Hard to insure, harder to ignore

The Brief

Finding insurance coverage in the US can be expensive – or impossible – if you live in an area, or even a state, that is considered to be at significant risk from natural disasters. Every US insurer has to file its rates for approval by the insurance commissioner in each state it wishes to underwrite in. If the insurer is using a catastrophe model or third-party tools, then those models may also need to be approved. Florida has historically had the most extensive, and expensive, approval process for hurricane rate filing.

For the last couple of years, it has been impossible for admitted insurers to use models to set rates for underwriting fire risk in wildfire-prone areas. The major US carriers have been withdrawing or significantly scaling back the homeowners insurance they offer in California and increasing amounts of fire insurance has moved into the Excess & Surplus, non-admitted market. So it’s great news, as we report below, that catastrophe models are now being accepted for setting rates.

 

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Exponential Risk News

Extreme heat drives major wildfire outbreaks across Spain

More than 20 large fires are burning nationwide and over 115,000 hectares have been lost in the past week, with temperatures as high as 45°C.

Storm Floris raises questions over shifting seasonal patterns

With gusts of 134mph recorded in the Highlands, Floris became the strongest named August storm since UK records began.

Magnitude 8.8 earthquake off Kamchatka triggers Pacific tsunami alerts

An earthquake near Russia’s Kamchatka Peninsula on 30th July prompted tsunami warnings across the Pacific basin.

Record July monsoon floods hit South Korea

JBA Event Response reports that between 16th – 21st July, South Korea saw record-breaking rainfall exceeding 500mm in places, triggering floods and landslides across multiple provinces.

CatIQ issues one-year loss updates for Canada’s 2024 catastrophes

Industry loss estimates include $950 million USD for the Calgary hailstorm, $2.03 billion USD for flooding from the remnants of Hurricane Debby in Ontario and Quebec, and $948 million USD for the Jasper wildfire complex.

PERILS reports $872 million USD industry loss from Windstorm Éowyn

The windstorm struck Ireland and the UK on 24th – 25th January. The figure, covering property losses across personal and commercial lines, reflects updated insurer data and represents the largest windstorm loss in Ireland for more than four decades.

Global insured nat cat losses reach $80 billion USD in H1 2025

California wildfires drove $40 billion USD of insured losses, the largest wildfire event on record. Severe thunderstorms added $31 billion USD, while hurricane and wildfire seasons could push full-year losses above $150 billion USD, reports Swiss Re.

 

Industry Updates

California approves wildfire models for insurance rate filings

The California Department of Insurance has completed reviews of a number of catastrophe models, including Verisk’s Wildfire Model for the US and Moody’s RMS US Wildfire Model v2.0. Both models, now approved for use in residential rate filings, incorporate property and community-level mitigation measures. KCC has also reported that it has completed its wildfire model review.

Aon launches Next Gen Food, Agribusiness and Beverage facility

The facility provides mid- to large-sized North American companies with integrated cover for risks including supply chain disruption, commodity volatility, regulatory change and climate perils.

Atrium enters weather and climate insurance market

Atrium has launched an underwriting class providing non-damage business interruption cover for weather-related risks, including temperature, wind and precipitation.