Agenda

The rising likelihood of extreme and catastrophic weather events makes monitoring the frequency and impact of natural disasters a critical regulatory function. NOAA’s National Centers for Environmental Information (NCEI) tracks U.S. weather and climate events that have great economic and societal impacts (www.ncdc.noaa.gov/billions). Since 1980, the U.S. has sustained 273 weather and climate disasters where the overall damage costs reached or exceeded $1 billion (including adjustments based on the Consumer Price Index, as of 2020). The cumulative cost for these 273 events exceeds $1.79 trillion.  Adam Smith, Applied Climatologist for NCEI, will provide an overview of weather and climate disaster loss trends for the past 40 years, as well as discuss implications for future losses

Basic introduction to wildland fire and mitigation (IBHS), National Fire Protection Association (NFPA) and Firewise Communities.

Western U.S. states have seen a dramatic increase in wildfire losses over the last decade.  Insured losses exceeded $27 bn USD during the 2017 and 2018 seasons alone, with most damage coming from California.  While the industry experienced only one company insolvency, insurers have been scaling back on the number of policies in force across the West.  Lack of insurance coverage options are hurting consumers while risk from wildfires is increasing. 

Catastrophe models (“CAT models”) are probabilistically based risk assessment tools and methods that leverage existing scientific understanding to assess plausible natural disaster risk beyond the historical record.  CAT modelers will provide insights on how catastrophe modeling firms handle wildfire in order to allow for assessing the insolvency potential of insurance companies, developing rating and pricing plans, and promoting risk reduction (mitigation) in the general population. 

CAT models can be used to assess the insolvency potential of insurance companies, develop rating and pricing plans, and promote risk reduction (mitigation) in the general population. While CAT models have been readily applied for these purposes in other natural disaster risk domains such as hurricanes and earthquakes, their acceptance and widespread usage for wildfire is in an early stage in the market. 

Working with regulators in CA and OR, the CIPR has partnered with RMS, IBHS, and Firewise on a research project aimed at demonstrating how a catastrophe model can be effectively used by state insurance regulators to have additional insight concerning wildfire catastrophe model output that will help them better prepare for disasters and continue to enrich the insurance markets in their respective states.  Project components and outcomes will be discussed.  Further, the NAIC Catastrophe Insurance (C) Working Group of the NAIC Property and Casualty (C) Committee maintains the NAIC Catastrophe Computer Model Handbook which provides guidance around areas and concepts to consider and explore in order to become well informed about catastrophe computer models.  This session will also explore what an updated CAT computer model handbook should look like specific to wildfire. 

Extreme weather is the vehicle that delivers the impacts of climate change. We have already detected a signal of climate change in deadly heatwaves and flooding rains. Recent events such as the wildfires in Australia and Siberia are highly unlikely to have been so severe without climate change. Is the record pace of this year’s North Atlantic hurricane season tied to the near record-warm ocean temperatures? Looking to the future, further changes in extreme weather are anticipated. Whereas the incremental warming of our earth system may seem small, on-the-ground impacts are anything but. In addition to local devastation, extreme weather impacts reverberate through our natural, physical, and social systems.

This talk will review what we know about extreme weather in a changing climate and how we know it. The talk will also look ahead at what we can expect to learn from the science in the next five years and its potential impact on risk management. It’s now more important than ever to have robust, science-informed regulation and risk management strategies. The talk will present opportunities for deeper integration of science and practice that is urgently needed to strengthen protection of lives and property.

Meteorological perils such as hurricane, severe convective storms, winter storms, flood, and wildfire will all feel the effects of a changing climate.  Increasing air and sea surface temperatures are causing noticeable changes in the frequency and severity of weather disasters, creating demand from the insurance industry for solutions.  CAT modelers will provide insights on how catastrophe modeling firms handle climate change from current indications to future simulations.

With the recent establishment of its Climate and Resiliency (EX) Task Force, NAIC has renewed and strengthened its engagement with climate-related risk and resiliency issues.

Researchers with the Center for Insurance Policy and Research have undertaken an analysis of the NAIC/ California Insurer Climate Risk Disclosure Survey, which since 2010 has collected information about how insurers across all lines of insurance assess and manage climate-related risks.

Every year, the survey’s yes/no questions and narrative responses contain enough data to fill six novels. CIPR researchers are working to generate insights that will make the survey disclosure information useful to both consumers and regulators as the industry tackles the urgent issues of climate risk.

The rubber hits the road when survey research is applied in the field, especially when it comes to communication. This panel will highlight consumer survey findings that underpin public policy and mitigation outreach, including the landmark, No Code. No Confidence. – Inspect2Protect.org transparency initiative.

As standard homeowners' policies do not cover flood and many people do not purchase a separate policy, flood damage is a major source of uninsured losses. Rising flood risks and the uncertain financial future of the National Flood Insurance Policy (NFIP) underscore the importance of growing the private flood insurance market.  As such, this session will discuss what was learned from the recent and more granular NAIC nationwide data call as well as the development of North Carolina Rate Bureau’s (“NCRB”) filed Residential statewide Flood program.

Various DOI representatives will discuss lessons learned from the development and implementation of their state mitigation programs.  New sources of funding from the federal level will also be introduced and discussed.

During this session we will discuss FORTIFIED successes for hurricane, and the shingle manufacturing response for hail.

Did you know the NAIC has numerous resources available for state regulators to help you better prepare for disasters? Newly-adopted revisions to the NAIC’s State Disaster Response Plan will be covered in this session, along with other NAIC documents that state regulators can leverage prior to disasters. Also included will be a summary of consumer-related documents and how the NAIC can assist states with call centers and disaster calls following catastrophes. Actual experiences of state DOIs will be described so that other states can learn how to implement their own state disaster response plans.

The growing frequency and severity of natural catastrophes warrant greater focus on resiliency.  Convinced that the continuing cycle of human suffering that strikes families and communities in the wake of severe weather can be broken, the Insurance Institute for Business & Home Safety (IBHS) is a team of scientists and risk communicators who deliver strategies to build safer and stronger homes and businesses.  By helping individuals, businesses, and communities take protective action before disaster strikes, public officials can take steps to save lives, encourage personal responsibility, enhance market-based solutions, promote long-term fiscal restraint, reduce public sector response and recovery costs, and create a more resilient society.  Roy Wright, President and CEO of IBHS, will share the latest research findings from IBHS to promote resilience to natural catastrophes.