The National Weather Service (NWS) – part of the National Oceanic and Atmospheric Administration (NOAA) – recently announced that it was reducing the number of weather balloons it launches across the country, citing staffing shortages at 11 NWS locations.
The launch cuts followed NOAA’s announcement of hundreds of layoffs or voluntary resignations across the agency, including at the NWS, related to efforts by President Donald Trump’s Department of Government Efficiency (DOGE). Former NOAA Administrator Rick Spinrad said in a press conference that about 650 NOAA employees were among those fired, and his former colleagues in the agency said they had been ordered to “identify another 1,029 positions” for termination.
Some of these suspensions – for example, in Omaha, Neb. – have been lifted. Two meteorologists are set to arrive from across the country to staff the Omaha office following lobbying from Rep. Mike Flood (R. – Neb).
However, the future of launches from the remaining 10 locations remains unclear.
What do weather ballons do?
Apart from occasionally being taken for extraterrestrial aircraft, weather balloons rarely attract public attention. Carrying a device called a “radiosonde”, they typically fly for a couple of hours – potentially reaching 100,000 feet – and are used for several purposes, from gathering data for weather prediction models and local forecasts to providing input for pollution and climate research.
“Weather balloon launches can be especially critical in severe storm situations,” said Dr. Phil Klotzbach, a researcher at Colorado State University and a Triple-I non-resident scholar. “They give us detailed information on temperature, pressure, and humidity that can help us determine potential impacts from tornadoes and hail.”
In addition, Klotzbach said, before U.S. hurricane landfalls, “NWS offices will often coordinate additional weather balloon launches to provide critical data to weather forecast models that improve predictions of the hurricane’s track.”
“While satellite technology continues to improve and provides invaluable information that has dramatically improved forecasting ability over the past several decades, weather balloons still serve a vital role in helping to predict weather events,” Klotzbach said.
Taken-for-granted resources highlighted
As with the Federal Emergency Management Agency’s recent termination of its Building Resilient Infrastructure and Communities (BRIC) grant and loan program, the sudden and substantial downsizing of NOAA’s data-gathering and forecasting resources underscores the extent to which government agencies that operate below the public’s radar screen help society and industry take steps to avoid costly losses related to weather- and climate-related events.
In the absence of reliable federal support, it’s more important than ever for families, communities, businesses, and other stakeholders to work together to mitigate risks and build resilience. The insurance industry is uniquely well positioned to support and advance these efforts.
New, alarming financial risks for homebuyers who are unaware of property flood histories has driven several states to implement new disclosure laws, helping protect consumers from unexpected costs after purchasing flood-prone homes, according to new research from Milliman.
Atmospheric conditions are intensifying flood risks across the U.S., with severe storms and rain events becoming more devastating and frequent. Despite this escalating threat, a significant regulatory gap has persisted: many states haven’t required home sellers to disclose previous flooding to potential buyers.
This omission creates a dangerous scenario where unsuspecting homebuyers invest their savings in properties with undisclosed flood histories.
As Joel Scata, senior attorney in the climate adaptation division at the Natural Resources Defense Council (NRDC), explains, “If a buyer doesn’t know the house is flood-prone, they don’t know they need to buy flood insurance. They don’t know they need to mitigate that risk, and that they could be in a really bad situation when the next flood happens.”
The issue became impossible to ignore in 2018 when Hurricane Florence inundated more than 74,000 buildings in North Carolina. At that time, sellers weren’t required to inform buyers about previous flooding, meaning hurricane-damaged homes could be cleaned up and sold without disclosure of this critical history. Since properties that have flooded once are likely to flood again, this lack of transparency created significant financial vulnerability for new homeowners, according to Milliman.
Quantifying the Financial Impact
To drive policy change, NRDC needed hard data quantifying the financial risks to homebuyers. They partnered with Milliman, where Larry Baeder, a senior data scientist, co-authored a study titled, “Estimating undisclosed flood risk in real estate transactions.”
Using catastrophe models, proprietary datasets, real estate transaction data, historical flood events and demographic patterns, Baeder analyzed the impact in three states with low marks on NRDC’s Flood Risk Disclosure Laws Scorecard: North Carolina, New York and New Jersey.
The findings revealed staggering financial disparities. In North Carolina, a home without flood history might face an average annual loss (AAL) of about $60. In contrast, a flood-prone property’s AAL jumped to approximately $1,200 — 20 times higher — and could exceed $2,000 based on future flood projections. Over 15 years, previously flooded North Carolina properties might require more than $18,000 in repairs.
