Monthly Archives: May 2025

Catastrophes, Disaster Preparedness, Disaster Resilience, Regulation, Risk Management, Wildfire

L.A. Homeowners’ Suits Misread California’s Insurance Troubles

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By Lewis Nibbelin, Contributing Writer, Triple-I

Two lawsuits filed in Los Angeles claim major California insurers colluded illegally to impede coverage in wildfire-prone areas, forcing homeowners into the state’s last-resort FAIR Plan.  Accusing carriers of violating antitrust and unfair competition laws, the two suits exemplify an ongoing disconnect between public and insurer perceptions of insurance market dynamics, exacerbated by legislators’ resistance to accommodating the state’s evolving risk profile.

An untenable situation

Both suits claim the insurers conspired to “suddenly and simultaneously” drop existing policies and cease writing new ones in high-risk communities, deliberately pushing consumers into the FAIR Plan. Left underinsured by the FAIR Plan, the plaintiffs argue they were wrongfully denied “coverage that they were ready, willing, and able to purchase to ensure that they could recover after a disaster,” Michael J. Bidart, who represents homeowners in one of the cases, said in a statement.

Established in response to the 1965 Watts Rebellion, the California FAIR Plan provides an insurance option for homeowners unable to purchase from the traditional market. Though FAIR Plans offer less coverage for a higher premium, they cover properties where insurance protection would otherwise not exist. California law requires licensed property insurers to contribute to the FAIR Plan insurance pool to conduct any business within the state, meaning they share the risks associated with those properties.

Intended as a temporary solution until homeowners can secure policies elsewhere, the FAIR Plan has become overwhelmed in recent years as more insurers pull back from the market. As of December 2024, the FAIR plan’s exposure was $529 billion – a 15 percent increase since September 2024 (the prior fiscal year end) and a 217 percent increase since fiscal year end 2021. In 2025, that exposure will increase further as FAIR begins offering higher commercial coverage for farmers, homebuilders, and other business owners.

With a policyholder count that has more than doubled since 2020, the FAIR Plan faces an estimated $4 billion total loss from the January fires alone.

Out of touch regulations

Homeowners are understandably frustrated with dwindling coverage availability, which currently afflicts many other disaster-prone states. Supply-chain and inflationary pressures, which could intensify under oncoming U.S. tariff policies, help fuel the crisis. But California’s problems stem largely from an antiquated regulatory measure that severely constrains insurers’ ability to manage and price risk effectively.

Despite a global rise in natural catastrophe frequency and severity, regulators have applied the 1988 measure, Proposition 103, in ways that bar insurers from using advanced modeling technologies to price prospectively, requiring them to price based only on historical data. It also blocks insurers from incorporating reinsurance costs into their prices, forcing them to pay for these costs from policyholder surplus and/or reduce their presence in the state.

Insurers must adjust their risk appetite to reflect these constraints, as they cannot profitably underwrite otherwise. Underwriting profitability is essential to maintain policyholder surplus. Regulators require insurers to maintain policyholder surplus at levels that ensure that every policyholder is adequately protected.

Restricting insurers’ use of prospective data, however, inhibits risk-based pricing and weakens policyholder surplus, facilitating policy nonrenewals and, in serious cases, insolvencies.

Insurance Commissioner Ricardo Lara implemented a Sustainable Insurance Strategy to mitigate these trends, including a new measure that authorizes insurers to use catastrophe modeling if they agree to offer coverage in wildfire-prone areas. The strategy has garnered criticism from legislators and consumer groups, one of whom is suing Lara and the California Department of Insurance over a 2024 policy aimed at expediting insurance market recovery after an extreme disaster.

“Insurers are committed to helping Californians recover and rebuild from the devastating Southern California wildfires,” Denni Ritter, the American Property Casualty Insurance Association’s department vice president for state government relations, said in a statement about the suit. “Insurers have already paid tens of billions in claims and contributed more than $500 million to support the FAIR Plan’s solvency – even though they do not collect premiums from FAIR Plan policyholders.”

