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Insurance Industry

Core Drivers and Emerging Risks for Workers’ Comp

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By William Nibbelin, Head of Industry Data and Actuarial Science, Triple-I 

Factors driving stability in the workers’ compensation line were a central focus at the NCCI Annual Insights Symposium (AIS) 2026 – a key event for the workers’ comp industry. In aggregate, workers’ comp welcomed its 11th consecutive year of net underwriting profitability in 2025, continuing to outpace the broader property/casualty industry.

Alongside this success, industry leaders and actuaries provided insights into the underlying trends and emerging risks to watch going forward for the line.

Key Findings

  • Premium: Workers’ comp net written premium decreased by 1.5 points in 2025, to $45.6 billion. For private carriers, this decrease was 0.2 points, to $41.6 billion.
  • Changes in premium include a 6-point decline in 2025 bureau loss costs and payroll growth of 4.8 points, comprising 0.5 points in employment and 4.3 points in wage rate.
    • Despite an overall decrease in premium, the residual market share declined to just 5 percent in 2025.
  • Profitability: The 2025 calendar year net combined ratio of 92.8 was an increase of 4.0 points over 2024 at 88.8. For private carriers, the net combined ratio of 91 was an increase of nearly 5 points over 2024 at 86, marking 12 consecutive years of underwriting gains. The accident year combined ratio of 102 is projected to develop downward by 5 to 6 points based on historical reserve experience.
  • Reserves: NCCI estimates a net redundant industry reserve position of $14 billion for private carriers.
  • Severity Trends: Both medical and indemnity severity increased by 4 points in 2025.
  • Frequency Trends: Lost-time claim frequency decreased by 2 points in 2025, compared to a decrease of 5.9 points in 2024. This represents a more moderate decrease in frequency compared to the long-term average annual decline of 3.8 points.

Economic Uncertainty

NCCI filed a 5 percent decrease in loss costs effective in 2026, marking the 13th consecutive year of declines. These results are a product of rising payroll and long-term frequency improvements, coupled with favorable reserve development expectations, which together have outpaced severity increases.

However, underwriting margins face clear headwinds from economic uncertainty, including the significant rise in energy prices and the potential for stagflation. In a stagnant economy, businesses stop growing, unemployment rises, and prices increase.

Yet, as NCCI Practice Leader and Senior Economist Stephen Cooper noted, the economy has remained resilient in 2026, despite these risks.

“Employment growth on a month-to-month basis has been volatile over the past year, with most growth concentrated in one sector,” Cooper explained. “Overall, however, the labor market remains in balance, as both supply and demand have evened out and there have been early signs of the labor market potentially strengthening in 2026.”

Evolving Risks

The symposium highlighted several structural and technological changes altering the nature of workers’ comp risk:

Pain Management: Pain management protocols have increasingly shifted toward holistic treatment methods, including extended physical therapy and topical solutions. Major surgery utilization has dropped by 8 points since 2016, whereas physical therapy utilization has expanded considerably, driven by a greater intensity of procedures per session, rather than an increase in session frequency.

Delivery of Care: Medical benefits are heavily impacted by the broader U.S. healthcare delivery system. Over the past decade, private equity firms have invested more than $1 trillion into independent ambulatory surgery centers, specialty practices, and outpatient clinics. Simultaneously, massive hospital networks are consolidating or restricting health care access in rural communities. These changes contributed to a 5-point drop in the share of workers visiting emergency departments on the day of their injury.

Remote Work: Work-from-home options are increasingly used as “reasonable accommodations” for injured employees in some industry sectors. By eliminating commuting constraints, remote work structures allow injured employees to perform tasks virtually, mitigating lost-time indemnity claims.

AI: Beyond general system performance optimization, AI tools are being deployed for early-stage claim triage, automated medical bill auditing, and identification of potential litigation vulnerability. NCCI has also instituted formal governance structures for digital assets and initiated programs that leverage machine learning models to streamline the risk classification code assignment process.

Aging Workforce: Employees aged 55 and older now account for nearly one-quarter of the total labor force, a segment that will expand over the next decade. While the experience of older workers minimizes injury frequency, their physiological responses are more complex, yielding higher average medical costs and prolonged recovery periods.

“Demographic forces help to shape the workers’ compensation claim environment,” said Paul Hendrick, NCCI Practice Leader and Senior Actuary. “Factors such as employee tenure or the aging workforce are not abstract economic concepts; they have a real, tangible impact on the nature and frequency of claims that occur every day in the workers’ comp system.”

Learn More:

Steady Workers Comp Performance Masks Uneven Industry Realities

Triple-I State of the Line Issues Brief: Workers’ Comp (members only)

Facts + Statistics: Workplace Safety/Workers’ Comp

Spotlight On: Workers’ Compensation

Insurance Industry

Steady Workers Comp Performance Masks Uneven Industry Realities

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By William Nibbelin, Head of Industry Data and Actuarial Science, Triple-I 

While the workers’ compensation line continues to demonstrate remarkable resilience, underlying metrics indicate carriers must move beyond national averages to maintain long-term underwriting stability, according to the NCCI Annual Insights Symposium (AIS) 2026 – a key event for the workers’ comp industry.

