The trusted source of unique, data-driven insights on insurance to inform and empower consumers. Insurance Information Institute
Auto Insurance, Business Insurance, General Liability, Homeowners Insurance, Insurers and the Economy, Market Conditions, Workers Compensation

U.S. P/C Market Records Hard-Earned Decade-Low Combined Ratio

Leave a comment

By William Nibbelin, Head of Industry Data and Actuarial Science, Triple-I 

After years of significant financial strain, the U.S. property/casualty (P/C) insurance industry is showing strong signs of recovery and stabilization. According to the latest Insurance Economics and Underwriting Projections: A Forward View report from Triple-I and Milliman, the industry’s net combined ratio (NCR) reached its lowest level in more than a decade in 2025, reflecting improved underwriting conditions as the sector navigates the tail-end of post-pandemic economic volatility and hyperinflation.

Economic Outlook

While the industry maintains demonstrated resilience, the economic environment signals greater uncertainty. Real GDP growth slowed to 2.0 percent in the first quarter of 2026, while inflation remained above the Federal Reserve’s target at 3.3 percent in March. Triple-I Chief Economist and Data Scientist Michel Léonard, Ph.D., CBE, emphasized the cost drivers behind these results, explaining they “should be viewed in the context of the significant financial strain insurers have faced in recent years.”

“Although conditions have stabilized somewhat, insurers continue to operate in an environment marked by elevated catastrophe risk, higher claims severity, and ongoing economic uncertainty,” Léonard said. “Insurance employment declined 1.8 percent year over year in March, underperforming the broader labor market and reflecting continued weakness in sector employment conditions. Meanwhile, higher energy prices and persistent inflationary pressures continue to strain household and business finances.”

A critical factor for future growth is monetary policy. Forecasts for 2027 and 2028 hinge on the Federal Reserve’s interest rate decisions, with a holding pattern currently in place as the market monitors unemployment rates as a barometer for potential rate cuts.

Personal Lines Underwriting Results

The 2025 recovery was most visible in personal lines, which achieved a dramatic turnaround from supply chain-driven losses following the pandemic.

  • Personal Auto: This segment reported a 2025 NCR of 91.8, a 3.5-point improvement from 2024. Net written premium growth slowed to 4.0 percent, its lowest level since 2021.
  • Homeowners: Despite an active catastrophe year, including the Los Angeles wildfires in the first quarter, underwriting performance improved significantly. The 2025 NCR of 88.1 was the lowest in over a decade, aided by easing replacement cost pressures and prior pricing discipline.

Commercial Lines Underwriting Results

While property lines flourished, certain commercial lines face ongoing challenges:

  • Commercial Auto and General Liability: These are the only major lines with an NCR above 100 in 2025. Jason B. Kurtz, FCAS, MAAA, principal and consulting actuary at Milliman, explained that “litigation pressures and claims severity trends continue to result in elevated loss costs, constraining improvement in these segments despite broader industry strength.”
  • Workers’ Compensation: This line remains a pillar of stability, with projected combined ratios in the low 90s through 2028. For 2025, the preliminary combined ratio is 91, at  “an increase of about 5 points from the prior year,” said Donna Glenn, chief actuary at the National Council on Compensation Insurance (NCCI). Glenn added this change “is primarily due to an increase in the loss and underwriting expense ratios.”

Forward View

Underlying P/C growth for the first half of 2026 is forecast at -3.7 percent, a significant dip from the 1.6 percent growth in 2025. A recovery is anticipated beginning in 2027.

Replacement costs are a primary area of concern for long-term pricing. Triple-I Chief Insurance Officer Patrick Schmid, Ph.D., noted, “replacement costs moderated significantly from their 2022 peak, but our forecasts show them re-accelerating through 2028 and eventually outpacing overall U.S. inflation.”

While property lines have strengthened, Schmid cautioned that “the industry faces a challenging road ahead with elevated catastrophe exposure, economic uncertainty, and persistent claims-cost pressures.”

New Deep-Dive Resource

To provide members with more granular insights, Triple-I has launched State of the Line Issues Briefs, a monthly series focusing on the nuances of individual segments. These deep dives are designed to help members navigate specific strategic planning challenges beyond high-level quarterly forecasts. In an addendum to the briefing, Triple-I shared key findings from these reports.

For the farmowners’ line, analysis revealed the producer price index for commercial machinery repair acts as a high-correlation leading indicator for premium changes. Additionally, a major structural shift was identified in fire and allied lines, where the standard market share dropped from 66.7 percent in 2016 to just 52.7 percent in 2024, as premiums migrated toward the excess and surplus and residual markets.

