Category Archives: Regulation

Catastrophes, Disaster Preparedness, Disaster Resilience, Flood Insurance, Floods, Regulation, Risk-Based Pricing

NFIP Proposals Highlight Urgency of Collective Action on Resilience

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By Lewis Nibbelin, Research Writer, Triple-I

Proposed reforms to FEMA’s National Flood Insurance Program (NFIP) would expand the role of private insurers in the flood market as part of a broader push for state and private sector participation in long-term disaster management and resilience.

Congress established NFIP in 1968, at a time when few private insurers were willing to write flood coverage. While private participation in the flood market has grown in recent years, NFIP has continued to cover more than half of all U.S. homeowners with flood insurance.

In their report released May 7, the FEMA Review Council described NFIP as “unsustainable” and “burdened by over $20 billion in debt” due to its “one-size-fits-all” approach to flood mapping, which “does not fully capture current or emerging flood hazards” on national and local scales. These shortcomings have contributed to inadequate insurance pricing and flood risk misconceptions among homeowners, exacerbating low flood insurance take-up rates in at-risk communities, the report said.

To ensure the availability of comprehensive flood protection, the report recommended establishing a depopulation program or a centralized flood insurance marketplace to shift more policies into the private market. Risk-based pricing for NFIP policyholders can also incentivize private involvement, the report said, as premiums adjust to reflect actual risk.

This transition builds upon NFIP’s Risk Rating 2.0 reforms, which aimed to make premium rates more actuarially sound and equitable by better aligning them with individual, property-level risk. As NFIP rates became further aligned with principles of risk-based pricing, some policyholders’ prices fell as many others rose, which boosted private market opportunities. Updates to the reforms based on new data could attract even greater private participation, the report said.

Private coverage gaps

Though flood was once considered an “untouchable” risk for the private market, advanced analytics capabilities and data sources have helped give them the comfort and flexibility they need to write the coverage. Federal regulations introduced in 2019 also allowed mortgage lenders to accept private flood insurance if the policies abided by regulatory definitions, propelling double-digit growth in private appetite.

Despite growth, private companies currently write only 27 percent of the flood market. Roughly 4.7 million homeowners have flood coverage through NFIP nationwide.

Mark Friedlander, Triple-I’s senior director of media relations, told USA Today Florida Network that private insurers are unprepared to take on all the risk NFIP covers, especially as flood risk severity rises.

“While private flood insurance is growing, NFIP remains vital for providing widespread, actuarially sound coverage against damages excluded from standard homeowners policies,” Friedlander said.

Ahead of a temporary NFIP lapse in 2025, a letter penned by organizations across the risk and insurance industry suggested the program’s absence “could further impact affordable housing, create additional challenges for small businesses, unnecessarily further increase the cost of homeownership, and must be avoided.”

Resilience key to insurance availability

For communities that invest in floodplain management, disbanding NFIP could disqualify homeowners from flood insurance premium discounts. FEMA currently incentivizes such practices through its voluntary Community Rating System, which rewards NFIP policyholders with corresponding discounts as high as 45 percent.

At a meeting with the FEMA Review Council before the 2025 lapse, NAIC members expressed support for these mitigation initiatives, with North Dakota Insurance Commissioner and NAIC Past President Jon Godfread adding “state insurance regulators are committed to expanding access to flood insurance through both the NFIP and private coverage.”

The recent restoration of FEMA’s Building Resilient Infrastructure and Communities (BRIC) program underscores the benefits of such multi-sector collaboration. Before its cancellation last year, the program had allocated more than $5 billion for investment in mitigation projects to alleviate human suffering and avoid economic losses from floods, wildfires, and other disasters.

Reinstated with several new rules to improve its impact, BRIC also “isn’t a perfect program, but it’s a necessary one,” said Daniel Kaniewski, CEO of Northstar Risk & Resilience, a former FEMA deputy administrator, and a Triple-I non-resident scholar. Though changes to the program may drive smarter resilience investment, he cautioned that “BRIC alone – or any federal program on its own – isn’t going to close the nation’s disaster resilience gap.”

