Monthly Archives: June 2025

Insurers and the Economy, Market Conditions, Technology, Workers Compensation

JIF 2025: U.S. Policy Changes and Uncertainty Imperil Insurance Affordability

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By Lewis Nibbelin, Contributing Writer, Triple-I

Global economic uncertainty emerging from recent U.S. policy actions was a major concern for thought leaders on the “Economics, Underwriting, and Geopolitics” panel at Triple-I’s Joint Industry Forum in Chicago.

Despite recently posting its most favorable underwriting performance since 2013, the property/casualty insurance industry faces several obstacles to continued progress, particularly from tariffs issued by the Trump Administration.

Short-term economic impacts

“Tariffs aren’t inherently good or bad,” said Triple-I Chief Economist and Data Scientist Dr. Michel Léonard, who co-moderated the discussion. “Where there is consensus among economists is that, in the short term, tariffs do lead to inflation and disruption.”

Put simply, tariffs can raise revenue for the issuing government while costing the domestic businesses that rely on imported goods. In advance of pending tariffs, companies up and down the supply chain are purchasing such goods at a record pace, which boosts the demand and prices of these materials. Consumers will inevitably shoulder some or all of the added cost.

Many proposed or enacted tariffs involve materials essential to construction and auto manufacturing. Earlier this month, for instance, the administration doubled its new steel and aluminum tariff to 50 percent – including on Canada, the largest steel supplier to the United States. P/C replacement costs will likely rise throughout the industry, leading to higher claim payouts and, consequently, premium rates.

Amid various tariff reductions, increases, impositions, and pauses, President Trump’s trade policies remain difficult to determine or predict. This lingering ambiguity – paired with impending replacement cost increases – creates a “double whammy” for insurers, said Aaron Klein, Miriam K. Carliner Chair and senior fellow in Economic Studies at the Brookings Institution.

“Other markets can adapt to that more quickly,” Klein said. “When I renew my auto policy in February, the insurer on the other side has to guess what the costs are going to be over six months.”

While in a period of extraordinary performance, the workers compensation line also faces potential risks from oncoming tariffs, noted Donna Glenn, chief actuary at the National Council on Compensation Insurance (NCCI). Mitigated by investments in technology and safety, workplace incidents could rise, she explained, as “a lot of the uncertainty puts businesses back in a defensive mode and asking, ‘how should I spend my money?’”

“I caution and say there will be some temporary lack of investment in safety,” Glenn continued.

Talent and technology

An evolving workforce poses additional risks.

“Workers comp has benefited from a very strong labor market,” Glenn said, pointing to consistently low U.S. unemployment rates, but current mass deportation efforts could undermine this trend. “We are accustomed to having a significant influx of foreign-born workers,” Glenn explained. “When we don’t – and when we shift to not having them – the labor market could stifle to some degree.”

Bridging the talent gap lends further urgency to this issue, as roughly 400,000 workers are projected to leave the insurance industry through attrition by 2026 in the U.S. alone, according to the U.S. Bureau of Labor Statistics. And with generative AI automating more processes across the insurance value chain, cultivating a workforce possessing the necessary skillset to oversee them compounds the problem.

“AI can certainly help improve productivity,” said Triple-I Chief Insurance Officer and co-moderator Dale Porfilio, “but we’re going to need people to do an awful lot of those jobs. We’re still going to have that talent gap.”

Embracing advanced technology, then, gives insurers an opportunity to both develop that expertise and rebuild the workforce by attracting younger tech professionals who might otherwise overlook the industry. Innovative companies like Argo Group are already paving the way for this collaboration.

Patrick Schmid, president of The Institutes’ RiskStream Collaborative, acknowledged that “getting clarity about how significantly you can leverage AI is very important.”

Concern about using AI in underwriting, Schmid said, given an absence of AI regulatory guidance, which does not exist federally and is set to be blocked on a state level.

To provide insight into these efficiencies, Schmid described how RiskStream – a consortium of insurers, brokers, reinsurers, and other industry leaders – applies AI to streamline data processing, lower operating costs, and enhance customer experiences. Beyond expediting business operations, AI offers potential solutions to a range of challenges plaguing insurers, Schmid said – including one application that might help mitigate legal system abuse by facilitating earlier claims intervention, preventing excessive attorney involvement.

The panelists agreed that insurers will continue to adapt their underwriting and pricing to reflect this dynamic environment and emphasized the economy’s strong, steady recovery post-COVID.

“There’s not been a single case of an economic expansion in recorded history dying of old age,” Klein said. “Are we near the tipping point? I don’t think so.”

