Best's Review

AM BEST'S MONTHLY INSURANCE MAGAZINE



National Flood Insurance Program
Republican Senators Offer One-Year NFIP Extension Bill

The Biden administration earlier this year gave Congress 17 proposals to reform the NFIP, including measures to end NFIP coverage to properties that repeatedly flood and prohibit new construction in flood-prone areas. See the Best’s Rankings list of Top 25 Writers – US Private Flood – 2022 Edition.
  • Timothy Darragh
  • September 2022

A group of Republican senators has released a proposal to extend the National Flood Insurance Program by one year. Bill Cassidy and John Kennedy, both of Louisiana, Marco Rubio of Florida and Cindy Hyde-Smith of Mississippi introduced legislation to reauthorize NFIP, which now is authorized through Sept. 30.

Florida is home to 1.7 million NFIP policies, more than any other state, Rubio said in a statement. “The National Flood Insurance Program is a lifeline for many Floridians,” he said. “We need to pass this legislation quickly so that no one experiences a lapse in coverage.”

Democratic Sen. Robert Menendez of New Jersey already has introduced a bill to extend the program an additional five years. He said his National Flood Insurance Program Reauthorization and Reform bill would put the program back on solid fiscal ground and reframes the nation's entire disaster paradigm to one that focuses more on prevention and mitigation to spare the high cost of rebuilding after flood disasters.

Sen. Marco Rubio Florida

Florida is home to 1.7 million NFIP policies, more than any other state. “The National Flood Insurance Program is a lifeline for many Floridians.”

Sen. Marco Rubio
Florida

Risk Rating 2.0

One thing the Democrat and Republicans have in common: They oppose Risk Rating 2.0. Cassidy called the program “disastrous.”

Earlier this year, Cassidy released a statement on the Federal Emergency Management Agency acknowledging an internal study finding that the implementation of Risk Rating 2.0 to the NFIP could cause 20% of policyholders to drop out of the program due to higher premiums.

Menendez said he hears from FEMA and special interest groups “who are completely out of touch with disaster victims, that premiums need to be raised sky high on policyholders to bring down costs. But these calls to raise premiums foolishly ignore the fact that FEMA's huge administrative costs should be reformed to provide premium savings.”

The Biden administration earlier this year gave Congress 17 proposals to reform the NFIP, including measures to end NFIP coverage to properties that repeatedly flood, prohibit new construction in flood-prone areas and require sellers and renters to make full disclosure of a property's flood history.

In December, Congress approved a stopgap funding measure to keep the government running past a Dec. 3 deadline as well as a short-term extension of NFIP.

The main property/casualty insurance trade groups, the American Property Casualty Insurance Association and the National Association of Mutual Insurance Companies, support long-term extensions of the program. In a position statement, NAMIC said it favors the shift toward risk-based rates, policies designed to increase private-sector involvement in the program and provisions to address affordability, increase mitigation and address repetitive loss properties.

At the APCIA, Don Griffin, vice president of policy, research, and international, said flooding is a bipartisan issue, but “strangely enough, there's still not agreement on how to reform it.” The legislative proposals at least provide a discussion point, but they need study, he said.

“While the Biden administration flood insurance proposals have interesting components, we need to evaluate them based on the impact on consumers, communities, insurers, and the financial health of the National Flood Insurance Program,” Griffin said. “However, APCIA has long advocated for no lapse in the NFIP, disclosure of previous losses and showing the true risk costs, and transparency in disclosure.”

The administration's plan would extend NFIP through Sept. 30, 2031, and would ensure FEMA is able to sell and service policies, even during a lapse of appropriations.

According to FEMA, the proposals would address four main goals: ensuring more Americans are covered by flood insurance by making it more affordable to low-and-moderate income policyholders; building climate resilience by transforming the communication of risk and providing Americans with tools to manage their flood risk; reducing risk, losses and disaster suffering by strengthening local flood-plain management minimum standards and addressing extreme repetitive loss properties; and instituting a sound and transparent financial framework that allows the NFIP to balance affordability and fiscal soundness.

Best's Rankings

Top 25 Writers — US Private Flood — 2022 Edition

Writers were ranked by 2021 direct premiums written.