“It’s going to take community leaders, emergency managers, businesses, nonprofits – and, of course, the insurance industry – pulling in the same direction,” Kaniewski said. “The burden can’t exclusively fall on property owners and federal taxpayers.”

Insurers have worked hard to develop partnerships that address these challenges. Strengthen Alabama Homes, for instance – financed by the insurance industry with more than $86 million in grants since 2016 – offers homeowners’ insurance discounts for those who build or retrofit their homes to voluntary IBHS construction standards for wind and hail resilience, prompting numerous states to implement their own programs.

Incentives and public-private collaboration will be critical to keeping insurance affordable and available amid the mounting toll of extreme weather. Swiss Re data indicates flooding, wildfires, and severe convective storms drove a record 92 percent of total global natural catastrophe insured losses in 2025, fueling a “decades-long trend of rising baseline risk.”

Learn More:

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Catastrophes, Coastal Property, Disaster Preparedness, Disaster Resilience, Hurricane, Regulation, Risk-Based Pricing

N.Y. Natural Catastrophe Exposure Highlights
Risk-Based Pricing Benefit

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By Lewis Nibbelin, Research Writer, Triple-I

New York may be less exposed to frequent natural catastrophes than states like Florida or California, but it is far from immune to massive catastrophe losses.

A recent white paper by risk modeler Karen Clark & Co (KCC) cautions against underestimating the Empire State’s vulnerability – or that of other states not typically identified with large-scale natural disasters. A future 1-in-100-year hurricane event in New York could cost insurers more than $100 billion, KCC reported, with a 1-in-250-year event potentially costing twice as much.

“Beyond hurricanes, New York also experiences substantial impacts from both severe convective storms and winter storms, which together generate almost $1 billion in average annual property losses in the state,” KCC notes.

As state lawmakers consider strengthening requirements for prior approval of premium rate increases to rein in rising costs, KCC suggests that cost reduction strategies that account for these potential impacts would help ensure “property insurance remains both available and affordable.”

Underlying cost drivers

New York is exposed to nearly $9 trillion in potential insured losses, $6 trillion of which is concentrated along the coast. Contributing factors include property location and associated rebuilding costs, demonstrating, in part, demographic shifts placing more people in harm’s way, KCC said.

“Even if rates remain constant, premiums will rise over time to reflect the increasing cost of construction,” the report said. It added that such costs for an average single-family home have doubled over the past decade.

With trillions in loss exposure, the state faces outsized impacts, even from less intense storms. For instance, Hurricane Sandy in 2012 – despite making landfall in New Jersey as a Category 1 storm – generated almost $10 billion in insured losses in New York. Based on current exposure, insured losses in New York would exceed $13 billion, with total losses climbing to $31 billion.

A Category 3 hurricane that made landfall in the state in 1938 would produce more than $20 billion in insured losses today, KCC said. The state’s “worst-case scenario,” however, is if a similar storm hit close to Rockaway Beach in New York City, as losses in the hundreds of billions would ripple through “the most populated areas of the state.”

Sustaining market health

In testimony to the New York State Senate in November 2025, the American Property Casualty Insurance Association (APCIA) estimated that such an event “would wipe out 69 years of homeowners’ insurance return on net worth. ” APCIA noted that New York State is second only to Miami in vulnerability to a hurricane exceeding $100 billion in losses.

At the same state senate hearing, Triple-I Chief Insurance Officer Patrick Schmid testified on market adjustments insurers made in the wake of Hurricane Sandy, such as updating rates and establishing reserves for Sandy-related claims that extended beyond the year of impact.

These changes have allowed state homeowners’ insurance premiums to remain “relatively average and reasonable as a percentage of household income,” contradicting “the narrative of an affordability crisis in New York’s homeowners’ insurance market,” Schmid explained.

