Climate Risk Creates New Challenges

Insurers and regulators grapple with the new challenges presented by climate risk as wildfires become more costly and the Atlantic hurricane season begins.

AM Best Student Challenge: Parametric Plan for High-Risk Regions Wins AM Best 2025 Student Challenge: Students at the University of Wisconsin-Madison’s Wisconsin School of Business won the AM Best 2025 Student Challenge with a parametric solution that would provide coverage to underserved markets.

AM Best TV & Audio: Wisconsin Regulator: Weather, Cyber, Health Market Consolidation Among Top Insurance Risks, Concerns: Professionals also explore 2024’s M&A landscape, discuss the evolution of abuse-prevention strategies and examine end-of-life planning.

AM Best Webinars & Briefings: Panelists Highlight Developments in the DUAE Market, Discuss the Future of the Sector : Professionals also explore digital forensics in insurance, examine the states of the Florida property and U.S. MPL markets and discuss auto insurance trends.

App Store: Allstate App Ventures Beyond ID Cards With Fuel Finder, Weather Alert Features: Michael Antognoli, Allstate’s mobile product director, looks to build customer relationships beyond transactions with the insurer’s app.

Artificial Intelligence: Large Language Models Examine Rising U.S. Homeowners Rates: In addition to severe weather, other factors impacting U.S. homeowners rates included regulation, reinsurance, the lack of affordable housing, high mortgage rates and carrier exits, according to the artificial intelligence models.

Best's Calendars: Mutual Reinsurer Meeting Addresses Market Risks, Financial Reporting and Regulation: The International Cooperative and Mutual Insurance Federation’s Meeting of Reinsurance Officials, scheduled to be held June 3-5 in Helsinki, Finland, offers reinsurance professionals from the mutual and cooperative sector presentations about the market, professional development and the latest topics in risk management.

Best’s Rankings: Largest European Insurers – 2025 Edition: Non-IFRS 17 companies ranked by 2023 gross premiums written. IFRS 17 companies ranked by 2023 insurance service revenue.

Bond Purchases: AM Best: NAIC-2 Bond Purchases Climb in 2024; Mortgages and Alternatives Muted: Analysts talked with AM Best TV about a Best’s Special Report that says reinvestment of cash flows by life/annuity insurers into higher-yielding bonds and mortgages drove higher net investment.

Bookstore: Author: Rising Cyberrisks From Third-Party Vendors Call for New Insurance Strategies: Cyber Intelligence 4U founder and CEO Ariel Evans explains how third-party cyberrisks are reshaping insurer strategies and risk management approaches.

China Investments: China’s Financial Regulator Increases Limits on Insurers’ Investments: The National Administration of Financial Regulation said it plans to optimize asset allocation and leverage long-term investment advantages of insurance funds to support China’s “real economy.”

Corporate Changes: Mergers, Acquisitions, State Action and Name and Ownership Changes: American Heritage Life, Centauri National and Key Insurance are among the U.S. life/health and property/casualty insurers that have experienced a corporate change.

European Insurers: Insurance Europe: Additional Sustainability Risk Rules Carry ‘Unnecessary Costs’: Insurance Europe said the European Commission should consider limiting minimum standards to climate risk. One European insurer, however, said hurricanes, thunderstorms and floods dominated a “loss-heavy year” for natural catastrophes in 2024.

Executive Changes: Liberty Mutual Appoints Successor as Retiring Chairman Wraps Up 40-Year Career: Hanover welcomes its first COO, Penn Mutual names new chief financial officer and Conduit Re CEO retires.

FAIR Plans: Affordability: The Last Resort: As Private Insurers Exit High-Risk Areas, FAIR Plans Find Competitive Foothold: Without the rate adequacy they need to sustain their books, insurers are exiting high-risk areas, leaving consumers with few remaining—and more costly—options.

FAIR Plans: Climate Risk: US Treasury’s FIO: Home Insurance Affordability, Availability Undermined by Climate Risks: Homeowners in higher-risk areas see nonrenewal rates about 80% higher, on average, than property owners in the lowest-risk ZIP codes, according to a report from the Federal Insurance Office.

FAIR Plans: Colorado: Colorado FAIR Plan Launches With Help From Plans Countrywide, Director Says: Colorado’s FAIR Plan will require a policyholder to be declined by three admitted carriers to be eligible for basic coverage up to $750,000 for homeowners and $5 million for commercial properties.