A call for collective action

Litigation prolongs – it does not alleviate – California’s risk crisis. Government has a crucial role to play in addressing it, from adopting smarter land-use planning regulations to investing in long-term resilience solutions.

For instance, Dixon Trail, a San Diego County subdivision dubbed the country’s first “wildfire resilient neighborhood,” models the Insurance Institute for Business & Home Safety (IBHS) standards for wildfire preparedness, but not at a cost attainable to most communities, and few local governments incentivize them. Launched by state legislature in 2019, the California Wildfire Mitigation Program is on track to retrofit some 2,000 houses along these guidelines, with the goal of solving how to fortify homes more quickly and inexpensively. Funded primarily by FEMA’s Hazard Mitigation Assistance Grant program, the pilot has thus far avoided the same cuts befalling FEMA’s sister programs under the Trump Administration.

Regardless of what legislators do, California homeowners’ insurance premiums will need to rise. The state’s current home and auto rates are below average as a percentage of median household income, reflecting a combination of the increased climate risk and of the regulatory limitations preventing insurers from setting actuarially sound rates. Insurance availability will not improve if these rates persist.

To quote Gabriel Sanchez, spokesperson for the state’s Department of Insurance: “Californians deserve a system that works – one where decisions are made openly, rates reflect real risk, and no one is left without options.” Insurers do not wield absolute control over that system, and neither do legislators, regulators, consumer advocates, or any other singular group. Confronting the root causes of these issues – i.e., the risks – rather than the symptoms is the only path towards systemic change.

Learn More:

Despite Progress, California Insurance Market Faces Headwinds

California Insurance Market at a Critical Juncture

California Finalizes Updated Modeling Rules, Clarifies Applicability Beyond Wildfire

How Proposition 103 Worsens Risk Crisis In California

Tariff Uncertainty May Strain Insurance Markets, Challenge Affordability

Issues Brief: California Struggles to Fix Insurance Challenges (Members only)

Issues Brief: Wildfire: Resilience Collaboration & Investment Needed (Members only)

Business Insurance, Workers Compensation

NCCI AIS 2025: Key Insights on Workers Comp

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William Nibbelin, Senior Research Actuary, Triple-I

Economic uncertainty, industry-specific trends, and evolving risks were the focus of the NCCI Annual Insights Symposium (AIS) 2025 – a key event for the workers compensation industry.

In her introduction, Tracy Ryan, NCCI president and CEO, highlighted the importance of data in improving worker safety and outcomes in the face of economic uncertainty, workforce changes, and technological advancements.

“Workers compensation is a product where compassion and analytics work hand-in-hand —protecting and caring for employees, while also leveraging data to make the entire system more effective and sustainable,” Ryan said.

Continued strong results

Workers comp remains financially fit, according to NCCI Chief Actuary Donna Glenn, FCAS, MAAA.

“The workers compensation system continues an era of exceptional performance with strong results and a financially healthy line,” Glenn said. “And while there are early indications of potential headwinds on the horizon, the industry is positioned well to navigate these challenges.”

Key Findings

  • Premium: Workers compensation net written premium decreased by 3.2 points in 2024. This is attributed to decreases in rates outpacing payroll growth, including a 9.2-point decline in 2024 bureau loss costs.
  • Profitability: The 2024 calendar year combined ratio for workers comp private carriers remained strong at 86 alongside a 2024 accident-year combined ratio of 99.
  • Reserves: NCCI estimates a redundant industry reserve position of $16 billion.
  • Claim Trends:
    • Lost-time claim frequency declined by 5 points in 2024, which is a faster pace than the long-term average of -3.6 points from 2004 to 2023.
    • Both medical and indemnity claim severity increased by 6 points in 2024.

Economic Uncertainty

Stephen Cooper, NCCI’s executive director and senior economist, noted that GDP declined in the first quarter of 2025, and there are concerns about stagflation.

