New Marsh Report Urges Reforms to National Flood Insurance Program
New York | December 09, 2015
Simplification, Transparency, New Technology, and Reinsurance Key to Better Serving Policyholders
A new report published today by Marsh, a global leader in insurance broking and risk management, urges policymakers to enact meaningful reforms to the National Flood Insurance Program (NFIP) to strengthen its role in the US flood insurance market. The report’s findings were shared today by Marsh President and CEO Peter Zaffino, who met with members of Congress and NFIP leaders in Washington, D.C. Congress will address the reauthorization of the NFIP before its expiration on September 30, 2017.
“Flood disasters represent the number one natural catastrophe in the US, and the NFIP plays a critical role in helping Americans recover from these events,” said Mr. Zaffino, who also serves as chairman of the Risk & Insurance Services segment of Marsh & McLennan Companies, Inc. (NYSE:MMC). “The report presents suggestions on how policymakers may capitalize on this opportunity to enact meaningful reforms and greatly improve this important program.”
Marsh’s report, Reforming the National Flood Insurance Program, is a collaborative effort of Marsh & McLennan subsidiaries Marsh, Torrent Technologies, Guy Carpenter, and Oliver Wyman. It offers policymakers recommendations on how to improve customer experience, lower costs, reduce debt, and strengthen engagement among the relevant parties.
Program recommendations include:
- Increase the risk community size: Increase the participation in flood coverage by simplifying the homeowners’ documentation process, increasing oversight of the mandatory purchase of insurance in high risk zones, providing greater transparency into the compensation structure of all program participants, and improving training requirements for agents who sell NFIP coverage and advise consumers about the NFIP.
- Share the risk community with the private industry: Reduce the federal government’s exposure to flood risk by increasing private insurer participation and adopting reinsurance transfer mechanisms to deliver more predictable results.
- Adopt more advanced technology: Upgrade technology and revise business practices in order to streamline the application, risk assessment, and claims process.
“By upgrading technology, increasing transparency, and harnessing the capital of the primary and reinsurance markets, policymakers can enable the NFIP to better serve communities and individuals for decades to come,” Mr. Zaffino said.
Marsh is the world’s leading insurance broker and risk adviser. With over 35,000 colleagues operating in more than 130 countries, Marsh serves commercial and individual clients with data driven risk solutions and advisory services. Marsh is a business of Marsh & McLennan Companies (NYSE: MMC), the leading global professional services firm in the areas of risk, strategy and people. With annual revenue approaching US$17 billion and 76,000 colleagues worldwide, MMC helps clients navigate an increasingly dynamic and complex environment through four market-leading businesses: Marsh, Guy Carpenter, Mercer, and Oliver Wyman. Follow Marsh on Twitter @MarshGlobal; LinkedIn; Facebook; and YouTube, or subscribe to BRINK.