FEMA has renewed the National Flood Insurance Program’s (NFIP) traditional reinsurance tower for 2025, securing 22% more in protection for this calendar year, at just over $757.8 million, from a broader panel of reinsurer counterparties.Notably, the 2025 renewal of the NFIP’s traditional reinsurance program was backed by 27 private reinsurance companies, where as .“In addition to announcing this year’s traditional renewal, I’m also pleased to share that the NFIP has increased its reinsurer participation in the program,” commented Elizabeth Asche, Ph.D., FEMA’s Assistant Administrator for Federal Insurance, and senior executive of the National Flood Insurance Program.“We now have 27 reinsurers, up from 18 last year, strengthening FEMA’s commitment to use private sector reinsurance to enhance the NFIP’s ability to pay flood insurance claims.” This expansion of the NFIP’s reinsurance panel is even more notable when considered in the context of rising flood insurance claims from 2024 hurricanes, which , just below the $7 billion traditional reinsurance attachment for 2024.

The $757.835 million of traditional reinsurance secured for calendar year 2025 is costing FEMA total premium of $139.9 million.That compares to the $121.1 million paid for .The 2025 reinsurance tower will provide FEMA with cover for NFIP flood insurance losses, at a rate of 12.0334% of losses between $7 billion and $9 billion and 25.8584% of losses between $9 billion and $11 billion.

Alongside three catastrophe bonds from the FloodSmart Re series of deals, FEMA will go through the 2025 calendar year with $2.058 billion of risk transfer and reinsurance protection against major flood loss events, remembering that the catastrophe bond component only covers named storm related flood losses.FEMA still has , from cat bonds issued since 2022, so the capital markets continue to the the NFIP’s largest provider of flood reinsurance protection.It’s likely will have played into this year’s negotiations for the reinsurance renewal for the NFIP and this is the latest the information has emerged, suggesting perhaps a slightly delayed renewal conclusion for the U.S.

Federal Emergency Management Agency (FEMA).However, the broad support achieved, from a larger panel of reinsurance counterparts, is a very positive signal for FEMA’s future ability to build-out the flood reinsurance tower.As in prior year’s, Guy Carpenter was the reinsurance broker assisting FEMA with its traditional reinsurance purchase for 2025.

Looking back, prior to tower, the NFIP reinsurance tower had shrank dramatically to just $502.5 million in size in 2023, in response to the hard and challenging reinsurance renewal market conditions.Which was a more than 50% reduction on the prior year’s .In years before that, at the January 2020 renewals, and in January 2019 renewed a $1.32 billion traditional reinsurance placement.

The first full placement of the NFIP reinsurance tower was in 2018, when ..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.Our can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.