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 FY2021

Statistics

Current as of June 30, 2021

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22,545

Participating Communities

$759

Average Annual Premium
(Incl. Premium & Federal Policy Fee)

$1.3 Trillion

Total Coverage of NFIP Policies

4.983 Million

Number of NFIP Policies in Force

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$16.9 Billion

Capacity to Pay Claims

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$20.5 Billion

Outstanding Debt with Treasury

Featured News

FEMA Updates Building Community Resilience with Nature-Based Solutions

In June, the Risk Management Directorate updated its Building Community Resilience with Nature-Based Solutions: A Guide for Local Communities publication to emphasize using nature-based solutions to combat the risk posed by the changing climate.

National Risk Index Full Applications Released with More Customization and Reporting and Data Updates

In August, FEMA announced the full application launch of the National Risk Index, an online resource that visually identifies traits of the communities most at risk from natural hazards.

This online mapping application provides a holistic view of community risk by providing baseline relative risk scores. It measures a community’s risk for 18 natural hazards, in addition to resilience, social vulnerability and expected annual loss.

See News from Previous Watermarks

NFIP Available Funds - as of 06/30/2021

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)	Mar. 31, 2021	June 30, 2021
Flood Fund Balance	5,910,818	6,340,328
Unpaid Obligations	(760,242)	(860,621)
Unpaid Loss & Loss Adjustment (Claims)	(292,556)	(524,033)
Mandatory Sequestration	(88,806)	(88,806)
Flood Fund Available Resources	4,769,214	4,866,868
Reserve Fund Balance	277,976	770,709
Net Investments	2,102,246	1,513,828
Outstanding Obligations	(504,445)	(424,121)
Reserve Fund Available Resources	1,875,778	1,064,308
Remaining Borrowing Authority	9,900,000	9,900,000
NFIP Total Capacity to Pay Claims *	16,544,992	16,911,029

* 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 $2.9B should the event reach $10B in losses.

Statements of Operations - as of 06/30/2021

National Flood Insurance Fund ($ in Thousands)

REVENUE	FY 2020	FY 2021 Q3	FY 2021 YTD
Premium	3,510,140	1,036,498	2,482,835
Reinsurance	0	0	0
Federal Policy Fee	191,199	54,269	135,358
Other Revenue	10,213	2,228	9,687
Total Flood Fund Revenue	3,711,552	1,092,995	2,627,880

EXPENSES	FY 2020	FY 2021 Q2	FY 2021 YTD
Total Loss & Loss Adjustment (Claims)	1,447,313	271,647	945,245
Unpaid Loss & Loss Adjustment (Claims)*	(670,576)	204,583	(210,538)
Commissions	57,662	17,084	41,354
Write Your Own (WYO) Expense Allowance	901,715	262,953	659,236
Interest Paid on Debt	438,412	71,280	284,749
Floodplain Management & Mapping Activities	174,295	50,716	122,641
Flood Related Grant Activities	121,291	72,924	206,763
Other Expenses	266,833	90,114	164,979
Total Flood Fund Expenses	2,736,945	1,041,301	2,214,429
FLOOD FUND NET INCOME (LOSS)**	974,607	51,694	413,451

National Flood Insurance Reserve Fund ($ in Thousands)

REVENUE	FY 2020	FY 2021 Q3	FY 2021 YTD
Assessment	583,703	117725	422216
Surcharge	338,458	51,002	205,730
Return on Investment	13,743	234,612	72,746
Total Reserve Fund Revenue	935,904	234,612	700,422

EXPENSES	FY 2020	FY 2021 Q3	FY 2021 YTD
Total Loss & Loss Adjustment (Claims)	0	0	0
Reinsurance-Traditional	153,924	47,328	149,231
Reinsurance-ILS	131,781	58,582	145,943
Obligated But Not Expended	73,624	(105,910)	148,532
Total Reserve Fund Expenses	359,329	0	443,706
RESERVE FUND NET INCOME (LOSS)	576,575	234,612	256,716

* 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.