Learn More:

JIF 2025: Litigation Trends, Artificial Intelligence Take Center Stage

Insurance Affordability, Availability Demand Collaboration, Innovation

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

Tariff Uncertainty May Strain Insurance Markets, Challenge Affordability

Reining in Third-Party Litigation Funding Gains Traction Nationwide

Claims Volume Up 36% in 2024; Climate, Costs, Litigation Drive Trend

Executive Exchange: Insuring AI-Related Risks

Disaster Preparedness, Health & Safety, Homeowners Insurance, Lightning, Risk Management

Lightning-Related Homeowners Claims
Fell 16.5% in 2024

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By Loretta Worters, Vice President, Media Relations, Triple-I

Lightning-related homeowners’ insurance claims totaled $1.04 billion in 2024, a 16.5 percent decrease from 2023, according to new data from the Insurance Information Institute and State Farm, the largest writer of homeowners’ insurance in the United States. The number of lightning-caused claims also fell significantly, dropping 21.5 percent, to 55,537, the lowest level recorded since before 2017.

More than half of all claims came from the top 10 states, with Florida, Texas, and California leading the country in lightning-related property losses.

“Fewer claims and a decline in severity indicate increased awareness and improved mitigation,” said Sean Kevelighan, CEO, Triple-I. “Nonetheless, lightning remains a significant threat to property and safety, particularly during storm season.”

Key lightning claim stats for 2024

  • Total number of claims: 55,537 (down from 70,787 in 2023)
  • Total claims value: $1.04 billion (down from $1.24 billion)
  • National average cost per claim: $18,641
  • Highest state average: $38,558 in Texas

Top three states by lightning losses

  • Florida – 4,780 claims, $113M in damages
  • Texas – 4,369 claims, $168M in damages
  • California – 4,005 claims, $75M in damages

“Lightning remains a costly and unpredictable threat, with ground surges causing nearly half of all claims,” said Michal Brower of State Farm. “These events can cause extensive damage to electrical systems, appliances, and even structural issues. The damage underscores the critical need for homeowners to be aware of the risks, invest in protective measures, and stay prepared, especially in high-risk regions where lightning strikes are most frequent and damaging.”

Lightning strikes can cause more than just a power outage. Common impacts include:

  • Fires in attics, roofs, or walls
  • Power surges that destroy electronics and appliances
  • Structural damage
  • Injury or even death

How to Stay Protected

Homeowners can protect their families and property by following a few guidelines:

  • Install whole-home surge protection and unplug devices during storms;
  • Consider a certified lightning protection system;
  • Check your homeowners’ insurance policy for lightning and surge-related coverage; and
  • Stay indoors and avoid wired devices during thunderstorms.

Damage caused by lightning, such as fire, is covered by standard homeowners’ insurance policies.  Some policies provide coverage for power surges that are the direct result of a lightning strike. 

The Lightning Protection Institute (LPI) notes that lightning strikes can occur at an astonishing rate of 100 times per second.

“Whether it’s a family home or a mission-critical facility, no property is immune to lightning,” said Tim Harger, Executive Director at LPI, whose organization provides resources for the design, installation, and inspection of lightning protection systems. “The most effective time to prevent lightning damage is before a storm. A lightning risk assessment paired with a professionally installed protection system can make all the difference in keeping people safe and operations uninterrupted.”

While lightning-related claims may be down, the risk is still very real, especially in high-strike areas like Florida, Texas, and California. Taking preventive steps now can reduce exposure to costly damage later.

Learn More:

Lightning Protection Institute

The Importance of Protecting Critical Facilities From Lightning Strikes

Lightning: Quantifying a Complex, Costly Peril to Support Resilience

Beyond Fire: Triple-I Interview Unravels Lightning-Risk Complexity

Business Risk, Catastrophes, Disaster Resilience, Emerging Risks, Industry Awards & Events, Industry Financials, Insurers and the Economy, Market Conditions, Regulation, Risk Management, Technology

JIF 2025: Litigation Trends, Artificial Intelligence Take Center Stage

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By Lewis Nibbelin, Contributing Writer, Triple-I

Identifying key risk trends amid an increasingly complex risk landscape was a dominant theme throughout Triple-I’s 2025 Joint Industry Forum – particularly during the panel spotlighting some of the insurance industry’s C-suite leaders.

Moderated by CNBC correspondent Contessa Brewer, the panel consisted of:

  • J. Powell Brown, president and CEO of Brown & Brown Inc.;
  • John J. Marchioni, chairman, president, and CEO of Selective Insurance Group;
  • Susan Rivera, CEO of Tokio Marine HCC (TMHCC); and
  • Rohit Verma, president and CEO of Crawford & Co.

Their discussion provided insight into how insurers can transform these uncertainties into opportunities for business development and for cultivating deeper connections with consumers.

Recouping policyholder trust

Given the volatility of the current risk environment – exacerbated by various ongoing geopolitical conflicts and the rising frequency and severity of natural catastrophes – it is more imperative than ever to reaffirm the intrinsic human element of insurance, the panelists agreed.

