did again this year.”
Marsh McLennan's reinsurance brokerage unit Guy Carpenter handled the placement.
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