The numbers were even more concerning in the Northeast. In New York, flood history could increase a property’s AAL from about $100 to $3,000. A previously flooded New Jersey home might incur $25,000 in damages over a 15-year period.
“These are big numbers, and they’re a scary reality that people are going to have to deal with,” Baeder noted. “If a homebuyer is taking on this risk, they should be aware of the risk.” Milliman’s research also found that more than 6% of all homes sold across these three states in 2021 had a record of flooding—with no requirement to warn new owners about this history.
Data-Driven Legislative Change
Armed with Milliman’s analysis, NRDC approached lawmakers with compelling evidence of the problem’s scale and impact.
“Before the report, I think legislators knew that people struggled to rebuild after a flood,” Scata said, “but I don’t think they realized just how much it costs a homeowner. These numbers helped lawmakers see this was a big problem, that their constituents were suffering, and that they should do something about it.”
The data-driven approach proved effective. In 2023, New Jersey began legally requiring sellers to disclose a property’s flood history. North Carolina and New York soon followed, with New York enacting disclosure requirements at the end of 2023 and North Carolina amending mandatory forms in 2024.
The impact extended beyond these three states. Four additional states — Florida, Maine, New Hampshire and Vermont — independently adopted disclosure requirements in 2024 after recognizing the need demonstrated elsewhere.
“The laws show the power of data,” Scata noted. “Having Milliman do this work was really important for showing the actual impacts of flood damage on homeowners and effecting change through the legislatures.”
The momentum continues as Baeder now leads a follow-up study for NRDC expanding the research to 25 additional states with insufficient disclosure laws. Scata hopes to eventually see strong disclosure requirements nationwide, providing all homebuyers and renters with insight into their flood risk.
“If we’re going to tell people about lead-based paint,” Scata concludes, referring to other widespread real estate disclosures, “if we’re going to tell people about asbestos, we should probably tell people about flooding, because flooding has such an impact on someone’s finances and health.”
The Institutes’ Pete Miller and Francis Bouchard of Marsh McLennan discuss how AI is transforming property/casualty insurance as the industry attacks theclimate crisis.
“Climate” is not a popular word in Washington, D.C., today, so it would take a certain audacity to hold an event whose title prominently includes it in the heart of the U.S. Capitol.
For two days, expert panels at the Ronald Reagan Building and International Trade Center discussed climate-related risks – from flood, wind, and wildfire to extreme heat and cold – and the role of technology in mitigating and building resilience against them. Given the human and financial costs associated with climate risks, it was appropriate to see the property/casualty insurance industry strongly represented.
Peter Miller, CEO of The Institutes, was on hand to talk about the transformative power of AI for insurers, and Triple-I President and CEO Sean Kevelighan discussed – among other things – the collaborative work his organization and its insurance industry members are doing in partnership with governments, non-profits, and others to promote investment in climate resilience. Triple-I is an affiliate of the Institutes.
Sean Kevelighan of Triple-I and Denise Garth, Majesco’s chief strategy officer, discuss how to ensure equitable coverage against climate events.
You can get an idea of the scope and depth of these panels by looking at the agenda, which included titles like:
Building Climate-Resilient Futures: Innovations in Insurance, Finance, and Real Estate;
Fire, Flood, and Wind: Harnessing the Power of Advanced Data-Driven Technology for Climate Resilience;
The Role of Technology and Innovation to Advance Climate Resilience Across our Cities, States and Communities;
Pioneers of Parametric: Navigating Risks with Parametric Insurance Innovations;
Climate in the Crosshairs: How Reinsurers and Investors are Redefining Risk; and
Safeguarding Tomorrow: The Regulator’s Role in Climate Resilience.
As expected, the panels and “fireside chats” went deep into the role of technology; but the importance of partnership, collaboration, and investment across stakeholder groups was a dominant theme for all participants. Coming as the Trump Administration takes such steps as eliminating FEMA’s Building Resilient Infrastructure and Communities (BRIC) program; slashing budgets of federal entities like the National Oceanographic and Atmospheric Administration (NOAA) and the National Weather Service (NWS); and revoking FEMA funding for communities still recovering from last year’s devastation from Hurricane Helene, these discussions were, to say the least, timely.
Helge Joergensen, co-founder and CEO of 7Analytics, talks about using granular data to assess and address flood risk.
In addition to the panels, the event featured a series of “Shark Tank”-style presentations by Insurtechs that got to pitch their products and services to the audience of approximately 500 attendees. A Triple-I member – Norway-based 7Analytics, a provider of granular flood and landslide data – won the competition.