“That’s one of the most underappreciated aspects of our industry,” Marchioni said. “We make communities safer and put people’s lives and businesses back together after an unexpected loss. Being the calming force when you have unsettling events like this happen around the world is a big part of what we do.”

Yet prevailing public perception continues to indicate otherwise, even as insurers report repeated losses or nominal profits compared to other industries.

“The insurance industry may be the only industry where record profits are a problem,” CNBC’s Brewer added, because consumers tend to “not care whether it’s coming from your investments, or whether it’s coming from your underwriting business or your reinsurance. They just hear that you’re making record profits.”

Brown noted that consumer mistrust derives, in part, from “a very active plaintiffs’ bar,” which the American Tort Reform Association estimates spent over $2.5 billion for nearly 27 million ads across the United States last year. He further discussed how, though the average homeowners’ insurance premium rate in Florida will increase this year, his home state has enjoyed far more stable rates after tort reforms eased litigation costs on insurers.

Previous research by the Insurance Research Council (IRC) – like Triple-I, an affiliate of the Institutes – showed that most consumers perceive the link between attorney advertising and higher insurance costs. Crawford’s Verma, however, emphasized that this awareness does not necessarily translate into consumers understanding their own agency.

“It’s easier for homeowners to understand how the weather impacts potential losses and the fact that weather patterns have changed,” Verma said. “But when it comes to [legal system abuse], I don’t think that connection is as well understood.”

Reflecting on a record high in nuclear verdicts last year, Rivera suggested insurers must reconfigure how they communicate legal system abuse to consumers.

“Where are those hospital professional liability verdicts going to go?” he said. “They’re going to go back into the cost of health care at the end of the day.”

Leading the AI charge

Maintaining consumer centricity while implementing or experimenting with technological innovations – especially generative AI – was a unifying objective for all the panelists.

“We look at AI as an enabler,” Brown said, “so we can put teammates in a position to spend more time with customers, which is the most important thing.”

For Tokio Marine’s Rivera, AI “ultimately helps all of our insureds” by boosting operational efficiency while reducing operational costs, as well as facilitating more proactive risk management than ever before. A growing percentage of insurance executives appear to agree, as generative AI models continue to expedite data processing across the insurance value chain, reshaping underwriting, pricing, claims, and customer service.

Such efficiency, paired with the potential for improved decision-making, is crucial “in our dramatically changing environment,” Marchioni stressed.

“We have thousands of claims every day,” he said. “Thinking about lawsuit abuse as a backdrop – a claims adjuster, every day, has to make decisions regarding, ‘Do I settle this claim based on injuries or venue? What’s the value of the injury and of the claim? Who’s the plaintiffs’ attorney?’ These tools give more refined information so your knowledge workers can make better, more timely decisions.”

Generative AI fails, however, when base datasets are insufficient, outdated, or inaccurate, Brown pointed out. Training AI models uncritically can lead to outputs containing false and/or nonsensical information, commonly known as “hallucinations”.

At their current capacity, at least, AI models cannot draw the kinds of salient conclusions that adjustors and underwriters can, meaning AI could “change the way we work, but it’s not going to replace the jobs,” Verma said.

Though they do not currently exist in the United States at the federal level, AI regulations have already been introduced in some states, following a comprehensive AI Act enacted last year in Europe. With more legislation on the horizon, insurers must help lead these conversations to ensure that AI regulations suit the complex needs of insurance, without hindering the industry’s commitments to equity and security.

A 2024 report by Triple-I and SAS, a global leader in data and AI, centers the insurance industry’s role in guiding conversations around ethical AI implementation on a global, multi-sector scale, given insurers’ unique expertise in analyzing and preserving data integrity.

Learn More:

Insurance Affordability, Availability Demand Collaboration, Innovation

Executive Exchange: Insuring AI-Related Risks

Tariff Uncertainty May Strain Insurance Markets, Challenge Affordability

Reining in Third-Party Litigation Funding Gains Traction Nationwide

Claims Volume Up 36% in 2024; Climate, Costs, Litigation Drive Trend

Personal Cyber Risk Is Up; Why Isn’t Adoption of Personal Cyber Coverage?

U.S. Cyber Claims Surge While Global Rates Decline: Chubb

FBI: Elder Fraud Up; Bolsters Case for Personal Cyber Insurance

Triple-I Issues Brief: Cyber Insurance (Members Only)

Triple-I Issues Brief: Legal System Abuse (Members Only)

Auto Insurance, Catastrophes, Disaster Preparedness, Disaster Resilience, Emerging Risks, Flood Insurance, Homeowners Insurance, Hurricane, Industry Awards & Events, Insurers and the Economy, Legal Environment, Market Conditions, Regulation, Risk Management, Severe Convective Storm, Tornado, Wildfire, Wind

Insurance Affordability, Availability Demand Collaboration, Innovation

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By Lewis Nibbelin, Contributing Writer, Triple-I

Insurance industry executives and thought leaders gathered yesterday for Triple-I’s Joint Industry Forum (JIF) in Chicago to discuss the trends, economics, geopolitics, and policy influencing the market today, as well as ways to navigate these complexities while focusing on making their products affordable and available for consumers.

