Category Archives: Floods

Catastrophes, Disaster Preparedness, Disaster Resilience, Flood Insurance, Floods, Homeowners Insurance, Hurricane, Risk Management, Severe Convective Storm, Wildfire, Wind

Texas: A Microcosm
of U.S. Climate Perils

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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

Catastrophes, Coastal Property, Disaster Preparedness, Disaster Resilience, Flood Insurance, Floods, Homeowners Insurance, Hurricane, Wind

“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

Catastrophes, Coastal Property, Disaster Resilience, Flood Insurance, Floods, Homeowners Insurance

Louisiana Senator Seeks Resumption of Resilience Investment Program

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By Lewis Nibbelin, Contributing Writer, Triple-I

Louisiana Sen. Bill Cassidy recently took to the Senate floor to call for restoration of FEMA’s Building Resilient Infrastructure and Communities (BRIC) program, whose elimination the agency announced on April 4.

Established by Congress through the Disaster Recovery Reform Act of 2018, the BRIC program has allocated more than $5 billion for investment in mitigation projects to reduce economic losses from floods, wildfires, and other disasters for hundreds of communities. Ending BRIC will cancel all applications from 2020-2023 and rescind more than $185 million in grants intended for Louisiana, leaving the 34 submitted and accepted projects funded by those grants in limbo.

Whereas the FEMA press release described BRIC as “wasteful and ineffective,” Cassidy identified “not doing the program and then having to rescue communities when the inevitable flood occurs – that is waste, because we could have prevented that from happening in the first place.”

Mitigation investment saves

Cassidy explained that flooding causes up to $496 billion in damages annually throughout the United States, adding that, “when we invest in levees and floodwalls, communities are protected when the storm hits, and we save billions on a recovery effort we never had to do.”

A 2024 study backed by the U.S. Chamber of Commerce supports this claim, which found that disaster mitigation investments save $13 in benefits for every dollar spent.

FEMA’s decision coincides with recovery efforts in Natchitoches, a small Louisiana city, after flash flooding inundated homes and downed power lines just weeks before. BRIC was set to fund improvements to the city’s backup generator system to pump out floodwater during severe weather.

Similarly, Lafourche Parish will lose $20 million to strengthen 16 miles of power lines, which Cassidy noted toppled “like dominos” during last year’s Hurricane Francine. Jefferson Parish residents displaced following Hurricane Ida in 2021 will lose the home elevation disaster grants they finally secured earlier this year.

“Louisiana was the third-largest recipient of BRIC’s most recent round of funding and is the largest recipient on a per capita basis,” Cassidy said. “Without BRIC, none of these projects would be possible.”

A national problem

Beyond Louisiana, Cassidy pointed to numerous states ravaged by severe storms so far this year, particularly inland communities where flooding is traditionally unexpected. At least 25 people died amid a severe weather outbreak across the southern and midwestern U.S. last month, underscoring a growing need for resiliency planning in non-coastal areas.

BRIC is one of many programs facing sudden termination under the Trump Administration. Twenty-two states and the District of Columbia have filed a lawsuit demanding the federal government unfreeze essential funding, including BRIC grants. Though the administration is reportedly complying with a federal judge’s order blocking the freeze, the states involved claim funding remains inaccessible.

Louisiana has not joined the lawsuit, but Cassidy emphasized the congressional appropriation of the program and requested the fulfillment of preexisting BRIC applications. He argued that “to do anything other than use that money to fund flood mitigation projects is to thwart the will of Congress.”

As President Trump weighs disbanding FEMA entirely – even as FEMA responds to record-breaking numbers of billion-dollar disasters – it is imperative to recognize the vast co-beneficiary benefits of disaster resilience, and develop our partnerships across these stakeholder groups.