Catastrophes, Disaster Preparedness, Disaster Resilience, Flood Insurance, Floods, Regulation, Risk-Based Pricing

NFIP Proposals Highlight Urgency of Collective Action on Resilience

Leave a comment

By Lewis Nibbelin, Research Writer, Triple-I

Proposed reforms to FEMA’s National Flood Insurance Program (NFIP) would expand the role of private insurers in the flood market as part of a broader push for state and private sector participation in long-term disaster management and resilience.

Congress established NFIP in 1968, at a time when few private insurers were willing to write flood coverage. While private participation in the flood market has grown in recent years, NFIP has continued to cover more than half of all U.S. homeowners with flood insurance.

In their report released May 7, the FEMA Review Council described NFIP as “unsustainable” and “burdened by over $20 billion in debt” due to its “one-size-fits-all” approach to flood mapping, which “does not fully capture current or emerging flood hazards” on national and local scales. These shortcomings have contributed to inadequate insurance pricing and flood risk misconceptions among homeowners, exacerbating low flood insurance take-up rates in at-risk communities, the report said.

To ensure the availability of comprehensive flood protection, the report recommended establishing a depopulation program or a centralized flood insurance marketplace to shift more policies into the private market. Risk-based pricing for NFIP policyholders can also incentivize private involvement, the report said, as premiums adjust to reflect actual risk.

This transition builds upon NFIP’s Risk Rating 2.0 reforms, which aimed to make premium rates more actuarially sound and equitable by better aligning them with individual, property-level risk. As NFIP rates became further aligned with principles of risk-based pricing, some policyholders’ prices fell as many others rose, which boosted private market opportunities. Updates to the reforms based on new data could attract even greater private participation, the report said.

Private coverage gaps

Though flood was once considered an “untouchable” risk for the private market, advanced analytics capabilities and data sources have helped give them the comfort and flexibility they need to write the coverage. Federal regulations introduced in 2019 also allowed mortgage lenders to accept private flood insurance if the policies abided by regulatory definitions, propelling double-digit growth in private appetite.

Despite growth, private companies currently write only 27 percent of the flood market. Roughly 4.7 million homeowners have flood coverage through NFIP nationwide.

Mark Friedlander, Triple-I’s senior director of media relations, told USA Today Florida Network that private insurers are unprepared to take on all the risk NFIP covers, especially as flood risk severity rises.

“While private flood insurance is growing, NFIP remains vital for providing widespread, actuarially sound coverage against damages excluded from standard homeowners policies,” Friedlander said.

Ahead of a temporary NFIP lapse in 2025, a letter penned by organizations across the risk and insurance industry suggested the program’s absence “could further impact affordable housing, create additional challenges for small businesses, unnecessarily further increase the cost of homeownership, and must be avoided.”

Resilience key to insurance availability

For communities that invest in floodplain management, disbanding NFIP could disqualify homeowners from flood insurance premium discounts. FEMA currently incentivizes such practices through its voluntary Community Rating System, which rewards NFIP policyholders with corresponding discounts as high as 45 percent.

At a meeting with the FEMA Review Council before the 2025 lapse, NAIC members expressed support for these mitigation initiatives, with North Dakota Insurance Commissioner and NAIC Past President Jon Godfread adding “state insurance regulators are committed to expanding access to flood insurance through both the NFIP and private coverage.”

The recent restoration of FEMA’s Building Resilient Infrastructure and Communities (BRIC) program underscores the benefits of such multi-sector collaboration. Before its cancellation last year, the program had allocated more than $5 billion for investment in mitigation projects to alleviate human suffering and avoid economic losses from floods, wildfires, and other disasters.

Reinstated with several new rules to improve its impact, BRIC also “isn’t a perfect program, but it’s a necessary one,” said Daniel Kaniewski, CEO of Northstar Risk & Resilience, a former FEMA deputy administrator, and a Triple-I non-resident scholar. Though changes to the program may drive smarter resilience investment, he cautioned that “BRIC alone – or any federal program on its own – isn’t going to close the nation’s disaster resilience gap.”

“It’s going to take community leaders, emergency managers, businesses, nonprofits – and, of course, the insurance industry – pulling in the same direction,” Kaniewski said. “The burden can’t exclusively fall on property owners and federal taxpayers.”

Insurers have worked hard to develop partnerships that address these challenges. Strengthen Alabama Homes, for instance – financed by the insurance industry with more than $86 million in grants since 2016 – offers homeowners’ insurance discounts for those who build or retrofit their homes to voluntary IBHS construction standards for wind and hail resilience, prompting numerous states to implement their own programs.