Triple-I CEO Sean Kevelighan in his opening remarks, noted that effective risk management depends on collaboration across stakeholder groups, as interconnected perils “present a community problem, not just an industry problem.”

JIF keynote speaker Louisiana Insurance Commissioner Tim Temple said facilitating community resilience planning is a top priority for the National Association of Insurance Commissioners (NAIC). The NAIC’s 2025 initiative  – “Securing Tomorrow: Advancing State-Based Regulation” – aims to improve disaster mitigation and recovery by consolidating “the collective expertise of experienced state regulators from across the country, who can share real-time insights and proven strategies,” Temple said.

Among the initiative’s goals is aggregating more data from insurers to better understand challenges to affordability and availability on state levels, which the NAIC can then translate into actionable policy proposals. Such data calls, Temple said, help regulators, legislators, and policyholders focus on improving the cost drivers of insurance rates.

Louisiana has consistently been among the least affordable states for homeowners and auto insurance, according to the Insurance Research Council (IRC), in part because of its reputation for being plaintiff-friendly in civil litigation. Significant tort legislation has been approved in the state, but resistance to reform remains a challenge.

Getting to the roots of high premiums

 After a recent data call in his home state, Temple told the JIF audience, “For the first time in Louisiana, we’re not talking about only premiums. We’re talking about why premiums are where they are.”

A critical lack of transparency surrounding cost drivers persists, however. Temple criticized the National Flood Insurance Program’s Risk Rating 2.0 reforms for not publicly disclosing more information “for individuals and communities to identify and address factors driving up their premiums,” such as “whether increased rates take into account levee systems, pump stations, and other things designed to help mitigate against floods.”

Conversely, government programs like Strengthen Alabama Homes – and the numerous programs it inspired, including in Louisiana – have demonstrated success in communicating the benefits of resilience investments for consumers and policymakers.

“We’re seeing major positive results after just a few short years,” Temple said, noting that, since early 2024, over 5,000 homeowners not chosen for Louisiana’s grant program still decided to invest in the same hazard mitigation, as they may still qualify for the corresponding state-mandated insurance discounts.

“As natural disasters become more frequent and severe, state regulators will continue to drive forward common-sense policies that protect consumers and ensure that insurance remains available and reliable for at-risk communities,” Temple concluded. Developing the database required for such policies is a necessary first step.

Keep an eye on the Triple-I Blog for further JIF coverage.

Learn More

Significant Tort Reform Advances in Louisiana

Louisiana Senator Seeks Resumption of Resilience Investment Program

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

Louisiana Is Least Affordable State for Personal Auto Coverage Across the South and U.S.

Who’s Financing Legal System Abuse? Louisianans Need to Know

Study Touts Payoffs From Alabama Wind Resilience Program

Outdated Building Codes Exacerbate Climate Risk

Resilience Investments Paid Off in Florida During Hurricane Milton

Careers and Employment, Technology

How Insurers Address Talent Gap Through Innovation & Technology

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As the insurance industry grapples with retirements and the challenge of attracting talent, forward-thinking insurers are finding success by combining traditional mentorship with cutting-edge technology, according to Triple-I’s latest Executive Exchange.

The “Ascend” Approach to Talent Development

David Corry, who heads Casualty for Argo Group, told Triple-I CEO Sean Kevelighan that the company’s “Ascend with Argo” program offers a blueprint for effective talent recruitment and retention. Rather than hoping young professionals will stumble into insurance careers, Argo actively partners with brokers to create meaningful experiences for early-career workers.

By offering shadow days, continuing education, and direct access to industry leaders, programs like Ascend make insurance careers tangible and appealing.

“Last month, we hosted a dozen young career brokers in our New York City office,” Corry said. “They spent a day with our underwriters and heard from senior leadership—giving them real exposure to how carrier operations work from the inside.”

Technology as a Talent Magnet

Cutting-edge technology – including generative AI – is transforming how insurers operate, as well as helping them attract tech-savvy talent who might otherwise overlook the industry. This creates what Corry calls “two-way learning,” with experienced professionals teaching industry fundamentals while younger workers contribute innovation skills. It’s a win-win that makes insurance careers more attractive to digitally minded professionals.

What ties these efforts together is authentic leadership focused on people rather than personal advancement.

“A strong leader is someone who’s in it for the people they work with, not for themselves,” Corry emphasizes.

