Category Archives: Disaster Preparedness

Catastrophes, Disaster Preparedness, Disaster Resilience, Severe Convective Storm, Tornado, Wind

Industry, Universities Team Up to Study Convective Storms

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By Lewis Nibbelin, Research Writer, Triple-I

In a year marked by severe convective storm-induced damage across the United States, timely and accurate data is more essential than ever to understand, predict, and prevent these evolving weather perils. Though federal cuts to weather monitoring and modeling have raised concerns about the industry’s capacity for risk mitigation, a new research center backed by insurers and the U.S. National Science Foundation (NSF) aims to help bridge the gap.

Directed by Dr. Victor Gensini, a professor at Northern Illinois University and a Triple-I non-resident scholar, the Center for Interdisciplinary Research on Convective Storms (CIRCS) will leverage the expertise of nearly two dozen scientists to develop research focused on advancing resilience against severe convective storms, which range from thunderstorms with lightning to tornadoes, straight-line winds, and hail.

Northern Illinois University and the University of Wisconsin-Madison launched CIRCS with $1.5 million in funding from NSF, as part of a joint initiative with the National Oceanic and Atmospheric Administration (NOAA) to create an Industry-University Cooperative Research Center (IUCRC) that can support the insurance sector.

Beyond funds under the IUCRC model, CIRCS also receives “funding for research, students, and lab equipment” from private industry members, most of whom are “insurance and reinsurance companies interested in research on convective storms,” said Gensini, who teaches in NIU’s Department of Earth, Atmosphere, and Environment. He added that CIRCS includes actuarial scientists within its panel of experts to “approach this specific peril from multiple directions.”

Rising in both frequency and severity, convective storms accounted for $42 billion in global insured losses during the first half of 2024 alone, driven by 12 U.S. storms with $1 billion or more in losses each, according to a Swiss Re report. Later Gallagher Re data supports the trend, with large U.S. thunderstorms contributing to $46 billion in insured losses through the third quarter of 2025, the fourth-costliest year on record.

Paradigm-setting research

In addition to the center’s launch, Gensini recently celebrated a major data haul gathered during the largest hail study ever conducted, known as ICECHIP – short for In-situ Collaborative Experiment for Collection of Hail in the Plains. Funded with an $11 million grant from NSF, the field study sent Gensini and more than 100 other scientists and students across the Great Plains to chase and analyze hailstorms, which facilitate as much as 80 percent of severe convective storm claims in any one year.

Collecting more than 10,000 stones for study, the researchers hope to reduce hail risk through improved forecasting, enabling residents to better protect themselves and their belongings before a hailstorm hits. As the first field campaign dedicated to studying hail since the 1970s, ICECHIP’s participants expect their data to inform research analysis for years to come, NIU reported.

“We recovered tennis-ball-sized hail or greater in about half of our instrument deployments,” Gensini said. “You hope and dream for these kinds of observations in order to push forward hail science.”

By partnering academia with industry and government agencies, CIRCS and ICECHIP showcase the kinds of collaborative, data-driven solutions needed to address climate risks in ways that respect the unique needs of all affected groups, fostering risk management strategies that can build resilience at a community level.

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Affordability, Disaster Preparedness, Disaster Resilience, Homeowners Insurance, Hurricane, Insurers and the Economy, Roof Condition, Severe Convective Storm, Tornado, Wind

Storm-Resistant Roof Efforts Gain Ground

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By Lewis Nibbelin, Research Writer, Triple-I

Severe convective storms cost insurers an estimated $46 billion in the first three quarters of 2025, Gallagher Re has reported, marking the third straight year of U.S. claims from these events through September exceeding $40 billion. Total losses from these storms – which include tornadoes, hail, straight-line winds, and drenching thunderstorms – reflect growing impacts from inland flooding and, in particular, the vulnerability of roofs to damage from these storms.

Approximately 70 to 90 percent of total insured residential catastrophic losses arise from roof-related damage, according to Insurance Institute for Business & Home Safety (IBHS) estimates. Though poorly maintained roofs contribute to this finding, outdated building codes exacerbate the risk, leading insurance industry leaders to advocate for widespread adoption of FORTIFIED roof standards.

