"The hearing, hosted by the Financial Services Subcommittee on National Security, International Development and Monetary Policy, focused on the macroeconomic effects from climate change and the monetary risks associated with it," James Jarvis reports for The Hill. "The NFIP covers more than 5 million flood insurance policies and collects approximately $4.75 billion in premiums, fees and surcharges each year."
Andy Karsner, who was assistant energy secretary for efficiency and renewables under George W. Bush, said flooding will continue to be a major risk, and "It is imperative for [insurance companies] to develop new tools of risk management because they are operating on very old model inputs and ancient legacy flood maps."
The repeated major hurricanes in 2017 and 2018 bled the program dry, leading to billions in losses. The disaster aid bill included provisions to help the NFIP pay off the claims, Jarvis reports.
Marshall Burke, an assistant professor of earth science at Stanford University, said the hurricanes will continue to be a problem: "We don’t have clear evidence that there will be more or less of them — but we know they will be more powerful and move more slowly. That will dramatically increase the likelihood of coastal flooding."
The uptick in hurricane has led some lawmakers to explore the idea of expanding the role of private insurers in the NFIP. That way they could share the risk and ensure the availability of flood insurance. "But it is unclear whether letting private insurance companies take on more risk will effectively help mitigate the problem," Jarvis reports.