Earth Day 2025 is a good time to recognize organizations that are working hard and investing in climate-risk mitigation and resilience – and to recommit to these efforts for the coming years. What better place to do so than walking distance from both the White House and the Capitol?
California’s Department of Insurance last week posted long-awaited rules that remove obstacles to profitably underwriting coverage in the wildfire-prone state. Among other things, the new rules eliminate outdated restrictions on use of catastrophe models in setting premium rates.
The measure also extends language related to catastrophe modeling to “nature-based flood risk reduction.” In the original text, “the only examples provided of the kinds of risk mitigation measures that would have to be considered in this context involved wildfire. However, because the proposed regulations also permit catastrophe modeling with respect to flood lines, it was appropriate to add language to this subdivision relating to flood mitigation.”
The relevant language applies “generally to catastrophe modeling used for purposes of projecting annual loss,” according to documents provided by the state Department of Insurance.
Benefits for policyholders
As a result, the department said in a press release, “Homeowners and businesses will see greater availability, market stability, and recognition for wildfire safety through use of catastrophe modeling.”
For the past 30 years, California regulations – specifically, Proposition 103 – have required insurance companies to apply a catastrophe factor to insurance rates based on historical wildfire losses. In a dynamically changing risk environment, historical data alone is not sufficient for determining fair, accurate insurance premiums. According to Cal Fire, five of the largest wildfires in the state’s history have occurred since 2017.
The state’s evolving risk profile, combined with the underwriting and pricing constraints imposed by Proposition 103, has led to rising premium rates and, in some cases, insurers deciding to limit or reduce their business in the state.
With fewer private insurance options available, more Californians have been resorting to the state’s FAIR Plan, which offers less coverage for a higher premium. This isn’t a tenable situation.
“Put simply, increasing the number of policyholders in the FAIR Plan threatens the solvency of insurance companies in the voluntary market,” California Insurance Commissioner Ricardo Lara explained to the State Assembly Committee on Insurance. “If the FAIR Plan experiences a massive loss and cannot pay its claims, by law, insurance companies are on the hook for the unpaid FAIR Plan losses…. This uncertainty is driving insurance companies to further limit coverage to at-risk Californians.”
“Including the use of catastrophe modeling in the rate making process will help stabilize the California insurance market,” said Janet Ruiz, Triple-I’s California-based director of strategic communication. “Homeowners in California will be able to better understand their individual risk and take steps to strengthen their homes.”
The new measure also requires major insurers to increase the writing of comprehensive policies in wildfire-distressed areas equivalent to no less than 85 percent of their statewide market share. Smaller and regional insurance companies must also increase their writing.
Requirements for insurers
It also requires catastrophe models used by insurers to account for mitigation efforts by homeowners, businesses, and communities – something not currently possible under existing outdated regulations today.
Moves like this by state governments – combined with increased availability of more comprehensive and granular data tools to inform underwriting and mitigation investment – will go a long way toward improving resilience and reducing losses.
The efficacy of collaboration and investment by “co-beneficiaries” in resilience initiatives was a dominant theme throughout Triple-I’s 2024 Joint Industry Forum – particularly in the final panel, which celebrated leaders behind recent real-world impacts of such investments.
Moderated by Dan Kaniewski, Marsh McLennan (MMC) managing director for public sector, the panelists discussed how their multi-industry backgrounds inform their innovative mindsets, as well as their knowledge on the profound ripple effects of targeted resilience planning.
The panel included:
Jonathan Gonzalez, co-founder and CEO of Raincoat;
Bob Marshall, co-founder and CEO of Whisker Labs;
Dawn Miller, chief commercial officer of Lloyd’s and CEO of Lloyd’s Americas; and
Lars Powell, director of the Alabama Center for Insurance Information and Research (ACIIR) at the University of Alabama and a Triple-I Non-Resident Scholar.
Productive partnership
Kaniewski – who spent most of his career in emergency management, previously serving as the second-ranking official at the Federal Emergency Management Agency (FEMA) and the agency’s first deputy administrator for resilience – kicked off the panel by raising the question “how do we define success?”
He characterized success as “putting theory into practice” and “having elected officials taking steps to reduce risk and transfer some of this risk from federal, state, or local taxpayers.”
But, as participants in earlier panels and this one made clear, government efforts can only go so far without private-sector collaboration.
“It doesn’t matter who makes that investment, whether it’s the homeowner, the business owner, or the government,” Kaniewski explained. “The reality is we all benefit from that one investment. If we can acknowledge that we benefit from those investments, we should do our best to incentivize them.”