“There’s not a single number that defines the workers’ compensation system,” said Donna Glenn, NCCI chief actuary, in her remarks on the NCCI State of the Line report. “Behind this year’s 91 combined ratio, factors such as industry mix, state differences, and carrier variation are all shaping results.”

Glenn added that insurers must interrogate the data and question these outcomes “to deliver deeper, actionable insights.”

State Differences

The workers’ comp system operates as a collection of unique jurisdictions with independent statutory frameworks and distinct economic exposures, creating variations in performance across states. NCCI acts as the licensed rating, advisory, and statistical organization for workers’ comp in most states, with California and New York being notable exceptions. Together, NCCI-rated states, alongside California and New York, make up 80 percent of the workers’ comp marketplace.

California results heavily skewed national reporting, with the state’s private-carrier accident-year combined ratio totaling 129 in 2025. Claims in the state can remain open after five years, at three times the national average, which has fueled a sharp escalation in cumulative trauma (CT) claims. Such claims now represent over 25 percent of all indemnity claims in the state, compared to a stable average of less than 5 percent across NCCI jurisdictions.

Litigation is another key driver, as more than 90 percent of CT claims in California become litigated. The transition to virtual case hearings has also allowed specialized legal firms to expand their reach statewide. Consequently, the California bureau filed a substantial 10.4 percent rate increase for late 2026.

In contrast, New York approved a loss cost decrease of 21.9 percent, effective late 2026, marking 10 consecutive years of downward rate adjustments. Workers’ comp writers in New York file for rate changes differently than those in California. In New York, they are required to use the New York Compensation Insurance Rating Board loss costs and, therefore, are only able to file loss-cost multipliers when filing for a rate change. In California, they can file loss costs in addition to their loss-cost multipliers.

New York also enforces strict medical treatment guidelines, generic drug formularies, and capped medical fee schedules that require extensive regulatory processes to alter.

On the exposure side, New York has experienced a noticeable post-pandemic structural shift in its economy. While overall total private sector jobs rose to 8.5 million, higher-risk sectors like construction and retail shrank by 7 percent and 9 percent, respectively, since 2019.

Regulatory Impacts

Looking at other states,Nevada was used as an example of how standalone statutory mechanisms impact actuarial trends. The state filed a standalone 21.6 percent loss cost increase for early 2026, an extreme outlier within NCCI states, driven by new state regulations. Senate Bill 317 effective October 1, 2026, will raise Nevada’s long-standing statutory cap limit on exposure reporting of $36,000 of an employee’s payroll to approximately $100,000.

Local medical and administrative delivery systems also impact state performances. NCCI actuaries evaluated temporary disability duration across claims closed within two years and observed substantial state-by-state disparities:

  • Low Duration States (e.g., Oregon, Vermont): 6–7 weeks on average.
  • High Duration States (e.g., the Carolinas, Georgia): 15 weeks on average.

Local care protocols, administrative efficiency, and attorney involvement amplify these disparities, with durations of litigated claims averaging six months longer than non-litigated counterparts.

“The time to close a workers’ compensation claim shows wide variation across jurisdictions: an additional 9 to 25 weeks after all medical services have been delivered”, said Raji Chadarevian, NCCI executive director for actuarial research. “That can have a meaningful impact on the cost of the claim.”

Industry-Specific Trends

At an industry level, claim trends diverge significantly from national averages:

  • Construction remains the largest industry sector by premium volume at 27 percent and achieved the largest drop in claim frequency at approximately 7 points between 2023 and 2024. Frequency decreased across each of its 10 largest job classifications, though medical severity remained the highest of any industry sector, driven by severe fall-from-height hazards. Notably, medical claim severity rose by a substantial 13 points between 2023 and 2024, with over half of the top ten construction classes reporting double-digit severity increases.
  • Health Care is, on average, a higher-frequency industry. Breaking from historical declines, claim frequency increased slightly in 2024, driven by significant multi-year employment growth that introduced a high volume of inexperienced, short-tenured workers. This was the sole sector that meaningfully contributed to job growth in 2025.
  • Office & Clerical roles are a historically low-frequency, low-exposure sector. Following a significant drop in frequency in 2020 due to widespread pandemic-related remote work, and a subsequent rebound in 2021, frequency decline has continued to outpace most other sectors. However, the sector recorded a slight increase in frequency in late 2024, primarily from a spike in motor vehicle accident claims for clerical workers whose professions involve driving.

Learn More:

Core Drivers and Emerging Risks for Workers’ Comp

Triple-I State of the Line Issues Brief: Workers’ Comp (members only)

Facts + Statistics: Workplace Safety/Workers’ Comp

Spotlight On: Workers’ Compensation

Cyber Risk, Insurance Industry

Bridging the Cyber Risk Resilience Gap Among Insurance Carriers

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By Lewis Nibbelin, Research Writer, Triple-I

Insurers bring considerable expertise to the cybersecurity landscape to help their commercial customers manage this growing risk, but even they are not immune to the threat. A new study from Triple-I and breach recovery company Fenix24 explores how insurers are managing cyber risk within their own operations and where gaps remain as attacks evolve.