Incentives and public-private collaboration will be critical to keeping insurance affordable and available amid the mounting toll of extreme weather. Swiss Re data indicates flooding, wildfires, and severe convective storms drove a record 92 percent of total global natural catastrophe insured losses in 2025, fueling a “decades-long trend of rising baseline risk.”

Learn More:

Mississippi Set to Launch Roof Grant Program

Resilient Post-Wildfire Rebuilding Pays Off

Welcome Back, BRIC

Claims Leaders Take Charge on Climate-Resilient Rebuilding

Flash Floods Set Records in 2025, Inland Risk Surges

End of Federal Shutdown Revives NFIP — For Now

Health & Safety, Market Conditions

Pet Insurance: A Growing, Diversifying Line

Leave a comment

By Lewis Nibbelin, Research Writer, Triple-I

Pet ownership in the United States has steadily grown in recent decades, climbing to 95 million households with at least one pet in 2025, according to the American Pet Products Association (APPA). Alongside the rise in ownership, the APPA projects $165 billion being spent on pet care in 2026 alone, continuing a trend of rising pet industry expenditures since 2018.

But from unexpected veterinary costs to greater liability concerns, pet companionship introduces a range of new risks. Triple-I’s latest Issues Brief identifies steps pet owners can take to keep their pets safe and healthy, which a growing market of property/casualty and specialty insurers are helping facilitate through pet insurance.

Reported and tracked as its own business line as of 2024, the pet insurance market has expanded by more than 10 percent every year since 2018, based on Triple-I analysis of S&P Global Market Intelligence data. Direct premiums written last year also hit a record high at $5.47 billion, with most of the largest insurers experiencing double-digit premium growth in 2025.

Despite growth, however, the North American Pet Health Insurance Association reported that fewer than 4 percent of pets are insured, suggesting many pet owners remain unaware of available coverage options or of the long-term value these protections can ensure.

Meeting individual pet needs

While policies vary, pet insurance typically covers only accidents (encompassing injuries, such as broken bones) or both accidents and illnesses (such as infections and cancer). Many insurance plans include hereditary and congenital condition coverage for policies in force. Plans are priced based on risk factors like age, gender, and breed.

Though most pet insurers exclude pre-existing health conditions from coverage, some will no longer assess a condition as preexisting if the condition is curable and the pet is symptom-free for some period, typically ranging from 180 to 365 days. Separate pet wellness plans can also cover preventive health care, including vaccinations and annual exams.

Unlike property/casualty coverages, most pet insurance policies work on a reimbursement basis, meaning policyholders must pay up front for services and then submit a claim to their insurer. Only once claims are submitted can the insurer pay for some or all of the service by reimbursing the policyholder.

Beyond alleviating the immediate burden of veterinary prices – which can amount to tens of thousands of dollars over a pet’s lifetime, according to the American Veterinary Medical Association – insurance can help owners keep their pets healthy longer, mitigating greater costs as the pet ages.

As coverage options continue to expand, pet insurance has evolved into a more flexible and comprehensive product, making it important for pet owners to compare policies carefully and understand how coverage, reimbursement, and exclusions work. Reviewing these options with an insurance professional can help pet owners decide what works best for their unique pet.

Learn More:

Infographic: Dog Bite Claims

Infographic: National Dog Bite Prevention Week

Dog-Related Injury Claims on the Rise in 2025

Spotlight on: Dog Bite Liability

Liability and Safety Tips for Dog Owners

Tips to Prevent Dog Bites

Catastrophes, Coastal Property, Disaster Preparedness, Disaster Resilience, Hurricane, Regulation, Risk-Based Pricing

N.Y. Natural Catastrophe Exposure Highlights
Risk-Based Pricing Benefit

Leave a comment

By Lewis Nibbelin, Research Writer, Triple-I

New York may be less exposed to frequent natural catastrophes than states like Florida or California, but it is far from immune to massive catastrophe losses.

A recent white paper by risk modeler Karen Clark & Co (KCC) cautions against underestimating the Empire State’s vulnerability – or that of other states not typically identified with large-scale natural disasters. A future 1-in-100-year hurricane event in New York could cost insurers more than $100 billion, KCC reported, with a 1-in-250-year event potentially costing twice as much.

“Beyond hurricanes, New York also experiences substantial impacts from both severe convective storms and winter storms, which together generate almost $1 billion in average annual property losses in the state,” KCC notes.