Kaniewski and Raincoat’s Gonzalez were both integral in the development of community-based catastrophe insurance (CBCI), developed in the wake of Superstorm Sandy in 2012.
“A lot of the neighborhoods that experienced flooding due to Sandy didn’t have access to insurance prior to the flooding – and then, post flooding, the government really had to step up to figure out how to keep those families in those houses,” Gonzalez said.
In collaboration with the city, a nonprofit called the Center for NYC Neighborhoods developed the concept of buying parametric insurance on behalf of these communities, with any payouts going toward helping families stay in their homes after disasters. Unlike traditional indemnity insurance, a parametric policy pays out if certain agreed-upon conditions are met – for example, a specific wind speed or earthquake magnitude in a particular area – regardless of damage. Parametric insurance eliminates the need for time-consuming claim adjustment. Speed of payment and reduced administration costs can ease the burden on both insurers and policyholders.
In this case, Kaniewski said, success was reflected in the fact that the pilot program received sufficient funding not only for renewal but expansion, bringing needed protection to even more vulnerable communities.
Powell reinforced this sentiment in explaining ACIIR’s research on the FORTIFIED method, a set of voluntary construction standards created by the Insurance Institute for Business and Home Safety (IBHS) for durability against severe weather. The insurance industry-funded Strengthen Alabama Homes program issues grants and substantial insurance premium discounts to homeowners to retrofit their houses along these guidelines, prompting multiple states to replicate the program.
Such homes in Alabama sustained 54 to 76 percent reduced loss frequency from Hurricane Sally compared to standard homes, Powell reported, and an estimated 65 to 73 percent could have been saved in claims if standard homes were FORTIFIED.
Incentivizing contractors to learn FORTIFIED standards was especially critical, Powell explained, because they further advertised these skills and expanded the presence of FORTIFIED homes beyond the grant program.
“A lot of companies have said for several years, ‘we don’t know if we’re comfortable writing these…we haven’t seen it on the ground,’” Powell said. “Well, now we’ve seen it on the ground. We need to have houses that don’t burn down or blow over. We know how to do it, it’s not that expensive.”
Addressing concerns to drive adoption
Miller described how Lloyd’s Lab works to ease that discomfort by creating a space for businesses to nurture and integrate novel insights and products without fear. With mentor support, companies are encouraged to test new ideas while free from the usual degree of financial and/or intellectual property risks attached to innovation investments.
“It’s about having an avenue out to try,” Miller said. “Having that courage, as we continue to work together, to try to understand what’s working, what’s not, and being brave to say, ‘this isn’t working, but we can course correct.’”
Whisker Labs’ Marshall noted that numerous insurance carriers have taken a chance on his company’s front-line disaster mitigation devices, Ting, by paying for and distributing them to their customers.
Ting plug-in sensors detect conditions that could lead to electrical fires through continuous monitoring of a home’s electrical system. Statistically preventing more than 80 percent of electrical fires, communities benefit – not only by preventing individual home fires but also by providing data about the electrical grid and potentially heading off grid-initiated wildfires.
“There are so many applications for the data,” Marshall said, but “to have a true impact on society…we have to prove that we’re preventing more losses than the cost, and we have to do that in partnership with insurance carriers.”
Everyone wins if everyone plays
Cultivating innovative solutions is pivotal to enhancing resilience, the panelists agreed – but driving them forward requires more than just the insurance industry’s support.
He pointed to a project last year – funded by Fannie Mae and developed by the National Institute of Building Science (NIBS) – that culminated in a roadmap for resilience investment incentives, focusing on urban flooding.
The co-authors of the project, including Triple-I subject-matter experts, represented a cross-section of “co-beneficiary” groups, such as the insurance, finance, and real estate industries and all levels of government, Kaniewski said.
Implementation of the roadmap requires participation from communities and multiple co-beneficiaries. Triple-I and NIBS are exploring such collaborations with potential co-beneficiaries in several areas of the United States.
Natural catastrophe perils’ rising frequency and severity may be impossible to fully abate, but Nationwide Property & Casualty Insurance Co. President and CEO Mark Berven believes modern building codes could dramatically reduce their costly destructiveness.
In a recent article for PropertyCasualty360, Berven wrote that inconsistent building codes create alarming safety disparities from state to state and that improved codes are essential to reducing risk and post-disaster recovery costs.
