The company which handles NFIP-Direct for the Federal Emergency Management Agency has been acquired by the company which does most of the back-office work for 50 Write-Your-Own companies.
CSC's flood insurance business process outsourcing unit, Flood BPO, is being acquired by National Flood Services (NFS), Inc. of Kalispell, Mont.
Financial terms were not disclosed.
CSC is a data processing company based in Falls Church, Va. Many of the 831,972 National Flood Insurance Program policies serviced by the CSC unit are policies divested by State Farm in 2010.
NFS is the leader in flood insurance processing, and has centers in St. Petersburg, Coral Springs and Lakeland, Fla. Its parent company is Stone River, which provides back-office service for life and P&C insurers.
The parent company of NFS is Stone River, which provides back-office service for life and P&C insurance companies.
CSC's flood data unit also services six WYO companies.
Steve Harty, president and CEO of NFS, says he hopes to complete the deal this month.
The CSC unit which handles flood-program processing is based in Overland Park, Kansas. NFS officials said the office will be retained and that NFS is extending offers to most of the 270 CSC employees who work there.
CSC has managed the NFIP Direct Servicing Agent contract since 2004. Under the program in 2010, CSC serviced more than $193 million in net premiums written and ended the year with $54.2 billion in insurance in force.
Most of those policies were formerly serviced by State Farm, which began divesting its NFIP policies in 2010 because of the uncertainty surrounding the reauthorization of the program.
Under an arrangement with FEMA, State Farm captive agents continue to sell the policies, but claims-servicing is handled by FEMA through CSC and government-designated claims adjusters.
CSC was awarded the contract for 5 additional years starting in March 2011 when it agreed to handle the work for $113.7 million.
When efforts were made to force FEMA to “depopulate” the State Farm policies in 2011, FEMA said the deal with CSC to take over the State Farm policies would save the agency more than $50 million annually, compared to the cost of the current WYO program.
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