The Watermark - National Flood Insurance Program Financial Statements

The Watermark is a quarterly report that provides transparency on the financial state of the National Flood Insurance Program (NFIP). This report provides information about the NFIP to interested groups and individuals, such as policyholders, industry partners and government officials.

Download the Latest Watermark - Third Quarter FY2020

Current as of June 30, 2020

Through an initiative known as the Future of Flood Risk Data (FFRD), FEMA aims to provide a more comprehensive picture of the country’s flood hazards and risk by leveraging new technologies to provide flood information more efficiently, accurately, and consistently across the nation.

BRIC will make $500 million available to states, local governments, US territories and tribes for mitigation activities designed to strengthen the Nation’s efforts to build a Culture of Preparedness.

The NFIP’s Available Resources provides information similar to a “Balance Sheet” used in the private sector. It is a snapshot of the program’s finances, including any prior period carryover for the given period.

AVAILABLE RESOURCES ($ in Thousands)	March 31, 2020	June 30, 2020
Flood Fund Balance	5,174,231	5,683,887
Unpaid Obligations	(660,019)	(726,112)
Unpaid Loss & Loss Adjustment (Claims)	(345,259)	(336,437)
Mandatory Sequestration	(90,093)	(90,093)
Flood Fund Available Resources	4,078,860	4,531,245
Reserve Fund Balance	628,540	160,567
Net Investments	1,199,546	1,739,066
Outstanding Obligations	(450,236)	(364,810)
Reserve Fund Available Resources	1,377,850	1,534,823
Remaining Borrowing Authority	9,900,000	9,900,000
NFIP Total Capacity to Pay Claims *	15,356,710	15,966,068

* FEMA’s reinsurance placements augment the NFIP’s Available Resources. After qualifying losses for a single event exceed $4B, the NFIP may collect up to $2.53B should the event reach $10B in losses.

REVENUE	FY 2019	FY 2020 Q3	FY 2020 YTD
Premium	3,386,176	1,046,658	2,499,751
Reinsurance	0	0	0
Federal Policy Fee	193,114	55,559	137,373
Other Revenue	9,039	2,163	7,002
Total Flood Fund Revenue	3,588,329	1,104,380	2,644,126

EXPENSES	FY 2019	FY 2020 Q3	FY 2020 YTD
Total Loss & Loss Adjustment (Claims)	1,884,347	191,726	1,179,192
Unpaid Loss & Loss Adjustment (Claims)*	1,351,335	(39,331)	(1,045,238)
Commissions	64,575	17,296	41,772
WriteYourOwn (WYO) Expense Allowance	913,995	244,357	703,503
Interest Paid on Debt	415,341	0	216,818
Floodplain Management & Mapping Activities	147,204	5,682	86,570
Flood Related Grant Activities	90,354	17,419	59,418
Other Expenses	496,613	207,481	237,781
Total Flood Fund Expenses	5,363,764	644,630	1,479,816
FLOOD FUND NET INCOME (LOSS)**	(1,775,435)	459,750	1,164,310

REVENUE	FY 2019	FY 2020 Q3	FY 2020 YTD
Assessment	503,585	139,890	390,119
Surcharge	361,596	63,600	228,666
Return on Investment	17,453	682	7,554
Total Reserve Fund Revenue	882,634	204,172	626,339

EXPENSES	FY 2019	FY 2020 Q3	FY 2020 YTD
Total Loss & Loss Adjustment (Claims)	0	0	0
Reinsurance-Traditional	185,880	51,308	102,616
Reinsurance-ILS	80,260	36,969	93,869
Obligated But Not Expended	27,074	(85,427)	162,844
Total Reserve Fund Expenses	293,214	2,850	359,329
RESERVE FUND NET INCOME (LOSS)	589,420	201,323	267,010

* In FY 2019, a new Federal Accounting Standard, Statement of Federal Financial Accounting Standards (SFFAS) 51 was issued that made changes to how claims are reported. SFFAS 51 gives guidance that claims must be reported at the time of occurrence. Unpaid Claims in this Watermark report show claims pursuant to SFFAS 51 and have been separated from Total Loss & Loss Adjustment. Unpaid claims include projections of claims reported, and projections of claims Incurred But Not Reported (IBNR), which is an estimate of claims not yet reported to insurance companies.

** The combination of Total Revenue and Total Expenses contribute to the Net Income or Net Losses for the NFIP. Because of the NFIP’s current structure of premium discounts, interest expenses on debt, and loss concentrations, Net Losses are anticipated.

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