Learn More:

BRIC Funding Loss Underscores Need for Collective Action on Climate Resilience

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

Undisclosed Flood Risks Spur Wave of State Laws

Tenfold Frequency Rise for Coastal Flooding Projected by 2050

Triple-I Brief Highlights Rising Inland Flood Risk

Hurricane Helene Highlights Inland Flood Protection Gap

Removing Incentives for Development From High-Risk Areas Boosts Flood Resilience

Executive Exchange: Using Advanced Tools to Drill Into Flood Risk

Catastrophes, Disaster Preparedness, Floods, Insurance News, Regulation

Undisclosed Flood Risks Spur Wave of State Laws

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Hurricane Helene flood damage in North Carolina

Source: Getty Images

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.”

View the Milliman report here.

Catastrophes, Coastal Property, Disaster Resilience, Flood Insurance, Floods, Homeowners Insurance, Insurers and the Economy, Market Conditions, Risk Management

BRIC Funding Loss Underscores Need
for Collective Action
on Climate Resilience

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The Trump Administration’s unwinding of the Building Resilient Infrastructure and Communities (BRIC) program and cancellation of all BRIC applications from fiscal years 2020-2023 reinforce the need for collaboration among state and local government and private-sector stakeholders in climate resilience investment.

Congress established BRIC through the Disaster Recovery Reform Act of 2018 to ensure a stable funding source to support mitigation projects annually. The program has allocated more than $5 billion for investment in mitigation projects to alleviate human suffering and avoid economic losses from floods, wildfires, and other disasters. FEMA announced on April 4 that it is ending BRIC .

Chad Berginnis, executive director of the Association of State Floodplain Managers (ASFPM), called the decision “beyond reckless.”

 “Although ASFPM has had some qualms about how FEMA’s BRIC program was implemented, it was still a cornerstone of our nation’s hazard mitigation strategy, and the agency has worked to make improvements each year,” Berginnis said. “Eliminating it entirely — mid-award cycle, no less — defies common sense.”

While the FEMA press release called BRIC a “wasteful, politicized grant program,” Berginnis said investments in hazard mitigation programs “are the opposite of ‘wasteful.’ “ He pointed to a study by the National Institute of Building Sciences (NIBS) that showed flood hazard mitigation investments return up to $8 in benefits for every $1 spent. 

“At this very moment, when states like Arkansas, Kentucky, and Tennessee are grappling with major flooding, the Administration’s decision to walk away from BRIC is hard to understand,” Berginnis said.

Heading into hurricane season

Especially hard hit will be catastrophe-prone Florida. Nearly $300 million in federal aid meant to help protect communities from flooding, hurricanes, and other natural disasters has been frozen since President Trump took office in January, according to an article in Government Technology.

The loss of BRIC funding leaves dozens of Florida projects in limbo, from a plan to raise roads in St. Augustine to a $150 million effort to strengthen canals in South Florida. According to Government Technology, the agency most impacted is the South Florida Water Management District, responsible for maintaining water quality, controlling the water supply, ecosystem restoration and flood control in a 16-county area that runs from Orlando south to the Keys.

“The district received only $6 million of its $150 million grant before the program was canceled,” the article said. “The money was intended to help build three structures on canals and basins in North Miami -Dade and Broward counties to improve flood mitigation.”

Florida’s Division of Emergency Management must return $36.9 million in BRIC money that was earmarked for management costs and technical assistance. Jacksonville will lose $24.9 million targeted to raise roads and make improvements to a water reclamation facility.

FEMA announced the decision to end BRIC the day after Colorado State University’s (CSU) Department of Atmospheric Science released a forecast projecting an above-average Atlantic hurricane season for 2025. Led by CSU senior research scientist and Triple-I non-resident scholar Phil Klotzbach CSU research team forecasts 17 named storms, nine hurricanes – four of them “major” (Category 3, 4, or 5).  A typical season has 14 named storms, seven hurricanes – three of them major.

