
The Federal Emergency Management Agency (FEMA) has announced the renewal of its reinsurance program for the National Flood Insurance Program (NFIP), transferring $758 million in flood risk to 27 private reinsurers. This marks a significant expansion, up from the 18 reinsurers involved in the previous year. FEMA’s assistant administrator, Elizabeth Asche, emphasized that the broader use of private reinsurance reflects the agency’s commitment to ensuring the NFIP’s ability to cover flood insurance claims efficiently.
The 2025 reinsurance agreement, facilitated with the help of broker services from Guy Carpenter, covers specific portions of NFIP losses resulting from catastrophic flood events. For instance, it provides coverage for approximately 12% of losses between $7 billion and $9 billion and 26% of losses between $9 billion and $11 billion. The total premium cost for this arrangement is $140 million.
Over the past three years, FEMA has also executed three capital markets reinsurance placements, cumulatively transferring $2.1 billion of flood risk to the private sector. In the event of a named storm causing sufficient damage to trigger all reinsurance agreements, FEMA will receive qualifying payouts, further bolstering its financial ability to meet flood insurance claims.