The insurance industry’s talent challenge is real, but companies are addressing it by combining innovative programs, mentorship, and technology adoption – demonstrating that insurance careers offer both stability and cutting-edge opportunities for the next generation of professionals.

Insurance Industry, Legal Environment

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

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By Tasha Williams and Loretta Worters

Practices that foster unnecessary or drawn-out litigation are among several hard-to-measure forces that can shift loss ratios for insurers and disrupt forecasts, making cost management more challenging. Ultimately, the resulting cost increase is passed on to consumers, which adversely impacts the affordability and availability of coverage. The Insurance Information Institute (Triple-I) and Munich Re US published a new resource to help consumers understand how legal system abuse is fueling higher claim costs, driving up premiums, and reducing the efficiency of our civil justice system.

A Consumer Guide: How Legal System Abuse Impacts You explains, using accessible language and engaging graphics, how elements of legal system abuse – including third-party litigation financing, persuasive jury anchoring, and the deluge of attorney advertising – can distort outcomes and siphon value away from injured parties, policyholders, and the economy.

“Legal system abuse has driven up litigation expenses and costs, impacting businesses and consumers across the United States,” said Joshua Hackett, Head of Casualty at Munich Re US. “If left unchecked, these rising costs will continue to increase insurance premiums and limit coverage options.”

The consumer guide outlines legal trends and quantifies the impact of legal system abuse beyond rising premiums.

• $6,664 in added annual costs for the average American family of four

• 4.8 million U.S. jobs lost due to excessive litigation

• $160 billion in tort-related costs borne by small businesses annually

Who Benefits from Large Settlements?

The narrative of legal system abuse can be muddled by news of large, high-profile settlements, which can imply plaintiffs are winning big. In reality, injured parties typically end up with only a fraction of their awarded damages after fees, obligations to third-party litigation funders, and inflated expenses are taken into account.

According to a recent report from Duane Morris Class Action Review, a defense attorney interest group, $42 billion in class action settlements was reached last year, the third-highest value the group has tallied over the past twenty years. That figure included ten settlements of at least $1 billion. Products Liability Class Actions reaped by far the largest amount for a practice area, at $23.40 billion. Annual numbers for overall settlements reported in 2023 and 2022 were $51.4 billion and $60 billion, respectively.

However, the bulk of these settlements do not ultimately benefit the injured parties. Attorneys can charge contingency fees ranging from 33 to 40 percent for their labor, plus expenses incurred through litigation, such as court costs and expert witness fees. Additionally, the process for injured parties to claim and receive their share of the settlement can be complex and drawn out, and, often, it is not worth the small share amounts dispersed to most claimants in the long run. A 2019 Federal Trade Commission study estimates the median claims rate for consumer class action settlements was 9 percent and that the weighted mean — weighted by the size of the class — was only 4 percent.

“While billboard attorneys use exploitative advertisements promising big dollar settlements, the truth is consumers and business owners can be left with less money, sometimes substantially less, if third-party litigation financiers are involved,” said Triple-I CEO Sean Kevelighan.

The consumer guide reinforces what many risk and claims professionals are observing in the market.

  • Longer case durations
  • Higher settlements and awards
  • Diminishing predictability in the legal environment

This erosion of predictability poses underwriting challenges and affects the affordability and availability of coverage, particularly in casualty and liability lines.

Legal system abuse can be mitigated by supporting public awareness and robust tort reform policy.

Triple-I and Munich Re US are encouraging the industry to advocate for:

  • Disclosure requirements for litigation financing
  • Reforms to reduce medical billing abuse
  • More oversight of attorney advertising practices

The guide serves as an educational tool that insurers, brokers, and industry partners can share with clients and stakeholders to explain the link between premium increases, other rising costs, and potential legal exposure.

This collaboration between Triple-I and Munich Re US is part of Triple-I’s multi-faceted awareness campaign to help educate industry insiders, consumers, and other stakeholders about the challenges posed by legal system abuse to coverage affordability and availability. We invite you to learn more about legal system abuse by reading our issue briefs, such as “Legal System Abuse: State of the Risk” and “Legal System Abuse and Attorney Advertising for Mass Litigation: State of the Risk,” and visiting our knowledge hub on this topic. To join the discussion, register for JIF 2025.

Auto Insurance, Industry Financials, Legal Environment, Market Conditions

Personal Auto 2024 Underwriting Results Best Since Pandemic

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By William Nibbelin, Senior Research Actuary, Triple-I

The U.S. personal auto insurance industry saw a significant turnaround in 2024, achieving its best underwriting result since the pandemic began, according to Triple-I’s latest Issues Brief.  

In fact, with a net combined ratio of 95.3, personal auto insurance has outperformed the broader property and casualty (P/C) insurance industry in terms of underwriting profitability for 10 out of the last 20 years. A combined ratio under 100 indicates an underwriting profit. One above 100 indicates a loss.