“In other words, the ‘profitable decade’ reflects a market that learned from a major catastrophic event and adjusted accordingly,” Schmid said. “This is how insurance markets should function.”

Importance of risk-based pricing

Insurance pricing must reflect increased risks to maintain policyholder surplus, or the funds regulators require insurers to keep on hand to pay claims. Regulatory constraints on risk-based pricing in some states have forced insurers to write fewer policies or withdraw from state markets entirely, leading to less affordable and available coverage.

Unlike its homeowners’ market, New York’s auto expenditures rank among the highest in the country, driven by repair costs as well as accident frequency and fraud, according to a Triple-I Outlook. Proposals to give New York regulators the authority to block auto premium rate changes could erode surplus and further push insurers to rethink their risk appetite in the state, which already imposes a restrictive “excess profit” law.

The role of profit in insurance pricing is not merely to reward insurers for the risks they assume. As KCC puts it, profit is “the mechanism through which insurers compensate capital providers for risk.” Rather than intervene in insurance markets, policymakers should aim to provide “a regulatory environment that allows insurers flexibility to set adequate rates.”

Learn More:

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Triple-I Brief Explains Benefits of Risk-Based Pricing of Insurance

Disaster Preparedness, Regulation, Terrorism Risk

TRIA Reauthorization Bill Advances to the House

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By Lewis Nibbelin, Research Writer, Triple-I

A bill that would extend the Terrorism Risk Insurance Act (TRIA) through 2034 recently cleared a U.S. House committee with strong bipartisan support, offering hope for the program’s renewal later this year.

Enacted in 2002 after the Sept. 11, 2001, attacks, TRIA created a federal backstop that shares catastrophic terrorism losses between insurers and the government, allowing private insurance markets and other industries to remain stable while absorbing such events. Congress has reauthorized TRIA four times since its inception, and no events have yet triggered the backstop.

With TRIA scheduled to expire at the end of 2027, many commercial property/casualty insurers are already preparing for the program’s potential lapse, driving risk and insurance leaders to urge proactive legislation ensuring its continuation.

“American businesses must be provided with the essential coverage to successfully operate in today’s uncertain global environment,” said Will Melofchik, CEO of the National Conference of Insurance Legislators, in a statement on the bill last year. “Failure by Congress to extend TRIA would likely result in the inability of insurers to offer coverage for future catastrophes resulting from terrorism, making terrorism risk insurance unavailable and unaffordable.”

Testifying on behalf of the National Association of Insurance Commissioners (NAIC), former Connecticut Insurance Commissioner and NAIC past president Andrew N. Mais said, “Businesses and consumers that live, work, and shop in communities in every state benefit from a stable insurance sector, which provides commercial terrorism insurance only because TRIA exists as a backstop.”

“Absent TRIA or a similar solution, we do not believe private insurance carriers would make meaningful capacity for affordable commercial terrorism coverage available,” Mais added.

Though the bill may evolve as it passes through the full House and Senate, it currently would raise the minimum loss threshold of $5 million to $10 million in 2029, as well as introduce a transparency measure that requires the Treasury Department to publish a notice in the Federal Register no less than 30 days after beginning the terrorism determination process.

Affordability, Auto Insurance, Insurers and the Economy, Legal Environment, Regulation

La. Auto Insurance Rates Benefit From Declines
in Frequency, Severity

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By Lewis Nibbelin, Research Writer, Triple-I

More than 20 requests for auto insurance rate decreases have been filed with Louisana’s Department of Insurance by insurers since mid-2025. According to the department, the decreases were driven by reductions in accident frequency and severity.

“I’m glad to see positive movement on auto rates in Louisiana for the first time in years,” said Louisiana Insurance Commissioner Tim Temple. “Because fewer accidents are contributing to these lower losses for insurers, we should not necessarily expect to see this level of decrease in future years unless we continue to pursue legal reform that addresses the foundational reasons our rates are the highest in the country.”

