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Lloyd’s calls for revamp of federal flood insurance

Posted: October 11, 2017

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Top executives of the global insurer Lloyd’s are advocating for the U.S. government to revamp the National Flood Insurance Program to encourage greater participation of private companies, which largely abandoned the market decades ago.

The executives, in Houston last week to ensure that Hurricane Harvey claims from its primarily business customers are getting paid quickly, said Lloyd’s would probably be one of several insurers interested in writing flood coverage if they could charge rates high enough to account for the risk. Many of the rates in the government program, which is paying out more in claims than it is collecting in premiums, are artificially low, say industry and government analysts.

The National Flood Insurance Program is $25 billion in debt — a figure that is expected to grow as it pays claims for Harvey and Hurricane Irma, which hit Florida and the Southeast in September.

“I think the commercial insurance market would be interested in participating in the flood insurance market in this part of the world,” Bruce Carnegie-Brown, Lloyd’s chairman. “But the way the NFIP (National Flood Insurance Program) is structured makes that quite difficult.”

Read the full story at the Houston Chronicle: Global insurer Lloyd’s calls for revamp of federal flood insurance – Houston Chronicle

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