It will be very challenging to privatize the entire flood insurance marketplace, because the National Flood Insurance Program must insure all homes and buildings in participating communities, even if they are high-risk or flood regularly.
In the last few years, many private insurers have entered the flood insurance marketplace to compete against the NFIP. These private carriers are cherry-picking the lowest-risk homes and buildings from the NFIP’s policy base but may never write the high-risk homes and buildings. Therefore, there is a longterm need for the NFIP to continue as a market of last resort.” - Dan Freudenthal, President Agency Flood Resources
Learn more about flood insurance at the Future of Flood event being held in Miami, Florida on November 16. Click here for more details and to register.
“It’s absolutely time to open up the flood insurance market for privatization. The repeated flood disasters of the last decade highlight the importance of flood insurance in disaster recovery for individuals and communities.
With advancements in computing, improved flood mapping and comprehensive replacement construction cost data, the capacity exists to capture the granular information needed to calculate flood risk. Like other natural catastrophe models, flood models permit the insurance market to understand the risk, assess the exposure and then price the products competitively and profitably.” - Howard Kunst, Senior modeler and actuary, CoreLogic
“The increased privatization of flood insurance creates more options for homeowners, allowing the industry to protect as many homes as possible. Recent advancements in modeling and analytics enable a more accurate assessment of flood risk and ensure the most economical, actuarially sound rates possible.
Private capital not only brings innovative products, progressive risk management practices and an enhanced experience for agents and policyholders, but can also help alleviate the burden of bearing the full risk and ever-increasing expense of the NFIP. Private flood insurance provides Americans with more options to protect what is most important to them.” - John Dickson, President and CEO, NFS Edge Insurance