FEMA recently released a new, concerning proposal for the National Flood Insurance Program (NFIP) called Direct to Customer (D2C).

The initiative was unveiled in a request for information (RFI), which was released to a suite of potential vendors on a General Services Administration (GSA) schedule. The RFI gives a brief overview of the D2C initiative and asks questions about how FEMA should approach developing and delivering the initiative. 

In the RFI, FEMA notes that, “other lines of insurance have made the leap into the digital realm, including WYO companies for their other lines of insurance. Flood Insurance remains behind the times, leading to potential customer frustration and the inability to protect one's home or business."

“As FEMA strives to increase climate resilience, ensure equitable access and outcomes for all citizens, and promote and sustain a ready FEMA and nation, it is imperative that FEMA enable the digital sale and servicing of flood insurance to increase the number of people covered. FEMA calls this initiative 'Direct to Customer' or 'D2C,'" FEMA said.

FEMA goes on to say that, “while the NFIP is the world's largest single peril insurance company, covering nearly 5 million policyholders with an annual premium of $3.5 billion and $1.3 trillion [of] insurance in force, only 4% of structures in the United States are covered. As climate change continues flood risks are increasing across the country with flooding events occurring in all 50 states and 99% of counties in the United States since 1996. In order to close the nation's flood insurance gap, the D2C investment has several goals:

• Achieve more equitable flood insurance outcomes by designing a new digital customer experience for selling and servicing NFIP policies.
• Improve climate resilience by providing digital solutions that make flood insurance more accessible and affordable to consumers and businesses.
• Reduce disaster suffering by utilizing digital solutions to make NFIP operations more efficient and more effective before, during and after flood events."
  

Last week, Chris Heidrick, chair of the Big “I" Flood Subcommittee; Joe Rossi, incoming chair of the Big “I" Flood Subcommittee; and other Big “I" staff met with FEMA as part of the Flood Insurance Producer National Committee (FIPNC) to express concern with the proposal and the future role of independent agents in the D2C effort, including its unique release and the lack of information surrounding it.

During the discussion, FEMA noted that this is a long-term—2-4 years—project and that they are in the early stages of looking at the concept and beginning to ask questions about it.

The Big “I" will submit comments on the RFI and is collecting feedback from the Big “I" Flood Subcommittee. Although the RFI says comments were due on Aug. 4, the deadline has been extended until Aug. 26.

Wyatt Stewart is Big “I" assistant vice president of federal government affairs.