Developed by IBHS, FORTIFIED standards can reduce severe weather damage in new or retrofitted homes through construction methods like sealing roof decks and anchoring roofs to wall framing using stronger nails. While such standards remain voluntary, Louisiana has modelled the proactive approach needed to facilitate adoption with the recent expansion of its Louisiana Fortify Homes Program, which began offering homeowners thousand-dollar grants to retrofit their houses along these guidelines in 2023, incentivizing roughly 40 percent of the now 10,000 FORTIFIED roofs in the state.

“FORTIFIED roofs are the long-term solution for affordable insurance in South Louisiana,” said state insurance commissioner Tim Temple, noting that his office aims to implement bigger and more standardized insurance discounts for FORTIFIED homeowners to reinforce the state’s already improved insurance rates.

An emerging trend

Though Louisiana became the “fastest-growing state” to adopt FORTIFIED standards, Alabama pioneered incentivizing them through its own Strengthen Alabama Homes program, financed by the insurance industry with more than $86 million in grants since 2016. Designed to enhance community resiliency while also lowering insurance rates, completed retrofits qualify residents for premium discounts ranging from 25 to 55 percent.

A May 2025 study from the Alabama Department of Insurance, in collaboration with the University of Alabama Center for Insurance Information and Research, showcases the program’s success, highlighting that FORTIFIED homes suffered less property damage and fewer insurance claims than homes built using other construction methods when Hurricane Sally made landfall in the state.

“The Center’s Hurricane Sally report doesn’t just quantify the effectiveness of the FORTIFIED program, it clearly demonstrates that homes can be built to survive storms, making them eminently more insurable,” said IBHS CEO Roy Wright. “This report should be a clarion call to communities across the country, urging them to implement Alabama’s multipronged approach to promoting disaster mitigation.”

Insurers answered the call in Oklahoma, North Carolina, and South Carolina, all of which boast similar programs backed by the insurance sector and accompanying premium reductions. Mississippi nearly joined their ranks before state funding for the grant program was suspended earlier this year, though insurance discounts remain available. States such as Florida, Georgia, and Minnesota also offer comprehensive insurance discounts for FORTIFIED properties, with the latter poised to fully replicate a grant program in response to mounting hailstorms.

Addressing cost concerns

While 75 percent of homeowners express willingness to invest in weather-resistant features, only 18 percent have reinforced or replaced their roofs with those materials, a recent Nationwide survey reveals. Grants help lower the cost of entry to FORTIFIED roofs for many homeowners, but it is worth noting the relative affordability of such upgrades, which can cost as little as $500 for a 2,000 sq. ft. home.

Describing the benefits of FORTIFIED standards as “measurable and increasingly essential,” Nationwide Property & Casualty president and COO Mark Berven emphasized the crucial role insurance agents play in raising consumer awareness of these risk reductions and their broad accessibility.

“Our industry needs to remind homeowners they have control in the face of severe weather events,” Berven wrote. “By investing in resilience, they can take an active role in protecting their homes, their valuables and their memories – giving them the peace of mind they’re looking for.”

Learn More:

Why Roof Resilience Matters More Than Ever

Study Touts Payoffs From Alabama Wind Resilience Program

Resilience Investment Payoffs Outpace Future Costs More Than 30 Times

Outdated Building Codes Exacerbate Climate Risk

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Louisiana Senator Seeks Resumption of Resilience Investment Program

Catastrophes, Disaster Preparedness, Disaster Resilience, Hurricane, Parametric, Risk Management

Jamaica Payout Spotlights Potential of Parametric

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By Lewis Nibbelin, Research Writer, Triple-I

Jamaica will receive a $150 million payout following devastation from Hurricane Melissa from its parametric catastrophe policy. Though one of the largest such payouts in recent years, the loss “had very little impact” on investors in the bonds backing the policy.

Investors in insurance-linked securities (ILS) “understand that these risks are part of what they cover,” said Jean-Louis Monnier, head of ILS Alternative Capital Partners at Swiss Re.