FAIR Plans: Wildfire Maps: California Regulators Say Redrawn Wildfire Hazard Maps Will Protect Homes, Communities: The California Department of Insurance said it wants to empower communities with more accurate information about the hazards faced by the state.

From the Editor’s Desk: Hurricane Watch: Best’s Review examines the growth of the residual property market. In addition, a team from the University of Wisconsin-Madison’s Wisconsin School of Business won the 2025 AM Best Student Challenge.

Germany Investments: German Regulator BaFin: Insurers Should Be Cautious of Complex Alternative Asset Investments: Germany’s financial regulator said it’s investigating the investment behavior of insurers, looking at alternative investments including real estate exposure and credit default risks.

Insurance Industry Research: Gallagher Re: First-Quarter $56 Billion Cat Losses Pummel US Insurers: The large global loss estimate came despite lower billion-dollar events than usual for the quarter, Gallagher Re said.

Insurance Marketing: Instanda’s Williams: Branding Takes Center Stage in Battle for Insurance Market Share: Helen Williams, global head of marketing at Instanda, says action during crises can help insurers build trust with customers and bring brands to life.

Insurance Professional Resources: Reasonable Value of Medical Care Still a Point of Contention in US Courts, as Billed Charges Reveal High Markups: Dan Thompson, of DeeGee Rehabilitation Technologies, says the value of past medical expenses is imperative when determining future medical expenses. It all hinges on the real value of medical care, which remains undefined.

Issues & Answers: ISSUES & ANSWERS: Asset Management: Managers and investors discuss opportunities in collateralized loan obligations as well as the importance of analyzing asset allocations and developing an effective strategy for financing.

Life Downgrades: US Life/Health: Downgrades Outnumber Upgrades in 2024: Most U.S. life/annuity insurers must contend with the potential for further interest rate cuts, increased use of higher risk assets and the ongoing drag of legacy liabilities, according to a Best’s Special Report.

Preferred Bloggers: Gen Re Blog’s Evolution, Expansion Focuses on Knowledge Center: Gen Re’s Knowledge Center avoids an overly promotional approach with a steady stream of content, said Sabine Denné, head of global marketing and client communications at the insurer.

Preferred Influencers: No Advantage Is Too Safe for Insurtech: IoT Insurance Observatory founder Matteo Carbone’s LinkedIn page boasts nearly 180,000 followers.

Preferred Podcasters: All Eyes on Economics Combines Insurance, Business and Strategy: The podcast’s host, Michel Léonard, chief economist and data scientist at the Insurance Information Institute, focuses on economic trends that are relevant to the insurance industry.

Preferred Publishers: Parametric vs. Traditional: Survey Finds Interest in Newer Plans: A majority of respondents to Intelligent Insurer’s Parametric Insurance Survey 2025 found interest in parametric coverage “increased a lot” in the past year.

Risk Adviser: Agents To Play Key Role Countering College Funding Cuts: Independent agents are helping colleges identify areas of risk and putting insurance solutions in place to address U.S. Department of Education budget changes.

State Rate Filings: Texas Considering Rate-Approval Requirements for Home, Auto Lines: Proposed legislation would subject any residential property or automobile insurance rate request of more than 10% above or below the previously filed rate to regulatory approval.

State Rate Filings: Texas Homeowners Multiperil Approved Rate Filings by Overall Effect With Increases of 37.8% or Greater: Based on an effective date beginning on Jan. 1, 2024, through Dec. 31, 2025.

Trending: Best’s News: Top Stories Include a Feature About Competition for Independent Agent Business and Articles About Captive Insurers: Other popular stories include an article about annuity surrenders and stories on the California insurance market.

Trending: Best’s Research: Trending Research Includes Reports on US Property/Casualty 2024 Results and on the London Market: Other trending research includes reports on U.S. excess and surplus lines and on P&I clubs.

Underwriting & Loss Control: Auto Repair Shop Fatal Accidents Highlight Underwriting Perils: Best’s Underwriting Reports and Best’s Loss Control Reports provide insights into the risks and lines of coverage for auto repair centers.

Web Traffic: Web Traffic: Visits to Largest European Insurers’ Sites: Chubb Ltd. leads web analytics provider Semrush's ranking of most-visited European insurers’ sites.

What AM Best Says: AM Best: ILS Market Posts Stellar Returns Yet Again in 2024: Analysts discussed a recently released AM Best report that indicated strong returns in the cat bond segment may intensify the appetites of investors for other forms of insurance-linked securities.