NAIC adopts national climate resilience strategy for insurance 

The US National Association of Insurance Commissioners (NAIC) has adopted the first-ever NAIC national climate resilience strategy for insurance to protect the US property insurance market.

The strategy was developed under the coordination of the NAIC’s Climate and Resiliency Task Force, co-chaired by Alaska Division of Insurance director Lori K. Wing-Heier and California Insurance Commissioner Ricardo Lara.

“The goal of the strategy is to drive faster and more effective risk reduction by state insurance regulators to ensure that insurance continues to be available and reliable as a crucial backbone to communities facing climate risks. This strategy gives regulators the tools to do that and an action plan by advocating for home hardening from wildfires, floods, and storms; utilising catastrophe modelling information; better informing the public of risks; and making sure new solvency tools are updated to incorporate further analysis of climate risks,” the NAIC said,

The NAIC said  the Property & Casualty Market Intelligence (PCMI) data call to collect and analyse data covering more than 80% of the US property insurance market by premium volume sits behind the strategy. This will gather data from more than 400 property insurers operating locally and across the country to give state insurance regulators a clear sense of what is happening in their individual property markets and the nation overall.

“Our property markets and the consumers we work to protect are under pressure. The PCMI data call and the national climate resilience strategy for insurance will help us close protection gaps and make every community stronger and more resilient,” said Wing-Heier. “This strategy document brings together many of our existing workstreams, focuses our work on pre-disaster risk mitigation, and will provide important coordination among US state regulators.”

Commissioner Lara added: “US states are in the forefront of making safer communities to withstand extreme weather and climate change, which is critical to keeping insurance available for all. Our national climate resilience strategy puts reducing risks and protecting solvency at the centre of our work to protect consumers.”

The NAIC National Climate Resilience Strategy addresses state insurance regulators’ plans to:

• Collect data to help identify and close protection gaps;
• Create a blueprint for the future of flood insurance;
• Leverage the recently created Catastrophe Modeling Center of Excellence;
• Create new resilience tools;
• Advocate for pre-disaster mitigation funding;
• Improve solvency tools, such as scenario analysis.