“With economic uncertainty elevated and recession concerns resurfacing, consumer behavior will be important to watch,” Cooper said. “While employment has been concentrated amongst fewer industries, the labor market has shown resilience and strong payroll growth in workers compensation.”

He also addressed the potential impact of tariffs on workers compensation costs, with direct impacts on both the costs of medical supplies and drugs.

Industry-Specific Trends

Sandra Kipust, FCAS, NCCI senior practice leader and actuary, explored how workers compensation trends vary across different industries focusing on the following four sections:

  • Combined Office: The shift to remote work in 2020 led to a decline in claim frequency among office workers and remains low for those who have continued to work remotely.
  • Health Care: Despite pandemic disruptions, health care claim frequency (excluding COVID-19 claims) generally declined from 2015 to 2023, driven by a near 30 percentage point reduction in strain-related injuries.
  • Leisure & Hospitality: Restaurant claim frequency declined in 2022 and 2023, potentially due to increased automation.
  • Education: Claim frequency in private education has risen, primarily driven by “struck or injured by” injuries, potentially resulting from workplace violence in the industry.

“While the overall frequency of workers compensation claims continues its long-term decline, industry-specific patterns present a varied picture,” Kipust said. “Workers and workplaces are safer today than ever; yet, understanding the nuances at an industry level can uncover both opportunities and challenges within the system.”

Emerging Risks

The symposium also examined several evolving risk factors:

Medical Utilization: Raji Chadarevian, executive director for Actuarial Research at NCCI, reviewed a new NCCI-developed additive utilization metric to better understand utilization trends.

 “Having an additive utilization measure for medical services and commodities allows us to develop trends and produce price indices by state, book of business, and class of claims,” he explained. “The potential is really remarkable!”

Chadarevian provided an overview of changes in medical utilization, such as surgery rates and physical therapy utilization, significantly impact costs. These changes reflect a trend toward less invasive procedures and a greater emphasis on physical medicine.

Motor Vehicle Accidents: Brian Stein, FCAS, assistant actuary at NCCI, provided a review of motor vehicle accident claims.

“Motor vehicle accidents remain an area of concern and opportunity for the industry,” Stein said. “While over the last 10 years, frequency for these uniquely harmful and costly accidents has yet to show improvement aside from during the pandemic, there is evidence to suggest that recent advances in technology and a focus on safety can get more workers home safely at the end of their day.”

Motor vehicle accidents are the number one cause of workplace fatalities and are costlier than the average lost-time claim. While overall claim frequency declines, motor vehicle accident frequency has not shown the same improvement, though there are positive signs in the trucking industry, driven by new technology and regulations addressing driver fatigue and overall safety.

Pain Management: The decline in opioid prescriptions has led to a shift in pain management strategies, with increased utilization of physical therapy and topical treatments. This shift aims to provide more holistic care and address the underlying causes of pain, rather than solely relying on medication.

Jon Sinclair, FCAS, director and actuary at NCCI, explained, “New NCCI research shows that opioid use in workers compensation has declined nearly 75 percentage points since 2012. Increasing utilization of physical therapy and non-opioid drugs reveal a shift to a more holistic approach that treats the whole person—not just the pain.”

For additional content on Workers Comp insurance, please visit the Insurance Information Institute and read our latest issues brief on Workers Comp, as well as our full report.

Catastrophes, Disaster Resilience, Homeowners Insurance, Lightning, Wildfire

Triple-I Brief Highlights Wildfire Risk Complexity

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Wildfire risk is strongly conditioned by geographic considerations that vary widely among and within states. The latest Triple-I Issues Brief shows how that fact played out in 2024 and early this year and discusses the importance of granular local data for underwriting and pricing insurance in wildfire-prone areas, as well as for much-needed investment in resilience.

