Shortly after Treasury’s Federal Insurance Office (FIO) proposed to have P/C insurers submit homeowners insurance underwriting data to assess climate risk, the response from industry trade associations was, at best, tepid.
“You don’t need a massive data collection to know that climate related losses have been increasing in recent years,” said Jimi Grande, senior vice president of federal and political affairs for the National Association of Mutual Insurance Companies (NAMIC). “What we need is effective public policy to better protect and prepare Americans for the next disaster.”
On Tuesday, FIO said the current and historical data it plans to be collected would also help to gauge the availability and affordability of insurance for million of Americans. Secretary of the Treasury Janet L. Yellen said the proposal is “an important step in determining how Americans are being affected by the increasing costs of climate change,” and the impacts of Hurricane Ian in Florida “demonstrate the critical nature of this work and the need for an increased understanding of insurance market vulnerabilities.”
“What is happening in the State of Florida’s personal homeowners and auto insurance markets are a result of public policy skewed in the favor of plaintiff attorneys who have exacerbated legal system abuse and fraud at the expense of economic sustainability,” said Sean Kevelighan, CEO of the Insurance Information Institute (Triple-I). He said Triple-I will submit formal comments on FIO’s request, adding that the P/C industry “has long been dealing with the impacts of climate risk severity, and as such planning its solvency ratios accordingly with state regulators – hence why the policyholder surplus is nearly $1 trillion.”
Similarly, Phil Carson, department vice president of financial regulation for the American Property Casualty Insurance Association (APCIA), said P/C insurers “confront climate change in the normal course of their business and are experts in understanding and measuring weather and climate-related risk.” The industry has also been an advocate for resiliency, mitigation and building codes, he added.
“While APCIA plans to respond to the Federal Insurance Office’s proposal to collect data from insurers about climate-related financial risks, we are only beginning our review for any potential substantive or technical issues it might create for insurers,” Carson added. “Based on feedback from our member companies, APCIA will share our members’ concerns, with the goal of ensuring an efficient data gathering process that optimizes the use of existing data sources while avoiding unnecessary cost and inconvenience.”
NAMIC’s Grande said the FIO’s proposal is “incredibly broad.”
“Having FIO collect vast amounts of data without a clear purpose or benefit will not help Americans in their recovery or preparedness efforts,” he said. “Insurers have been at the forefront of planning for and responding to the risks of climate change to policyholders and their communities and have been among the leading voices calling for greater funding for mitigation projects in communities – particularly those long neglected by federal spending – to prevent losses from occurring.”
Photo: Tony Rivera carries items recovered from his family’s waterlogged car through receding flood waters still filling a street in the Harlem Heights neighborhood, three days after the passage of Hurricane Ian, in Fort Myers, Fla., Oct. 1, 2022. (AP Photo/Rebecca Blackwell)
Topics Climate Change
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