Neptune Flood proposes private takeover of much of federal flood insurance

Neptune Flood, a private company that assesses flood risk and connects property owners with underwriters, has pitched a plan to the White House and the Treasury Department to stop the National Flood Insurance Program from issuing new policies, the company’s chief executive, Trevor Burgess, told The New York Times.

The company said it works with 39 “risk‑taking partners” to write policies and argued at an October White House gathering that the private sector could absorb up to 95 percent of the roughly 4.7 million policies the federal program currently insures, using improved flood modeling and artificial intelligence to set premiums property by property.

Mr. Burgess told the Times the government could “do less, and let the free market provide most of the solution.” Industry and policy experts pushed back. David Blades of AM Best said the risk of catastrophic losses makes it unlikely carriers could absorb 95 percent of the market, and Chad Berginnis of the Association of State Floodplain Managers said private insurers often drop policyholders after a single claim.

David Maurstad, who led recent changes to the federal program, said private participation could help but should not replace the National Flood Insurance Program, which the article notes was established in 1968 and remains deeply in debt — $22 billion in the red plus $16 billion in debt forgiven by the Treasury — after decades of subsidized premiums and recent shifts to higher, risk‑based pricing in 2021.

Key Topics

Politics, Neptune Flood, Nfip, Trevor Burgess, Fema, Treasury Department