Filed Under:Markets, Reinsurance

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.”

Top Story

Here is your 6-step hurricane season checklist for 2015

The Atlantic Hurricane season runs from June 1st through November 30th. Are you ready? Are your clients?

Top Story

5 things you should know about flood insurance

Making the wrong assumptions about flood insurance can be costly.

More Resources

Comments

eNewsletter Sign Up

PropertyCasualty360 Daily eNews

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

Mobile Phone
         

Advertisement. Closing in 15 seconds.