Based on interviews with insurance industry executives across various organizational sizes and market segments, the study explains that, while most firms have invested in robust security practices, vulnerabilities persist in areas such as security testing and recovery readiness.

Though many insurers, for instance, reported maintaining immutable backups – i.e., files that cannot be altered and are thus protected from malicious action – definitions for such backups are not universally accepted, meaning standards for one company may not meet those of another. System updates to security weaknesses are similarly variable, with half of the participants indicating they deploy security patches monthly.

“Traditional compliance frameworks don’t move at the velocity of ransomware actors,” said Mark Grazman, Fenix24 CEO and co-founder, in a recent Executive Exchange with Triple-I CEO Sean Kevelighan. “When an organization gets on the phone and tells us, ‘Don’t worry, our data was immutable and therefore survived,’ there’s an 84 percent chance they’re wrong.”

While effective cyber resilience strategies will balance investments in both threat resistance and recovery, Grazman pointed out that “over 90 percent of budgets” are allocated to resistance alone, further reflecting organizations’ false sense of security in preexisting infrastructure against dynamic attacks.

“I’d liken it to, you have a fire extinguisher in the building, but you also have a fire escape,” Grazman said. “Having the focus to resist the attack does not preclude the need to make sure that, if an attack is successful, the organization can bring itself back online and keep its data.”

For large ransomware incidents as well as smaller-scale email compromises, Grazman emphasized that most attacks begin with identity hacking. Though all insurers in the report said they use corporate password vaults and require multi-factor authentication or hardware tokens for administrative accounts, several revealed they still allow less secure methods, exacerbating systemwide exposure.

Noting the convenience of such practices, Grazman encouraged organizations to “assume if the administrator can do it, so too will the threat actor.”  He added, “You’ve got to make it so even your own team couldn’t delete data without a very fixed time clock.”

Grazman recommended insurers uphold security practices that meet or exceed the minimum requirements they impose on policyholders, saying, “We need our carriers to continue doing what they’re doing and lead the pack in terms of resiliency, recovery, and setting a standard for themselves and their insureds that keep us all safer.”

Consumers and government also play a role in managing cyber risks, Kevelighan said, especially as businesses become more globally interconnected. He explained that just one sophisticated attack “could potentially generate billions and billions of dollars of losses, if not trillions,” as the disruption propagates across multiple businesses along a supply chain.

While cyber insurance can help mitigate these impacts, Kevelighan noted that many remain unaware of the coverage, necessitating greater outreach to stakeholders on coverage options and benefits.

Learn More:

Cyber Claim Severity Surges as AI, Litigation Accelerate Risk

Amid Data Boom, Actuarial Analysis Belongs in the Forefront

Tech — Especially A.I. — Is Top of Mind for Global Insurance Executives

As Global Risks Evolve, So Must Insurance

Executive Exchange: Insuring AI-Related Risks

Careers and Employment, Insurance Industry

Charting the Future
of Specialty Insurance: Sabrina Hart’s Journey
as an Industry Leader

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

As we celebrate Women’s History Month, Triple-I is spotlighting leaders shaping the future of insurance. Sabrina Hart, CEO of Munich Re Specialty North America (MRS-NA), shares her insights on leadership, innovation, and the growing role of women in specialty insurance.

“I get to work alongside incredible people who advance my continued learning and growth,” Hart said. “It is extremely rewarding to contribute to further shaping a culture where talented people can contribute, grow, and see themselves reflected in leadership.”

Hart joined MRS-NA in 2022 to expand the Excess & Surplus lines business and was named CEO in 2023. Reflecting on that transition, she emphasizes listening, learning quickly, and setting clear priorities.

“In specialty insurance, agility and disciplined underwriting are essential, so ensuring that teams understand both the strategic direction and their role in achieving it is critical,” she said. “Unleashing the power of Global Specialties allows us to better serve our customers and our distribution partners.”

Early roles at Marsh and Zurich North America, including chief underwriting officer and executive vice president of the Midwest Region, gave Hart a holistic view of the industry.

“Working across these perspectives provided a broad view of the industry and reinforced how important relationships, trust, and transparency are in our business,” she noted. “The best leaders stay close to the fundamentals, understanding the customer, empowering experts to make decisions, and creating an environment where people feel accountable and supported.”

Her education – a bachelor’s degree in mathematics and completion of the Executive Management Program at Kellogg School of Management – has shaped her disciplined approach to leadership and decision-making.

Hart also helped advance inclusion in the industry by co-founding Zurich North America’s Women’s Innovative Network around 2007–2008. The initiative began after she attended an industry presentation on future workforce demographics that highlighted the growing diversity of the talent pipeline.

“At the time, projections showed that by 2020 about 54 percent of college graduates would be women,” Hart recalls. “It underscored that diversity and inclusion weren’t just cultural priorities. They were strategic imperatives for attracting the best talent and serving an increasingly diverse client base.”

The network was designed to create a structured forum where women could connect, share experiences, support one another, and build leadership capabilities. Over time, it has grown into a successful community that helps strengthen the industry’s leadership pipeline.

At MRS-NA, Hart focuses on attracting and retaining top talent by fostering meaningful work, growth opportunities, and a culture where expertise is valued. She sees the future workforce as increasingly interdisciplinary, combining underwriting, analytics, technology, and risk expertise.