Among the strongest Atlantic hurricanes ever recorded, Hurricane Melissa became the most powerful cyclone to make landfall in the island’s history, causing an estimated $6 billion to $7 billion in damages and at least 75 deaths across the Caribbean. With a minimum central pressure of 892 millibars, the storm met the parametric thresholds for a full payout. The policy was backed by a bond issued in 2024 by the World Bank through its International Bank for Reconstruction and Development (IBRD) and structured by Aon Securities and Swiss Re Capital Markets.

Unlike traditional indemnity insurance, parametric insurance covers risks without sending adjusters to evaluate post-catastrophe damage. Rather than paying for damages incurred, policies pay out if certain conditions are met – for example, if wind speeds or rainfall measurements meet an established threshold. Speed of payment and reduced administration costs can ease the burden on insurers while expediting recovery for policyholders.

Determining appropriate parametric triggers is no easy task. Just a year earlier, the same policy did not pay out after air pressure levels narrowly missed the predefined minimum during Hurricane Beryl, despite widespread destruction. The ensuing backlash generated greater public and industry scrutiny over parametric coverage, including an intergovernmental “examination” into the ILS market broadly.

Monnier explained that this specific bond was designed to respond to larger events like Melissa, as part of the country’s extensive risk management strategy that encompasses many layers of protection. Parametric coverage from Skyline Partners and Munich Re, for instance, offered a partial payout after Beryl, as did the Caribbean Catastrophe Risk Insurance Facility Segregated Portfolio Company, which issued its largest single payout in history at $70.8 million after Melissa.

In a press release on the payout, World Bank vice president and treasurer Jorge Familiar emphasized the “proactive approach” of Jamaica’s disaster risk management, noting it could “serve as a model for countries facing similar threats and seeking to strengthen their financial resilience to natural disasters.”

Estimated to reach $34.4 billion by 2033, the global parametric insurance market is growing at a rapid pace, driven by increasingly severe climate and weather-related risks. Yet many industry leaders identify parametric structures as less comprehensive – and therefore not a substitute for – traditional indemnity risk transfers. By design, parametric insurance correlates to measurable events rather than actual damages, leading to an innate basis risk when the two do not perfectly align.

Whereas indemnity coverage is “generally preferable,” parametric structures can “complement other forms of insurance” and are particularly beneficial for sovereigns, which tend to lack the granular data needed to inform underwriting and pricing of indemnity catastrophe bonds, according to Monnier.

“Many countries use both instruments, and they can be very complementary,” Monnier concluded. “There is a large global protection gap, and Swiss Re advocates for reducing that gap, whether through traditional reinsurance or by structuring capital-market solutions.”

Learn More:

Parametric Insurance Gains Traction Across U.S.

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Mangrove Insurance: Parametric + Indemnity May Aid Coastal Resilience

Catastrophes, Disaster Preparedness, Disaster Resilience, Insurers and the Economy

End of Federal Shutdown Revives NFIP — For Now

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By Lewis Nibbelin, Research Writer, Triple-I 

With last week’s end of the longest U.S. government shutdown in history, Congress reauthorized FEMA’s National Flood Insurance Program (NFIP).  

During the shutdown, the NFIP continued to pay claims using available funds, but it could not sell or renew policies until reauthorized. These restrictions affected an estimated 1,300 property sales each day, as prospective property owners must purchase flood coverage in Special Flood Hazard Areas (SFHA), where private flood options – despite gaining traction – are still limited. 

With millions of homeowners and countless communities relying on the NFIP, many organizations across the risk and insurance industry sent a letter urging congressional leaders to reauthorize NFIP ahead of its expiration, writing that a lapse “could further impact affordable housing, create additional challenges for small businesses, unnecessarily further increase the cost of homeownership, and must be avoided.” 

While reauthorization allows NFIP insurers to retroactively issue policies for applications received during the shutdown, the measure extends their authority only through Jan. 30, 2026, leaving the program’s fate an open question. Absent a long-term NFIP authorization bill, Congress has now reauthorized the program 34 times since fiscal year 2017. 

Incentivizing risk reduction 

Flood risk was long considered untouchable by private insurers, which is a large part of the reason NFIP exists. While private participation in the flood market has grown in recent years, NFIP remains a critical source of protection for this growing and underinsured peril. 

