Reinsurance News

FEMA reports NFIP has paid $793m in claims so far following Hurricane Ian

29th November 2022 - Author: Kane Wells

The U.S. Federal Emergency Management Agency (FEMA) has reported that the National Flood Insurance Program (NFIP) has paid $793 million in claims following Hurricane Ian, as Federal support nears $3 billion.

nfipFEMA suggests that more than $2.97 billion in federal grants, disaster loans and flood insurance payments has been provided to the state of Florida and to households after Hurricane Ian, with FEMA providing $769 million to households and $358 million to the state for emergency response.

As of the 28th of November, the NFIP has paid $793 million in claims, an increase of $141 million from the $652 million registered just over a week ago on the 21st of November.

In addition, the U.S. Small Business Administration has provided $1 billion in disaster loans, an increase from $962 million.

Meanwhile, FEMA also recently announced it has extended the period for applications from survivors to January 12th, 2023, noting that it has made individual assistance available to 26 counties in Florida.

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Earlier this month, FEMA estimated that Hurricane Ian could drive National Flood Insurance Program losses of between $3.5 billion to $5.3 billion, including loss adjustment expenses, which at the mid-point would trigger its reinsurance protection.

At the lower end of FEMA’s initial loss estimate for the NFIP, its reinsurance protection would not trigger as this is set at $4 billion or more to trigger a percentage of recovery payments.

However, if losses do come in above the $4 billion mark, then the NFIP will be able to collect under its 2022 reinsurance programme.

For 2022, FEMA secured $1.064 billion of flood reinsurance protection for the NFIP.

Secured at the January 1st, 2022, reinsurance renewals, the NFIP reinsurance tower is structured to cover 4.163% of losses between $4 billion and $6 billion; 26.565% of losses between $6 billion and $8 billion; and 22.453% of losses between $8 billion and $10 billion.

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