This positive shift comes after a period in which personal auto premiums experienced fluctuations. While the overall P/C industry outpaced personal auto in premium growth from 2018 to 2022, personal auto saw a strong rebound in 2023 and 2024, with double-digit premium growth rates of 14.4 percent and 12.8 percent, respectively. This surge in premiums follows a notable decline in 2020, the first since 2009, largely due to reduced driving during the initial phase of the COVID-19 pandemic. Since then, vehicle miles driven have returned to pre-pandemic levels.

A major factor influencing auto insurance premiums has been the significant rise in replacement costs for vehicles and parts after the pandemic. Insurers adjusted rates in response to these increased costs. The changes in consumer prices for new and used vehicles, as well as parts and repairs, have shown a strong correlation with average insurance rate adjustments over the past decade:

  • New Vehicles: 88 percent correlation;
  • Motor Vehicle Parts & Equipment: 74 percent correlation;
  • Used Vehicles: 79 percent correlation; and
  • Motor Vehicle Maintenance & Repair: 78 percent correlation.

Looking at losses, the direct incurred loss ratio for personal auto improved considerably by 21.7 points from late 2022 to the end of 2024. However, this improvement wasn’t uniform across all types of claims. Auto physical damage claims saw more improvement than auto liability claims, creating the largest disparity between the two in over a decade of 15.7 points.

Loss trends in personal auto are shaped by how often claims occur (frequency) and the average cost of each claim (severity). For personal auto liability, while the number of claims has stayed below pre-pandemic levels, the average cost per claim has continued to rise year after year with a cumulative increase from 2019 to 2024 of 54.2 points.

One of the significant challenges contributing to the increasing severity in personal auto liability is what’s known as legal system abuse. This includes a rise in lawsuits, larger jury awards, and more attorney involvement in claims. This phenomenon, intertwined with broader inflation, has driven up auto liability losses and related expenses by a range of $76.3 billion to $81.3 billion from 2014 to 2023 according to the latest Triple-I | Casualty Actuarial Society study.

Another important factor impacting the auto insurance market is the state regulatory environment. A recent report by the Insurance Research Council on Rate Regulation in Personal Auto Insurance indicated that the process for insurers to get rate changes approved has become more complex across the country between 2010 and 2023. This has led to longer approval times and a higher incidence of insurers receiving less than their requested rate increases. These trends can ultimately affect the availability of competitive auto insurance policies for consumers.

Learn More:

Even With Recent Rises, Auto Insurance Is More Affordable Than During Most of Century to Date

New IRC Report: Personal Auto Insurance State Regulation Systems

U.S. Consumers See Link Between Attorney Involvement in Claims and Higher Auto Insurance Costs: New IRC Report

Disaster Preparedness, Disaster Resilience, Homeowners Insurance, Legal Environment, Market Conditions

Disasters, Litigation Reshape Homeowners’ Insurance Affordability

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Rising natural disaster costs, increased home repair expenses, and legal system challenges have made homeowners’ insurance significantly less affordable across the United States over the past two decades,  according to new research from the Insurance Research Council. The trend shows no signs of slowing.

The financial burden of protecting one’s home has grown substantially. With homeowners insurance expenditures growing much faster than incomes over the past two decades, American households now dedicate an increasing share of their income to insurance premiums.

 In 2001, homeowners typically spent about 1.19 percent of their household income on insurance coverage. This figure climbed to 2.09 percent – a 75 percent increase – by 2022, the most recent available year’s data.

Projections of average premiums from the Insurance Information Institute suggest the trend will continue escalating, with estimates indicating households could spend 2.4 percent of their income on homeowners’ insurance by 2024 – the highest level recorded in more than two decades.

Wide variation by state

Utah emerged as the most affordable state in 2022, where residents spent only 1.00 percent of their income on homeowners’ insurance. Other states offering relative affordability included Oregon (1.09 percent), Alaska (1.23 percent), and Maryland (1.27 percent).

Louisiana ranked as the least affordable, with households dedicating 4.22 percent of their income to homeowners’ insurance. Disaster-prone states dominated the least-affordable rankings, with Florida (3.99 percent), Mississippi (3.87 percent), and Oklahoma (3.45 percent), following the Pelican State.

Multiple Cost Pressures

The affordability crisis stems from interconnected factors that have intensified pressure on insurance markets, according to IRC. Increased natural catastrophe risk represents a primary driver, with weather-related events becoming more frequent and severe.

Rising home construction and repair costs have compounded the challenge. Supply-chain disruptions have inflated material prices and extended project timelines, directly impacting claim settlements. When homes require repairs or replacement, insurers face significantly higher costs than in previous years, necessitating premium adjustments to maintain financial stability.