As state lawmakers consider strengthening requirements for prior approval of premium rate increases to rein in rising costs, KCC suggests that cost reduction strategies that account for these potential impacts would help ensure “property insurance remains both available and affordable.”

Underlying cost drivers

New York is exposed to nearly $9 trillion in potential insured losses, $6 trillion of which is concentrated along the coast. Contributing factors include property location and associated rebuilding costs, demonstrating, in part, demographic shifts placing more people in harm’s way, KCC said.

“Even if rates remain constant, premiums will rise over time to reflect the increasing cost of construction,” the report said. It added that such costs for an average single-family home have doubled over the past decade.

With trillions in loss exposure, the state faces outsized impacts, even from less intense storms. For instance, Hurricane Sandy in 2012 – despite making landfall in New Jersey as a Category 1 storm – generated almost $10 billion in insured losses in New York. Based on current exposure, insured losses in New York would exceed $13 billion, with total losses climbing to $31 billion.

A Category 3 hurricane that made landfall in the state in 1938 would produce more than $20 billion in insured losses today, KCC said. The state’s “worst-case scenario,” however, is if a similar storm hit close to Rockaway Beach in New York City, as losses in the hundreds of billions would ripple through “the most populated areas of the state.”

Sustaining market health

In testimony to the New York State Senate in November 2025, the American Property Casualty Insurance Association (APCIA) estimated that such an event “would wipe out 69 years of homeowners’ insurance return on net worth. ” APCIA noted that New York State is second only to Miami in vulnerability to a hurricane exceeding $100 billion in losses.

At the same state senate hearing, Triple-I Chief Insurance Officer Patrick Schmid testified on market adjustments insurers made in the wake of Hurricane Sandy, such as updating rates and establishing reserves for Sandy-related claims that extended beyond the year of impact.

These changes have allowed state homeowners’ insurance premiums to remain “relatively average and reasonable as a percentage of household income,” contradicting “the narrative of an affordability crisis in New York’s homeowners’ insurance market,” Schmid explained.

“In other words, the ‘profitable decade’ reflects a market that learned from a major catastrophic event and adjusted accordingly,” Schmid said. “This is how insurance markets should function.”

Importance of risk-based pricing

Insurance pricing must reflect increased risks to maintain policyholder surplus, or the funds regulators require insurers to keep on hand to pay claims. Regulatory constraints on risk-based pricing in some states have forced insurers to write fewer policies or withdraw from state markets entirely, leading to less affordable and available coverage.

Unlike its homeowners’ market, New York’s auto expenditures rank among the highest in the country, driven by repair costs as well as accident frequency and fraud, according to a Triple-I Outlook. Proposals to give New York regulators the authority to block auto premium rate changes could erode surplus and further push insurers to rethink their risk appetite in the state, which already imposes a restrictive “excess profit” law.

The role of profit in insurance pricing is not merely to reward insurers for the risks they assume. As KCC puts it, profit is “the mechanism through which insurers compensate capital providers for risk.” Rather than intervene in insurance markets, policymakers should aim to provide “a regulatory environment that allows insurers flexibility to set adequate rates.”

Learn More:

Claims Leaders Take Charge on Climate-Resilient Rebuilding

New York Among Least Affordable States for Auto Insurance

Few, High-Powered Storms Defined 2025 Hurricane Season

Triple-I Testifies on New York Insurance Affordability

Resilience Investment Payoffs Outpace Future Costs More Than 30 Times

Triple-I Brief Explains Benefits of Risk-Based Pricing of Insurance

Cyber Risk, Insurers and the Economy, Legal Environment, Technology

Cyber Claim Severity Surges as AI, Litigation Accelerate Risk

Leave a comment

By Lewis Nibbelin, Research Writer, Triple-I

Despite a 34 percent decline in cyber insurance claim frequency for large U.S. businesses in 2025, average claim severity doubled to more than $4.4 million, according to Chubb’s 2026 Cyber Claims Report. Though AI-driven detection systems helped stabilize claim frequency across several global markets, advanced cyberattacks – alongside liability litigation challenges – ranked among the top cost drivers.

Drawing on historical claims data, the report explained how bad actors have begun leveraging AI for increasingly sophisticated attacks capable of “compromising multiple systems in a matter of minutes,” including large-scale incidents that involve minimal human oversight. Data-breach claims alone exceeded a historic $10.2 million in the U.S., propelled in part by the outsized impact of individual ransomware encounters.