Temple said he hopes for further rate changes as the market continues to stabilize, citing Florida’s recent premium reductions after sweeping tort reform legislation in 2022 and 2023.

Longstanding affordability challenges

Among those who filed for rate decreases include Louisiana’s largest auto insurers, with the latest reductions impacting nearly 470,000 Progressive policyholders, or roughly 23.5 percent of the state’s auto market. More than one million State Farm policies also achieved lower average rates implemented this month.

While the statewide decreases can offer relief for drivers in one of the least affordable states for auto insurance, Temple cautioned that rates for individual policyholders will differ based on personal risk factors, urging consumers to shop among the “30 companies that have taken a rate decrease.”

The announcement arrives less than a year after Louisiana lawmakers passed a 2025 tort reform package to curb excessive lawsuits and a rate of bodily injury claims more than twice the national average. Beyond fueling higher insurance premiums in the state, such practices generate an annual $965 “tort tax” on every Louisianan and cost over 40,562 jobs per year, as highlighted by Triple-I’s consumer awareness campaign to build support for the reforms.

Other 2025 legislative measures, however, stipulate increased regulatory intervention in rate-setting, which can create further strain on an insurance market just beginning to recover. Another bill targeting nuclear verdicts (awards of $10 million or more) also failed to pass, playing a role in the state’s recurring spot on the American Tort Reform Foundation’s annual list of “judicial hellholes.”

Noting that reduced accident frequency contributed to the rate changes, Temple said in a statement that “we should not necessarily expect to see this level of decrease in future years unless we continue to pursue legal reform that addresses the foundational reasons our rates are the highest in the country.”

Lessons from Florida

Measurable benefits from Louisiana’s existing reforms may require a few more years to unfold, Temple added, based on the trajectory of similar legislation in Florida. In 2022, Florida accounted for over 70 percent of the nation’s homeowners claim-related litigation, despite representing only 15 percent of homeowners’ insurance claims, according to the state’s Office of Insurance Regulation (OIR). State legislators responded to the crisis with several tort laws that, among other things, eliminated one-way attorney fees and assignment of benefits (AOB) for property insurance claims.

Under the reforms, 17 new insurance companies have entered the Sunshine State and dozens of homeowners’ and auto insurers have filed for rate decreases, with Citizens Property Insurance – the state’s insurer of last resort – approved for major average rate cuts this spring, according to a recent announcement from Florida Gov. Ron DeSantis.

A 50 percent drop in Citizens policies in 2025 helped facilitate the cuts, reflecting the largest transition of policies back to the private market in a decade. Later that year, additional cost-savings achieved through the reforms helped state regulators secure nearly $1 billion in premium refunds for Progressive auto insurance policyholders in the state.

Though the specific policy levers may differ, Florida’s reforms continue to model the kinds of market improvements that states like Louisiana and Georgia can expect after successfully passing their own tort legislation. State government moves like these are essential to eradicating legal system abuse and keeping insurance affordable and available, especially as legislative challenges to legal reform persist.

“Premiums are lowering because we’ve enacted real reforms and withstood the pressure to reverse course,” DeSantis said. “We will hold firm in our commitment not to go back to the broken insurance market of the past.”

Learn More:

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Florida Governor Touts Auto Insurance Rebates, Tort Reform Success

Litigation Reform Works: Florida Auto Insurance Premium Rates Declining

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Who’s Financing Legal System Abuse? Louisianans Need to Know

Auto Insurance, Legal Environment, Market Conditions, Regulation

Florida Governor Touts Auto Insurance Rebates, Tort Reform Success

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By Jeff Dunsavage, Senior Research Analyst, Triple-I

Florida Gov. Ron DeSantis announced last week that state regulators have secured nearly $1 billion in premium refunds for Progressive auto insurance policyholders in the state, due to cost savings achieved through litigation reform.

DeSantis, who signed sweeping tort reform legislation bills into law in 2022 and 2023, said the refunds are a direct result of declining litigation expenses in Florida’s auto insurance market.