Mentorship and sponsorship have also played a pivotal role in her career.

“Creating space for conversations about career growth and skill development, as well as helping others see opportunities they may not have considered, is essential,” she said.

Hart’s advice to young women considering insurance careers?

“Diverse viewpoints are essential to solving complex challenges,” she said. “Be curious and open to different experiences; be a lifelong learner. Build transferable skills and relationships, balance technical skills with interpersonal skills, seek mentors, and stay confident in your voice and perspective.”

Looking ahead, Hart is encouraged by the growing presence of women in leadership across insurance.

“Organizations are increasingly recognizing that diverse perspectives drive stronger decisions and better outcomes,” she said. “As that momentum continues, I’m confident we’ll see even greater representation and impact from women across our industry.”

Careers and Employment, Insurance Industry

Women’s History Month: Kristen Martin’s
Full-Circle Journey
to Leading Utica National

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

During Women’s History Month, the insurance industry celebrates leaders who are shaping its future. One such leader is Kristen Martin, President and CEO of Utica National Insurance Group, whose path to the top reflects both determination and the power of community support.

Martin became CEO in 2024, following the retirement of Richard Creedon. For her, the role is deeply personal. Growing up near Utica National’s headquarters, she passed it almost every day and even visited as a middle schooler for a Legal Eagles program.

“Leading the organization today feels surreal,” Martin said. “It’s a full-circle moment that underscores my connection to Central New York and the people who have helped shape my career.”

She credits mentors, colleagues, family – including her husband, sister, and sister-in-law – and close friends, for supporting her ambitions while raising a family. Raising two sons with a partner who shares responsibilities has given them a healthy view of teamwork and respect. Martin hopes they continue to embody values she sees in them already: kindness, responsibility, and the importance of showing up for others.

“You can be a dedicated parent, partner, and professional simultaneously,” she said. “Leading Utica National shows the power of support, representation, and community, and motivates me to help others feel the same sense of possibility.”

Martin’s career began at Utica National in 2001 as an examiner after working as a trial attorney. Claims work, she explains, is one of the best ways to understand the insurance business, offering insight into distribution, underwriting, risk management, and customer impact. Those early experiences shaped her leadership philosophy: ask thoughtful questions, stay curious, and consider the real-world consequences of every decision.

Over the years, Martin held roles across underwriting operations, governance, and executive leadership. Serving as President and COO starting in 2019 provided valuable preparation for the CEO role. Positions such as Corporate Secretary to the Board and General Auditor broadened her understanding of governance, risk, and operational mechanics. Combined with her legal training at Albany Law School, Martin developed a disciplined approach to decision-making, emphasizing clarity, scenario planning, and evaluating impact.

Despite progress, women currently hold only about 22 percent of C-suite positions in insurance. Martin believes progress requires three key shifts: openly discussing resilience, letting go of perfectionism, and being clear about career goals.

“Build a support system, take care of yourself, and ask for what you want,” she said. “None of us succeeds by ourselves.”

Addressing the industry’s talent gap is another priority. Martin emphasizes early exposure through internships, which allow early-career workers to connect with industry professionals and explore multiple career paths. “Leadership isn’t the only path to a meaningful career. Individual contributor roles are equally valuable. Mentorship is also critical, helping young professionals grow while staying authentic.”

For young women considering insurance, Martin advises them to “surround yourself with diverse perspectives, step outside your comfort zone, keep learning, and don’t be afraid to ask for what you want. Persistence and authenticity are essential.”

Martin is optimistic about the next generation. Through internships, she sees young women arriving confident, curious, and eager to learn about leadership and career paths.

“As I meet our interns and see the confidence and curiosity they bring, it makes me incredibly positive about the future,” she said. “When I think about where they’ll be in 15 or 20 years, I see a generation of women who will continue to expand opportunities and shape the future of this industry.”

Insurance Industry, Insurers and the Economy, Reinsurance and E&S

Triple-I Features Lloyd’s in Latest Issue Brief

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A diagram of Lloyd's, depicting the integration of the 3 core groups in the marketplace: Members, Syndicates, and Managing Agents

Triple-I’s latest Issues Brief, Lloyd’s: Trends and Insights, spotlights one of the world’s leading specialist insurance and reinsurance marketplaces. The brief explains how the nearly 350-year-old platform has functioned differently from the common stand-alone model while evolving into an integral source of capacity and resilience for the global 21st-century risk landscape.

Contrary to a common misperception, Lloyd’s is not a single insurer; rather it’s a marketplace – i.e. hub, network, platform – connecting risk brokers, underwriters, and capital providers who negotiate the transfer of risk. It consists of three core groups:

  • Members: Persons or corporate entities that provide the capital that funds a syndicate.
  • Syndicates: An accounting construct with assets, liabilities, and Profit and Loss (P&L) statement segregated from those of other Lloyd’s syndicates.
  • Managing Agents: Entities appointed by syndicate members to handle underwriting and claims, as well as oversee the governance and operations on behalf of the syndicates.

The arrangement allows policies to have multiple underwriters, enabling each underwriter to  take on more risk than they would have the appetite for as a sole underwriter. As a result, complex and hard-to-place risks can be covered.