Becoming faster and more difficult to detect, ransomware incidents can propagate across multiple businesses along a supply chain with just one attack, especially as markets become more globally interconnected. One such event in the U.K. led to roughly $568 million in losses for the targeted company but a $1.4 billion loss for the entire supply chain as manufacturing “halted for five weeks across sites in the U.K., Slovakia, Brazil, and China.” Over 5,000 U.K organizations in total were affected, Chubb said.

Consequences of cyber incidents extend beyond these losses, the report noted, as incidents increasingly escalate to legal action, often within days and “irrespective of the size of the entity or any controls perceived to be lacking.” Federal legislation enacted in 1988 to protect physical video privacy has helped lead the trend, as plaintiff attorneys continue to reinterpret the law to apply to modern streaming and social media platforms.

Similar applications of a 1967 statute in California – originally intended to prevent wiretapping – now target businesses that use website technologies such as cookies and tracking pixels, generating thousands of lawsuits in recent years. A bill that would remove these prohibitions for businesses has garnered strong bipartisan support, though faces an uncertain future after stalling in the state legislature last year.

“At a time when affordability is already one of California’s greatest challenges, these lawsuits are quietly making life more expensive for everyone,” wrote Scott Miller, president and CEO of the Fresno Chamber of Commerce, for The Fresno Bee. “[SB 690] would restore balance, reduce abusive litigation, and allow small businesses to focus on serving their customers, not defending against opportunistic lawsuits.”

A “growing body of privacy laws” are further “imposing complex, layered obligations for companies that store and/or transfer personal data,” Chubb reported, highlighting new laws in Indiana and Kentucky aimed at implementing stricter opt-in mechanisms for personal information. Companies may struggle to navigate these emerging regulations as privacy and cyber risks continue to evolve, creating compliance concerns and potentially exacerbating losses and broader supply-chain disruptions when cyberattacks occur.

Investing in threat detection, AI governance, and employee cybersecurity education are among the many ways organizations can boost their cyber resilience. A separate Chubb survey also suggests interest in cyber insurance to mitigate these risks is rising. Leaders across lower, core, and upper middle market segments identified cybersecurity and advancing technology as their chief risk concerns, with 47 percent of respondents indicating they were considering adding or increasing cyber coverage.

Learn More:

Triple-I Legal System Abuse Awareness Campaign Enters California, Illinois

Legal System Abuse, Artificial Intelligence Cloud 2026 Outlook

Amid Data Boom, Actuarial Analysis Belongs in the Forefront

Tech — Especially A.I. — Is Top of Mind for Global Insurance Executives

As Global Risks Evolve, So Must Insurance

Executive Exchange: Insuring AI-Related Risks

Affordability, Auto Insurance, Catastrophes, Homeowners Insurance, Legal Environment

Florida Reforms Drive Benefits for Consumers

Leave a comment

By Lewis Nibbelin, Research Writer, Triple-I

Legal system reforms targeting fraud and excess litigation in Florida are helping drive renewed underwriting business and lower premium rates for consumers throughout the state, signaling ongoing improvements in the Sunshine State’s insurance market health, according to an S&P Global Market Intelligence analysis.

Post-reform, nearly 20 new property insurers have entered the Sunshine State and existing carriers have expanded their market share, fueling double-digit growth in direct written premiums for many of the state’s largest insurers in 2025. As policyholders shifted to the private market, policies in force for Citizens Property Insurance Corp. – the state-run insurer of last resort and previously the state’s largest residential insurance writer – dropped by 57.8 percent from 2024.

Premiums for Citizens policyholders fell 43.7 percent, alongside extensive premium reductions for thousands of Florida homeowners and drivers across the property/casualty insurance market. Florida’s top five auto insurance groups, for instance, averaged a more than 6 percent rate reduction through mid-year, accounting for 78 percent of the state’s auto market. These reductions have increased to an average of 8 percent based, on the most recent 2026 regulatory filings.

Claims-related litigation has also plummeted, slashing the market’s defense and cost containment expense ratio to 1.9 percent, S&P reported – a major decline from 8.4 percent in 2022, before the 2022 and 2023 reforms were fully implemented. In dollar terms, 2025 saw $537 million in direct incurred legal defense expenses, down from roughly $792 million the prior year and from $1.6 billion in 2022.

Amid decreasing litigation costs, Florida’s residential property insurers recorded over $2 billion in underwriting gains in 2025, with the state’s homeowners’ market posting its highest net income in more than a decade.

Favorable 2025 results are good news, but it’s important for policyholders and policymakers to remember the sustained, industry-wide reform efforts that underpin Florida’s current stability. Despite their measurable benefits to consumers, the reforms have faced repeated legislative attacks, threatening to undo much of this progress.