The 2024 wildfire season in the South and Southwest was particularly severe, marked by such events as the Texas and Oklahoma Panhandle fires in February and March and significant blazes in Arizona and New Mexico. The Southwest accounted for the largest number of residential structures destroyed by wildfire, and three of the top five areas for homes destroyed were in the South. 

California accounted for the largest number of homes at risk for extreme wildfires. In the first half, the state experienced an above-average number of fires, though most were contained before growing to “major incident” size. Subsequent rains suppressed subsequent wildfire conditions – and caused substantial flooding. 

But this rain contributed to an accumulation of fuels so that, when hurricane-force Santa Ana winds whipped through Los Angeles County in early January 2025, the conditions were right for fast-moving blazes to tear through Pacific Palisades and Eaton Canyon.

Temperature, humidity, wind, and topography vary too widely for a single “one size fits all” mitigation approach. This underscores the importance of granular data gathering and scrupulous analysis when underwriting and pricing insurance.  It is also important that insurers proactively engage with diverse stakeholder groups to promote investment in mitigation and resilience.

A recent paper by Triple-I and Guidewire – a provider of software solutions to the insurance industry – uses case studies from three California areas with very different geographic and demographic characteristics to go deeper into how such tools can be used to identify properties with attractive risk properties, despite their location in wildfire-prone areas.

Learn More:

Getting Granular to Find Lower-Risk Properties Amid Wildfire Perils

P&C Insurance Achieves Best Results Since 2013; Wildfire Losses, Tariffs Threaten 2025 Prospects

Despite Progress, California Insurance Market Faces Headwinds

California Finalizes Updated Modeling Rules, Clarifies Applicability Beyond Wildfire

California Insurance Market at a Critical Juncture

Auto Insurance, Business Insurance, Business Risk, Homeowners Insurance, Insurers and the Economy, Market Conditions, Wildfire

P&C Insurance Achieves Best Results Since 2013; Wildfire Losses, Tariffs Threaten 2025 Prospects

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By William Nibbelin, Senior Research Actuary, Triple-I

The U.S. P&C insurance industry’s financial outcomes for 2024 revealed a net combined ratio (NCR) of 96.6, demonstrating a substantial 5.1-point enhancement compared to the prior year and representing the sector’s most favorable underwriting performance since 2013, as detailed in a recent report by Triple-I and Milliman.

However, this progress faces potential impediments. The economic repercussions from early 2025 California wildfire losses, in conjunction with the unfolding influence of tariff policies, introduce factors that could dampen the industry’s performance throughout 2025 and possibly counterbalance the recent positive trajectory.

Noteworthy 2024 performance indicators:

  • The disparity in profitability between personal and commercial lines diminished, with both segments achieving an NCR below 100 for the year.
  • Personal auto insurers reported a 2024 NCR of 95.3, marking a considerable 9.6-point year-over-year improvement. This advancement was largely attributable to robust net written premium (NWP) expansion, with growth rates of 14.4 percent in 2023 and 12.8 percent in 2024.
  • Homeowners’ insurance experienced an 11.2-point improvement from 2023, as reflected in a 2024 NCR of 99.7. This represents the first instance of an NCR below 100 since 2019. Furthermore, the NWP growth rate reached 13.6 percent, surpassing the 12.4 percent growth observed in 2023 and achieving the highest level in over 15 years.

Impending challenges and market pressures:

  • The general liability segment is encountering increased financial strain, as evidenced by the least favorable NCR since 2016 and the third worst since 2010.
  • Early forecasts for the first quarter of 2025 suggest that the P&C industry may face its most challenging first-quarter results in over 15 years due to the extensive losses from the January 2025 Los Angeles wildfires.
  • The imposition of tariffs, effective as of early May 2025, is beginning to exert pressure on fundamental growth metrics and is contributing to the escalation of replacement costs across various insurance lines, initially with personal auto, and subsequently affecting homeowners and renters, commercial auto, and commercial property.  