“Florida was really considered a litigation hellhole by a lot of folks,” DeSantis said. “That contributed to consumers having to bear more costs with respect to auto insurance.”

He pledged Insurance Commissioner Mike Yaworksy is negotiating with other major auto carriers for similar reimbursements to their customers.

Mark Friedlander, Triple-I’s director of communications, told Spectrum News Florida that reduced lawsuit expenses has enabled auto insurers to lower average costs and, in some cases, return premium to customers.

“When you take that out of the equation — all of those abusive lawsuits — this brings down the expenses, and that in turn gets passed along to the consumer,” Friedlander said. “The consumer wins with legal system reform.”

Learn More:

Litigation Reform Works: Florida Auto Insurance Premium Rates Declining

Florida Senate Rejects Legal-Reform Challenge

What Florida’s Misguided Investigation Means for Georgia Tort Reform

Florida Bills Would Reverse Progress on Costly Legal System Abuse

Florida Reforms Bear Fruit as Premium Rates Stabilize 

How Georgia Might Learn From Florida Reforms

Resilience Investments Paid Off in Florida During Hurricane Milton

Florida Homeowners Premium Growth Slows as Reforms Take Hold, Inflation Cools

Insurers and the Economy, Regulation, Risk Management, Risk-Based Pricing

Triple-I Brief Explains Benefits of Risk-Based Pricing of Insurance

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By Jeff Dunsavage, Senior Research Analyst, Triple-I

“Risk-based pricing” is a basic insurance concept that might seem intuitively obvious when described – yet misunderstandings about it regularly sow confusion and spark calls for government intervention that would likely do consumers more harm than good.

Simply put, it means offering different prices for the same level of coverage, based on risk factors specific to the insured person or property. If policies were not priced this way, lower-risk drivers would necessarily subsidize riskier ones.

Confusion ensues when actuarially sound rating factors intersect with other attributes in ways that can be perceived as unfairly discriminatory. A new Triple-I Issues Brief sorts out the reasons for such confusion and explains why legislative involvement in insurance pricing is not the answer to rising premiums. In fact, the report says, such involvement would tend to drive premiums up, not down.

Worries about equity

Concerns have been raised about the use of credit-based insurance scores, geography, home ownership, and motor vehicle records in setting home and car insurance premium rates. This confusion is understandable, given the complex models used to assess and price risk. To navigate this complexity, insurers hire teams of actuaries and data scientists to quantify and differentiate among a range of risk variables while avoiding unfair discrimination.

Triple-I’s brief shows how one frequently criticized rating factor for auto insurance – insurance-based credit scores – effectively tracks collision claim frequency.  Drivers with the worst 10 percent of scores have twice as many collision claims as the best 10 percent. The sophisticated tools actuaries and underwriters use ensure fair, accurate pricing, and insurers do everything they can to see that all valid claims are paid on time and in full.

Climate and inflation

Areas that were once less vulnerable to certain natural perils – such as wildfire and hurricane-related flooding – increasingly are being affected by these costly events. Furthermore, more people have been moving into at-risk areas on the coasts and in the wildland-urban interface (WUI), putting more property into harm’s way.

Insurance pricing must reflect these increased risks to maintain policyholder surplus – the funds regulators require insurers to keep on hand to pay claims. In some states, this increased risk – combined with regulatory decisions that make it hard to raise premium rates to the levels needed to adequately meet it – has forced some insurers to reduce their exposure and not write as many policies and even withdrawing from states completely. In these states, not only has homeowners’ coverage become less affordable – in some cases, it has also become less available.

Another factor driving up premiums is inflation. As material and labor costs rise, the cost to repair and replace damaged homes and vehicles increases. If premium rates don’t reflect these increased costs, insurers would quickly exhaust their policyholder surplus. If their losses and expenses exceed their revenues by too much for too long, they risk insolvency.

