The US Federal Crisis Management Agency has secured $ 300 million of flood reinsurance for three years for the National Flood Insurance Program through the issue of its second disaster band, FloodSmart Re Ltd. (Series 2019-1), said the agency on Thursday.
"FEMA continues to re-enter the reinsurance markets to strengthen the financial framework of NFIP and promote private sector participation in risk management," said David I. Maurstad, Deputy Associate Administrator of Federal Insurance and Mitigation Administration and Head of NFIP's Managing Director who speaks in conversation on Thursday afternoon.
This latest Floodsmart tie goes in conjunction with its larger brother from August and a traditional reinsurance in January that gives NFIP's total reinsurance program to $ 2.1
"Since this case, FEMA has been working to secure an additional reinsurance placement for NFIP through a transaction that for the second time engages the capital markets," says Maurstad.
On Tuesday, FEMA entered into a three-year reinsurance agreement, Wednesday with Hannover Re (Ireland) appointed operating company, he said. 19659002] The agreement is structured to cover 2.5 percent of the $ 6 billion to $ 8 billion loss, for a particular flood event from a named storm, and 12.5 percent of the $ 8 billion to $ 10 billion loss, he said. and FEMA paid $ 32 million in premiums for the first year of bond reinsurance.
"By engaging both the traditional reinsurance markets and the capital markets, NFIP can reduce the cost of risk transfer, gain access to additional market capacity and further forward its risk transfer partners," says Maurstad.
Although this will be the final reinsurance investment in 2019, "FEMA is committed to further developing and maturing the NFIP reinsurance program in a way that strengthens the financial framework of NFIP, and expands the role of private markets in managing US flood risk ", says Maurstad.