Economic dynamics and trends

Triple-I’s chief economist and data scientist, Michel Léonard, Ph.D., CBE, pointed out that P&C underlying economic growth in 2025 has doubled the growth of the U.S. GDP, with the former at 5 percent and the latter at 2.5 percent year-over-year.  

In addition, it is anticipated that P&C replacement costs will not increase as quickly as the U.S. Consumer Price Index (CPI), with projected rates of 1.0 percent, compared to 2.0 percent year over year.  

However, Léonard offered a cautionary perspective, stating, “While P&C economic drivers continue to outperform the broader U.S. economy—with stronger growth and lower replacement cost inflation—we now anticipate a shift in 2025 due to ongoing and expanded tariffs”.  

He further elaborated on the potential adverse effects of tariffs: “These headwinds are expected to slow the sector’s momentum, potentially leading to a contraction later in the year that could exceed the overall GDP slowdown. Additionally, replacement costs, initially projected to rise more slowly than CPI, may accelerate and begin to outpace it, adding further pressure. Even though rising costs may lead to additional premium increases, these will likely be insufficient to offset slowing consumer spending and corporate investment.”

He explained how the timing of tariff impacts is staggered due to inventory management behavior, with the full effect of current tariffs yet to be realized.

Underwriting context and projections

Dale Porfilio, Chief Insurance Officer at Triple-I, attributes the notable 2024 turnaround in personal lines to the hard market conditions that allowed for necessary premium adjustments, rather than a decrease in incurred losses, which remained nearly flat. However, some upward pressure on the combined ratio is expected for 2025, reflecting tariff impacts and increased acquisition expenses. A deeper look into personal auto trends reveals that physical damage loss ratios have been improving rapidly, while liability coverage improvements have plateaued, raising concerns about legal system abuse and liability coverage responsiveness.

Homeowners’ insurance improvements were also driven primarily by premium increases, though a 2.5 percent decrease in net incurred losses, mainly from catastrophes, contributed. However, the 2025 outlook for homeowners is heavily influenced by the Los Angeles wildfires, with projections indicating that Q1 2025 could be the worst first quarter for the P&C industry in over 15 years. Current estimates suggest that the 2025 wildfires may lead to the costliest wildfire losses in U.S. history.

Jason B. Kurtz, FCAS, MAAA, a principal and consulting actuary at Milliman, emphasized the persistent negative influence of adverse prior year development (PYD) on the profitability of commercial auto and general liability lines, noting that this trend has been observed for three consecutive years.  

In discussing general liability, Kurtz pointed out the substantial reserve strengthening undertaken during 2024.

“The 2024 net combined ratio of 110 included a staggering nine points of adverse prior year development, amounting to more than $9 billion of reserve strengthening, the highest seen in at least 15 years,” Kurtz said. “It is also concerning that the hard-market years 2020-2023, which saw significant rate increases, are also seeing reserve increases.”  

Conversely, workers compensation combined ratios continued to benefit from favorable PYD for the eighth consecutive year, indicating sustained underwriting profitability.  

Donna Glenn, FCAS, MAAA, chief actuary at the National Council on Compensation Insurance (NCCI), presented an overview of the year’s average loss cost level changes and provided insights into the long-term financial stability of the workers compensation system.  

“The workers compensation system continues an era of exceptional performance with strong results and a financially healthy line,” said Glenn. “And while there are early indications of potential headwinds on the horizon, the industry is positioned well to navigate these challenges.”  

*Note: Insurance Economics and Underwriting Projections: A Forward View is a quarterly report available exclusively to Triple-I members and Milliman customers.

Business Risk, Careers and Employment, Insurance Industry, Insurers and the Economy, Market Conditions, Risk Management, Specialty Coverage

Hartford’s Karla Scott on the Present & Future of Marine Insurance

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By Loretta L. Worters, Vice President of Media Relations, Triple-I

When Karla Scott first entered the insurance industry, she didn’t set out with a grand plan to become a leader in marine underwriting.

