FEMA lifts NFIP reinsurance coverage at renewal
- May 31, 2025
- Posted by: Luke Gallin
- Category: Insurance
The U.S. Federal Emergency Management Agency (FEMA) transferred $757.835 million of the NFIP’s financial risk to the private reinsurance market at its renewal for a total premium of $139.9 million, as the number of participating reinsurers increased year-on-year.
The 2025 reinsurance placement covers 12.0334% of NFIP losses between $7 billion and $9 billion, and 25.8584% of losses between $9 billion and $11 billion arising from a single qualifying flood event.
Together with its three in-force catastrophe bonds, FloodSmart Re Ltd. (Series 2024-1), FloodSmart Re Ltd. (Series 2023-1), and FloodSmart Re Ltd. (Series 2022-1), FEMA has transferred $2.058 billion of the NFIP’s flood risk to the private sector.
Elizabeth Asche, Ph.D., FEMA’s Assistant Administrator for Federal Insurance, and senior executive of the National Flood Insurance Program, commented: “In addition to announcing this year’s traditional renewal, I’m also pleased to share that the NFIP has increased its reinsurer participation in the program.
“We now have 27 reinsurers, up from 18 last year, strengthening FEMA’s commitment to use private sector reinsurance to enhance the NFIP’s ability to pay flood insurance claims.”
As well as the increase in participating reinsurers, there are some slight differences this year compared with the 2024 reinsurance placement.
Last year, FEMA transferred an additional $619.5 million of the NFIP’s financial risk to the private market for a premium of $121.1 million, so has secured 22% more protection for the 2025 calendar year.
However, this was an increase on 2023 when FEMA transferred $502.5 million of the NFIP’s flood risk to the reinsurance market, which was actually 50% down on the 2022 placement of $1.064 billion.
For this year’s renewal, FEMA contracted with reinsurance broker Guy Carpenter, part of Marsh McLennan, to provide broker services to assist in securing reinsurance for the NFIP.
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