SLTX Contributes to National Flood Report
The private flood insurance market is emerging as an option for homeowners, despite the fact that the National Flood Insurance Program (NFIP) is responsible for a majority of residential flood insurance policies in the US, according to a report published by the Wharton School of Business at the University of Pennsylvania.
This formal report is funded by a grant through the US Department of Homeland Security for the Flood Apex Program under Contract HSHQDC-17-C-B0032. Its primary objectives were to be presented to legislators, market participants, and other stakeholders so as to provide a clearer picture of the private flood insurance market in the US.
Norma Essary, SLTX CEO, and Tara Mitchell, SLTX Vice President of ITS/CIO, shared their insights with researchers regarding flood insurance and the surplus lines market in Texas. SLTX emphasized the importance of educating consumers on flood insurance and the benefits of private flood coverage via the excess and surplus lines marketplace.
Additionally, SLTX provided data on the growth of surplus lines residential flood policies. SLTX found that Texas experienced an 838% growth in the total number of surplus lines flood policies between 2014 and 2017, with a 260% increase in flood premium during this time.
Overall, it is estimated that private flood insurance makes up 3.5-4.5% of all primary residential flood policies currently purchased, with roughly 175,000-220,000 private policies in force.
While the NFIP currently makes up a large portion of the flood insurance market, the private market has proved that it is healthy and able to take on greater risk. As the need for flood insurance becomes greater, consumers may turn increasingly to the surplus lines industry, and the industry will be prepared.
The Emerging Private Residential Flood Insurance Market in the United States