Texas: A Microcosm
of U.S. Climate Perils

Devastating flooding in central Texas over the July 4, 2025, weekend highlighted several aspects of the state’s risk profile that also are relevant to the rest of the country, according to the latest Triple-I Issues Brief. One is the rising incidence of severe inland flooding related to tropical storms.

Tropical Storm Barry made landfall in Mexico on June 29 and weakened quickly, but its remnant moisture drifted northward into Texas, according to Dr. Phil Klotzbach, a research scientist in the Department of Atmospheric Science at Colorado State University and a Triple-I non-resident scholar.

“A slow-moving low-pressure area developed and helped bring up the moisture-rich air rom Barry and concentrated it over the Hill Country of central Texas,” Klotzbach said. “The soil was also extremely hard from prior drought conditions, which exacerbated the flash flooding that occurred.”

Such flooding far from landfall has become more frequent and severe in recent years.  In Texas – as in much of the United States, particularly far from the coasts – few homeowners have flood insurance. Many believe flood damage is covered by their homeowners’ or renters’ insurance. Others believe the coverage is not worth buying if their mortgage lender doesn’t require it.  In Kerr County, where much of the July 4 flooding took place, flood insurance take-up rates through the National Flood Insurance Program (NFIP) were 2.5 percent.

Convective storms, fires, and freezes

But tropical storms aren’t always the impetus for flooding. In July 2023, a series of intense thunderstorms resulted in heavy rainfall, deadly flash floods, and severe river flooding in eastern Kentucky and central Appalachia. The conditions that lead to such severe convective storms also are prevalent in Texas.

Severe convective storms are a growing source of losses for property/casualty insurers. According to Gallagher Re, severe convective storm events in 2023 and 2024 “have cost global insurers a remarkable US$143 billion, of which US$120 billion occurred in the U.S. alone.”

Given its aridity and winds, it should be no surprise that Texas is highly subject to wildfire – but the state also has been increasingly prone to severe winter storms and debilitating freezes. On Valentine’s Day 2021, snow fell across most of Texas, accumulating as temperatures stayed below freezing and precipitation continued through the night. A catastrophic failure of the state’s independent electric grid exacerbated these conditions as snow and ice shut down roads and many homes suffered pipe bursts and multiple days without power.

Texas’s 2021 experience illustrates how grid instability can act as a “risk multiplier” for natural disasters. The entire U.S. electric power grid is increasingly vulnerable as the infrastructure ages and proliferating AI data centers increase demand.  

Need for data and collaboration

The severe damage and loss of life from the July 4 flooding have naturally raised the question of whether the Trump Administration’s reductions in National Weather Service  staffing contributed to the high human cost of this event. While it is hard to say with certainty, these cuts have affected how NWS works – for example, in its use of weather balloons to monitor weather. As early as April, staffing data gathered by NWS indicated that field offices were “critically understaffed”.

In June, panelists at Triple-I’s Joint Industry Forum expressed concern about the impact of the federal cuts on weather monitoring and modeling, as well as programs to help communities adequately prepare for and recover from disasters. Triple-I has published extensively on the need for insurers to shift from exclusively focusing on repairing and replacing property to predicting events and preventing damage.

Collective action at all levels – individual, commercial, and government – is needed to mitigate risks, build resilience, and reduce fraud and legal system abuse. Triple-I and its members are committed to fostering such action and regularly provide data and analysis to inform the necessary conversations.

Learn More:

Triple-I Brief Highlights Rising Inland Flood Risk

Hurricane Helene Highlights Inland Flood Protection Gap

JIF 2025: Federal Cuts Imperil Resilience Efforts

Weather Balloons’ Role in Readiness, Resilience

ClimateTech Connect Confronts Climate Peril From Washington Stage

BRIC Funding Loss Underscores Need for Collective Action on Climate Resilience

JIF 2024: Collective, Data-Driven Approaches Needed to Address Climate-Related Perils

Texas Winter Storm Costs Raise Extreme-Weather Flags for States, Localities

“Active” Hurricane Season Still Expected, Despite Tweak to CSU Forecast

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Recent developments in the atmosphere over the Caribbean Sea have led researchers at Colorado State University (CSU) to make slight improvements to their hurricane forecast for the 2025 Atlantic-basin season, in an update published Wednesday.

Triple-I non-resident scholar Phil Klotzbach, Ph.D., a senior research scientist in the Department of Atmospheric Science at CSU, and the CSU TC-RAMS research team are now predicting 16 total named storms through the end of the year, a small drop from their original forecast of 17.