“I fell into it,” she admits. Starting at a brokerage firm focused on logistics insurance, she quickly discovered a passion for global trade and cargo underwriting.

“It’s different every day,” says Scott, who is global logistics product leader and senior managing director, Ocean Marine, The Hartford. She joined the company after The Hartford acquired Navigators in 2019.

“The technical work keeps my skills sharp, while the camaraderie and shared purpose offer personal and professional fulfillment.”

– Karla Scott

Scott works with clients, agents, and brokers around the world to ensure that businesses have the protection they need through the product’s entire supply-chain life cycle. Her team insures raw materials and finished goods that are transported on containerships, planes, trains, and trucks.  From geopolitics to commodity shifts, it’s an ever-evolving, complex industry that demands constant awareness and adaptation.

Now, with 24 years in marine insurance, Scott reflects on a career shaped by resilience, strong mentorship, and a deep commitment to community. Her journey underscores both the opportunities and challenges faced by women in a traditionally male-dominated field.

“Disrupting trade with…China, Canada, or Mexico would affect cost and the availability of insurance coverage.”

– Karla Scott

A Sea Change for Women

“Fifteen years ago, I sat at a table with 35 industry leaders and was the only woman,” Scott says. “But progress is happening. While marine insurance remains a niche within the broader insurance world, more women are entering the field and rising into leadership roles.”

There continues to be a gender pay gap and lack of career advancement opportunities, but Scott says “part of the reason, frankly, is that women tend not to self-advocate. It’s critical in the marine insurance space to promote yourself, but women often feel uncomfortable doing that.  Self-advocacy is not boastfulness. No one is going to put you in the spotlight unless you step into it.  Those are the skills we need to teach women coming up in this business.”

Being a woman on the West Coast in an East Coast-dominated industry meant navigating additional hurdles.

“There’s a current you swim against,” she says.

Overcoming Barriers

Support from forward-thinking male mentors and advisors helped her stay the course.

“I am indebted to three mentors who presented different strengths,” Scott says. “I learned how to manage people, to motivate people, technical skills, how important your reputation is in this industry, and how to push hard and be aggressive in certain situations and not aggressive in other situations.”

She also candidly addresses the internal battles many women face — imposter syndrome.

“I’ve experienced it myself and have reached out to my mentors, who are great at listening to my frustrations,” she says. “Having a strong network can help you work through those issues. Now that I’m on the other side, I’m pushing my mentees through those obstacles, helping them find their voice and teaching them to self-advocate—skills critical to closing the gender pay gap.”

The Power of Community

Scott’s involvement with the American Institute of Marine Underwriters (AIMU) and the Board of Marine Underwriters in San Francisco has been instrumental in her career. She has served as president of the latter twice and speaks passionately about the importance of collaboration in the insurance industry.

“One of the most unique parts of marine insurance is that we work in partnership with competitors to solve industry problems,” she says. “The technical work keeps my skills sharp, while the camaraderie and shared purpose offer personal and professional fulfillment.”

Trade Tensions and Industry Impacts

As global trade faces increasing scrutiny and tariff battles, Scott is already seeing the effects.

“Clients are canceling freight contracts, and volumes are dropping,” she says. “The result means lower trade volume, higher valuation of goods, and potential inflationary cycles may hit consumers hard.”

She points out that the lack of federal stimulus (unlike during the pandemic) leaves little room for economic cushioning.

“It’s a ‘hold your breath’ kind of moment,” Scott says.

Cargo theft is another growing concern.

“It spikes when inflation rises,” Scott notes, pointing out how easy it has become to resell stolen goods on platforms like Amazon and eBay.

Talk of reshoring manufacturing often overlooks the complexity of global trade.

“You can’t flip a light switch and manufacture everything in the U.S.,” she explains. “Machinery to build those goods often comes from Germany or Japan.