Florida’s strong market performance also reflects relatively mild catastrophe activity in 2025, including the absence of any U.S. hurricane landfalls. Though the 2026 Atlantic hurricane season is forecast to be “somewhat below normal,” ongoing caution is essential, as just one significant landfall could threaten recent market growth and leave lasting damage.

Compounding these challenges is Florida’s most severe drought in over 25 years, which has produced nearly 2,000 wildfires in 2026 year-to-date and impacted many areas traditionally considered low risk. With wildfire risks still looming, the shift underscores the dynamic headwinds that imperil the state, necessitating continued legislative support of reforms to keep coverage affordable and available in one of the most complex states to insure.

Learn More:

Legal System Abuse Awareness Campaign Spreads Across U.S.

Lessons for Texas in Florida Legal Reforms

Florida Premiums Drop Amid Post-Reform Stability

Litigation Reform Works: Florida Auto Insurance Premium Rates Declining

New Consumer Guide Highlights Economic Impact of Legal System Abuse and the Need for Reform

Florida Senate Rejects Legal-Reform Challenge

Affordability, Auto Insurance, Homeowners Insurance, Insurers and the Economy, Legal Environment

Illinois Bill Would Hurt Insurers and Customers

Leave a comment

By Jeff Dunsavage, Head of Research Publications and Insights

Senate Bill 1486 – currently moving through the Illinois General Assembly – would unnecessarily burden insurers and hurt the customers it is intended to protect.

“The measure would add new regulatory layers that could impede the accurate pricing of risk while doing nothing to address the underlying causes of rising premiums,” Triple-I said in a recently published Policy Brief. “Premiums are increasing at different rates across the country, reflecting a mix of factors that include climate events, shifting populations, rising costs to repair and replace property, and legal system abuse.”

All these factors drive up the number and the cost of claims and, if not properly addressed, could erode the policyholder surplus insurers are required to keep on hand to pay claims. If surplus declines below levels mandated by regulators, insurers must raise rates or rethink their appetite for writing coverage in riskier states.

Neither option is good for consumers.

If affordability is the goal, the most effective path is cost reduction. Illinois leaders should model the behavior of states that are addressing the root causes of rising insurance premiums – not just treating the symptoms.

The brief also points out that both homeowners’ and personal auto insurance in Illinois is more affordable than the U.S. average, when measured as a ratio of average insurance expenditures to median household income.

Learn More:

Trends and Insights: Illinois (Members-only content)

Illinois Storms Highlight Severe Weather Losses

Triple-I Legal System Abuse Awareness Campaign Enters California, Illinois

Illinois Lawmakers Reject Risk-Based Pricing Challenge

New Illinois Bills Would Harm — Not Help — Auto Policyholders

Affordability, Insurers and the Economy, Legal Environment

States Take the Lead on Third-Party Litigation Funding Reform

Leave a comment

By Lewis Nibbelin, Research Writer, Triple-I

The Louisiana Department of Insurance’s new partnership to combat marketing tactics tied to third-party litigation funding (TPLF) is only the latest in a wave of state efforts to limit the practice across the country.

TPLF occurs when outside investors profit from lawsuits by paying for legal costs in exchange for a share of the settlement or judgement if the suit wins. In practice, this incentivizes prolonged and unnecessary cases and can culminate in extreme nuclear verdicts of $10 million or more.

By partnering with the National Insurance Crime Bureau (NICB) and digital intelligence company 4WARN to investigate and raise awareness of these practices, the Louisiana department aims to shield the public “from opportunists who manipulate the claims process to fuel excessive litigation, which is a primary driver of our high insurance costs,” said Insurance Commissioner Tim Temple.

A joint study from NICB and 4WARN reveals that third parties invested an estimated $380 million into online search ads from June 2024 to June 2025, attracting 27.8 million clicks to TPLF-hosted websites in June of last year alone. Some mislead policyholders into believing they are communicating with their insurer to escalate disputes before they talk to the insurance company, the Louisiana insurance department said, reflecting a coordinated online claimant recruitment system designed to promote legal system abuse.

Beyond inflating insurance premiums, TPLF costs each U.S. household more than $600 annually, at $192.79 per individual, in lost earnings and purchasing power, according to a report from the Perryman Group and Citizens Against Lawsuit Abuse. Another finding suggests direct annual losses associated with TPLF total $35.8 billion as of 2024.