Beyond providing economic protection for policyholders, the NFIP also plays a critical role in promoting climate resilience, particularly through its Community Rating System (CRS). A voluntary program, the CRS rewards homeowners with premium discounts when their communities invest in floodplain management practices that exceed the NFIP’s minimum standards, with the program’s highest rating qualifying residents for a 45 percent premium reduction. 

After the cancellation of other FEMA-managed initiatives like BRIC, the CRS can help provide relief where still needed. For instance, Jefferson Parish homeowners displaced following Hurricane Ida in 2021 had secured BRIC grants to elevate and reconstruct their homes shortly before the program ended, leaving these projects in limbo. But the CRS now offers residents and businesses more than $12 million in flood insurance savings annually after the parish secured a Class 3 rating – the first of its kind in Louisiana. 

By incentivizing improved building codes, citizen awareness campaigns, and other resilience solutions, the CRS can ensure that vulnerable communities “will continue to benefit from a comprehensive floodplain management and mitigation plan that helps make us more resilient in the face of disasters,” said Jefferson Parish President Cynthia Lee Sheng in a statement. Notably, however, the parish earned its rating mere weeks ahead of the NFIP lapse, which delayed the discounts from appearing in new and renewed policies. 

As climate and weather-related events become increasingly frequent and severe, the success of these investments will depend on proactive strategies informed by timely, granular data. Though NOAA announced it would cease tracking the country’s costliest disasters earlier this year, nonprofit Climate Central aims to fill the gap by rebuilding NOAA’s database and expanding it to track smaller catastrophes, providing insurers and other stakeholders more reliable information to understand individual disasters. 

Taken together, such efforts can help insurers accurately reflect rising risks in insurance pricing while engaging with communities and businesses in solutions to keep coverage accessible. Sustaining this balance involves continuous collaboration between public and private sectors. 

Learn More: 

JIF 2025: Federal Cuts Imperil Resilience Efforts 

Some Weather Service Jobs Being Restored; BRIC Still Being Litigated 

Louisiana Senator Seeks Resumption of Resilience Investment Program 

Nonprofit to Rescue NOAA Billion-Dollar Dataset 

BRIC Funding Loss Underscores Need for Collective Action on Climate Resilience 

Hurricane Helene Highlights Inland Flood Protection Gap 

Executive Exchange: Using Advanced Tools to Drill Into Flood Risk 

Accurately Writing Flood Coverage Hinges on Diverse Data Sources 

Lee County, Fla., Towns Could Lose NFIP Flood Insurance Discounts 

Coastal New Jersey Town Regains Class 3 NFIP Rating 

Catastrophes, Disaster Preparedness, Disaster Resilience, Floods

Storms Slam California, Raising Mudslide Risk

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By Lewis Nibbelin, Research Writer, Triple-I

An atmospheric river system dumped up to six inches of heavy rains and claimed multiple lives in California last weekend, with thunderstorms on the horizon posing outsized risks for communities still recovering from January’s devastating wildfires.

Triggering mudflows and flash flooding across streets and highways, the multiday storm highlights the added complexity of insuring and preventing disasters in the state’s many wildfire-prone areas.

Coverage confusion

Californians grappling with this destruction may be unaware that homeowners and commercial policies typically exclude flood, mudslide, debris flow, and similar catastrophes, or of the distinctions between these events. Though media outlets may use these terms interchangeably, insurers differentiate between mudflows and mudslides for coverage eligibility.

Essentially rivers of mud, mudflows are covered by flood insurance, which is available from FEMA’s National Flood Insurance Program (NFIP) and a growing number of private insurers. Mudslides – or masses of rock and earth pulled downhill by gravity – typically do not involve much liquid and remain ineligible for flood coverage.

But if recent perils covered by standard insurance policies either directly or indirectly cause any of these events, insurers must cover ensuing damages, as explained in a notice from California Insurance Commissioner Ricardo Lara shortly before the storms. Such protections can help residents bracing for possible mudslides later this week – particularly those living in Southern California neighborhoods scorched by wildfires earlier this year.