Nationwide impacts

More than $280 million in federal funding for flood protection and climate resilience projects across New York City — “including critical upgrades in Central Harlem, East Elmhurst, and the South Street Seaport” – is now at risk, according to an article in AMNY. The cuts affect over $325 million in pending projects statewide and another $56 million of projects where work has already begun.

Senate Majority Leader Chuck Schumer and Gov. Kathy Hochul warned that the move jeopardizes public safety as climate-driven disasters become more frequent and severe.

“In the last few years, New Yorkers have faced hurricanes, tornadoes, blizzards, wildfires, and even an earthquake – and FEMA assistance has been critical to help us rebuild,” Hochul said. “Cutting funding for communities across New York is short-sighted and a massive risk to public safety.”

According to the National Association of Counties, cancellation of BRIC funding has several implications for counties, including paused or canceled projects, budget and planning adjustments, and reduced capacity for long-term risk reduction.

North Dakota, for example, has 10 projects that were authorized for federal funding. Those dollars will now be rescinded. Impacted projects include $7.1 million for a water intake project in Washburn; $7.8 million for a regional wastewater treatment project in Lincoln; and $1.9 million for a wastewater lagoon project in Fessenden. 

“This is devastating for our community,” said Tammy Roehrich, emergency manager for Wells County. “Two million dollars to a little community of 450 people is huge.”

The cancellation of BRIC roughly coincides with FEMA’s decision to deny North Carolina’s request to continue matching 100 percent of the state’s spending on Hurricane Helene recovery.

“The need in western North Carolina remains immense — people need debris removed, homes rebuilt, and roads restored,” said Gov. Josh Stein. “Six months later, the people of western North Carolina are working hard to get back on their feet; they need FEMA to help them get the job done.”

Resilience key to insurance availability

Average insured catastrophe losses have been on the rise for decades, reflecting a combination of climate-related factors and demographic trends as more people have moved into harm’s way.

“Investing in the resilience of homes, businesses, and communities is the most proactive strategy to reducing the damage caused by climate,” said Triple-I Chief Insurance Officer Dale Porfilio. “Defunding federal resilience grants will slow the essential investments being made by communities across the U.S.”

Flood is a particularly pressing problem, as 90 percent of natural disasters involve flooding, according to the National Flood Insurance Program (NFIP). The devastation wrought by Hurricane Helene in 2024 across a 500-mile swath of the U.S. Southeast – including Florida, Georgia, the Carolinas, Virginia, and Tennessee – highlighted the growing vulnerability of inland areas to flooding from both tropical and severe convective storms, as well as the scale of the flood-protection gap in non-coastal areas.

Coastal flooding in the U.S. now occurs three times more frequently than 30 years ago, and this acceleration shows no signs of slowing, according to recent research. By 2050, flood frequency is projected to increase tenfold compared to current levels, driven by rising sea levels that push tides and storm surges higher and further inland.

In addition to the movement of more people and property into harm’s way, climate-related risks are exacerbated by inflation (which drives up the cost of repairing and replacing damaged property); legal system abuse, (which delays claim settlements and drives up insurance premium rates); and antiquated regulations (like California’s Proposition 103) that discourage insurers from writing business in the states subject to them.  

Thanks to the engagement and collaboration of a range of stakeholders, some of these factors in some states are being addressed. Others – for example, improved building and zoning codes that could help reduce losses and improve insurance affordability – have met persistent local resistance.

As frequently reported on this blog, the property/casualty insurance industry has been working hard with governments, communities, businesses, and others to address the causes of high costs and the insurance affordability and availability challenges that flow from them. Triple-I, its members, and partners are involved in several of these efforts, which we’ll be reporting on here as they progress.