​Another distinctive feature of Lloyd’s is its capital structure, also known as the “Chain of Security.”  The brief explains how the Chain of Security is designed to provide the financial backing for all insurance policies written at Lloyd’s. As a result of this setup, the major rating agencies typically apply a single financial strength rating (FSR) to all the policies written through Lloyd’s, regardless of which syndicates participate in the policy.

Successful handling of long-tail and complex risks –  where claims may emerge decades later  –  can be vital to fostering confidence in the larger insurance industry. Throughout its long history, Lloyd’s has been called upon to absorb extreme and unexpected losses while paying claims and recapitalizing. This track record includes playing a key role in supporting U.S. economic recovery, from major disasters, such as the 1906 San Francisco earthquake, the September 11 attacks, Hurricane Katrina, and more recent hurricanes and wildfires.

Managing uncertainty in today’s fast-evolving risk landscape can require keeping abreast of interconnected threats that outpace traditional risk management strategies. Insurers and risk managers can improve the prediction and prevention of emerging threats across core strategic areas:

  • ​advancing analytics capabilities
  • strengthening capital resilience
  • collaborating across the industry

Centering these objectives, Lloyd’s cultivates channels for talent development, innovation, and new capital flows.

For example, its London Bridge 2 (LB2) platform gives institutional investors a flexible and efficient means to deploy funds into the Lloyd’s market, attracting approximately $2.5 billion in new capital since its launch in 2022. Lloyd’s education platform supports the sustainable growth of the market by equipping professionals with the insight needed to navigate the emerging risk landscape. And, Lloyd’s Lab – a product development accelerator designed to rapidly develop, test, and refine new products, concepts, and solutions – supported 48 U.S. startups, which collectively have raised $490 million to scale solutions tackling wildfire, flood, and cyber risks.

The United States is Lloyd’s largest market, accounting for roughly half of the marketplace’s global premiums. Excess and surplus underwriting accounts for over 60 percent of Lloyd’s total premiums written in the U.S. In 2024, this share worked out to $20.8 billion in surplus lines insurance capacity, approximately 16 percent of the entire U.S. surplus lines market.  Additionally, Lloyd’s gross written premiums for U.S. reinsurance totaled $9.86 billion in 2024, with the marketplace ceding around $2.9 billion annually in reinsurance premiums to U.S. reinsurers.

This special edition of the Triple-I issue brief series is part of ongoing efforts to educate and raise awareness about how insurance market participants support coverage affordability and availability.

Affordability, Homeowners Insurance, Industry Financials, Insurance Industry, Severe Convective Storm, Technology

Inflation, replacement costs, climate losses shape homeowners’ insurance options

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A person's hands are arched over a small model of a home that is placed on top of an insurance contract.

The homeowners insurance market is catching up to its cost drivers while still facing challenges to affordability and availability. Rates continue to climb as natural disasters intensify and replacement costs rise, but industry analysts expect meaningful improvement over the next two years. A new Triple-I Issues Brief provides a snapshot of the market’s performance and outlook, and discusses how some trends are shaping its future.

The latest results for the product line have helped narrow the anticipated 2025 gap between the performance of the personal and commercial lines. Despite a volatile start to 2025 driven largely by January’s destructive Los Angeles wildfires, homeowners insurance is still headed for double-digit net written premium growth this year.

With ​​nearly half of all homes in the United States at risk of “severe or extreme” damage from weather related events, climate risk looms large. In January 2025, the U.S. Department of the Treasury released “Analyses of U.S. Homeowners Insurance Markets, 2018-2022: Climate-Related Risks and Other Factors.“ a report based on the most comprehensive and granular snapshot of the homeowners insurance market to date. The agency found that climate risk is making it more costly for insurers to operate, as insurers’ costs in 2018-2022 were higher in areas with the highest expected losses from climate-related perils. The paid loss ratio, which reflects how much insurers paid for claims relative to the premiums they collected, was highest in the highest-risk ZIP Codes.

In 2025, the U.S. experienced its first hurricane season without a single landfall in a decade. However, the Triple-I issue brief explains, while 2025 economic losses from natural catastrophes are running below recent averages, other perils — such as severe convective storms, wildfires, and flash flooding — are becoming formidable sources of insurer loss. These increasingly frequent moderate disasters are challenging traditional catastrophe models built around infrequent peak perils, such as major hurricanes.

At the same time, soaring replacement costs have become the new normal for the homeowners market. Repair and rebuilding expenses have jumped nearly 30 percent over the past five years, fueled by inflation, supply-chain disruptions, rising construction material prices, labor shortages, and, more recently, new federal tariffs. Although the full impact of these tariffs has been milder than expected so far, the worst effects may simply be deferred until 2026 as inventories decline. Rising replacement costs translate directly into higher claim payouts, placing additional pressure on insurers and, ultimately, policyholders.

Beyond tariffs, other political and regulatory shifts are adding a new uncertainty as federal disinvestment in climate monitoring and mitigation may impede the insurance industry’s ability to accurately price risk, predict future losses, and, ultimately, provide affordable coverage. Meanwhile, several states grapple with balancing affordability with the stability and solvency of their insurance markets.