Noting that “it is critical to prepare for flooding, mud, and debris flow when heavy wind and rain, also called atmospheric rivers, are forecast,” Janet Ruiz – Triple-I’s California-based director of strategic communication – advises policyholders to “check your insurance coverage, as you will need a separate flood policy for flooding and mudflow. Use sandbags – most communities provide them free of charge. Be safe, and don’t drive into flooded areas.”

These recommendations are especially vital for fire-scarred areas, where heat-damaged soil repels water and even minor showers can escalate into dangerous flash flooding and debris flows. An absence of vegetation to absorb rain exacerbates both, leaving nearby homes, businesses, and other infrastructure more vulnerable.

From one system to another

Beyond facilitating substantial flooding, the wet weather also weakened elevated fire conditions that emerged during the fall – a reoccurring interplay in California’s climate that complicates developing effective mitigation and resilience strategies. Within the Golden State alone, factors like temperature, humidity, wind, and topography vary too widely to apply a singular mitigation approach, underscoring the importance of property-specific data analysis.

Using case studies from three distinct California areas, research from Triple-I and Guidewire shows how granular data can help identify properties with attractive risk profiles despite these evolving risks. Noting “every property being assessed for wildfire risk is unique,” their report found that home hardening reduces wildfire damage by as much as 70 percent but emphasized proactive collaboration between insurers, regulators, and policyholders as key to long-term success.

With more people moving into the wildland urban interface and communities increasingly hit with inland flooding, such partnerships are crucial to bridge protection gaps while keeping insurance affordable and available.

Learn More:

Mudslides Often Follow Wildfire; Prepare, Know Insurance Implications

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California Insurance Market at a Critical Juncture

California Finalizes Updated Modeling Rules, Clarifies Applicability Beyond Wildfire

Catastrophes, Disaster Preparedness, Disaster Resilience, Floods, Hurricane, Risk Management, Roof Condition, Severe Convective Storm, Tornado, Wildfire, Wind

Resilience Investment Payoffs Outpace Future Costs More Than 30 Times

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By Lewis Nibbelin, Contributing Writer, Triple-I

Every dollar invested in disaster resilience today can save communities up to $33 in avoided economic costs, according to new research from the U.S. Chamber of Commerce, Allstate, and the U.S. Chamber of Commerce Foundation.

Building on their 2024 finding that such investments save $13 in benefits, the report detailed the burgeoning toll of increasingly frequent and severe natural catastrophes across the United States, underscoring a need for stronger collective action to mitigate climate risk.

Invest Now, Save Later

After experiencing the fifth consecutive year of 18 or more billion-dollar disasters in 2024, the United States further drove the second costliest half-year ever for global insured losses from natural catastrophes in 2025 with January’s devastating wildfires in Southern California. Though reflecting a troubling “new normal,” the report demonstrates how resilience funding can help stabilize local economies and protect lives and jobs, regardless of the scale or type of disaster.

Modeling scenarios for five disaster types – hurricanes, tornadoes, wildfires, droughts, and floods – the study revealed that high resilience investments may cut GDP losses by billions, with reduced funding leading to significantly higher long-term costs across all scenarios.

For hurricane-prone areas, which can grapple with lasting disruptions to housing, education, and other basic infrastructure, the study noted that higher investment could prevent the loss of $13.2 billion and more than 70,000 jobs.

Emphasizing the “smart, cost-saving” efficacy of disaster mitigation, the report concluded that “preparedness is not just a safety measure – it’s a local economic development strategy.”

“Preparedness is as much about plans as it is people,” added Rich Loconte, senior vice president and deputy general counsel for government and industry relations at Allstate. “It’s supporting a local nonprofit to retain its employees and keeps its doors open after a disaster, working with civic leaders to develop recovery plans that minimize rebuilding costs, and educating community members on proactive investments that help better weather storms.”

Risk Reduction in Practice

Beyond identifying the broad impact of disaster preparedness, the report also provides actionable insights for local leaders who aim to boost community resilience but are unsure where or how to start. Recommendations for disaster preparation include:

  • Risk-Informed Design: Adopt and enforce hazard-resistant building codes, such as those that meet the Insurance Institute for Business & Home Safety’s FORTIFIED standards. Update zoning and land use planning according to the latest risk data.
  • Data-Based Decisions: Improve access to risk data to inform, track, and assess the success of disaster mitigation efforts.
  • Dedicated Resilience Funding:Create a local fund for disaster mitigation to ensure consistent investment and expedite post-disaster recovery.
  • Public Engagement: Launch risk awareness campaigns to facilitate individual and organized participation in preparedness and raise insurance take-up rates.
  • Stakeholder Partnerships: Coordinate cross-sector and multi-jurisdictional resilience strategies to maximize benefits.

