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 - Fourth Quarter FY2020

Current as of September 30, 2020

The Heritage Emergency National Task Force (HENTF) is a partnership between the Office of Environmental Planning & Historic Preservation (OEHP) and the Smithsonian Cultural Rescue Initiative (SCRI). It strives to protect cultural and historic resources in our nation’s states, tribes, territories and local communities from the damaging effects of disasters. In addition to assisting museums and other cultural institutions when their collections are damaged by an event, HENTF helps reduce disaster suffering by assisting the public.

Using big data, FEMA’s modeling of the 18.1 million buildings constructed in the United States since 2000 has found the nation has saved $1.6 billion every year. These savings represent the cumulative losses avoided when structures follow International Codes or similar building codes that mitigate flood, hurricane and earthquake damage. FEMA projects that by 2040, the nation will save around $3.2 billion per year. This adds up to almost $133 billion in total losses avoided from 2000 to 2040.

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)	June 30, 2020	Sep. 30, 2020
Flood Fund Balance	5,683,887	5,870,295
Unpaid Obligations	(726,112)	(698,057)
Unpaid Loss & Loss Adjustment (Claims)	(336,437)	(707,677)
Mandatory Sequestration	(90,093)	(90,093)
Flood Fund Available Resources	4,531,245	4,374,468
Reserve Fund Balance	160,567	531,138
Net Investments	1,739,066	1,579,834
Outstanding Obligations	(364,810)	(275,590)
Reserve Fund Available Resources	1,534,823	1,835,382
Remaining Borrowing Authority	9,900,000	9,900,000
NFIP Total Capacity to Pay Claims *	15,966,068	16,109,850

* 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 Q4	FY 2020
Premium	3,386,176	1,010,389	3,510,140
Reinsurance	0	0	0
Federal Policy Fee	193,114	53,826	191,199
Other Revenue	9,039	3,211	10,213
Total Flood Fund Revenue	3,588,329	1,067,426	3,711,552

EXPENSES	FY 2019	FY 2020 Q4	FY 2020
Total Loss & Loss Adjustment (Claims)	1,884,347	268,121	1,447,313
Unpaid Loss & Loss Adjustment (Claims)*	1,351,335	374,662	(670,576)
Commissions	64,575	15,890	57,662
WriteYourOwn (WYO) Expense Allowance	913,995	198,212	901,715
Interest Paid on Debt	415,341	221,594	438,412
Floodplain Management & Mapping Activities	147,204	87,725	174,295
Flood Related Grant Activities	90,354	61,873	121,291
Other Expenses	496,613	29,052	266,833
Total Flood Fund Expenses	5,363,764	1,257,129	2,736,945
FLOOD FUND NET INCOME (LOSS)**	(1,775,435)	(189,703)	974,607

REVENUE	FY 2019	FY 2020 Q4	FY 2020
Assessment	503,585	193,584	583,703
Surcharge	361,596	109,792	338,458
Return on Investment	17,453	6,189	13,743
Total Reserve Fund Revenue	882,634	309,565	935,904

EXPENSES	FY 2019	FY 2020 Q4	FY 2020
Total Loss & Loss Adjustment (Claims)	0	0	0
Reinsurance-Traditional	185,880	51,308	153,924
Reinsurance-ILS	80,260	37,912	131,781
Obligated But Not Expended	27,074	(89,220)	73,624
Total Reserve Fund Expenses	293,214	0	359,329
RESERVE FUND NET INCOME (LOSS)	589,420	309,565	576,575

* 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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