Sandy's Impact to Hit NFIP, Reinsurers, Says SNL

A report from SNL Financial indicates that, based on recent catastrophes, reinsurers may be footing some of the bill left by Superstorm Sandy. 

And one of these reinsurers is the Federal Emergency Management Agency (FEMA) since, as the administrator of the National Flood Insurance Program (NFIP), it basically reinsures business under the “Write Your Own” program that allows private insurance companies to write federal flood-insurance policies in their names. 

According to SNL, Wright Insurance Group ceded the most business to the NFIP in 2011, followed by Allstate and The Hartford Financial Services Group. A homeowners' policy does not cover flood, including flood by storm, therefore “the NFIP will likely be substantially on the hook from Sandy,” reports SNL’s Thomas Mason. 

SNL also analyzed the federal flood premiums written in Connecticut, New Jersey and New York—the states hardest hit by Sandy. According to the data, the industry as a whole wrote about $342.8 million of direct premiums in the tri-state area in 2011, and Selective Insurance leads a list of top writers of flood insurance in this tri-state area. 

Of traditional reinsurers, Flagstone Reinsurance Holdings and RenaissanceRe recorded catastrophe losses from Hurricane Irene, which struck the Northeast last year. RenRe reported a negative impact of about $26.7 million from Irene—about 45.9 percent of its catastrophe loss for the 2011 third quarter. Flagstone recorded $10.9 million of catastrophe losses from Irene, which made up about one-fifth of its overall catastrophe losses for the quarter, says SNL. 

“But the ultimate losses borne by reinsurers will depend, of course, on the reinsurance programs in place at the underwriters that wrote policies within the region affected by Sandy,” reports Mason. “Such underwriters include State Farm Mutual Automobile Insurance Co., Allstate Corp., Travelers Cos. Inc., Liberty Mutual Holding Co. Inc. and Chubb Corp.”

Comments

Resource Center

View All »

Contractors General Liability Coverage 102

What is a prior work exclusion? Which option is right for my client? Why do...

Sign up today to get a 50% matching credit -...

Insurance marketing sometimes seems like it's a game of swings and misses, but we're here...

Guide: 5 Steps to Selling Cyber

Cyber risk and data security is on the agenda of every business owner and executive....

Citation Correlation

Do rigger and signalperson qualifications correlate with the cause of crane and rigging accidents? ...

Complete Guide to Electronic Signatures in Property & Casualty Insurance...

In property and casualty insurance, closing new business quickly is key. Learn how to leverage...

INSTANT ACCESS: Complimentary Sales Closer Questionnaires

Help property owners or managers compare your commercial residential property insurance coverage vs. the competition....

Determining Vacant Property Perils and Valuations

Are your clients fully covered for Vacant Properties? In this economic climate, your insureds may...

Risk Management for Law Firms

This package of 3 concise risk management articles offers straightforward content and practical suggestions law...

Guide: Top 15 E&O Risks-And How To Avoid Them

Accidents happen. But when it's an errors and omissions oversight, that accident can open your...

We'll Show You How to Reach Your Sales Goals

Whether you work alone or have a team of agents working for you, we can...

PropertyCasualty360 Daily eNews

Get P&C insurance news to stay ahead of the competition in one concise format - FREE. Sign Up Now!

Advertisement. Closing in 15 seconds.