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Last updated 12/12/2024

Natural disasters have an immense impact on the U.S. and global economy. According to a , natural catastrophe events in 2024 resulted in a $310 billion global economic loss, 6% up from $291 billion in 2023 and still well above the 10-year average of $241 billion. The insured portion for Nat-cat was $135 billion in 2024, 17% up from the previous year and above the 10-year average of $98 billion. Insured catastrophe losses are on track to exceed US $135 billion by the end of 2024, marking the fifth consecutive year where the insurance market has dealt with losses of over US $100 billion.

According to the , in 2024 (as of Nov. 1^st) there were 24 weather/climate disaster events in the United States with losses exceeding $1 billion each. The 1980–2023 annual average for these billion-dollar events is 8.5 events (CPI-adjusted); the annual average for the most recent 5 years (2019–2023) is 20.4 events (CPI-adjusted).

Background: The growing frequency and severity of natural catastrophes warrants 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 ²»Á¼Ñо¿Ëù¹Ù·½ established a Climate and Resiliency Task Force in 2020 to serve as the coordinating ²»Á¼Ñо¿Ëù¹Ù·½ 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 ²»Á¼Ñо¿Ëù¹Ù·½ 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 webpage. In October 2023, the Center for Insurance Policy and Research in collaboration with Society of Actuaries (SOA) Research Institute analyzed the data submitted by insurers to examine how disclosures vary both across and within lines-of-business and presented the findings in a report

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.

²»Á¼Ñо¿Ëù¹Ù·½ members have taken an active role in educating Congress and providing feedback on various proposals regarding natural catastrophes. ²»Á¼Ñо¿Ëù¹Ù·½ 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 ²»Á¼Ñо¿Ëù¹Ù·½ outlined numerous ways state insurance regulators manage climate-related risks and respond to natural catastrophes in a report, Adaptable to Emerging Risks.

In March 2024, Climate and Resiliency (EX) Task Force adopted the first of the ²»Á¼Ñо¿Ëù¹Ù·½ and its members ‘National Climate Resilience Strategy for Insurance’. This strategy aims to bring together the products of existing workstreams into an enduring strategy that promotes resilient insurance markets in all US jurisdictions.

On August 2, 2024, the ²»Á¼Ñо¿Ëù¹Ù·½ Financial Condition (E) Committee adopted new interrogatories for the disclosure of climate-conditioned catastrophe exposure for hurricane and wildfire only in the catastrophe risk component of the P&C RBC blanks. The adopted proposal requires property and casualty insurers to use one of the two disclosure scenario options - time-based or frequency-based - to show the potential impact of hurricane and wildfire risks in 2040 and 2050. Reporting will begin in 2025 and conclude in 2027. The disclosures will be used for informational purposes only, not to develop new risk-based capital standards. The ²»Á¼Ñо¿Ëù¹Ù·½ has established a Climate Scenario Resource Center to assist with the disclosure requirements.