Learn More:

Tariff Uncertainty May Strain Insurance Markets, Challenge Affordability

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

Triple-I Brief Highlights Rising Inland Flood Risk

Tenfold Frequency Rise for Coastal Flooding Projected by 2050

Hurricane Helene Highlights Inland Flood Protection Gap

Removing Incentives for Development From High-Risk Areas Boosts Flood Resilience

Executive Exchange: Using Advanced Tools to Drill Into Flood Risk

Coastal Property, Disaster Resilience, Floods, Insurance News

Tenfold Frequency Rise for Coastal Flooding Projected by 2050

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Florida coastal flooding

Approximately 2.5 million Americans in 1.4 million homes will be at risk from severe coastal flooding by 2050, with Florida, New York, and New Jersey facing the highest exposure, according to a new report from Climate Central’s Coastal Risk Finder.

Coastal flooding in the U.S. now occurs three times more frequently than 30 years ago, and this acceleration shows no signs of slowing. By 2050, flood frequency is projected to increase tenfold compared to current levels, driven by rising sea levels that push tides and storm surges higher and further inland, according to the report.

The report defines a “severe flood” as one with a 1% chance of occurring in any given year. Such events, while statistically rare, can cause catastrophic damage to communities and infrastructure. The analysis incorporates the latest elevation data, levee information, sea level rise projections, and U.S. Census statistics to create comprehensive risk assessments.

Regional differences in risk exposure are significant. While the densely populated Northeast shows higher numbers of at-risk residents, the Gulf region faces greater land area vulnerability due to higher rates of sea level rise and naturally low-lying coasts.

Vulnerable Communities and Populations

Florida leads the nation with 505,000 residents projected to face risk from a severe coastal flood by 2050, followed by New York and New Jersey. At the municipal level, New York City tops the list with an estimated 271,000 people living in “high” at-risk areas. Among the cities with the highest exposure, six are located in the Northeast.

The report also highlighted a troubling demographic pattern: older adults face disproportionate exposure to coastal flood risks. Nearly 540,000 people aged 65 or older live in areas at risk of severe coastal flooding by 2050, representing 22% of the total at-risk population despite comprising only 16% of residents in coastal states. Florida has the highest number of vulnerable seniors with more than 143,000 at risk, while Maine, Oregon, and Delaware show the highest proportions of seniors living in flood-prone areas.

Social vulnerability—the combination of socioeconomic factors that worsen disaster impacts—further complicates the risk landscape. The report utilizes the U.S. Census Bureau’s Community Resilience Estimates to identify individuals with various risk components. Of the 2.5 million Americans in flood-risk zones, approximately 1.85 million (74%) have at least one component of risk, and 617,000 (25%) have three or more risk factors.

“Older adults, especially those living in care facilities, are among the most vulnerable to death and health setbacks due to hurricanes, storm surges, and other floods,” the report noted, emphasizing that age is just one of many factors contributing to vulnerability.

Tools and Adaptation Imperatives

The Coastal Risk Finder tool, which informed this report, offers detailed flood projections and risk assessments for any coastal state, county, city, town or district in the contiguous U.S. Developed following interviews with over 100 government officials, community leaders and researchers, the tool addresses the specific information needs of coastal communities.

Users can access customized maps, graphics and data to understand flood risks under different climate scenarios. The tool includes specific resources for media professionals, government officials and community leaders to help communicate and plan for worsening coastal flood risks.

The full range of demographic data, including social vulnerability metrics, is available for states, counties and cities through the Coastal Risk Finder, enabling communities to develop more targeted and equitable resilience plans.

Obtain the full report here.

Catastrophes, Coastal Property, Disaster Resilience, Floods, Risk Management

Parametric Insurance Gains Traction Across U.S.

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By Lewis Nibbelin, Contributing Writer, Triple-I

Heading into 2025, countless communities are still grappling with the $27 billion natural disasters that impacted the United States last year – a total driven by costly storms and severe inland flooding. Many affected residents lacked flood coverage and will rely almost exclusively on federal relief funding to recover, underscoring a widespread protection gap.

Aiming to expedite disaster recovery for riverine communities in the Mississippi River Basin, the Mississippi River Cities and Towns Initiative (MRCTI) recently announced a flood insurance pilot currently in development with Munich Re that will use parametric insurance.

