FEMA SECURES 350M IN CAT BOND COVER FOR NFIP

The US Federal Emergency Management Agency has returned to the catastrophe bond market for the fourth time with its FloodSmart Re Ltd (2021-1) offering to secure at least $350m in collateralised flood reinsurance for the National Flood Insurance Programme over three years, Artemis.bm has reported. The issuance will bring FEMA’s total cat bond cover on behalf of the NFIP to $1.55bn, as the three previous FloodSmart deals – a $500m offering in 2018, a $300m offering in 2019 and last year’s $400m deal – remain in force. The 2018 FloodSmart notes mature this year, meaning the new FloodSmart deal could grow in order to maintain the same level of cat bond cover for the NFIP. The cat bond cover FEMA has obtained for the NFIP is in addition to the $1.15bn of traditional reinsurance FEMA secured for the programme at January renewals.