Insurability in the face of climate change is a top concern for US regulators
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Insurance availability and affordability has become a “top-of-mind” concern for consumers and US regulators alike after some insurers have suspended writing new business in specific markets, according to the president of the National Association of Insurance Commissioners.
Chlora Lindley-Myers did not specify which business lines were affected but said she had been asked by reporters about the issue.
“With news reports of severe weather events like extreme heat waves, wildfires, hailstorms, tornadoes, and yes the fires on Maui, reporters asked what steps consumers can take to mitigate the risks to their properties in the face of natural disasters,” she said at the 2023 NAIC Summer National Meeting in Seattle on Sunday.
She added: “This is a real, top-of-mind concern among both consumers and regulators today.”
Lindley-Myers, who is also the director of the Missouri Department of Commerce and Insurance, said her thoughts are with her colleague Gordon Ito, commissioner of Hawaii, “as he faces this deadly catastrophe and its aftermath”.
She said the industry had been grappling with the issue of climate risk and resilience for more than a decade. She also stressed that climate risks are real for every jurisdiction, “whether you are inland or coastal, in a colder climate or a warmer climate, more rural or more urban”.
She noted reporters also wanted to know how consumers could protect themselves from scams and make sure that they have the right amount of insurance, adding that educating consumers on how to better engage with the insurance industry “is central to our role as regulators”.
Deadly wildfires broke out on the Maui Island and Hawaii Island on 8-10 August. According to Aon, five main fires across the two islands quickly grew due to strong winds associated with the passing of Hurricane Dora, as well as dry conditions.
According to Aon’s Weekly Cat Report, published on Friday, total economic losses “will reach into the billions USD”.
While risk modellers have yet to provide preliminary insured loss estimates, Karen Clark & Co said last week that the insured loss would be “the second largest in Hawaii’s history” — second only to a repeat of Hurricane Iniki in 1992, based on today’s property values.
Official reports indicate that 1,700 structures have been burned in Lahaina, KCC said, but the modelling firm estimated many more buildings to be impacted by the fire, with approximately 3,500 structures falling within the fire perimeter.
What steps can insurers take to help consumers mitigate the risk of climate change?
