Government shutdown means opportune timing

The timing of Neptune Insurance Holdings’ IPO couldn’t be more opportune.

Neptune, the nation’s largest private flood insurance, debuts on the New York Stock Exchange Wednesday under the ticker symbol “NP.” The company sold more than 18 millions shares in its initial public offering at $20 apiece, and shares opened Wednesday at $22.50.

The company’s first trade comes just as the U.S. government has shut down, meaning the National Flood Insurance Program (NFIP) isn’t accepting applications or processing new claims.

“Neptune is open for business,” said Neptune chairman and CEO Trevor Burgess. “We can help the 1,300 people every day who are trying to close on their homes who need flood insurance or required to have flood insurance.”

The National Association of Realtors has warned the government shutdown will delay real estate closings, because it prevents buyers from securing flood insurance that is necessary for some mortgages.

A growing number of U.S. properties are opting for insurance through private carriers rather than government insurance.

Burgess said Neptune’s underwriting results are far outperforming the NFIP. Neptune offers flood insurance of up to $7 million rather than the NFIP’s $250,000 maximum.

The company uses AI and other advanced technology to assess risk on individual properties, rather than looking at broad zip codes or whole neighborhoods.

“We tell the truth to consumers,” Burgess said. “If we say that it’s $200 a year, it’s pretty low risk. If we say it’s $12,000, that’s pretty high risk. And if we say, ‘No, [we won’t cover you]’, you should move.”

A 2024 study by the Joint Economic Committee found that flooding costs the nation between $179.8 billion and $496 billion each year. Nearly one third of NFIP flood insurance claims, according to federal data, come from outside high-risk flood areas.