A role for governments

Policymakers naturally want to address the impact of rising costs – including insurance premiums – on their constituents. A good start would be to help reduce risk by modernizing building codes and incorporating resilience into their infrastructure investments. Reduced risk and less costly damages would, over time, translate into lower premium rates.

Governments also can work with insurers and other stakeholders to incentivize homeowners to invest in mitigation and resilience. The Strengthen Alabama Homes program is a great example of one such collaboration between state government and the insurance industry that has measurably improved results and is beginning to be imitated by other states.

Learn More:

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

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

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

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

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

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

Practicality, not politics

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

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

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

Learn More:

Revealing Hidden Cost to Consumers of Auto Litigation Inflation

Easing Home Upkeep to Control Insurance Costs

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

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

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Auto Premium Growth Slows as Policyholders Shop Around, Study Says

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Texas: A Microcosm of U.S. Climate Perils

New Illinois Bills Would Harm — Not Help — Auto Policyholders

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

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

Catastrophes, Coastal Property, Disaster Preparedness, Disaster Resilience, Earthquakes, Floods, Homeowners Insurance, Hurricane, Lightning, Regulation, Risk Management, Severe Convective Storm, Tornado, Wildfire, Wind

Some Weather Service Jobs Being Restored;
BRIC Still Being Litigated

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Amid a summer full of deadly fires and storm-related flooding, the Trump Administration appears to be rolling back some of the spending cuts imposed upon the National Weather Service (NWS) by the Department of Government Efficiency (DOGE).

The National Oceanic and Atmospheric Administration (NOAA) – of which NWS is a part – announced at an internal all-hands meeting earlier this month that they will hire 450 meteorologists, hydrologists, and radar technicians. CNN reported the announcement, citing an unnamed NOAA official. In jointly timed press releases, Congressmen Mike Flood and Eric Sorensen (D-Ill.) and Mike Flood (R-Neb.) acknowledged the planned hirings.

While the decision is welcome news, both congressmen continued to urge their colleagues to pass their bipartisan Weather Workforce Improvement Act to ensure these positions will remain permanent and not be subject to any future reductions. 

“For months, Congressman Flood and I have been fighting to get NOAA and NWS employees the support they need in the face of cuts to staff and funding,” Sorenson said. “Hundreds of unfilled positions have caused NWS offices across the country to cancel weather balloon launches, forgo overnight staffing, and force remaining meteorologists to overwork themselves.”

“For decades the National Weather Service has helped keep our communities safe with accurate and timely forecasts,” said Flood, adding that the NOAA announcement “sends a message that they’re focused on strengthening the NWS for years to come.”  

NOAA and FEMA cuts raised fears

It’s not just the NOAA and NWS cuts that have raised concerns. On April 4, 2025, the Federal Emergency Management Agency (FEMA) announced that it would be ending its Building Resilient Infrastructure and Communities (BRIC) program and cancel all BRIC applications from fiscal years 2020-2023. 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.

At the time, Chad Berginnis, executive director of the Association of State Floodplain Managers (ASFPM), called the decision to terminate BRIC “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.”

Resilience investment is key to long-term insurance availability and affordability.  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.

Efforts have been made to save BRIC, and a U.S. District Judge in Boston recently granted a preliminary injunction sought by 20 Democrat-led states while their lawsuit over the funding moves ahead. Judge Richard G. Stearns ruled the Trump Administration cannot reallocate $4 billion meant to help communities protect against natural disasters.

In his ruling, Stearns said he was not convinced Congress had given FEMA any discretion to redirect the funds. The states had also shown that the “balance of hardship and public interest” was in their favor.

“There is an inherent public interest in ensuring that the government follows the law, and the potential hardship accruing to the States from the funds being repurposed is great,” Stearns wrote. “The BRIC program is designed to protect against natural disasters and save lives.”

