Private Flood Insurers Are Capitalizing on the Shutdown
With the US government shutdown effectively paralyzing the National Flood Insurance Program, private firms such as Neptune Insurance Holdings are seizing the opportunity to push for the near-total privatization of flood insurance.
Neptune and other private flood insurers have a leg up after decades of inadequate NFIP funding, combined with the Trump administration’s ongoing assault on climate research, hazard mitigation, and adaptive planning. (Joseph Prezioso / AFP via Getty Images)
When the federal government shut down on October 1, so too did the country’s publicly managed National Flood Insurance Program, which covers about 90 percent of the flood insurance policies in the United States. That means amid ever-increasing flood risks, homeowners and renters across the country aren’t able to obtain federal flood insurance or renew their policies, and they could face difficulties getting claims paid.
For many of the same reasons, October 1 was a very good day for Neptune Insurance Holdings. The artificial intelligence–powered private flood insurance company was executing an initial public offering on the New York Stock Exchange as the National Flood Insurance Program (NFIP) ground to a halt. The company’s stock climbed 24 percent. Neptune president and chief executive officer Trevor Burgess, who’s been making the rounds in corporate media, called the timing of his company’s new securities issue “fortuitous.”
The newly minted billionaire is not wrong. While the NFIP is effectively paralyzed, Neptune, which claims to be the largest private flood insurer in the country, is “open for business,” as Burgess put it.
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