Insurance pricing must reflect these increased risks to maintain policyholder surplus, the funds regulators require insurers to keep on hand to pay claims. If premium rates fail to reflect increased costs, insurers may rapidly drain their policyholder surplus. This issue brief discusses how emerging technologies, such as advanced predictive analytics, aerial imagery, and smart-home sensors, could pave the way for more accurate pricing, faster claims processing, and improved risk prevention.

An Insurance Research Council (IRC) study indicates that homeowners familiar with some AI-driven insurance solutions view pricing using those technologies as fairer and express fewer concerns overall. These tools may play a critical role in bolstering affordability, rebuilding trust, and strengthening the resilience of the homeowners’ insurance sector amid escalating climate and economic pressures.

The issue brief’s list of factors and trends impacting the homeowners’ market isn’t intended to be exhaustive. Accordingly, future briefs on homeowners (or property lines in general) may highlight other pertinent topics, such as the link between insurance premiums and property prices. While home values in high-risk areas can often be diminished by rising premiums, higher home values can generally mean higher replacement costs, and consequently, lead to higher premiums. As of early 2025, home prices are up 60 percent nationwide since 2019 and still rising by 3.9 percent YoY, according to the Joint Center for Housing Studies at Harvard University. The Harvard report cites Freddie Mac data indicating home insurance premiums jumped 57 percent from 2019 to 2024.

We invite you to read our take on the homeowners’ market and follow our blog to keep abreast of key issues impacting the industry.

Careers and Employment, Insurance Industry

BIIC Publishes New Research Advancing Pathway for Black Leadership in Insurance

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While the insurance workforce has become incrementally more diverse, Black professionals remain starkly underrepresented in C-suites and senior leadership.

The Black Insurance Industry Collective (BIIC) recently released a report, Fostering Black Leadership in Insurance, which calls attention to this industry-wide leadership gap.

The report explains how organizations can take strategic, data-driven actions to identify and overcome the structural barriers limiting the advancement of Black professionals in the industry.

Bureau of Labor Statistics data cited in the report shows that, in 2024, Black professionals made up 14.7 percent of the insurance workforce, up from 9.9 percent 10 years ago. Yet only 1.8 percent of executives at the 10 largest insurers were Black. Research shows companies with diverse leaders benefit, however.

“BIIC’s mission is to help the industry move from awareness to action,” says Amy-Cole Smith, Executive Director for BIIC/Director of Diversity at The Institutes. “Using various data sources, our report scans Black professionals’ representation in insurance, analyzes key structural challenges, and gives recommendations for setting targets and integrating accountability.”

The collective’s new report furthers its commitment to “identifying organizational strategies that enable talent to break through mid-level ceilings and into the C-suite.” It explains how diversity in senior management can positively affect brand, organizational culture, and the bottom line. Successful outcomes can include demonstrating a commitment to diversity in both the workforce and consumer markets, expanding organizational diversity, and achieving higher profits.

The report identifies four imperatives for measurable and sustainable progress:

  1. ​Accountability and transparency with data;
  2. Sponsorship initiatives to support potential leaders;
  3. Equitable succession planning that prepares diverse candidates before leadership vacancies arise; and
  4. A culture of psychological safety

These findings were the result of tackling the essential question, “Why haven’t hiring gains translated into increased representation in upper management?” Inequitable hiring and promotion, biased performance reviews, limited recruitment channels, and cultures that value “fit” over actual value can weaken the leadership pipeline. Many of these issues can occur across all organizational levels, but their cumulative effect is most evident in the C-suite.

For example, the report highlights the “glass cliff” phenomenon, whereby Black and other underrepresented professionals are often only promoted to senior roles during periods of organizational crisis. Explaining the lack of adequate support and long-term strategic commitment that often accompany these highly visible promotions, the report argues that this scenario heightens the risk of failure for newly appointed leaders and reinforces biased perceptions of leadership capability.

Putting a new leader on the glass cliff creates doubt about an organization’s overall commitment to maintaining a diverse workplace. BIIC indicates that a better course of action would require a strategic commitment to equity, such as involving Black professionals in succession planning during stable periods to prepare them for long-term success, rather than being positioned as last-resort problem solvers.

There is a discussion of problematic recruiting conventions, such as the tendency of hiring managers to use the word “qualified,” particularly in conversations about expanding recruitment to include more diverse candidates. This habit can perpetuate the bias that “diverse” and “qualified” candidates are mutually exclusive groups. Further, the word “qualified” isn’t tied to specific, objective, and job-relevant criteria. The resulting ambiguity allows the personal preferences of individual hiring managers (e.g., educational background, accent, or appearance) to shape their assessment of a candidate’s suitability, rather than focus on actual skills and ability to perform the job.

Community insights collected through BIIC’s engagements with more than 4,000 professionals reveal that career advancement can be hampered by a lack of visibility, insufficient exposure to decision-makers, or unclear career advancement pathways. Participants emphasized the importance of candid communication with managers, organizational agility, and access to leadership development opportunities in overcoming these barriers.

BIIC, a five-year-old nonprofit that is an affiliate of The Institutes, has worked to provide career advancement infrastructure for Black professionals – a strong network of peers, opportunities to learn from industry executives, and expanded resources through strategic partnerships such as 2022 collaboration with Darden School of Business at The University of Virginia.