“Extreme weather events like heat waves, large storms, landslides and more are becoming more frequent and intense,” Berven writes. “The U.S. has already experienced at least 24 confirmed weather disaster events through October with losses exceeding $1 billion each.”
“Building Codes Save” — a landmark report by the Federal Emergency Management Agency (FEMA) –found that universal enforcement of modern building codes could prevent more than $600 billion in disaster losses by 2060. In states where stricter codes have been implemented, the report says, billion-dollar savings already have been realized.
Virginia and Florida, for example, have long-modeled robust building code systems, leading both to consistently top code adoption rankings – especially after the latter saved an estimated $1 billion to $3 billion in averted damages during Hurricane Ian through its modern Florida Building Code.
By contrast, fewer than one-third of hazard-prone jurisdictions have adopted modernized building codes, and some states – such as Delaware and Alabama – lack mandatory statewide building code systems entirely.
Perceived cost an obstacle
Barriers to adoption include the perceived expenses of enforcement. Conforming existing structures to the same standards as new buildings can be costly, as can rebuilding communities in non-hazardous areas. Navigating these concerns in tandem with an ongoing affordable housing shortage will require a coordinated effort on local, state, and federal levels.
But as the annual average of billion-dollar disasters in the U.S. trends upward, improving building codes must take precedence for policymakers at every level of government, Berven explained, adding that the research organization Insurance Institute for Business & Home Safety (IBHS) has already provided a versatile and relatively affordable outline for safer construction standards.
Known collectively as the FORTIFIED method, such standards reinforce the durability of homes against severe weather, involving, for example, anchoring roofs to wall framing using stronger nails. The FORTIFIED method is, at present, completely voluntary, though the insurance industry-funded Strengthen Alabama Homes incentivizes homeowners to retrofit their houses along these guidelines via thousand-dollar grants. Completed retrofits reduce post-disaster claims and qualify grantees for substantial insurance premium discounts, prompting flood-prone Louisiana to replicate the program.
Given the programs’ demonstrated success, “updating our building codes to align with proven frameworks like IBHS’s FORTIFIED standards is not just an option — it’s a necessity,” Berven wrote. “The time for action is now, and the cost of inaction is far too high.”
Many consumers are unaware of the current absence and potential benefits of building code regulations, he continued, emphasizing an industry need for greater public outreach. Building codes play an indispensable role in enhancing resilience against evolving climate and weather risks, but any “revolution” in their regulation cannot advance without the collaboration of all relevant stakeholders.
The need for collective action to address the property/casualty risk crisis was a recurring theme throughout Triple-I’s Joint Industry Forum in Miami – particularly during the panel on climate risk and resilience. The discussion focused heavily on what’s currently being done to address this evolving area of peril.
The panel, moderated by Veronika Torarp – a partner in PwC Strategy’s insurance practice – consisted of subject-matter experts representing a cross section of natural perils, from hurricanes and floods to wildfires and severe convective storms. They were:
Dr. Philip Klotzbach, research scientist in the Department of Atmospheric Science at Colorado State University;
Matthew McHatten, president and CEO at MMG Insurance and chairman of Triple-I’s Executive Leadership Committee;
Emily Swift, sustainable business framework senior manager at American Family Insurance; and
Heather Kanzlemar, consulting actuary at Milliman.
Part of the reason for this need to build coalitions is the diverse and overlapping causes of climate-related events and the related losses. Torarp cited a PwC study that projects the global protection gap in 2025 at $1.9 trillion, though she acknowledged that number may turn out to be “an understatement”.
Warmer, wetter, riskier
Running through the discussions of the various perils was the dynamic nature of evolving threats and the protection gap. Examples included increased inland flooding, such as the devastation caused in the rural southeast by Hurricane Helene, and damage inflicted by surprisingly intense tornadoes spun off by Hurricane Milton.
Dr. Klotzbach discussed the “very busy” 2024 Atlantic Hurricane season with its surprising impact on Asheville, N.C., and surrounding communities from Helene.
“It’s important to understand that the inland flooding threat is extremely problematic,” he said.
MMG’s McHatten emphasized the complexity of addressing flood risk, given the environmental forces driving it.
“Warmer planet, warmer ocean, more precipitation, more wind,” he said, “as well as this dynamic of atmospheric rivers and what happens to them as they start to hit higher elevations.” He pointed out how such conditions – which led to cataclysmic rains in Ashville as well as in MMG’s home state of Maine and the mountains of Vermont – are exacerbated by population trends.
“People live near water because that’s where economy and commerce was,” he said. “The ability to adapt to dynamic conditions that are changing rapidly is super-difficult. We can’t just say, ‘Raise every house six feet’ that’s near a body of water.”
