Now that flood insurance is a federal thing. Actuarial studies employ several formulas to determine their figures. To not get all technical they are concerned with the number of losses; the severity of losses and then they factor in other variable such as steps taken to prevent flood damage, ability to pay, whatnot.... Then they factor all that for inflation. There is a range of numbers that can be used. I think actuaries tend to rate these things conservatively. Usually, in an open marketplace, their conservative figures are tempered by market interactions. I don't know how this would fly with a federal program though.