States Want Insurer Flood Data

Windstorm agency faces cuts, BoM discloses $25M typhoon hit

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States to Push Private Flood Market Development Trough Data

US insurance regulators are planning a new push to develop private flood insurance markets in their respective states by increasing the data collection from private insurers and making it public.

The proposals were discussed during a recent National Association of Insurance Commissioners (NAIC) and will be on the agenda at the December 9 meeting of the NAIC’s Property Casualty Insurance Committee.

Under consideration are:

  • Separating information collected of residential flood insurance premiums from commercial premiums.

  • Breaking down data by stand-alone policies and endorsements of homeowners policies by both first dollar and excess.

  • More robust claims and policy data.

A report developed by the NAIC on the issue argues that a “flood insurance gap” exists in the US since 69% of properties in high-risk flood zones do not buy coverage provided by the National Flood Insurance Program.

Concurrently, there has been a heightened interest amongst private carrier to expand their residential flood insurance offerings, greatly assisted by the development of sophisticated flood mapping and risk modeling technologies.

The NAIC had already begun preparing for changes to the data collected from private insurers, including expanding disclosure process that is part of its annual “data call” that drives the examination process. According to NAIC documents, data collected through the expanded data call will be publicly available in a similar way to the annual statement that is published as part of the annual statement.


Windstorm Budget Once Again Under the Knife

The U.S. House Science Committee is holding a hearing today to set the table for reauthorization of the National Windstorm Impact Reduction Program which has already seen its budget cut from previous years.

The program studies windstorms, including tornados and hurricanes, and conducts research to help mitigate their impacts by offering improvements in building codes and risk assessments. It is part of the National Institute of Standards and Technology (NIST).

NIST budget was flat in fiscal year 2019, while funding for research facility construction was cut sharply.

The windstorm program was originally authorized in 2004 and the statutes governing it were last updated in 2015, when Congress transferred principal responsibility for it to the NIST.


Despite Reinsurance Exit, Bank of Montreal Faces Another $25M Typhoon Hit

Bank of Montreal disclosed a $25 million pre-tax and after-tax reinsurance adjustment in the latest quarter resulting from the net impact of major reinsurance claims from “Japanese typhoons.”

The charge comes after BoM already announced its decision to wind down its reinsurance business last quarter.

BoM decided to exit reinsurance after determining that pricing pressure and increase catastrophe frequency made the sector unattractive.

“In light of the environment in the reinsurance sector, performance is no longer meeting our risk-return expectations, and so we’ve made the strategic decision to exit the majority of this business,” the bank said during an investor conference call.


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