Private Flood Market Grows, Again: Report

By | July 1, 2019

The private flood insurance grew again in 2018 but not nearly as much as it grew in 2017. According to the recently released Carrier Management report on “Top Private Flood Insurers, 2019 Market Study,” during 2018 private insurers reported direct private flood insurance premiums written of $681.4 million, an increase of $51.3 million over 2017. However, the growth is less than experienced from 2016 to 2017 where the private flood insurance market jumped $272.2 million from $357.9 million in premium (2016) to $630.1 million (2017).

However, because Lloyd’s, which enters the U.S. market through its inclusion in the NAIC “Quarterly Listing of Alien Insurers,” was not included as an element of the report, it could account for some or even most of the unexpected slowdown as the premium that might have migrated to Lloyd’s is unknown, according to Craig Poulton, CEO of Poulton Associates LLC, which administers the Natural Catastrophe Insurance Program.

“Lloyd’s has been a major source of insurance capacity for the peril of flood for many years,” Poulton said. “I would estimate that including excess flood, commercial lines flood and personal lines flood premiums, the Lloyd’s market writes well over $200 million of US flood premium and grew that premium significantly in 2018.”

The number of insurers writing private flood insurance also grew, adding 33 new companies reporting premium to the National Association of Insurance Commissioners Annual Statement, “Line 2.5 – Private Flood” for writers of the private market coverage.

Figure 1 of the report illustrates the rapid increase from 49 reporting carriers in 2016 to 124 in 2018. New participation came predominately from the Liberty Mutual Group (12 companies), CNA Insurance Group (six companies), Nationwide Group (four companies) and Sompo American Insurance Company.

Flood insurance policies are available through the National Flood Insurance Program (NFIP) and on the private market. As of March 2018, NFIP premiums written reached $3.55 billion.

Other findings in the Carrier Management report:

  • The 2018 top five writers of direct written premium for private flood insurance in the commercial market were: FM Global ($299,748,831); Zurich Re ($77,128,401); Berkshire Hathaway ($19,836,530); Alleghany Group ($17,571,105); and Allianz ($15,924,495).
  • The 2018 top five writers of direct written premium for private flood insurance in the residential market were: Assurant ($83,042,125); AIG ($59,759,482); Swiss Re ($49,687,501); Liberty Mutual Fire ($7,556,975); and ASI-Progressive ($6,070,467).

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