A survey released in tandem with the report shows that most resilience stakeholders – encompassing emergency managers, community planners, government officials, and other risk experts –  believe public-private collaboration needs improvement, with more than half of respondents highlighting insufficient resource allocation and unclear decision-making processes as leading causes for poor coordination.

While most indicated state and local governments must play a major role in disaster preparedness, response, and recovery, 58 percent of respondents additionally underscored the federal government as crucial at every phase, particularly for financial assistance. As numerous community resilience projects hang in limbo following the Trump Administration’s cancellation of $882 million in federal grants, it is imperative for all beneficiaries of disaster resilience to help develop sensible solutions for predicting and preventing losses.

“As the cost and economic toll of disasters continue to increase, leaders at all levels of government should know that investments in infrastructure resilience will go a long way in protecting and preparing local communities,” said Marty Durbin, senior vice president of policy at the U.S. Chamber of Commerce. “Resilience investments reduce costs and speed up recovery. The faster a community bounces back, the faster jobs and economic growth return.”

Learn More:

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Can a Fire-Prevention Device Be a “Gateway Drug” to Home Resilience?

JIF 2025: Federal Cuts Imperil Resilience Efforts

Why Roof Resilience Matters More Than Ever

Study Touts Payoffs From Alabama Wind Resilience Program

Louisiana Senator Seeks Resumption of Resilience Investment Program

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BRIC Funding Loss Underscores Need for Collective Action on Climate Resilience

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

Study Supports Defensible Space, Home Hardening as Wildfire Resilience Tools

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A recent paper published in Nature that  analyzes five major California wildfires confirms what insurers, fire scientists, and risk modelers have long asserted: Defensible space and home hardening help mitigate wildfire risk and improve resilience.

The study found that clearing vegetation and flammable materials within 1.5 meters of a structure — an area known as “Zone 0” — is one of the most effective actions a homeowner can take. When this is paired with home-hardening features like non-combustible siding, enclosed eaves, and vent screens, the results are staggering: predicted losses dropped by as much as 48 percent, according to the study.

Homes built after 1997, when California adopted stricter building codes, consistently outperformed older structures. These newer homes incorporated fire-resistant materials and design features that significantly improved survival rates.

From an insurance perspective, such steps – by leading to reduced losses and fewer, less-costly claims – can alleviate some of the upward pressure on premium rates in areas at higher risk for wildfire. In the long term, they can improve insurance affordability and availability in fire-vulnerable geographies.

Wildfire risk is strongly conditioned by geographic considerations that vary widely across and within states. A recent paper by Triple-I and Guidewire – a provider of software solutions to the insurance industry – used 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. The use of such data-driven analysis can help insurers identify less risky properties within higher-risk geographies. 

The study in Nature examined five major fires from recent history in the wildland-urban interface (WUI) – Tubbs (2017), Thomas (2017), Camp (2018), Kincade (2019), and Glass (2020) – using machine learning to analyze on-the-ground post-fire data collection, remotely sensed data, and fire reconstruction modeling to assess patterns of loss and mitigation effectiveness.

Using a tool called an XGBoost classifier, the study found that “structure survivability can be predicted to 82 percent.” The study reported that “spacing between structures is a critical factor influencing fire risk…while fire exposure, the ignition resistance (hardening) of structures, and clearing around structures (defensible space) work in combination” to mitigate that risk.

“With the science-based information from this report, we can reduce risk and make our communities safer from wildfire,” said Janet Ruiz, Triple-I’s California-based director of strategic communication.  Accuracy of 82 percent on predictability of structures burning is a major improvement, and mitigation is the key.”

Coordinated community-wide strategies like vegetation management, building code enforcement, and distance between structures are essential. Triple-I and its members and partners are working to inform, educate, and drive behavioral change to reduce risk and build resilience.

