18 July 2018News

RAA welcomes reported creation of FEMA cat bond

The Reinsurance Association of America (RAA) has welcomed the reported creation of a Bermuda-domiciled cat bond created by the Federal Emergency Management Administration (FEMA).

According to Artemis FEMA is launching the cat bond to transfer risk from the National Flood Insurance Program (NFIP) to the capital markets through Flood Smart Re, an insurance vehicle that is domiciled on Bermuda.

The RAA said that this was significant step to utilise the private market to manage the financial burden of the NFIP’s catastrophic flood risk.

“The RAA has long advocated for the NFIP to utilise the private market to provide financial backing for the government’s flood risk,” said Frank Nutter, president of the RAA. “Along with its second successful placement of reinsurance coverage earlier this year, the cat bond issuance confirms FEMA’s continued commitment to expanding private sector backing and the financial protections it will afford the NFIP and American taxpayers.”

Commenting further on the upside of FEMA’s utilisation of the private market, Nutter noted that FEMA recovered the full $1.04 billion of reinsurance coverage it placed with the private reinsurance sector in January 2017.




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5 April 2018   In an announcement that will be of great interest to Bermuda’s growing insurance-linked securities (ILS) community, the US Federal Emergency Management Agency (FEMA), which manages the National Flood Insurance Program (NFIP), has said it is exploring the possibility of using an ILS transaction to transfer risk to the capital markets.
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16 November 2017   The US House of Representatives has voted to reauthorise the National Flood Insurance Program (NFIP) with some amendments, a move that has been greeted positively by insurance industry representatives that include the Property Casualty Insurers Association of America (PCI).

More on this story

ILS
5 April 2018   In an announcement that will be of great interest to Bermuda’s growing insurance-linked securities (ILS) community, the US Federal Emergency Management Agency (FEMA), which manages the National Flood Insurance Program (NFIP), has said it is exploring the possibility of using an ILS transaction to transfer risk to the capital markets.
News
16 November 2017   The US House of Representatives has voted to reauthorise the National Flood Insurance Program (NFIP) with some amendments, a move that has been greeted positively by insurance industry representatives that include the Property Casualty Insurers Association of America (PCI).