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 - Second Quarter FY2021

Current as of March 31, 2021

The Office of the Flood Insurance Advocate (OFIA) reflects on its role within FEMA over the last five years. The report highlights progress, provides transparency, and supports FEMA’s Federal Insurance and Mitigation Administration in its ongoing improvements to the NFIP. The OFIA continues to identify and report on topics to improve the customer experience.

The annual Hazard Mitigation Assistance (HMA) Division’s Year in Review provides an overview of HMA’s 2020 activities and accomplishments. It also highlights success stories that demonstrate how HMA advances FEMA's strategic goals of building a culture of preparedness and readying the nation for catastrophic disasters through its grant programs.

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)	Dec. 31, 2020	Mar. 31, 2021
Flood Fund Balance	5,769,587	5,910,818
Unpaid Obligations	(804,945)	(760,242)
Unpaid Loss & Loss Adjustment (Claims)	(549,823)	(292,556)
Mandatory Sequestration	(88,806)	(88,806)
Flood Fund Available Resources	4,326,012	4,769,214
Reserve Fund Balance	770,709	277,976
Net Investments	1,513,828	2,102,246
Outstanding Obligations	(186,009)	(504,445)
Reserve Fund Available Resources	2,098,528	1,875,778
Remaining Borrowing Authority	9,900,000	9,900,000
NFIP Total Capacity to Pay Claims *	16,324,541	16,544,992

* 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 2020	FY 2021 Q2	FY 2021 YTD
Premium	3,510,140	782,801	1,446,337
Reinsurance	0	0	0
Federal Policy Fee	191,199	40,904	81,089
Other Revenue	10,213	4,695	7,459
Total Flood Fund Revenue	3,711,552	828,400	1,534,885

EXPENSES	FY 2020	FY 2021 Q2	FY 2021 YTD
Total Loss & Loss Adjustment (Claims)	1,447,313	169,738	673,598
Unpaid Loss & Loss Adjustment (Claims)*	(670,576)	(203,337)	(415,121)
Commissions	57,662	12,308	24,270
Write Your Own (WYO) Expense Allowance	901,715	201,995	396,283
Interest Paid on Debt	438,412	101,544	213,469
Floodplain Management & Mapping Activities	174,295	28,596	71,925
Flood Related Grant Activities	121,291	100,656	133,839
Other Expenses	266,833	(1,700)	74,865
Total Flood Fund Expenses	2,736,945	409,800	1,173,128
FLOOD FUND NET INCOME (LOSS)**	974,607	418,600	361,757

REVENUE	FY 2020	FY 2021 Q2	FY 2021 YTD
Assessment	583,703	128,575	304,491
Surcharge	338,458	65,725	154,728
Return on Investment	13,743	5,498	6,591
Total Reserve Fund Revenue	935,904	199,798	465,810

EXPENSES	FY 2020	FY 2021 Q2	FY 2021 YTD
Total Loss & Loss Adjustment (Claims)	0	0	0
Reinsurance-Traditional	153,924	50,595	101,903
Reinsurance-ILS	131,781	49,088	87,361
Obligated But Not Expended	73,624	344,023	254,442
Total Reserve Fund Expenses	359,329	443,706	443,706
RESERVE FUND NET INCOME (LOSS)	576,575	(243,908)	22,104

* 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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