With that in mind, more data is needed. Whether it be compilations from disaster organizations, insurers, government entities – or all of the above – data will be part of the battle as we attempt to combat these natuaral disasters. •
INDUSTRY TRENDS structure and identify which ones are likely to still be standing after a disaster occurs. This lies on top of what you traditionally get from a standard climate model, but because we can get into the weeds of what makes a property more survivable, we ' re able to a) better predict which properties will result in a claim, b) give policyholders action items to reduce their risk which makes them more profitable, and c) create more of a competitive advantage among companies who are focused on loss control and business retention. Our ideal scenario is that every homeowner in a wildfire, hurricane, flood, or just general natural disaster zone mitigates their risk in order to qualify for insurance benefits, creating this positive feedback loop where both parties benefit from a reduction in risk."
PARAMETRIC APPROACHES
You ' ve likely heard about Parametric insurance, but what is it and what could it potentially do?
“ In its simplest form, parametric weather insurance is:‘ Did the weather happen? Yes or no.’ And if the answer is yes, here’ s your claim check,” Robert Holmes, president and meteorologist at Spectrum Weather Insurance, told Business Insurance in a recent interview.“ But if the answer is no, even if you still lost money, you’ re out of luck.”
That’ s where the limitations become clear. Unlike traditional cancellation insurance, which reimburses actual financial losses, parametric coverage is rigid in its payout criteria.“ While parametric has its place, it’ s certainly open to gaps in coverage,” Holmes added.
Sola is an InsurTech that is combining technology with a parametric approach. Wesley Pergament, Co- Founder and CEO of Sola, recently told Reinsurance News,“ At Sola, we are building a lifeline for homeowners who have incredibly high premiums and deductibles.”
He added,“ With our new wind and hail product, we’ re tackling these challenges head-on and delivering much needed relief to more homeowners.”
Their wind and hail parametric product is designed to reduce high deductibles and out-of-pocket costs for damage caused by wind, hail, and tornadoes. It is being backed by industry partners including Tokio Marine Kiln, Canopy Weather, Crawford & Company, Spinnaker Insurance Company, and Costero Brokers.
INDUSTRY EFFORTS
The Big I continues to work on the Federal level for disaster mitigation efforts. Along with the American Property Casualty Insurance Association, National Association of Mutual Insurance Companies, and Reinsurance Association of America, the Big“ I " sent a letter to Senate leaders expressing support and encouraging passage of Senate Bill 1462, the“ Fix Our Forests Act of 2025."
The bill seeks to improve forest management, reduce wildfire risk, and protect critical infrastructure through enhanced federal, state, tribal, and local collaboration.
In addition, the Big I has launched a Wildfire Taskforce and continues to advocate for long-term stability in the National Flood Insurance Program.
WHAT ELSE NEEDS TO BE DONE?
In May of this year, the National Oceanic and Atmospheric Administration( NOAA) announced it will“ retire” a free, public database of climate and weather disasters that caused at least $ 1 billion in damage,“ with no updates beyond calendar year 2024.” Past reports from 1980-2024 will be archived.
AM Best has noted that this could have signifcant impact on insurers ability to track and plan for disaster impacts.
With that in mind, more data is needed. Whether it be compilations from disaster organizations, insurers, government entities – or all of the above – data will be part of the battle as we attempt to combat these natuaral disasters. •
MAY / JUNE 2025
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