“The primary reason for the slight decrease in our outlook is both observed and predicted high levels of Caribbean wind shear,” Klotzbach said. “High levels of Caribbean shear in June and July are typically associated with less active hurricane seasons.”

Klotzbach warned, however, that peak hurricane season – which typically occurs from mid-August through late October – could still be very active, despite current atmospheric conditions.

“The subtropical eastern Atlantic and portions of the tropical Atlantic are warmer than normal,” he said. “The current Atlantic sea surface temperature pattern is fairly similar to what we typically observe in July prior to active Atlantic hurricane seasons.”

Learn More:

Triple-I Facts + Statistics: Hurricanes

JIF 2025: Federal Cuts Imperil Resilience Efforts

Louisiana Senator Seeks Resumption of Resilience Investment Program

BRIC Funding Loss Underscores Need for Collective Action on Climate Resilience

Resilience Investments Paid Off in Florida During Hurricane Milton

Hurricane Helene Highlights Inland Flood Protection Gap

FEMA Highlights Role of Modern Roofs in Preventing Hurricane Damage

Weather Balloons’ Role in Readiness, Resilience

ClimateTech Connect Confronts Climate Peril From Washington Stage

Personal Auto Shines, General Liability Faces Headwinds in Q3 2025

By William Nibbelin, Senior Research Actuary, Triple-I

The U.S. property/casualty (P/C) insurance industry is entering the latter half of 2025 with a nuanced underwriting landscape, as revealed in the latest “Insurance Economics and Underwriting Projections: A Forward View” report from Triple-I and Milliman. While personal auto continues to be a strong performer, the general liability sector is grappling with persistent profitability concerns.

Industrywide Trends

The overall industrywide net combined ratio (NCR) for 2025 is forecast at 99.3, a 2.7-point increase from 2024. Despite some line-specific challenges, a broader return to profitability is anticipated in 2026. The overall Net Written Premium (NWP) growth rate for 2025 is projected to be 6.8 percent, a decrease of 2.0 points from 2024, marking the lowest growth since 2020. Personal lines growth is expected to outpace commercial lines by 1.5 percentage points in 2025, though this gap is predicted to narrow by 2027.

Economic Influences

Michel Léonard, Ph.D., CBE, chief economist and data scientist at Triple-I, highlighted the resilience of the U.S. economy and the P&C industry amidst tariffs and trade uncertainty.

“The insurance industry’s economic growth drivers continue to outperform overall U.S. GDP growth,” he stated. However, Léonard cautioned that revised economic data for the first half of the year might paint a weaker picture of the U.S. economy, potentially leading to more widespread concerns of contraction or even recession heading into the fall.

He also noted, “With inventories running low, their depletion will now accelerate inflation and slow growth for the rest of the year.”

Léonard pointed out that price increases due to tariffs and other economic factors have been most severe for personal auto, with used car and truck prices increasing by 7.7 percent in the first half of this year. The P&C industry typically lags the broader economy by one to two quarters, suggesting that a potential broader economic contraction could impact the industry starting in Q1 or Q2 of 2026.

Personal Lines Underwriting Performance

Personal auto continues to be a robust area, with a forecast 2025 NCR of 96.0. This is approximately 1 point higher than 2024, but the line remains on track for continued profitability.

Homeowners insurance, however, faced significant challenges in Q1 2025 due to the Los Angeles wildfires earlier this year. The Q1 2025 Loss Ratio for homeowners was the worst first-quarter experienced in over 15 years and the worst of any quarter since Q2 2011.

Commercial Lines Underwriting Performance

Jason B. Kurtz, FCAS, MAAA, a principal and consulting actuary at Milliman, noted that commercial auto is forecast to remain unprofitable from 2025 to 2027, despite an estimated double-digit NWP growth in 2025.

Commercial Property with a forecast 2025 NCR of 88.3 remains profitable while 5.5 points over 2024. Strong premium growth from 2021 through 2023 contributed to profitability in the two most recent years, but there’s been a significant slowdown with premiums growing just 4.2 percent for Q1 2025. Commercial Multi-Peril swung to profitability in 2024 after combined ratios above 100 dating back to 2016. However, poor Q1 2025 results are driving a forecast 2025 Net Combined Ratio of 101.0.