Hope amid the perils
American Family’s Emily Swift discussed the state of severe convective storm risk, which she said is tending to migrate from its historic domain of the U.S. Midwest toward the Southeast.
“As we’re seeing the impact of hurricanes move further west and severe convective storms move further east, that means a lot more risk exposure to our customers who are living in those regions,” she said. “However, I think there’s a lot of hope.”
Swift talked about emerging partnerships between the insurance industry and academia — particularly work being done through Industry-University Cooperative Research Centers (IUCRC) funded by the National Science Foundation (NSF) to better understand severe convective storms and develop innovative ways of addressing the risks they pose.
“I’m optimistic that, although we don’t know quite the direction where severe convective storms are heading, we at least have diversified our risks to better manage them” – thanks, in part, to the learnings derived from these partnerships, Swift said.
Kanzlemar reinforced Swift’s optimistic tone in discussing Milliman’s work around wildfire risk. In the midst of a growing insurance availability and affordability crisis in fire-prone states – particularly California – Milliman is partnering with the Insurance Institute for Building and Home Safety (IBHS) and and stakeholders in its Wildfire Prepared Home program to gather data to help inform insurance underwriting, as well as mitigation and prevention at the community level.
“Most insurers have data on type of structure, what the roof material is, the number of stories,” Kanzlemar said, “but a lot of the granular data around eave enclosures, ember-resistant vents, that data is typically not available, and almost no insurers had that data at a community level to account for adjacent risk.”
That’s the bad news, she said, but “the good news is in the kinds of solutions we’re working toward. Most insurers were willing to consider a contributory data model like a comprehensive loss-underwriting exchange for [wildland-urban interface (WUI)] data as long as there’s sufficient participation and reciprocity. That’s an effort that we’re calling the ‘WUI Data Commons’. ”
All the panelists agreed that such collaborative, data-driven approaches that respect consumer needs and interests at the community level were going to be key to solving natural catastrophe risk in our rapidly changing future.
The devastation wrought by Hurricane Helene in September 2024 across a 500-mile swath of the U.S. Southeast highlighted the growing vulnerability of inland areas to flooding from both tropical storms and severe convective storms, according to the latest Triple-I “State of the Risk” Issues Brief.
These events also highlight the scale of the flood-protection gap in non-coastal areas. Private insurers are stepping up to help close that gap, but increased homeowner awareness and investment in flood resilience across all co-beneficiary groups will be needed as more and more people move into harm’s way.
Helene dumped 40 trillion gallons of water across Florida, Georgia, the Carolinas, Virginia, and Tennessee, causing hundreds of deaths and billions in insured losses. Much of the loss was concentrated in western North Carolina, with parts of Buncombe County – home to Asheville and its historic arts district – left virtually unrecognizable. Less than 1 percent of residents in Buncombe County had federal flood insurance when Helene struck.
The experience of these states far inland echoed those of New York, New Jersey, and Pennsylvania in August 2021, when remnants of Hurricane Ida brought rains that flooded subways and basement apartments, with more than 40 people killed in those states.
“The whole swath going up the East Coast” that Hurricane Ida struck in the days after it made landfall “had less than 5 percent flood insurance coverage,” said Triple-I CEO Sean Kevelighan at the time.
Then, 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. Flooding led to 39 fatalities and federal disaster-area declarations for 13 eastern Kentucky counties. According to the Federal Emergency Management Agency (FEMA), only a few dozen federal flood insurance policies were in effect in the affected areas before the storm.
Low inland take-up rates largely reflect consumer misunderstandings about flood insurance. Though approximately 90 percent of all U.S. natural disasters involve flooding, many homeowners are unaware that a standard homeowners policy doesn’t cover flood damage. Similarly, many believe flood coverage is unnecessary unless their mortgage lenders require it. It also is not uncommon for homeowners to drop flood insurance coverage once their mortgage is paid off to save money.
Private insurers stepping up
More than half of all homeowners with flood insurance are covered by NFIP, which is part of FEMA and was created in 1968 – a time when few private insurers were willing to write flood coverage. In recent years, however, insurers have grown more comfortable taking on flood risk, thanks in large part to improved data and analytics capabilities.
The private flood market has changed since 2016, when only 12.6 percent of coverage was written by 16 insurers. In 2019, federal regulators allowed mortgage lenders to accept private flood insurance if the policies abided by regulatory definitions. The already-growing private appetite for flood risk gained steam after that. Private insurers are gradually accounting for a bigger piece of a growing flood risk pie.