Unlike traditional indemnity insurance, parametric structures cover risks without sending adjusters to evaluate post-catastrophe damages. Rather than paying for specific damages incurred, parametric policies issue agreed-upon payouts 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 both insurers and policyholders, especially as weather and climate risks become more severe and unpredictable.

Several insurers demonstrated this efficiency in the wake of last year’s hurricanes – among them climate risk-management firm Arbol, which paid out $20 million in parametric reinsurance claims within 30 days after Milton made landfall.

Coast-to-coast trends

Though the MRCTI pilot presents a novel approach to inland flooding, similar pilots are already underway along the coast. New York City developed its own parametric flood program following Superstorm Sandy to bolster the resilience of low- and moderate-income neighborhoods struggling to recover. The program received enough funding last year not only for renewal but expansion, bringing needed protection to even more vulnerable communities.

For flood-prone Isleton, Calif. – a small Sacramento County town that lacks the resources to support a police department – risk mitigation has long taken a backseat to more immediate concerns. But the city’s location in a floodplain made it the perfect candidate for California’s parametric flood pilot, backed by a two-year, $200,000 grant going into effect this year.

The emergence of these community flood solutions reflects a growing interest in parametric insurance throughout the U.S., which propelled the $18 billion value of the global parametric insurance market in 2023. From Lloyd’s first dedicated parametric syndicate to Amwins’ parametric program for golf courses, more parametric coverage options are available than ever before, particularly after numerous private carriers – emboldened by improved data analytics and modeling – expanded their parametric flood insurance business in the U.S. last year.

Take FloodFlash, a leading parametric flood insurance provider based in London. Initially limited to five states, FloodFlash became known for offering coverage beyond the National Flood Insurance Program’s (NFIP) limits and in areas traditionally unsupported by private markets. Increased broker demand motivated the company, in partnership with Munich Re, to gradually roll out coverage to all mainland states last year, ahead of active hurricane season forecasts.

New insurance startups like Ric are also lowering the cost of entry into innovative parametric-based resilience. A winner of the RISE Flood Insurance of the Future Challenge, Ric will launch later this year on the coasts with micro-policies ranging from $14 to $50 per month. The company plans to collaborate with employers to extend their policies as employee benefits, which could help raise awareness of and reduce coverage gaps.

Regulatory momentum

As parametric risk transfer continues to gain traction, regulatory uncertainty in the absence of corresponding insurance laws persists. Given that many jurisdictions have structured their legal insurance framework around traditional indemnity principles, it’s unclear how restrained insurers in some areas are to issuing payouts only for actual losses.

Determining appropriate thresholds for coverage poses another challenge. For example, following extensive devastation from Hurricane Beryl last year, a $150 million parametric catastrophe bond did not yield a payout because air pressure levels narrowly missed the predefined minimum. The ensuing backlash included an intergovernmental “examination” into insurance-linked securities broadly and sparked industry-wide debate surrounding the equity of parametric structures.

To date, only a handful of states have enacted parametric insurance legislation, though substantial movement last year suggests more regulations are on the horizon. Notably, Vermont updated its previous 2022 law permitting captive insurance companies to enter parametric contracts. Based on evidence of their utility as insurance contracts, parametric contracts are now less restricted.

New York also unanimously passed its first parametric insurance law, recognizing parametric coverage as an authorized form of personal line insurance within the state. The law further stipulates mandatory disclosures on all parametric applications that distinguish parametric insurance as less comprehensive, and therefore not a substitute for, traditional property and flood insurance.

Such regulations are a promising step forward towards refining parametric coverage and facilitating its adoption across the country, but tensions between parametric and indemnity risk structures remain largely unresolved. Navigating how parametric insurance functions alone or as part of a package including indemnity coverage will require more collective input from all industry stakeholders.

One thing is for certain: traditional risk-transfer mechanisms are no longer sufficient to address the risk crisis presented by our evolving climate. Tools like parametric insurance – paired with hazard mitigation and community resilience planning – are guiding the way forward.