Cole-Smith says, “BIIC’s goal is not only to elevate individual careers but also transform the industry’s leadership landscape, ensuring that diverse perspectives and voices shape its future.”

The insurance industry’s future depends on serving diverse communities, which requires addressing structural challenges and investing in inclusive leadership. Fostering Black Leadership in Insurance urges prompt action and systemic transformation. Even as workforce representation improves, advancement into executive ranks can remain restricted by persistent inequities unless organizations rise to the challenge.

Homeowners Insurance, Insurance Industry

COTW: Native Americans Face Heightened Extreme Weather Risks. 

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The bottom background color is white and displays a chart to the left and a text box to the right Chart Details: Title: American Indian and Alaska Native (AIAN) Population by County Subtitle: (Percent of Population) Chart description: A map colored by county in varying shades of blue Chart Data available upon request. The source data line reads: Sources: Analysis: Insurance Information Institute, Data: Census through Rural Health Information Hub; (As of 11/11/2025). The Census uses “AIAN” to represent people who self-identify as American Indian and Alaska Native. The first line of text, in a dark blue bolded font: The AIAN population is estimated to be about 7.1 Million or about 2.1% of the total U.S. population. Below, in plain black font, it says Key Numbers for AIAN: followed by the following two lines, each sentence a bullet point: 50.9% live in Oklahoma, Arizona, California, New Mexico, and Texas; facing heightened risks from wildfires, floods, tornadoes, and droughts. AIAN face higher death rates from extreme weather events than the total U.S. population, 0.6 per 100,000 compared to 0.2 per 100,000.
Chart of the Week 11 18 2025: Native Americans Face Heightened Extreme Weather Risks

As part of an ongoing discussion on the link between the housing and insurance markets, the Insurance Information Institute (Triple-I) released a Chart of the Week (COTW) that provides a snapshot of climate risk concerns for American Indian and Alaska Native (AIAN) population.

The provided estimate for the number of Native Americans in the U.S. is 7.1 million – about 2.1 percent of the total population. As much as 95 percent of the general U.S. population lives in a county that has experienced a natural disaster since 2011. However, this COTW says at least 50.9 percent of Native Americans live in states facing heightened risks from wildfires, floods, tornadoes, and droughts. The chart also reveals that Indigenous people in the U.S. face higher death rates from extreme weather events than the total national population, at 0.6 per 100,000 compared to 0.2 per 100,000.

Native communities are situated on the front line of climate risk.

As insurance is designed to help policyholders and their communities recover from insurable events, coverage availability and affordability can contribute to resilience. However, states that are home to at least half of the U.S. Native American population rank high on the Insurance Research Council (IRC) report, Homeowners Insurance Expenditures as a Percent of Median Household Income – Oklahoma (4th), Arizona (5th), Texas, (6th), New Mexico (14th), California (25th) – indicating comparatively less coverage affordability in those states. While availability and affordability can ultimately be driven by a mix of key underlying cost drivers, climate risk and home-ownership challenges can play a crucial role in access for many Native American homeowners.

Extreme weather events, such as hurricanes and typhoons, have shaped the way colonization of North America unfolded, beginning in the early centuries of European contact. For thousands of years prior, Native Americans had thrived in their homelands by taking measures to survive long-term severe weather, such as seasonally migrating away from flood-prone areas or building nature-based infrastructure as needed. Colonial expansion, in which Indigenous people lost nearly 99 percent of their historical land base over time, decimated Indigenous populations and pushed survivors into high-severe-weather-risk areas or lands, in many cases previously unknown to their respective tribal groups.

As a result of centuries of these forced removal policies and government-directed or sanctioned land dispossession, present-day Native American lands “are also generally far from historical lands, averaging a distance of roughly 150 miles” and are often in inherently more climate risk-prone areas today – i.e., low-lying, exposed, less habitable due to drought, etc. Living today on the front lines of climate risk across the U.S. means frequently experiencing acute effects, such as thawing permafrost, rising sea levels, increased flooding, stronger storms, erosion, and shifting ecosystems.

For instance, a 2024 study indicates that Oklahoma, home to 39 federally recognized tribal nations, “faces climate and demographic changes that disproportionately put many Native Americans at risk. The heavy rainfall, 2-year floods, and flash floods are all projected to have increased risks by 501.1 percent, 632.6 percent, and 296.4 percent, respectively.”

In a village in western Alaska, where permafrost is thawing, buildings (including a preschool) are shifting, water intrusion is increasing, and relocation is becoming a real threat. Recently, nearly 50 Alaska Native communities experienced “towering wind speeds, record storm surge, and widespread flooding”, resulting in at least one death and the displacement of 1,500 people. Initial estimates have reported that the storm decimated 90 percent of homes in the coastal village of Kipnuk and 35 percent in Kwigillingok, “which has also experienced toxic chemicals spilling into its freshwater supply.”