Learn More

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Russia Quake Highlights Unpredictability of Natural Catastrophes

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Louisiana Senator Seeks Resumption of Resilience Investment Program

Texas: A Microcosm of U.S. Climate Perils

BRIC Funding Loss Underscores Need for Collective Action on Climate Resilience

Weather Balloons’ Role in Readiness, Resilience

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Business Risk, Catastrophes, Disaster Resilience, Emerging Risks, Industry Awards & Events, Industry Financials, Insurers and the Economy, Market Conditions, Regulation, Risk Management, Technology

JIF 2025: Litigation Trends, Artificial Intelligence Take Center Stage

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By Lewis Nibbelin, Contributing Writer, Triple-I

Identifying key risk trends amid an increasingly complex risk landscape was a dominant theme throughout Triple-I’s 2025 Joint Industry Forum – particularly during the panel spotlighting some of the insurance industry’s C-suite leaders.

Moderated by CNBC correspondent Contessa Brewer, the panel consisted of:

  • J. Powell Brown, president and CEO of Brown & Brown Inc.;
  • John J. Marchioni, chairman, president, and CEO of Selective Insurance Group;
  • Susan Rivera, CEO of Tokio Marine HCC (TMHCC); and
  • Rohit Verma, president and CEO of Crawford & Co.

Their discussion provided insight into how insurers can transform these uncertainties into opportunities for business development and for cultivating deeper connections with consumers.

Recouping policyholder trust

Given the volatility of the current risk environment – exacerbated by various ongoing geopolitical conflicts and the rising frequency and severity of natural catastrophes – it is more imperative than ever to reaffirm the intrinsic human element of insurance, the panelists agreed.

“That’s one of the most underappreciated aspects of our industry,” Marchioni said. “We make communities safer and put people’s lives and businesses back together after an unexpected loss. Being the calming force when you have unsettling events like this happen around the world is a big part of what we do.”

Yet prevailing public perception continues to indicate otherwise, even as insurers report repeated losses or nominal profits compared to other industries.

“The insurance industry may be the only industry where record profits are a problem,” CNBC’s Brewer added, because consumers tend to “not care whether it’s coming from your investments, or whether it’s coming from your underwriting business or your reinsurance. They just hear that you’re making record profits.”

Brown noted that consumer mistrust derives, in part, from “a very active plaintiffs’ bar,” which the American Tort Reform Association estimates spent over $2.5 billion for nearly 27 million ads across the United States last year. He further discussed how, though the average homeowners’ insurance premium rate in Florida will increase this year, his home state has enjoyed far more stable rates after tort reforms eased litigation costs on insurers.

Previous research by the Insurance Research Council (IRC) – like Triple-I, an affiliate of the Institutes – showed that most consumers perceive the link between attorney advertising and higher insurance costs. Crawford’s Verma, however, emphasized that this awareness does not necessarily translate into consumers understanding their own agency.

“It’s easier for homeowners to understand how the weather impacts potential losses and the fact that weather patterns have changed,” Verma said. “But when it comes to [legal system abuse], I don’t think that connection is as well understood.”

Reflecting on a record high in nuclear verdicts last year, Rivera suggested insurers must reconfigure how they communicate legal system abuse to consumers.

“Where are those hospital professional liability verdicts going to go?” he said. “They’re going to go back into the cost of health care at the end of the day.”

Leading the AI charge

Maintaining consumer centricity while implementing or experimenting with technological innovations – especially generative AI – was a unifying objective for all the panelists.

“We look at AI as an enabler,” Brown said, “so we can put teammates in a position to spend more time with customers, which is the most important thing.”

For Tokio Marine’s Rivera, AI “ultimately helps all of our insureds” by boosting operational efficiency while reducing operational costs, as well as facilitating more proactive risk management than ever before. A growing percentage of insurance executives appear to agree, as generative AI models continue to expedite data processing across the insurance value chain, reshaping underwriting, pricing, claims, and customer service.

Such efficiency, paired with the potential for improved decision-making, is crucial “in our dramatically changing environment,” Marchioni stressed.