Learn More:

Rising Interest Seen in Parametric Insurance

Hurricane Delta Triggered Coral Reef Parametric Insurance

Mangrove Insurance: Parametric + Indemnity May Aid Coastal Resilience

Business Risk, Catastrophes, Cyber Risk, Disaster Resilience, Floods, Life Insurance

Executive Exchange: RiskScan Survey Taps Cross-Market Viewpoints

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For insurers, “customer” is one word that encompasses individual policyholders, business owners, risk managers, agents and brokers, and others, all with different (often divergent) priorities. For reinsurers – whose primary customers are insurers themselves – “understanding the customer” is particularly challenging.

This was part of the motivation behind RiskScan 2024 – a collaborative survey carried out by Munich Re US and Triple-I. The survey provides a cross-market overview of top risk concerns among individuals across five key market segments: P&C insurance carriers, P&C agents and brokers, middle-market business decision makers, small business owners, and consumers. It explores not only P&C risks, but also how economic, political, and legal pressures shape risk perceptions. 

“I get very excited when we have a chance to be in our customers’ shoes,” said Kerri Hamm, EVP and head of cyber underwriting, client solutions, and business development at Munich Re US, in a recent Executive Exhange interview with Triple-I CEO Sean Kevelighan. “To really understand how they feel about a broad range of issues from what are their most important risks to how they feel about the cost of insurance and the economic environment.”

 Hamm discussed how more than one-third of respondents ranked economic inflation, cyber risk, and climate change as top concerns, identifying them as “increasing or resulting in rises of the cost of insurance.”

“When we really understand what our customers want, we can design a better product and think about whether the coverages we’re providing are meaningful to them,” Hamm said. “That can help us match pricing better to their expectations.”

One result that Hamm found “surprising” was that “legal system abuse” didn’t appear to be as widely accepted by respondents – apart from the insurance professionals – as driving up insurance costs. Kevelighan cited other research – including by Triple-I’s sister organization, the Insurance Research Council – that has found consumers to be aware of the growing influence of “billboard attorneys”.

Unfortunately, he said, “They don’t seem to be making the connection with how that’s affecting them. What we’re trying to do at Triple-I is to help them make that connection.”

Kevelighan talked about Triple-I’s education campaign around “the billboard effect” in Georgia. That campaign includes an actual billboard (“Trying to fight fire with fire,” he said), as well as a microsite called Stop Legal System Abuse. The campaign focuses on Georgia because the state tops the most recent list of places that the American Tort Reform Foundation calls “judicial hellholes”. 

“We’re trying to help citizens in Georgia see that this is costing you,” Kevelighan said, adding that Triple-I has seen high engagement through the program with people in the state.

Learn More:

Triple-I “State of the Risk” Issues Brief: Legal System Abuse (Members only)

Triple-I Launches Campaign to Highlight Challenges to Insurance Affordability in Georgia

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

JIF 2024: What’s In a Name? When It Comes to Legal System Abuse, A Lot

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Catastrophes, Disaster Resilience, Floods, Risk Management, Technology, Wildfire

Data Fuels the Assault
on Climate-Related Risk

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By Lewis Nibbelin, Contributing Writer, Triple-I

Identifying opportunities to mitigate climate risk was on the minds of “Risk Take” presenters at Triple-I’s 2024 Joint Industry Forum (JIF). Risk Takes – a new addition at JIF – are 10-minute problem/solution-oriented presentations by high-impact experts who are deeply engaged in addressing specific perils. 

Inserted between panel discussions of broader issues and trends, these compact talks were tightly focused on how current challenges are being met.

Munich Re US, for example, is diving deep into understanding how consumers and insurers perceive climate-related risks. According to RiskScan 2024, a recently published survey by Munich Re US and Triple-I, more than one-third of respondents ranked climate change as a top concern, identifying it as “a key driver of insurance costs,” said Kerri Hamm, EVP and head of cyber underwriting, client solutions, and business development at Munich Re US.