Learn More:

Triple-I Brief Highlights Wildfire Risk Complexity

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

Data Granularity Key to Finding Less Risky Parcels in Wildfire Areas

California Finalizes Updated Modeling Rules, Clarifies Applicability Beyond Wildfire

Business Risk, Catastrophes, Cyber Risk, Disaster Preparedness, Disaster Resilience, Emerging Risks, Insurers and the Economy, Market Conditions, Technology

As Global Risks Evolve,
So Must Insurance

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By Lewis Nibbelin, Contributing Writer, Triple-I

Economic shifts, geopolitical uncertainties, cybersecurity trends, and mounting climate perils have created an increasingly severe and interconnected risk crisis, according to participants in a members-only Triple-I webinar.

In an environment constrained, for instance, by frequent natural disasters and rising replacement costs, risks no longer develop in isolation. They collide with and compound each other. Their combined impact exceeds the sum of individual risks’ effects. Such interdependence complicates identifying, let alone mitigating, the forces underpinning a specific risk.

“Under this new system that’s emerging, risk can propagate very rapidly through a host of otherwise disconnected networks,” TradeSecure president and cofounder Scott Jones told webinar host Michel Léonard, Triple-I’s Chief Economist and Data Scientist.  “This new reality fundamentally challenges the core principles that insurance has relied on for centuries.”

Jones emphasized the growing unpredictability of risk on a global scale, particularly as nations impose export controls, sanctions, investment restrictions, and tariffs for purposes like economic competition. Companies with global footprints may struggle to ascertain these interwoven, sometimes competing regulations, creating compliance concerns and potentially exacerbating supply-chain disruptions.

With the frequency and severity of U.S. cyber claims on the rise, cyberattacks also carry substantial transnational implications. Sophisticated ransomware encounters can exploit businesses of all sizes, propelling privacy liability claims and related third-party litigation.

TradeSecure vice president and cofounder Michael Beck explained how the almost universal accessibility of malware – harnessed by criminal syndicates, activist groups, or even lone hackers – presents “a new class of systemic non-physical disruption” that could undermine “the entire system’s liquidity and stability.”

“A coordinated non-state cyberattack wouldn’t just steal money – it could stop the flow of money, causing many transaction failures and possibly triggering a wave of claims far beyond what traditional cyber policies are designed to handle,” Beck said.

Though insurers as well as business owners and consumers consider cyber incidents a chief risk concern, personal cyber take-up rates remain low, with the broader cyber insurance market facing its third consecutive year of declining rates. Misunderstandings surrounding cyber risk and benefits of coverage fuel this discrepancy, revealing a gap between agent perceptions of product value and that of their customers.

Learn More:

2025 Cat Losses to Date Are 2nd-Costliest Since Records Have Been Kept

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

Tariff Uncertainty May Strain Insurance Markets, Challenge Affordability

How Tariffs Affect P&C Insurance Prospects

Calls for Insurance-Price Legislation Would Hurt Policyholders, Not Help

Nonprofit to Rescue NOAA Billion-Dollar Dataset

Russia Quake Highlights Unpredictability of Natural Catastrophes

US Cyber Claims Surge While Global Rates Decline: Chubb

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

Disaster Preparedness, Disaster Resilience, Homeowners Insurance, Insurers and the Economy, Legal Environment, Market Conditions, Regulation

Calls for Insurance-Price Legislation Would Hurt Policyholders, Not Help

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Increased legislative involvement in regulating homeowners’ insurance pricing and rates – as recently called for by some officials in Illinois – would hurt insurance affordability in the state, rather than helping consumers as intended, Triple-I says in its latest Issues Brief.

Rising premiums are a national issue. They reflect a combination of costly climate-related weather events, demographic trends, and rising material and labor costs to repair and replace damaged or destroyed property. Average insured catastrophe losses have been increasing for decades, fueled in part by natural disasters and population shifts into high-risk areas. More recently, these and other losses to which the property/casualty insurance industry is vulnerable were exacerbated by inflation related to the pandemic and Russia’s invasion of Ukraine. Tariffs and changes in U.S. economic policies have since put even more upward pressure on costs.