“Disrupting trade with top partners like China, Canada, or Mexico would significantly affect both cost and the availability of insurance coverage,” Scott says. “If consumer confidence drops and trade volumes fall, insurance demand will, too.”

Scott also highlights a deeper economic risk: the potential erosion of the U.S. dollar’s dominance in global trade. “If that shifts, the American economy could face even greater challenges.”

Catastrophes, Disaster Preparedness, Disaster Resilience, Homeowners Insurance, Technology, Wildfire

Data Granularity Key
to Finding Less Risky Parcels in Wildfire Areas

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As high-severity natural catastrophes – wildfires, floods, hurricanes, and others – become more frequent and more people move into riskier locales, insurance affordability and availability have become a challenge in many states.

Insurers underwrite and price coverage based on the risks they’re assuming, and rising premiums in these states have pushed more homeowners into residual market mechanisms, such as state-backed insurance pools or agencies. Reliance on these funds – which often provide more limited coverage at higher costs – is not sustainable in the long term.

To ensure market stability and continued insurance availability and affordability, insurers must leverage more granular and dynamic risk models that account for real-time environmental conditions, mitigation measures, and property-specific characteristics. A new paper by Triple-I and Guidewire – a provider of software solutions to the insurance industry – uses case studies from three California areas with very different geographic and demographic characteristics to show how such tools can be used to identify properties with attractive risk properties, despite their location in wildfire-prone areas.

California’s risk profile

In addition to its particular risk characteristics, California’s insurance challenge is exacerbated by a 1988 measure – Proposition 103 – that has constrained insurers’ ability to profitably insure property in the state. In a dynamically evolving risk environment that includes earthquakes, drought, wildfire, landslides, and damaging floods, regulatory interpretation of Proposition 103 has made it hard for some insurers to offer coverage in the state.

In some cases, this has led to insurers limiting or reducing their business in the state. With fewer private insurance options available, more Californians are resorting to the state’s FAIR Plan, which offers less coverage for a higher premium. For many, this “insurer of last resort” has become the insurer of first resort. This isn’t a tenable situation for the state or its policyholders. California’s insurance availability/affordability challenges will require a multi-pronged approach, and underlying every component is the need for granular, high-quality, reliable data.

Modeling based on granular data

Guidewire’s analysis, based on its HazardHub Wildfire Score, has shown that wildfire mitigation and home hardening can reduce wildfire damage by as much as 70 percent. But identifying less risky lots in such areas is no easy task.

“Every property being assessed for wildfire risk is unique,” the report says. “Therefore, it’s important to subject as many relevant variables as possible to analysis. For example, proximity of structures to fuel is important – but, to be more predictive, it helps to know more: What kind of fuel? Is there potential for a wind-driven event? Is the property on a hill? If so, is it north-facing?”

Guidewire’s model includes standard variables, such as slope, aspect, wildfire history, wind, and the amount of nearby vegetation. It also includes differentiators like vegetation type and fire-suppression success rate.

“The traditional approach to wildfire risk assessment has left many Californians without access to affordable property insurance coverage,” said Triple-I Chief Insurance Officer Dale Porfilio. “Our research shows that with more detailed, property-level analysis, insurers can confidently offer coverage in areas previously deemed too risky.”

Important moves by California

California has taken steps to address regulatory obstacles to fair, actuarially sound insurance underwriting and pricing – most notably, the state’s Sustainable Insurance Strategy, an ambitious plan released by Insurance Commissioner Ricardo Lara in 2023 plan aimed at safeguarding the health of the insurance market while ensuring long-term sustainability. A key component of the plan is a requirement that insurers writing homeowners coverage in the state write no less than 85 percent of their statewide market share in areas identified by the commissioner as “under-marketed.”

Tightly focused, data-driven analysis using tools like the HazardHub Wildfire Score, can go a long way toward helping insurers meet those requirements by identifying less risky parcels in undermarketed areas.