($ Thousands)

2021
Rank
2020
Rank
Company / Group AMB# 2021
Direct
Premiums
Written
%
Change in
Premiums
Market Share (%) Adjusted Loss Ratios % of
Company
Premiums
2021 2020 2019 2021 2020 2019
1 1 Zurich Ins US PC Group 018549 $168,788 70.9 16.1 13.4 15.2 85.2 367.0 34.8 1.1
2 3 Amer Intl Group 018540 156,871 108.3 14.9 10.3 9.9 54.8 32.9 28.1 1.1
3 2 Assurant P&C Group 018523 107,151 10.0 10.2 13.3 16.3 34.6 10.1 16.3 1.2
4 4 XL Reins America Group 018557 71,163 3.6 6.8 9.3 6.7 22.2 34.0 12.3 0.9
5 5 Swiss Reins Group 003262 60,763 -9.9 5.8 9.2 12.7 14.3 8.0 56.3 2.4
6 8 Liberty Mutual Ins Cos 000060 59,941 55.3 5.7 5.3 4.3 35.0 -6.7 -48.2 0.1
7 7 Berkshire Hathaway Ins 000811 52,113 25.8 5.0 5.6 4.3 14.2 16.7 -86.9 0.1
8 6 Arch Ins Group 018484 48,821 -1.7 4.7 6.8 6.6 8.4 9.2 5.3 0.9
9 12 Chubb INA Group 018498 44,221 188.4 4.2 2.1 0.9 61.9 0.5 22.8 0.2
10 9 Allstate Ins Group 000008 33,664 -5.4 3.2 4.8 3.0 24.1 21.6 14.1 0.1
11 10 Allianz US PC Ins Companies 018429 33,217 22.5 3.2 3.7 3.8 28.0 -20.2 107.6 0.6
12 39 Sompo Hldgs US Group 018878 33,024 999.9 3.1 0.0 0.0 7.2 0.0 0.0 0.5
13 11 Alleghany Corp Group 018640 26,862 2.8 2.6 3.6 3.8 3.1 -0.1 -0.8 1.0
14 16 Munich-Amer Hldg Corp Cos 018753 23,568 196.8 2.2 1.1 1.4 37.0 27.1 31.6 0.7
15 57 Transverse Ins Group 018931 17,322 0.0 1.7 0.0 0.0 96.5 0.0 0.0 7.8
16 13 MAPFRE North America Group 018801 15,367 5.9 1.5 2.0 2.3 4.5 1.7 10.7 0.7
17 20 Trisura US Ins Group 018944 12,084 110.5 1.2 0.8 0.0 261.0 69.3 59.7 1.5
18 15 Palomar Hldgs US Group 018954 11,653 42.5 1.1 1.1 0.9 36.9 -2.3 34.2 2.5
19 14 Progressive Ins Group 000780 10,175 7.7 1.0 1.3 1.3 3.9 2.7 0.2 0.0
20 18 United Surety & Indemnity Co 011138 6,458 1.2 0.6 0.9 1.1 0.2 1.2 1.2 8.3
21 19 Tokio Marine US PC Group 018733 5,782 -8.6 0.6 0.9 1.3 86.2 0.4 41.0 0.1
22 17 Markel Corp Group 018468 5,267 -25.0 0.5 1.0 1.4 87.6 52.9 36.7 0.1
23 21 Nationwide Group 005987 5,240 21.3 0.5 0.6 0.6 84.7 132.3 8.3 0.0
24 25 W. R. Berkley Ins Group 018252 5,078 166.4 0.5 0.3 0.0 285.7 0.8 0.0 0.1
25 22 Cincinnati Ins Cos 004294 4,754 23.0 0.5 0.5 0.6 152.0 18.3 13.0 0.1
Top 25 Writers $1,019,347 41.1 97.0 98.3 99.4 43.7 62.8 22.5 0.3
Total U.S. P/C Industry $1,050,352 42.9 100.0 100.0 100.0 43.3 62.0 22.8 0.1

Reflects Grand Total (includes Canada and U.S. Territories).

Source: BestLink logo - State/Line (P/C Lines) - P/C, US; data as of July 29, 2022.


Timothy Darragh is an associate editor. He can be reached at timothy.darragh@ambest.com.



There’s So Much to Cover—Don’t Miss the Latest

Get more news stories like this delivered to your inbox by signing up for our article spotlights.

Subscribe

Back to Home