These increasing costs – if not addressed – threaten to erode the policyholder surplus insurers are required to keep on hand to pay claims. If surplus falls below a certain level, insurers have no choice but to increase premium rates or adjust their willingness to assume risks in certain areas.

To avoid this, many insurers have filed with state regulators for rate increases – requests that often meet with resistance from consumer advocacy groups and legislators. Illinois would not be the first state to try to ease consumers’ pain by constraining insurers’ ability to accurately set coverage prices to reflect increasing levels of risk and costs.

Practicality, not politics

Such efforts, while perhaps politically popular, confuse one symptom (higher premiums) of a growing risk crisis with its underlying cause (increasing losses and rising costs). Using the blunt instrument of legislation to address the complexities and sensitivities of underwriting and pricing would tend to disrupt the market and further hurt insurance affordability – and, in some areas, availability.

Rather than target insurers with misguided legislation, the brief says, states would be wiser to work with the industry to improve their risk profiles by investing in mitigation and resilience. The brief describes the causes of higher premium rates nationally and in Illinois and how other states have successfully collaborated to address those causes and reduce upward pressure on – and eventually bring down –premium rates.

“Triple-I welcomes the opportunity to collaborate with state policymakers to develop constructive approaches to risk mitigation and resilience that will benefit communities and consumers,” the brief says.

Learn More:

Revealing Hidden Cost to Consumers of Auto Litigation Inflation

Easing Home Upkeep to Control Insurance Costs

Survey: Homeowners See Value of Aerial Imagery for Insurers; Education Key to Comfort Levels

Nonprofit to Rescue NOAA Billion-Dollar Dataset

2025 Cat Losses to Date Are 2nd-Costliest Since Records Have Been Kept

2025 Tornadoes Highlight Convective Storm Losses

Auto Premium Growth Slows as Policyholders Shop Around, Study Says

Litigation Reform Works: Florida Auto Insurance Premium Rates Declining

IoT Solutions Offer Homeowners, Insurers Value — But How Much?

Texas: A Microcosm of U.S. Climate Perils

New Illinois Bills Would Harm — Not Help — Auto Policyholders

Illinois Bill Highlights Need for Education on Risk-Based Pricing of Insurance Coverage

Hail: The “Death by 1,000 Paper Cuts” Peril

Disaster Preparedness, Disaster Resilience, Homeowners Insurance, Risk Management, Roof Condition, Technology, Wind

Survey: Homeowners See Value of Aerial Imagery for Insurers; Education Key to Comfort Levels

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Among homeowners surveyed by the Insurance Research Council (IRC), 88 percent recognize that aerial imagery is a beneficial tool for insurers.

Nearly all respondents said they recognize the value of using satellite, drone, and aircraft images for early problem detection, claims processing, and hazard identification before costly damage occurs. Most also said they believe aerial imaging can lead to fairer pricing.

Key findings:

  • Nine out of 10 respondents said they see at least one benefit from aerial imagery’s use in insurance. More than half said it leads to fairer insurance pricing.
  • While 60 percent have some awareness that insurers use aerial imagery, 40 percent know little or nothing about it.
  • When homeowners are familiar with the use of aerial imagery for underwriting, they are nearly twice as likely to think it makes insurance pricing fairer.
  • Homeowners worry more about accuracy than privacy in the context of aerial imagery. Accuracy emerges as the top individual concern, with 31 percent citing it as their biggest worry, compared to 24 percent who cite privacy as their primary concern.

Education and transparency are key to acceptance of this technology, the survey found.  Homeowners who were already familiar with aerial imagery applications were found to show consistently higher confidence levels, greater benefit recognition, and more positive sentiment across all insurance uses. Younger homeowners also demonstrated greater acceptance and higher confidence in the technology’s accuracy.

“Consumers see value in aerial imagery when they understand how it’s used in insurance,” said IRC President Pat Schmid. “Efforts to increase transparency and consumer knowledge can bridge the confidence gap, improve customer trust, and help homeowners realize the benefits of faster claims, fairer pricing, and better risk prevention.”

The IRC, like Triple-I, is an affiliate of The Institutes.