However, when it comes to flood risk, the survey highlighted a substantial disconnect between concern about the peril and understanding of related insurance coverage. Despite understanding the rising severity of climate risks and their direct influence on insurance costs, many consumers erroneously believe their homeowners policy includes flood coverage or that they do not reside in an area at risk of flooding, contributing to a significant flood protection gap.

High-risk areas are only expanding, Hamm pointed out, as upsurges in flash flooding implicate more and more noncoastal properties. Increased private-sector interest in flood risk has led to new forms of flood coverage, such as a private Inland Flood Endorsement offered at Munich Re, to support these properties. Take-up rates for these insurance products remain low – underscoring the importance of consumer education and improved training for agents and brokers to encourage flood insurance sales.

“We can do better as an industry to make options available, attractive, and better known to vulnerable homeowners,” Hamm said. Education is vital, as is “developing innovative solutions that benefit our society by closing the insurance gap.”

Combining geoscience with data science is one solution, said Helge Jørgensen, CEO and co-founder of the Norway-based 7Analytics. Jørgensen discussed how, by leveraging geological and hydrological information with machine learning technology, his company develops granular data that can map out property flood risk “neighbor by neighbor,” enabling highly representative flood policies.

Beyond incentivizing private insurers to write flood coverage, this data is further “crucial for communities,” Jørgensen stressed, “because, if you have a lot of information on which areas and buildings are more exposed to flooding, then you can build resilience.”

Urban growth, particularly rising populations in higher-risk areas, render community-level resilience initiatives even more important, he noted.

Guidewire’s Christina Hupy reinforced Jørgensen’s emphasis on utilizing granular data while discussing HazardHub, a property risk data platform owned by Guidewire.

“Historically, risk data was provided only at the Census block or even ZIP code level,” Hupy said, whereas HazardHub provides comprehensive and updated geospatial data across various perils to pinpoint individual property risk levels.

In collaboration with Triple-I, HazardHub will release a report in early 2025 focusing on wildfire risk within three high-risk California counties, aiming to demonstrate how using detailed geographic data can help sustain or improve underwriting profitability within such areas.

“We’re going to need to look at mitigation in these high-risk areas as the next frontier,” Hupy said, “to spark that interest from California government and carriers” and enhance resilience “both from a customer and a business perspective” in the state.

California’s Department of Insurance helped launch this frontier last month by announcing new regulations allowing insurers to use catastrophe risk modeling to set rates, rather than limiting insurers to only historic risk data, as was the rule for decades. Insurers must also expand their coverage in riskier areas and account for resilience efforts when setting rates, which was also not previously possible.

Alongside emerging forms of insurance coverage and innovative granular data tools, such regulations empower the insurance industry to incentivize climate risk mitigation and achieve considerable progress towards eliminating the protection gap.

Learn More:

RiskScan 2024 Reveals Risk Priorities Across the Insurance Marketplace

JIF 2024: What’s In a Name? When It Comes to Legal System Abuse, A Lot

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

JIF 2024: What Resilience Success Looks Like

JIF 2024: Panel Highlights Human-Centered Use of Advanced Technology

Climate Resilience and Legal System Abuse Take Center Stage in Miami

Disaster Preparedness, Disaster Resilience, Flood Insurance, Floods, Insurers and the Economy, Market Conditions, Regulation, Risk Management

JIF 2024: What Resilience Success Looks Like

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By Lewis Nibbelin, Contributing Writer, Triple-I

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.

Learn More:

Outdated Building Codes Exacerbate Climate Risk

Rising Interest Seen in Parametric Insurance

Community Catastrophe Insurance: Four Models to Boost Resilience

Attacking the Risk Crisis: Roadmap to Investment in Flood Resilience

Mitigation Matters – and Hurricane Sally Proved It