The general liability line continues to be a source of profitability concern. The Q1 2025 General Liability Loss Ratio was the second worst first quarter in more than 15 years, showing less than a 1-point improvement from Q1 2024. For general liability, he stated, “the NCR is expected to improve in 2026-2027 but remain unprofitable. It is worrisome that the 1st quarter 2025 direct incurred loss ratio was only marginally improved relative to the 1st quarter of 2024, and that these two results are the highest first quarter loss ratios in more than 15 years. On a positive note, premium growth does appear to be picking up.”

In contrast, workers compensation continues its strong performance. Kurtz highlighted that the forecasted 2025 NCR of 90.6 represents a 1.0-point improvement from prior estimates, as the Q1 2025 Loss Ratio was the lowest in over 15 years. Stephen Cooper, Executive Director and Senior Economist at the National Council on Compensation Insurance (NCCI), commented on the labor market’s impact, stating, “While employment has been concentrated amongst fewer industries, the labor market has shown resilience and continued strong payroll growth for workers compensation.”

He also added, “With economic uncertainty elevated and recession concerns resurfacing, consumer behavior will be important to watch.”

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

JIF 2025 “Risk Takes”:
Data Solutions for Today’s Challenges

By Lewis Nibbelin, Contributing Writer, Triple-I

Analysis based on granular, cutting-edge data is essential to staying ahead in our rapidly shifting risk landscape. During Triple-I’s Joint Industry Forum in Chicago, two “Risk Take” presenters dove deep into the innovative data initiatives they engaged in to help turn these challenges into new opportunities for insurers.

Balancing consumer needs

With natural catastrophe frequency and supply chain uncertainty on the rise, so are home maintenance costs. Estimated to exceed $10,000 annually in 2024 – at a 5.9 percent year-over-year increase – home maintenance further weighs against the mounting costs of premium rates and property taxes across the U.S., leading many homeowners to forgo investing in at-home risk mitigation like smart home telematics.

“Across the providers we’ve talked to, adoption of telematics falls somewhere between the single digits,” said presenter James Bilodeau, CEO and founder of PreFix Inc. “The reason is simple: the value proposition of what we would like homeowners to do isn’t important enough compared to what homeowners actually need.”

For Bilodeau, the solution is also simple: combine advanced technology with routine preventative maintenance. By providing personalized, year-round home repair, Bilodeau’s Texas-based firm aims to mitigate losses while gathering unique primary data on the properties they service. Insurers can use this data to develop telematics technology and more accurately price the associated risks.

Such data collection “creates a flywheel in which we help our partners delight their customers with exceptional service and hit directly at affordability issues, both with home maintenance and in premium reduction,” Bilodeau said.

After a successful pilot program, USAA expanded its partnership with the company to offer discounted maintenance services to members who sign up for PreFix. Noting that the company is pursuing partnerships with other major insurers, Bilodeau highlighted that industry collaboration is crucial to not only facilitate more refined coverage but to lower the cost of entry to enhancing resilience.

Emerging public safety risks

An eightfold increase in New York City fire incidents between 2019 and 2023 correlates strongly with the growing popularity of e-mobility devices, according to a joint report by UL Standards & Engagement (ULSE) and Oxford Economics that is based in part on Triple-I data.

Presenting on the report, ULSE Director of Insights Sayon Deb explained how lithium-ion battery fires linked to e-bikes and scooters became a mainstream risk for COVID-era urban environments, due in part to the booming online food and grocery delivery market.

“Nearly $519 million worth of damages were caused in just four years from structural property damage, injuries, and loss of life,” Deb said, pointing out that this figure does not account for “the additional cost of communal fear, in terms of fires happening across the hallway from you, and also the loss in economic opportunities and the community toll that it takes as we respond to these fires.”

Inadequate public safety awareness, paired with the easy availability of uncertified devices, helped fuel the crisis. Beyond overusing or incorrectly charging the devices, e-mobility users often left them in dangerous locations, with “66 percent of those who charge at home charging their devices near their exit,” Deb explained – effectively “blocking your exit from your home in the event of a fire.”

E-mobility regulations vary wildly by state. Though New York City regulations passed in 2023 show progress, ULSE recommends more proactive public outreach, safety standard enforcement, and incident reporting to better track e-mobility risk data.

“The better the data we collect, the better we can understand where, how, and why these battery fires occur, so that we can prevent future fires from happening,” Deb concluded.

Learn More:

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

JIF 2025: Litigation Trends, Artificial Intelligence Take Center Stage

Insurance Affordability, Availability Demand Collaboration, Innovation

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