Population migration patterns have exacerbated risk concentrations, with more Americans moving to areas susceptible to natural disasters, the report noted. Coastal regions prone to hurricanes, wildfire-vulnerable areas, and tornado-prone territories have seen increased development, creating larger pools of exposed properties that insurers must protect.

Litigation has added another layer of complexity. Insurance companies report challenges with fraud, excessive claims, and legal system abuse following catastrophic events. The expense index – measuring what insurers spend to process, investigate, and litigate claims as a percentage of incurred losses – varies significantly across states, with litigation rates affecting overall costs.

Battery Fire, E-mobility, Emerging Risks, Technology

E-Mobility Battery Fire Data Exposes Potential “Blind Spot” for Insurers

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By Sayon Deb, Director of Insights, UL Standards & Engagement

In just five years, lithium-ion battery fires linked to e-mobility devices have evolved from a fringe risk into a mainstream safety and liability crisis – particularly in dense urban areas, like New York City, where adoption of these devices has outpaced regulatory safeguards.

In addition to the obvious public safety threat, e-mobility battery related fires represent a significant and expanding liability exposure for insurers, property managers, and city agencies. Our latest report – developed in collaboration with Oxford Economics – sets out to answer a more fundamental question: What is this crisis truly costing the city?

The answer, conservatively estimated, is up to $519 million in combined human and economic loss between 2019 and 2023. This figure includes fatalities, injuries, and structural property damage

Why Now? Why New York?

The dramatic rise in fire incidents – an estimated eightfold increase from 21 in 2019 to as many as 187 incidents in 2023 – correlates strongly with the influx of low-cost, uncertified e-bikes and scooters. New York City’s unique combination of traffic congestion, delivery-based gig work, and dense multi-family housing has made it a case study in how quickly innovation can outstrip risk management.

Data from the Fire Department of New York, the Consumer Product Safety Commission, and UL Solutions’ Lithium-Ion Battery Fire Incident Database formed the foundation of our modeling. This helped us generate incident estimates of fatalities, injuries, and structural properties damages.

Oxford Economics translated these incident reports into cost estimates using a rigorous, conservative methodology by applying federal valuation metrics for loss of life and injury. Fatality costs were calculated using the U.S. Department of Transportation’s Value of a Statistical Life, set at $13.2 million per life as of 2023. Non-fatal injury costs were derived as severity-weighted fractions of that value, ranging from minor injury to critical injury, in accordance with DOT and Office of Management and Budget economic guidance.

Our analysis then integrated structural fire cost benchmarks from both Triple-I and the National Fire Protection Association. Triple-I’s data was particularly important in defining the upper-bound estimates for property loss. Claims data on the average insurance payout for residential fire damage provided a grounded, actuarial counterweight to NFPA’s generalized national averages.

This dual-source approach allowed us to capture a more realistic range of likely losses across different housing types, from NYCHA public units to private homes.

A growing blind spot for insurers

From a risk-modeling standpoint, e-mobility fire incidents don’t map easily to conventional insurance categories. Many e-mobility users, particularly gig economy workers, rely on leased, used, or modified e-bikes and e-scooters to meet delivery demands. Some of these devices are powered by third-party or uncertified batteries or, in some instances, contain second-hand components. This creates a messy risk environment in which it’s hard to know who owns what, how it has been maintained, or how it’s being used. Moreover, fires resulting from these devices often fall outside the scope of standard product warranties or manufacturer responsibility. This makes it difficult to determine who’s responsible when something goes wrong.

For insurers, this presents a growing blind spot. Traditional assumptions around property and contents coverage did not include high-risk devices charged in hallways or shared living spaces or for ignition sources that are not part of conventional product recall channels.

A $300 imported battery with no certification can trigger a six-figure claim, and those risks are becoming more common.

The Path Forward

Regulatory momentum is improving. New York City’s Local Law 39, signed in 2023, bans the sale and lease of uncertified e-mobility devices. In July 2024, New York Governor Hochul enacted additional statewide measures to support battery safety and user education. Federal legislation aimed at establishing nationwide safety requirements for lithium-ion batteries used in e-bikes and e-scooters is making its way through Congress.  While these are positive steps, enforcement and awareness remain uneven, leaving significant gaps in consumer protection and risk mitigation.

From our perspective at ULSE, a multi-pronged strategy is essential:

  • Better enforcement of safety standards for batteries and chargers.
  • More robust public education on safe charging practices.
  • Trade-in and swap programs that encourage delivery workers to discard unsafe batteries.
  • Underwriting models that consider device certification, consumer behavior, and building type.
  • Improved incident reporting frameworks that enable cities and insurers to collect better data and therefore better track risk exposure.

With better data, smarter standards, and more coordinated public-private action, the future of e-mobility will thrive with safety at its center.

Mr. Deb will be among the risk and insurance industry thought leaders speaking at Triple-I’s Joint Industry Forum (JIF) in Chicago on June 18, 2025. It’s not too late to register to attend this insight-driven event.

