Issue: Natural disasters have an immense impact on the U.S. and global economy. According to a Swiss Re report, 285 natural catastrophe events occurred in 2022, causing the global economy $284 billion, down from $303 billion in 2021 but still well above the 10-year average of $220 billion. The insured portion was $125 billion in 2022, up from $121 billion in 2021 and above the 10-year average of $81 billion. According to the National Oceanic and Atmospheric Administration (NOAA), in 2022 there were 18 weather/climate disaster events in the United States with losses exceeding $1 billion each.
Background: The growing frequency and severity of natural catastrophes warrant greater focus on natural catastrophe risk and resiliency. Maintaining healthy insurance markets through high loss years can be challenging as insurers must charge enough premium to maintain solvency while keeping insurance affordable for consumers. For this reason, the NAIC established a Climate and Resiliency Task Force in 2020 to serve as the coordinating NAIC body for discussion and engagement on climate-related risk and resiliency issues, including dialogue among state insurance regulators, industry, and other stakeholders. The Task Force established multiple workstreams to carry out its charges. The Climate Risk Disclosure Workstream revised the NAIC Climate Risk Disclosure Survey in 2022 to align the questions to the Financial Stability Board's Task Force on Climate-Related Financial Disclosure.
The survey is voluntary for states and territories to use at their discretion. All insurers licensed in a participating state/territory that reported in the prior year annual financial statement with at least $100 million in direct written premium across all lines of business countrywide must complete a survey. The survey is facilitated and administered by the California Department of Insurance (DOI), on behalf of all participating states. The California Department of Insurance maintains all insurer responses on the Climate Risk Disclosure Survey webpage. In November 2020, the Center for Insurance Policy and Research analyzed the data submitted by insurers and presented the findings in a report Assessment of and Insights from NAIC Climate Risk Disclosure Data.
The Pre-Disaster Mitigation Workstream developed a webpage to assist regulators in identifying ways to get involved in mitigating property loss and advocating for resiliency measures at the federal, state and local levels.
Status: NAIC members have taken an active role in educating Congress and providing feedback on various proposals regarding natural catastrophes. NAIC members have met with members of Congress and testified on important climate-related issues, stressing the role of the states in effectively managing insurance markets. In 2021, the NAIC outlined key ways state insurance regulators manage climate-related risks and respond to natural catastrophes in a report, Adaptable to Emerging Risks.
In 2020, 2021 and 2022 the NAIC Insurance Summit included a Natural Catastrophe Risk and Resiliency track. Content from those events can be viewed on the NAIC Library Archives.
Regulators Respond to Disasters – NAIC Fall National Meeting 2016
This video shows disasters and response to wildfires in Tennessee, a tornado in Alabama and earthquakes in Oklahoma. It features then-NAIC President-Elect and then-Tennessee Insurance Commissioner Julie Mix McPeak.
Regulators Respond to Disasters – NAIC Fall National Meeting 2015
NAIC members representing California, South Carolina, Texas and Washington discuss devastating floods and fires in 2015.
Regulators Respond to Disasters in Arizona and Oklahoma
Then-Arizona Insurance Director Germaine Marks and then-Oklahoma Insurance Commissioner John Doak discuss disasters affecting insurance consumers in their states and the response coordinated by their departments, fellow regulators and the NAIC.
Regulators Respond to Superstorm Sandy
Members of the NAIC discuss the impact of Superstorm Sandy in 2012. They describe efforts of state insurance regulators to address the needs of insurance consumers and the market in the wake of historic losses.
Regulators Respond to Disasters
Members of the NAIC discuss the impacts of natural disasters in their states during 2011. They describe efforts of state insurance regulators to address the needs of insurance consumers and the market in the wake of historic losses.
Committees Active on This Topic
Property and Casualty Insurance (C) Committee
Catastrophe Insurance (C) Working Group
NAIC Research Library Resources on Climate, Catastrophe, and Resilience
Assessments of and Insights from NAIC Climate Risk Disclosure Data (CIPR report, November 2020)
Assessing NAIC Climate Risk Disclosure Data (CIPR presentation, Sept. 10, 2020)
Task Force on Climate-Related Financial Disclosures
June 2019 Report
Translating Resilience Research (December 2019, NAIC Winter National Meeting presentation)
State and Local Policy Instruments for the Promotion of Catastrophe Mitigation
2017, Journal of Insurance Regulation
Natural Catastrophes, Insurance and Alternative Risk Transfer
November 2017, CIPR Newsletter
Catastrophe Risk and the Regulation of Property Insurance Markets
2016, Journal of Insurance Regulation
CIPR Symposium: Implications for Increasing Catastrophe Volatility on Insurers and Consumers
NAIC Education & Training: Climate Change and Risk-Focused Examinations
Property and Casualty Insurance (C) Committee Public Hearing on Catastrophe Issues
Guiding Principles for Consideration of Federal Catastrophe Insurance
CIPR Topic: Flood Insurance/National Flood Insurance Program (NFIP)
The Impact of Hurricane Sandy on the Financial Markets
NAIC Capital Markets Special Report (Nov. 16, 2012)
- U.S./Global Natural Catastrophe Update
- Emerging Risks: Climate Change
- Emerging Risks: Climate Extremes in the U.S.
- Post Catastrophe Insurer Insolvencies
NAIC Levels Up on Climate & Resiliency (July 7, 2020)
Insurance Commissioners Visit Site of California's Most Destructive Wildfire During Risk and Resilience Summit
May 2, 2019
Changing Weather Patterns Mean Homeowners Need to Rethink Insurance Risks
March 29, 2017
NAIC Provides Support to Puerto Rico After Hurricanes
Sept. 29, 2017
NAIC Provides Support to US Virgin Islands After Hurricanes
Oct. 11, 2017
NAIC Leads Catastrophe Discussion
Feb. 27, 2014
Regulators Attend Post-Tornado Forum in Oklahoma
June 13, 2013
Testimony and Speeches
Managing Extremes in 2014 Forum
(Feb. 27, 2014 – Sen. Ben Nelson)
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