A growing trend

Legislation targeting TPLF reached a record nationwide high last year, including within a package of Georgia reforms that, among other things, requires litigation financiers to register with the state Department of Banking and Finance and prohibits them from influencing case outcomes, such as by making decisions related to settlements or counsel selection. In the wake of these reforms, the Peach State has welcomed a trend of major auto insurance rate reductions and unprecedented dividends for thousands of drivers.

More recently, a new Mississippi law that takes effect July 1 will mandate disclosure of foreign litigation funding to prevent foreign entities from exploiting the U.S. legal system for sensitive information. Utah passed its own bill in March, introducing comparable restrictions.

Legislation that passed a Michigan House committee earlier this month would bar foreign TPLF altogether, as well as require disclosure and registration of all funders in TPLF-backed cases. Similar bans on foreign TPLF have been proposed in Missouri, Tennessee, and Ohio, with bills in the latter two states both passing their state Houses.

Louisiana lawmakers have also introduced legislation to increase TPLF transparency, building on the state’s 2024 law introducing some oversight of foreign TPLF. The proposed bill would further require attorneys to disclose TPLF contracts either within 30 days of being retained as counsel or 30 days of entering a funding agreement, depending on whichever action comes first. Though the bill failed to receive a vote in the state’s previous legislative session, it continues to garner strong bipartisan support.

While Louisiana’s overall premium rates declined in 2025, including a 5.8 percent average decrease in auto premiums, Temple noted in a separate statement that “we should not necessarily expect to see this level of decrease in future years unless we continue to pursue legal reform that addresses the foundational reasons our rates are the highest in the country.”

Learn More:

Legal System Abuse Awareness Campaign Spreads Across U.S.

Florida Premiums Drop Amid Post-Reform Stability

Triple-I Legal System Abuse Awareness Campaign Enters California, Illinois

La. Auto Insurance Rates Benefit from Declines in Frequency, Severity

Reining in Third-Party Litigation Funding Gains Traction Nationwide

Significant Tort Reform Advances in Louisiana

Georgia Targets Legal System Abuse

Catastrophes, Disaster Preparedness, Disaster Resilience, Homeowners Insurance, Hurricane, Roof Condition, Severe Convective Storm, Tornado, Wind

Mississippi Set to Launch Roof Grant Program

Leave a comment

By Lewis Nibbelin, Research Writer, Triple-I

Mississippi recently adopted a program that will offer homeowners grants of up to $10,000 for roofs built to the FORTIFIED™ standard, following in the footsteps of states across the country to mitigate the rising frequency and severity of extreme weather.

Developed by the Insurance Institute for Business & Home Safety (IBHS), the FORTIFIED™ standard can help reduce high wind and hail damage through construction methods like sealing roof decks and anchoring roofs to wall framing using stronger nails. While such standards remain voluntary, many insurers in Mississippi began providing premium discounts for homes that meet the designation, prompting state lawmakers to further incentivize their construction.

The Magnolia State is only the latest to follow Alabama’s lead, which largely pioneered these incentives through its own Strengthen Alabama Homes program, financed by the insurance industry with more than $86 million in grants since 2016. Designed to enhance community resiliency while also lowering insurance rates, completed retrofits earn residents premium discounts ranging from 25 to 55 percent.

Slated to begin accepting applications later this year, Strengthen Mississippi Homes authorizes the state’s insurance department to allocate $15 million a year towards grants and gives the department flexibility in determining grant eligibility as the program rolls out. More than one thousand homes are expected to qualify each year, including in inland areas and along the coast.

Notably, the new grant program builds on the state’s preexisting hurricane-specific mitigation initiative, in part reflecting growing nationwide vulnerability to other perils. While global insured losses fell below average in the first quarter of 2026, Gallagher Re analysis shows that U.S. convective storms were among the largest loss events, including a March tornado outbreak that killed multiple Mississippi residents and caused upwards of a billion dollars in insured damages throughout the Midwestern and Eastern U.S.

Mississippi ranked fourth in the nation for tornado frequency in 2025, at 111 tornadoes, according to data from the National Weather Service. Currently, it ranks second for such activity, at 48.

Modeling what works

Research from the Alabama Department of Insurance, in collaboration with the University of Alabama Center for Insurance Information and Research, has demonstrated the success of Strengthen Alabama Homes. The study found FORTIFIED homes suffered less property damage and fewer insurance claims than homes built using other construction methods when Hurricane Sally made landfall in the state.

Programs modeled on Alabama’s have sprouted throughout the United States, including in coastal Louisiana, North Carolina, and South Carolina. Farther inland, Oklahoma just opened its program statewide after three pilot launches last year, and Kentucky unveiled its $5 million program for the first time last month. Similar efforts are underway in Minnesota after the state established a grant program in 2023, with full implementation expected during 2026. Arkansas’ program also remains under development.