Homeowners Insurance, Insurance Industry, Insurers and the Economy, Specialty Coverage

LGBTQIA+ Homeownership Gap May Be Fueling Insurance Protection Gap

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Chart of the Week (COTW), As Fewer Same-Sex Couples Own Their Dwelling, They Face a Larger Insurance Protection Gap. The homeownership gap for same-sex couple households is 25.2% based on the most recent data.
The homeownership gap for same-sex couple households is 25.2% based on the most recent data.

As part of an ongoing discussion on the link between the housing and insurance markets, the Insurance Information Institute (Triple-I) released a Chart of the Week (COTW), “As Fewer Same-Sex Couples Own Their Dwelling, They Face a Larger Insurance Protection Gap.” Based on data from 2023, 62.6 percent of same-sex households own their homes and 37.4 percent rent, representing a homeownership gap of 25.2 percentage points within this community. In comparison, 82 percent of married opposite-sex households own their homes, while only 18 percent rent.

In the United States, homeownership offers several benefits (versus renting) to those with the financial resources to achieve and sustain it. Owners can accrue equity to increase their chances of making a profit when they sell their home. They can reap tax benefits through mortgage deductions. Mortgage holders can also lower monthly housing costs when interest rates drop. Ultimately, a home can increase personal net worth and offer a mechanism to transfer wealth to the next generation. Protecting this asset and its contents makes good financial sense.

Renters may not own their dwelling, but they keep personal belongings in it. They can face serious financial risks in the event of a loss, theft, disaster, or personal liability event. Yet, according to the COTW, 43 percent of renters are uninsured or underinsured, compared to 30 percent of homeowners. There are several reasons attributable to this difference, but it’s essential to keep one at the forefront: insurance coverage requirements are commonplace in mortgage agreements but not in lease agreements. Thus, homeownership status can drive participation in the insurance market.

Examining factors that impede homeownership for same-sex couples might shed light on how to attract and retain more policyholders in this demographic. Looking closely at the interplay of just three of these – housing prices, geography, and legislative environment – reveals that housing tends to be more expensive in LGBTQIA+-friendly areas. Prospective buyers may need to earn at least $150,000 a year – as much as 50 percent more – to avoid living in regions without basic legal protections, according to a recent study of real estate market data across 54 major U.S. metropolitan areas.

High monthly housing costs strain budgets, pushing homeowners and renters out of the insurance market. It can also put the financial qualifications for home buying – i.e., building credit and savings – out of reach. Households are considered cost-burdened when they spend more than 30 percent of their income on rent, mortgage payments, and other housing costs, according to the U.S. Department of Housing and Urban Development (HUD).

Nationwide, renters had higher median housing costs as a percentage of their income (31.0 percent) compared to homeowners (21.1 percent for homeowners with a mortgage and 11.5 percent for those without a mortgage). In metropolitan areas that welcome and protect diversity, renters are more likely to be housing cost-burdened, particularly in New York (52.1 percent of residents pay more than 30 percent of their income) and San Francisco (37.6 percent of residents). Renters in states and municipalities where legislation is considerably less welcoming but rents are lower can face comparatively higher premiums for rental coverage.

Despite the legalization of same-sex marriage and various anti-discrimination laws, the LGBTQ community still battles considerable discrimination and systemic biases in many areas of life, including housing. Insurers can work to better understand the diverse needs of LGBTQIA+ individuals, couples, and their families, facilitating more effective solutions for managing financial risks. And most importantly, the industry can improve communication around potential coverage benefits for these households.

“We can start closing the protection gap by having people at the table who understand the lived experiences behind the numbers,” says Amy Cole-Smith, Executive Director for BIIC/ Director of Diversity at The Institutes.

For example, renters might find it helpful to know their policy covers a loss event linked to discrimination against them, such as malicious damage or vandalism to the property by a third party. Even when it’s evident the destruction isn’t the renter’s fault, the landlord might still attempt to hold them responsible, either through a lawsuit, a rent increase, or eviction. Additionally, unmarried couples should be informed about whether the insurer includes both partners’ names on a policy and how this provision affects them in the event of a claim.

“Cultivating an inclusive workforce drives smarter solutions, like renters’ insurance that aligns with the realities of same-sex couples, more equitable underwriting, and marketing that truly resonates,” Cole-Smith says. “This isn’t just about equity—it’s about unlocking growth and staying competitive in a changing market. When the insurance workforce reflects the diversity of the market, we’re in a stronger position to build products that meet people where they are.”

Triple-I works to advance the conversation around crucial issues in the insurance industry, including Talent and Recruitment. To join the discussion, register for JIF 2025. We also invite you to follow our blog to learn more about trends in insurance affordability and availability across the property/casualty market.