BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Insurers may trickle into flood insurance market on NFIP reforms

Insurers may trickle into flood insurance market on NFIP reforms

Reforms to the National Flood Insurance Program could encourage private insurers to enter the market, according to a new report by Standard & Poor's Corp.

“As the NFIP is set to expire Sept. 30, 2017, there has been interest from policymakers and private insurers alike in the future form of flood insurance,” according to the report, “Privatizing U.S. Flood Insurance: A Trickle-Down Effect, Or Opening Floodgates?”

“Taking clues from ongoing reforms, we believe the future flood insurance market may end up looking very different from the current one,” said the report, which was released Monday.

But private insurers wishing to enter the market now dominated by the debt-ridden NFIP would have to overcome considerable difficulties, according to S&P. These include challenges with modeling the flood peril and producing flood maps for a large country like the United States.

S&P said it believes that excess and surplus lines insurers, along with reinsurance partners, “may be willing to offer limited capacity to assume flood risk that fits within their risk/return parameters.”

S&P said excess and surplus lines may be the first ones to enter the market because “they can work with flexible terms, conditions, and prices.”

“At this point, we don't expect a wave of private insurers to sweep into this market but rather a trickle as insurers would enter cautiously before they become more comfortable with the risks involved,” said S&P.

Read Next

  • Photo gallery: Flood insurance payouts

    With the House Finance Committee passing a bill to allow private insurers to underwrite flood risk, Business Insurance looks at the states that received the biggest payouts from the National Flood Insurance Program in 2014, the most recent data available.