Insurance necessary – but not sufficient
Insurance can play a major role in closing the protection gap, but, with increasing numbers of people moving into harm’s way and storms behaving more unpredictably, the current state of affairs is not sustainable. Greater investment in mitigation and resilience is essential to reducing the personal and financial losses associated with flooding.
Such investment has paid off in Florida, where the communities of Babcock Ranch and Hunters Point survived Hurricanes Helene and Milton relatively unscathed. Babcock Rance made headlines for sheltering thousands of evacuees from neighboring communities and never losing power during Milton, which devastated numerous neighboring cities and left more than three million people without power.
Both of these communities were designed and built in recent years with sustainability and resilience in mind.
Incentives and public-private partnership will be critical to reducing perils and improving insurability in vulnerable locations. Recent research on the impact of removing development incentives from coastal areas can improve flood loss experience in the areas directly affected by the removal of such incentives, as well as neighboring areas where development subsidies remain in place.
By Kelley Collins, Director of Business Development and Communications, Lightning Protection Institute
We rely on critical facilities not only in our day-to-day lives but also during emergencies and natural disasters. As defined by government agencies, such as FEMA, critical facilities include fire stations, police stations, hospitals, and emergency operation centers, among others. But here’s the question: Are these essential facilities in your community adequately protected from the destructive impact of lightning?
The Impact of Lightning on Structures
Lightning, though less publicized than other weather events, is equally destructive and must be understood so we can take preventive measures. Lightning strikes happen continuously, with approximately 100 strikes per second globally. Each strike unleashes a tremendous amount of electricity, with millions of volts and temperatures soaring higher than the surface of the sun. When a structure is struck, the surge of electricity travels through its pipes, electrical systems, and infrastructure. While lightning often causes fires, the less visible damage can be just as severe. Computers, communication devices, security systems, and other critical electronics can be rendered useless, leading to loss of data, revenue, and the ability to provide vital services.
A strike to a critical facility can prevent essential services from being available when they’re needed most.
A single lightning strike can have devastating effects on individuals, homes, businesses, and entire communities, including critical facilities. A lightning strike to a critical facility can prevent essential services, such as emergency response or medical care, from being available when they are needed most. A well-designed and properly installed lightning protection system can prevent these consequences.
Whether you are a homeowner, business owner, or part of the design and construction industry, it’s essential to understand the impact of lightning and the steps necessary to mitigate the risk. The Lightning Protection Institute has started to advocate for stronger regulations for critical facilities, particularly in high-risk areas where the potential for lightning strikes is greater.
The Need for Regulatory Requirements
Despite the constant threat of lightning, regulatory requirements for lightning protection systems in critical facilities remain minimal. A historical look at other life safety actions could give us the foundation to protect critical facilities from lightning, which we know can create fires.
When looking to safeguard individuals and buildings from fire, fire alarms and sprinkler systems have been implemented. Fire alarms alert individuals of smoke and/or fire to ensure that they exit the building. Sprinkler systems were designed to minimize the spread of a fire and damage to the structure. Depending on states, either or both, fire alarms and sprinkler systems are required in commercial properties and/or homes.
Just as fire alarms and sprinkler systems are mandated to prevent building destruction and protect lives, lightning protection systems should be required for the same reasons. Lightning protection systems protect both lives and structures.
There are government documents that outline what is considered a critical facility and what structures are encompassed in our critical infrastructure. In addition, these federal agencies clearly see the need for higher standards in critical facilities and critical infrastructures due to their guidelines for protecting against potential flooding. Yet, there is not a mandate to protect either facilities or infrastructure from lightning strikes.
Lightning: Second Only to Floods
Lightning is the second most damaging natural hazard after floods, impacting both individuals and communities. The same level of consideration given to flood prevention should apply to mitigating the risks of lightning. Installing lightning protection systems in critical facilities ensures these buildings remain operational during and after a strike, safeguarding the community.
Introducing regulatory requirements for lightning protection in high-risk areas would ensure that critical facilities continue to function during emergencies, providing vital services when they are needed most.
Conclusion: Lightning Deserves Our Attention
With the potential for destruction that lightning carries, it deserves as much attention as hurricanes, floods, and fires, which often dominate the headlines. We’ve taken significant steps to prepare for and protect against these natural disasters through regulations and personal actions.
The design and construction industries continue to innovate with new materials and techniques to increase the safety of individuals and communities when building new structures. Fire alarms and earthquake-resistant buildings are now standard safety measures, and hurricane-resilient homes are being built with new designs. These advancements result from collaboration across industries.
