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State insurance regulators ensure consumers have access to fair, competitive, and healthy insurance markets. They fulfill this mission by monitoring their state’s insurance market and using a wide range of regulatory tools to protect the insurance-buying public. They know their market better than anyone. They know the consumers they serve, the companies offering coverage, the products available and in development, and the risks policyholders and insurance companies face.

From targeted data collection and market analysis to regular, comprehensive market conduct examinations, state insurance regulators have checks on insurance companies’ compliance with applicable laws and regulations and are quickly able to identify practices that could have a negative effect on consumers. These regulators are focused on reviewing companies’ operations and management, complaint handling, marketing and sales, policyholder service, underwriting and rating, and claims. They investigate consumer complaints against insurance companies and producers, including improper cancellations, unfair claims practices and misconduct, and disagreements about claim payments. They also review insurance company premium rates and policy forms for the products available in their state’s market. Because market conduct problems can signal a potential solvency concern, regulators use this information to supplement the robust financial data they routinely require companies to submit for examination and analysis.

Insurance departments in every state, the District of Columbia, and the five U.S. territories coordinate through the National Association of Insurance Commissioners (²»Á¼Ñо¿Ëù¹Ù·½), and they unite as the state-based system of insurance regulation. Collectively, they are able to share best practices, explore potential market disruptions, and address emerging trends that impact access to insurance coverage. They are also able to aggregate the data they collect individually to provide a snapshot of insurance markets nationally.

Data Provides Insights for State Markets

In March 2024, state insurance regulators issued a comprehensive, multi-state data call coordinated by the ²»Á¼Ñо¿Ëù¹Ù·½ to collect and analyze data for the U.S. home insurance market. This Property & Casualty Market Intelligence Data Call (PCMI) is gathering granular data from approximately 350 insurance companies operating locally and across the country to give state insurance regulators a clear sense of what is happening in their individual home insurance markets. Rising property insurance costs and coverage challenges underscore the importance of this collective effort. As regulators manage market uncertainty, the wide-ranging data call will provide deeper insights into home insurance market costs, coverages, and protection gaps amid the increasing frequency and severity of natural disasters, escalating reinsurance costs, and continued inflationary pressures.

Leveraging the information already available to state insurance regulators, even before the PCMI analysis is complete, we see that the overall home insurance market remains robust, with several hundred companies operating consistently across the country. There is also a diverse mix of companies writing home insurance, from national companies operating in nearly all states to single-state and regional writers focused on narrow market segments.

At a high level, however, shifts are transpiring in the national home insurance market. Some companies are reducing the number of policies they write. The majority of policies and premiums are underwritten by companies writing in a large number of states, and these are often the companies decreasing their policy counts. Company-initiated nonrenewal rates have been increasing over time, and cancellations for nonpayment have also risen. Policies are being absorbed by regional and single-state writers with loss ratios generally comparable to the multi-state companies. Despite the challenges facing property insurers, competition in the home insurance market provides policyholders options for coverage.

The home insurance markets are exhibiting other signs of stress. Although claim frequency has mostly decreased over time, claim severity has been increasing overall. In general, underwriting profit fluctuates significantly year over year and across the country. As home insurance markets shift over time, state insurance regulators will continue to collect data, hold companies accountable, and respond to the need for consumers to access reliable insurance products.

State Regulators Understand the Insurance Market Best

It is state insurance regulators who are best positioned to interpret data about their respective markets and make policy recommendations to serve those markets. They are on the front line in addressing the increasing frequency and severity of weather events, rising reinsurance costs, litigation, and inflationary pressures that are making home insurance availability and affordability more challenging for consumers. They are responsible for overseeing the insurance market in their state and know that market better than anyone else. They understand their state’s dynamics and the perils consumers face. They have the expertise and experience to advocate for new laws, alterations to the regulatory structure, changes in building codes, resilience initiatives and mitigation programs.

Since 1871, states have collaborated in addressing market challenges through the ²»Á¼Ñо¿Ëù¹Ù·½. This work is especially important in times of market stress and as the coverage landscapes shift. Their common goal is to protect consumers and ensure safe, stable insurance markets.