Insurers have long called for boosting roof resilience within and beyond hurricane-prone regions. IBHS research estimates 70 to 90 percent of storm-related insurance claims involve roof damage, meaning roof upgrades can substantially minimize losses and improve market stability, keeping insurance affordable and available for more homeowners. In addition to making homes safer, the study revealed FORTIFIED™ homes sell for nearly 7 percent more than similar homes with non-FORTIFIED™ roofs.

Mounting demand suggests such improvements are gaining traction even beyond state grant programs. An unprecedented 20,000-plus designations were issued in 2025 alone, at a 20 percent increase over the prior year, keeping IBHS on track to reach a nationwide total of 120,000 by the end of 2026.

Learn More:

Resilient Post-Wildfire Rebuilding Pays Off

Convective Storm Losses: Historic 3-Year Streak

Few, High-Powered Storms Defined 2025 Hurricane Season

Storm-Resistant Roof Efforts Gain Ground

Why Roof Resilience Matters More Than Ever

Industry Financials, Market Conditions

Fire and Allied Lines: Recent Success in a Challenging Market

Leave a comment

By William Nibbelin, Head of Industry Data and Actuarial Research, Triple-I

U.S. fire and allied lines have emerged as a standout performer within the property and casualty (P/C) industry, achieving a net combined ratio of 84.8 in 2024. This marks the lines’ best underwriting performance since 2007 and the third consecutive year they have outperformed the broader P/C industry, according to Triple-I’s latest Issues Brief.

This success is particularly notable given the industry’s five-year streak of underwriting losses between 2017 and 2021. Combined ratio is the most common measure of insurer underwriting profitability. It is calculated by dividing the sum of the claim-related losses and expenses by premium. A ratio over 100 indicates the industry is paying out more than it is taking in.

What are Fire and Allied Lines?

Though often grouped together, fire and allied lines serve distinct purposes:

  • Fire Insurance: Covers direct property damage caused by fire.
  • Allied Lines Insurance: Acts as a broader catch-all, covering damage from other perils, such as wind, water, and vandalism.

Together, they provide property protection comparable to that of a standard homeowners’ policy or commercial multi-peril policy, but without liability coverage. The market for these lines is predominantly commercial, protecting larger risks, such as retail shops, office buildings, warehouses, large farms, and schools. Some businesses with significant large-risk exposure may carry more than one fire and allied lines policy from multiple carriers, known as “stacking.”

Shifts in Market Distribution

The way fire and allied lines policies are sold has changed dramatically over the last decade. Standard insurance policies, which once made up two-thirds of the market, dropped to just under 53 percent in 2024.

In their place, two other segments have gained ground:

  • Excess and Surplus Market: This market, which handles higher-risk or non-standard properties, has grown significantly in market share, from 22 percent to over 36 percent
  • Residual Market: After a period of decline, the residual market (also known as the market of last resort) has grown at an annual rate of over 12 percent since 2020.

Severe Weather Amplifies Loss Trends

Weather has increasingly dictated the performance of both lines in recent years. Allied lines insurance, which covers wind and storm damage, has experienced quarterly loss ratios greater than those of fire insurance in 17 of the past 20 quarters due to mounting severe convective storm and hurricane damage.

Though the frequency of fire and wind incidents is similar across personal and commercial lines, the severity of these losses differs. Commercial policies, which cover larger risk properties like industrial facilities and corporate high-rises, tend to have lower frequency rates but much larger severity losses when a disaster strikes. This discrepancy suggests that while fire and wind incident frequency may be predictable, the high value of commercial assets makes every major claim a significant financial event.

Healthy Competition for Consumers

Despite the challenges posed by natural disasters, the fire and allied lines market remains exceptionally competitive. In 2024, the U.S. Department of Justice classified the lines both separately and combined as “unconcentrated,” as measured by the Herfindahl-Hirschman Index (HHI), meaning there is no single dominant player stifling competition.

The number of companies writing these policies has either grown or remained flat in every state with Alabama, California, Delaware, New Jersey, and New York among the most competitive markets. This level of competition is a positive sign for the industry’s long-term stability and for business owners seeking diverse coverage options.

Learn More:

Illinois Storms Highlight Mounting Severe Weather Losses

Convective Storm Losses: Historic 3-Year Streak

Few, High-Powered Storms Defined 2025 Hurricane Season

Wildfire: State of the Risk

Excess and Surplus: State of the Risk

Latest research and analysis