New Marsh Report Urges Reforms to National Flood Insurance Program

Business Wire

Simplification, Transparency, New Technology, and Reinsurance Key to Better Serving Policyholders

NEW YORK--(BUSINESS WIRE)-- 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.

About Marsh

Marsh is a global leader in insurance broking and risk management. Marsh helps clients succeed by defining, designing, and delivering innovative industry-specific solutions that help them effectively manage risk. Marsh’s approximately 27,000 colleagues work together to serve clients in more than 130 countries. Marsh is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global professional services firm offering clients advice and solutions in the areas of risk, strategy, and people. With 57,000 colleagues worldwide and annual revenue exceeding US$13 billion, Marsh & McLennan Companies is also the parent company of Guy Carpenter, a leader in providing risk and reinsurance intermediary services; Mercer, a leader in talent, health, retirement, and investment consulting; and Oliver Wyman, a leader in management consulting. Follow Marsh on Twitter @MarshGlobal, or on LinkedIn, Facebook and YouTube.