“We have thousands of claims every day,” he said. “Thinking about lawsuit abuse as a backdrop – a claims adjuster, every day, has to make decisions regarding, ‘Do I settle this claim based on injuries or venue? What’s the value of the injury and of the claim? Who’s the plaintiffs’ attorney?’ These tools give more refined information so your knowledge workers can make better, more timely decisions.”

Generative AI fails, however, when base datasets are insufficient, outdated, or inaccurate, Brown pointed out. Training AI models uncritically can lead to outputs containing false and/or nonsensical information, commonly known as “hallucinations”.

At their current capacity, at least, AI models cannot draw the kinds of salient conclusions that adjustors and underwriters can, meaning AI could “change the way we work, but it’s not going to replace the jobs,” Verma said.

Though they do not currently exist in the United States at the federal level, AI regulations have already been introduced in some states, following a comprehensive AI Act enacted last year in Europe. With more legislation on the horizon, insurers must help lead these conversations to ensure that AI regulations suit the complex needs of insurance, without hindering the industry’s commitments to equity and security.

A 2024 report by Triple-I and SAS, a global leader in data and AI, centers the insurance industry’s role in guiding conversations around ethical AI implementation on a global, multi-sector scale, given insurers’ unique expertise in analyzing and preserving data integrity.

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Insurance Affordability, Availability Demand Collaboration, Innovation

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By Lewis Nibbelin, Contributing Writer, Triple-I

Insurance industry executives and thought leaders gathered yesterday for Triple-I’s Joint Industry Forum (JIF) in Chicago to discuss the trends, economics, geopolitics, and policy influencing the market today, as well as ways to navigate these complexities while focusing on making their products affordable and available for consumers.

Triple-I CEO Sean Kevelighan in his opening remarks, noted that effective risk management depends on collaboration across stakeholder groups, as interconnected perils “present a community problem, not just an industry problem.”

JIF keynote speaker Louisiana Insurance Commissioner Tim Temple said facilitating community resilience planning is a top priority for the National Association of Insurance Commissioners (NAIC). The NAIC’s 2025 initiative  – “Securing Tomorrow: Advancing State-Based Regulation” – aims to improve disaster mitigation and recovery by consolidating “the collective expertise of experienced state regulators from across the country, who can share real-time insights and proven strategies,” Temple said.

Among the initiative’s goals is aggregating more data from insurers to better understand challenges to affordability and availability on state levels, which the NAIC can then translate into actionable policy proposals. Such data calls, Temple said, help regulators, legislators, and policyholders focus on improving the cost drivers of insurance rates.

Louisiana has consistently been among the least affordable states for homeowners and auto insurance, according to the Insurance Research Council (IRC), in part because of its reputation for being plaintiff-friendly in civil litigation. Significant tort legislation has been approved in the state, but resistance to reform remains a challenge.

Getting to the roots of high premiums

 After a recent data call in his home state, Temple told the JIF audience, “For the first time in Louisiana, we’re not talking about only premiums. We’re talking about why premiums are where they are.”

A critical lack of transparency surrounding cost drivers persists, however. Temple criticized the National Flood Insurance Program’s Risk Rating 2.0 reforms for not publicly disclosing more information “for individuals and communities to identify and address factors driving up their premiums,” such as “whether increased rates take into account levee systems, pump stations, and other things designed to help mitigate against floods.”

Conversely, government programs like Strengthen Alabama Homes – and the numerous programs it inspired, including in Louisiana – have demonstrated success in communicating the benefits of resilience investments for consumers and policymakers.

“We’re seeing major positive results after just a few short years,” Temple said, noting that, since early 2024, over 5,000 homeowners not chosen for Louisiana’s grant program still decided to invest in the same hazard mitigation, as they may still qualify for the corresponding state-mandated insurance discounts.

“As natural disasters become more frequent and severe, state regulators will continue to drive forward common-sense policies that protect consumers and ensure that insurance remains available and reliable for at-risk communities,” Temple concluded. Developing the database required for such policies is a necessary first step.

Keep an eye on the Triple-I Blog for further JIF coverage.

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