FEMA OBTAINS $1.042BN OF REINSURANCE FOR NFIP

The US Federal Emergency Management Agency has secured $1.042bn in reinsurance cover for the National Flood Insurance Programme from 25 reinsurers for 2017. Under the arrangement, the carriers will be responsible for 26% of losses between $4bn and $8bn in losses that the NFIP incurs from a single event, an occurrence that FEMA said has a 17.2% chance of taking place during the year. “This placement is a key step towards achieving the NFIP’s long-term vision of building a stronger financial framework,” FEMA said. “It places the NFIP in a stronger position to manage losses incurred from major events...by transferring exposure to reinsurers.” FEMA procured to cover for the NFIP after having tested the reinsurance market last September with a $1m placement with three reinsurers.