FEMA to Renew Reinsurance for NFIP
The Federal Emergency Management Agency (FEMA) has started its procurement process for the renewal of a flood reinsurance program designed to protect against flood risks in the United States that are insured by the National Flood Insurance Program (NFIP). FEMA returned to the traditional market for its NFIP reinsurance program for the fifth year running, having first obtained flood reinsurance coverage for the NFIP to the tune of $1 million in 2016.
In 2017 came a larger placement, with FEMA securing $1.024 billion of flood reinsurance for the NFIP, which was followed in 2018 by a bigger, restructured renewal, of $1.46 billion. In 2019, FEMA announced a slightly smaller NFIP reinsurance program of $1.32 billion. The smaller amount is related to FEMA’s procurement of an additional $500 million of capital markets-backed reinsurance protection secured in the previous year by FEMA, through the issuance of FloodSmart Re Ltd., the world’s first pure U.S. flood risk catastrophe bond.