While flood insurance might represent the biggest growth opportunity for private carriers in years, it's no certainty the industry would be eager or even willing to take on a greater share of such exposures unless conditions are established to give them a reasonable chance of making a profit.
That won't be easy in a line that historically has been difficult to write, for both private and public entities alike.
Facing a deficit of around $30 billion, it's no wonder the National Flood Insurance Program and other government agencies have been exploring the potential for greater private market participation. Yet despite the prospect of having a portion of the more than $3 billion paid annually for NFIP coverage in play, most insurers and capital market investors are still likely to take a pass on this risk unless the factors that have undermined the program's solvency in the first place are addressed to their satisfaction.
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