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 »

Is It Time To Step Up And Own An Agency?

Download this eBook for insight on how to determine if owning an agency is right...

Claims - The Good The Bad And The Ugly

Fraudulent claims cost the industry and the public thousands of dollars in losses. This article...

Leveraging BI for Improved Claims Performance and Results

If claims organizations do not avail themselves of the latest business intelligence (BI) tools, they...

Top 10 Legal Requirements for E-Signatures in Insurance

Want to make sure you’ve covered all your bases when adopting e-signatures? Learn how to...

Get $100 in leads with $0 down!

NetQuote's detailed, real-time leads have boosted sales for thousands of successful local agents across the...

The Growing Role of Excess & Surplus Lines in Today’s...

The excess and surplus market (E&S) provides coverage when standard insurance carriers cannot or will...

Increase Sales Conversion with this Complimentary White Paper

This whitepaper will share proven techniques - used by many of the industry's top producers...

D&O Policy Definitions: Don't Overlook These Critical Terms

Unlike other forms of insurance where standard policy language prevails, with D&O policies, even seemingly...

Environmental Risk: Lessons Learned from Willy Wonka and the Chocolate...

Whether it’s a chocolate factory or an industrial wastewater treatment facility, cleanup and impacts to...

More Data, Earlier: The Value of Incorporating Data and Analytics...

Incorporating more data earlier in claims lifecycles can help you reduce severity payments by 25%*...

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.