The next collaboration should be the initiative to protect communities from the impact of a lightning strike. This initiative involves implementing regulatory measures for lightning protection systems to safeguard critical facilities. Lightning protection systems intercept a lightning strike and safely disperse the energy along the conductors to ground. When properly installed by certified lightning protection contractors, these systems are scientifically proven to mitigate risks for homes, businesses, and critical facilities and infrastructure.
Several industries have the opportunity to provide their insight and expertise to protect communities: Architects, Engineers, Insurance Providers, Risk Assessors, Weather Researchers, Local Governments as well as Lightning Protection Professionals. As experts in various fields, we can protect our communities by raising awareness of lightning risks and advocating for the installation of certified lightning protection systems.
The next time you pass by a fire station, police station, or hospital in your community, take a moment to look up. Is there a lightning protection system installed? It’s critical to ensure these essential facilities are protected, especially in high-risk areas, so they can continue serving individuals and communities during and after a storm.
Earlier this year, baseball-sized hailstones in Denver totaled vehicles and pummeled homes and businesses during the second-costliest hailstorm in Colorado history, equating to billions in damages. Melon-sized stones hit Texas the same month, downing power lines and requiring snow plows to reopen roads.
Hail – a sub-peril of severe convective storms (SCS), which also include thunderstorms with lightning, tornadoes, and straight-line winds – is among the most destructive natural catastrophes in the United States, behind as much as 80 percent of SCS claims in any one year. Yet hailstorms remain ill-monitored and highly unpredictable due to a lack of public and industry attention.
“These are death-by-1000-paper-cut perils,” explained Triple-I’s Non-Resident Scholar Dr. Victor Gensini, meteorology professor at Northern Illinois University and leading expert in convective storm research, in an interview for the All Eyes on Research podcast. “In general, we’re seeing hail on 200 out of 365 days of the year.”
While individual SCS events generating losses on the multi-billion-dollar scale of Hurricane Andrew or Katrina don’t happen, over the course of a given year the losses add up quickly.
SCS, which are rising infrequency and severity – accounted for 70 percent of insured losses globally the first half of 2024, at a billion-dollar sum 87 percent higher than the previous decade average. And in 2023, U.S. insured SCS-caused losses exceeded $50 billion for the first time on record for a single year, propelled by thousands of major hailstorms impacting more than 23 million homes.
Gensini – who was motivated to study atmospheric science after a tornado impacted his high school – shifted his focus away from tornadoes “because hail is way more common across the United States every year, and it has a much larger socioeconomic impact – whether you’re talking about agricultural losses…or just rooftop damage to your asphalt shingles,” he told host and Triple-I Economic Research Analyst Marina Madsen.
“When you take a step back and look at the thunderstorm perils producing the greatest number of insured losses, it’s hail.”
Urbanization and inflation drive these losses, as more people populate disaster-prone areas and the value of their assets and the costs to repair them have increased. The expanding presence of solar farms, spread throughout flat, originally uninhabited plains, are especially susceptible to SCS damage, with one 2019 hailstorm causing $70 million in damages to a solar energy project in Texas.
Another explanation for greater hail-related losses is our warming climate. A Climate and Atmospheric Science study led by Gensini projects that, while higher temperatures will melt more hailstorms overall, increasingly large hailstones will become more common. Stronger updrafts fueled by higher temperatures can suspend stones in the air for longer, spurring further growth.
Such trends do not bode well for insurance premium rates, but upcoming research efforts promise actionable insight into hailstorm detection and prediction. The In-situ Collaborative Experiment for the Collection of Hail in the Plains – or ICECHIP – will send Gensini and several other researchers into the Great Plains to chase and collect granular data from hailstorms next year. Backed by the National Science Foundation with more than $11 million in funding, the field study aims to reduce hail risk through improved hailstorm forecasting, enabling residents to better protect themselves and their belongings before a hailstorm touches down.
A newer initiative – the Center for Interdisciplinary Research on Convective Storms, or CIRCS – is a prospective academic industry consortium to develop multidisciplinary research on SCS risk, fostering resilience and recovery strategies informed by diverse stakeholder partnerships.
“As you can imagine, the greatest interest right now in our research is in the insurance and reinsurance verticals,” Gensini said. “Hopefully, as we continue to build relationships…the [CIRCS] center will serve as a hub for information and knowledge creation for industry members. It’s a really unique consortium and a lot of potential lines of business could benefit from it.”