Climate risk can threaten lives and property, of course, but also regional economies, one of the key ingredients in building capacity for resilience. For example, a study of climate-driven economic challenges posed to Navajo Nation, the largest Indian reservation in the U.S., shows that “drought has a larger impact on cattle production than hay production, resulting in total economic losses of $8.2 million and $0.4 million for the cattle and hay sectors, respectively.” Without robust regional economies, infrastructure, or policy support, Native American homeowners and their communities may struggle to adapt or relocate effectively.

Homeownership costs may contribute to the protection gap.

Native American homeowners are more likely to lack coverage if they:

  • Are homeowners living in New Mexico and certain rural areas of Texas
  • have manufactured homes, or
  • own inherited homes.

Data collected through the Home Mortgage Disclosure Act (HMDA) reveals that Native Americans, on average, pay more to finance their homes – in some contexts up to two times more. While that disparity can be attributed to several factors, one major driver is the loan type that appears to be more common among Native borrowers, home-only loans. “Nearly 40 percent of loans to Native American borrowers on reservations were for manufactured homes, compared to 3 percent of loans to White borrowers”. Further, about 8 out of 10 manufactured-home loans were home-only loans.

Home-only loans, a financing tool used for movable personal property in which the lender retains ownership of the property until the borrower fully pays the loan, can make financial sense in some instances. Nonetheless, borrowers typically pay higher interest rates and have fewer consumer protections, such as federal guarantees, than regular mortgages. The pressure of these circumstances may compel the homeowners to carry insufficient coverage, or, when they pay off the loan, none at all.

Federal funding freezes can impede resilience.

Data from the National Congress of American Indians show that “U.S. citizens receive, on average, about $26 per person, per year, from the federal government, while tribal citizens receive approximately $3 per person, per year.”  Recent federal disinvestment in 2025 from crucial risk prevention and management programs and other supportive infrastructure –  including public radio stations which can be used for advance severe weather warnings and coordination of disaster recovery efforts – has exacerbated the burden from longstanding disparities. This decrease in support can also heighten the need for insurance coverage and closing the protection gap.

Amy Cole-Smith, Executive Director for BIIC/ Director of Diversity at The Institutes says, “the numbers are clear: Native Americans face higher exposure to extreme weather, higher insurance burdens, and higher rates of being uninsured. These factors reflect not just climate trends but historical inequities that continue to shape outcomes today. Strengthening coverage access is essential to protecting lives, homes, and cultural continuity.”

As Smith has often expressed, one way the industry can start closing the protection gap is “by having people at the table who understand the lived experiences behind the numbers.”

Triple-I works to advance the conversation around crucial issues in the insurance industry. We invite you to follow our blog to learn more about trends in insurance affordability and availability across the property/casualty market.

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Chart of the Week, “U.S. GDP and Insurance Growth Bolstered by Hispanic and Latino Community.”

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Chart of the Week (COTW), "U.S. GDP and Insurance Industry Growth Bolstered by Hispanic and Latino Community

Even as Latinos continue to play an essential role in the U.S. economy, Latino representation of insurance industry workers fell slightly in 2024, to 14.9 percent, from 15.3 percent in 2023, according to a recent Triple-I “Chart of the Week”. The highest representation of this demographic was 18.3 percent of insurance sales agents, with claims and policy processing clerks following closely, at 17.7 percent. The lowest representation was among underwriters, at 8.8 percent.

The chart — “U.S. GDP and Insurance Industry Growth Bolstered by Hispanic and Latino Community.”  — is based on data from the Bureau of Labor Statistics and the U.S. Latino GDP report.

From 2019 to 2023, Latinos drove 30.6 percent of U.S. GDP growth despite making up only about 20 percent of the overall U.S. population (by 2024) and 19.4 percent of the workforce. Latinos generate a GDP of $4.1 trillion by 2023 (up from $3.7 trillion in 2022), sufficient to rank alone as the fifth-largest GDP in the world. The Latino consumer market, with $2.7 trillion in consumption in 2023, has a buying power larger than the economies of powerhouse states such as Texas ($2.58 trillion) and New York ($2.17 trillion).

The National Association of Hispanic Real Estate Professionals predicts that Latinos will be the largest group of homebuyers in the country by 2030. Homeownership for this group is 9.8 million households, with 238,000 new Latino owner households added in 2023 alone —the largest increase of any racial or ethnic group for the second consecutive year. Data analysis indicates there may be more than 30 million new Latino drivers hitting the roads through 2050. Latinos are also the fastest-growing group of entrepreneurs, according to the Stanford Latino Entrepreneurship Initiative.

Effectively engaging this formidable market creates immense opportunity for the insurance industry. However, only just over half of the respondents to a survey conducted by Marsh and the Latin American Association of Insurance Agencies (LAAIA) said they believed their companies were invested in attracting Hispanic customers. Nearly two-thirds of respondents said insurers do not employ enough Latinos. Only 14 percent thought insurers employed an adequate number. Moreover, 84 percent agreed that Latinos are underrepresented in the senior management of most insurance companies.

Efforts to create a diverse and inclusive workforce can drive greater client satisfaction and loyalty.  As Amy Cole-Smith, Executive Director for BIIC/ Director of Diversity at The Institutes, has pointed out, “this isn’t just about equity —it’s about unlocking growth and staying competitive in a changing market. When the insurance workforce reflects the diversity of the market, we’re in a stronger position to build products that meet people where they are.”