FEMA puts call out for 2018 NFIP reinsurance bids
The Federal Emergency Management Agency has launched a procurement process to secure reinsurance for the National Flood Insurance Program, effective on or about Jan. 1, 2018.
FEMA piloted a reinsurance program for 2016 and secured a new placement effective Jan. 1, 2017, through Jan. 1, 2018, through a consortium of 25 reinsurers arranged through Guy Carpenter & Co. L.L.C.
Under the agreement, the reinsurers indemnified FEMA for flood claims on an occurrence basis. The layer is structured to cover 26% of losses between $4 billion and $8 billion. A combined total of $1 billion of the NFIP’s flood risk was transferred to the private reinsurance market through this agreement.
FEMA was expected to tap the reinsurance layer to deal with claims losses caused by hurricanes Harvey, Irma and Maria.
Final tenders for the next one-year reinsurance agreement, which will again be brokered by Guy Carpenter, are due by Dec 15.