“The Triple-I analysis highlights how next-generation tools and data can uncover lower-risk properties – even in high-risk areas – empowering insurers to expand coverage confidently and responsibly,” said Leo Tenenblat, Senior Vice President and General Manager, Data and Analytics at Guidewire.

Learn More:

Despite Progress, California Insurance Market Faces Headwinds

California Insurance Market at a Critical Juncture

California Finalizes Updated Modeling Rules, Clarifies Applicability Beyond Wildfire

California Risk/Regulatory Environment Highlights Role of Risk-Based Pricing

How Proposition 103 Worsens Risk Crisis in California

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

Florida Senate Rejects
Legal-Reform Challenge

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By Lewis Nibbelin, Contributing Writer, Triple-I

The Florida House’s attempt to curtail recent legal system reforms met firm resistance from the state Senate this week, preserving the 2022 and 2023 legislation that stabilized the state’s property insurance market.

Aiming to reinstate one-way attorney fees in insurance litigation, the House added an amendment – originally part of a separate bill – to an unrelated Senate bill focused on creating legal protections for owners of former mining sites.

Filed by state Rep. Berny Jacques, the amendment would have restored Florida’s previous requirement for insurers to shoulder the insured’s legal costs, even if the insured’s jury award was only slightly higher than the settlement insurers offered. Current law stipulates that each side is responsible for their own fees.

Senate members refused to concur with the proposal and sent the bill back to the House, which can either remove Jacques’ amendment or let the entire bill die.

Insurers and policyholders benefit

Jacques’ amendment prompted instant criticism from industry leaders, notably Florida Insurance Commissioner Michael Yaworsky, who sent an email warning the governor’s legislative affairs director that it would dismantle “hard-won progress” achieved by the 2022-2023 reforms, according to a report by the South Florida Sun Sentinel.

That progress includes the introduction of 12 new insurers into Florida’s property sector after a multi-year exodus and a 23 percent decrease in lawsuit filings year over year, Yaworsky wrote.

Proponents of Jacques’ amendment argued it would return balance to the legal system, which had overcorrected to favor insurance companies at the expense of consumers.

Yet, in 2019, Florida accounted for just over 8 percent of U.S. homeowners insurance claims, but more than 76 percent of U.S. property claim lawsuits, pushing premium rates up to three times the national average. Post-reform, in 2024, 40 percent of all insurers in the state filed for rate decreases, with average home insurance premiums down 5.6 percent at the start of this year.

Reversing these reforms would reinvigorate fraudulent and unnecessary lawsuits, increasing insurer costs and, consequently, premium rates. Dulce Suarez-Resnick, an insurance agent based in Miami, told the Sun Sentinel that supporters predicted reforms wouldn’t be felt for three years.

“We are two years in, and I’ve already seen a lot of impact,” Suarez-Resnick said. “The Legislature needs to be patient. We have one more year to go.”

Reforms expected to remain intact

Though Florida’s 2025 legislative session was extended, the House has little time to push for further changes to the reforms. Even if the Senate somehow acquiesces and passes the amended bill, it is unlikely to survive – Gov. Ron DeSantis has vowed to veto any bill targeting tort reform and publicly condemned the House’s efforts to roll it back.

And Florida isn’t alone: Georgia successfully passed its own comprehensive tort reform package last month, after plaintiffs’ attorneys began transferring their marketing tactics to the neighboring state. State government moves like these are essential to eradicating legal system abuse and protecting all stakeholders from rising costs.

Learn More:

What Florida’s Misguided Investigation Means for Georgia Tort Reform

Florida Bills Would Reverse Progress on Costly Legal System Abuse

Florida Reforms Bear Fruit as Premium Rates Stabilize 

Georgia Targets Legal System Abuse

How Georgia Might Learn From Florida Reforms

Louisiana Reforms: Progress, But More Is Needed to Stem Legal System Abuse

Resilience Investments Paid Off in Florida During Hurricane Milton