Insured claims paid by FEMA’s National Flood Insurance Program (NFIP) after hurricane Ian have now reached above $3.4 billion, bringing the figure close to the lower-end of its most recent loss estimate for the major storm, Artemis understands.
Update: After we published this FEMA released an update stating that claims paid have reached above $3.9bn, so the NFIP reinsurance tower now looks at high-risk of attaching.
When we last reported on data supplied by the U.S. Federal Emergency Management Agency (FEMA), insured claims paid by the NFIP had reached more than $2.2 billion, which was back in January.
That was some way off the bottom end of FEMA’s most recent December 2022 estimate for flood insurance losses from the major hurricane’s impacts, largely in Florida, when it had pegged the expected range as somewhere between $3.7 billion and $5.2 billion.
Now, we understand the NFIP claims paid figure reached $3.2 billion early in March, and had surpassed $3.4 billion by the end of that month, with somewhere north of 46,400 NFIP flood insurance claims received from hurricane Ian.
By now, the figure has likely risen a little higher still.
Putting the NFIP flood insurance claims paid from hurricane Ian very close to the bottom-end of the estimated range, but still some way off the attachment point for the NFIP’s 2022 reinsurance program.
The NFIP’s reinsurance tower for 2022 pays for a percentage of flood insurance losses above an attachment point set at a $4 billion trigger per-event, meaning claims paid from hurricane Ian are still some way below that, although approaching.
But now over seven months after the hurricane’s initial landfall in Florida, the chances of hurricane Ian’s flood insurance claims creeping into the layer of losses where the NFIP reinsurance tower could pay out, seems to be lowering in probability.
On the catastrophe bond side, the lowest down of the FloodSmart Re cat bond program would only attach and begin paying out at $5.32 billion of losses to the NFIP from a flood event.
It now seems highly unlikely that the NFIP’s losses from hurricane Ian could reach that level. Reflecting this, Artemis has seen more recovery in the prices of the FloodSmart Re cat bonds in recent weeks, on some broker pricing sheets.
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