Commentary/Opinion
The $1.5 Trillion Opportunity for Home Insurers | Insurance Thought Leadership
A study finds that U.S. homes will lose $1.47 trillion of value by 2055 because of climate change. Therein lies a major challenge — and opportunity. A new study reports that U.S. homes will lost 6% of their value in the next 30 years, or a collective $1.47 trillion (that's trillion, with a "t"), because of climate change and the staggering premiums that insurers will have to charge to cover the growing risks.
The study by First Street, a group that focuses on climate threats to housing, says the home insurance premium amounted to about 8% of the mortgage payment not long ago. Today, the average is closer to 20%. And First Street says premiums will rise an average of 29% by 2055, not counting inflation, to catch up with the risks that aren't currently priced into premiums (partly because of resistance from regulators) and to account for the growing threats from climate change. Some locales may see premiums double or quadruple, soaring so high they become unaffordable.
Unless....
... insurers find a way to work with homeowners, regulators and other government officials to reduce the risks. Saving homeowners some significant portion of $1.47 trillion would be a huge service to humanity, while being immensely profitable for insurers.
Paul Carroll, editor-in-chief, Insurance Thought Leadership
WTW warns of growing insurance protection gap
What does this mean for insurers and their clients?
The insurance protection gap for natural catastrophes is estimated to reach 60% as 2024 becomes the first year to surpass 1.5 degrees Celsius, according to WTW’s Natural Catastrophe Review for the second half of 2024.
Natural catastrophes continued to place significant pressure on global insurance markets in 2024, with global insured losses exceeding $140 billion, marking the fifth consecutive year that insured damages topped $100 billion.
Total economic damages from these events exceeded $350 billion, underscoring the lack of resilience to climate-related risks. In addition, wildfires in Los Angeles have already caused insurance loss estimates in the region of $30 billion to $40 billion in the first few weeks of 2025.
Natural Catastrophe Review
The Natural Catastrophe Review, a biannual publication, explores the physical, vulnerability, and socioeconomic factors contributing to the largest natural catastrophes in the latter half of 2024. The report goes beyond the statistics, offering insights on improving natural catastrophe risk management and resilience across sectors.
Research
Latest ‘Insurer Report Card’ grades ‘record-high’ 22 companies with C- or lower
A record-high of 22 companies, including six of the largest U.S. auto insurers, received a grade of C- or lower from collision repairers on the 2025 “Insurer Report Card” for how well their claims practices help promote quality repairs and customer service.
None of the top 10 largest and best-known auto insurers received an overall grade higher than a C+ while more than 60 other insurers ranked higher.
Six companies received an A- or higher. Thirty insurers received a B or higher to earn a spot on this year’s “Honor Roll.”
InsurTech/M&A/Finance💰/Collaboration
Gallagher acquires firms in UK, New York - Business Insurance
Arthur J. Gallagher & Co. said Monday that Gallagher Bassett Services Inc., its claims management unit, has acquired W K Webster & Co. Ltd., a London-based marine and transit claims consultancy.
Separately, Gallagher said Monday it acquired Syracuse, New York-based Dominick Falcone Agency Inc. and Falcone Associates Inc.
Terms of the transactions were not disclosed.
Howden reportedly in talks to acquire US insurance broker Risk Strategies
Howden is reportedly in discussions to acquire the US-based Risk Strategies, according to sources familiar with the matter.
A report from Bloomberg says that the negotiations involve Risk Strategies' private equity backer, Kelso & Co, but there is no assurance that a deal will be finalized, as per the sources, who requested anonymity due to the confidential nature of the discussions.
The report noted that Howden has long been viewed as a potential candidate for an initial public offering. The company is owned by 5,200 employee-shareholders along with private equity firms General Atlantic and HgCapital, Canadian institutional investor Caisse de Dépôt et Placement du Québec (CDPQ), and the Howden Foundation.
Analysts also note that acquiring Risk Strategies, one of the largest privately held insurance brokers in the US, would represent Howden’s expansion into the American retail insurance market, a move that has been widely anticipated.
Markel Implements Guidewire Cloud to Modernize Claims and IT Operations
Markel, the insurance operations within Markel Group Inc. (NYSE: MKL), and Guidewire (NYSE: GWRE) announced that Markel successfully migrated Guidewire ClaimCenter from an on-premise environment to Guidewire Cloud to power and simplify its claims and IT operations. The company implemented ClaimCenter on Guidewire Cloud for its specialty lines of business across its US operations.
"Migrating ClaimCenter onto Guidewire Cloud enables us to automate and transfer system maintenance and updates to Guidewire so our teams can increase their focus on delivering value to our customers and partners," said Markel Chief Information Officer Morris Taylor. "Our successful transition to Guidewire Cloud underscores our confidence in Guidewire's cloud-based offering and innovations.
Looking ahead, we are excited to explore the full potential of the Guidewire Analytics capabilities available on Guidewire Cloud and quicker access to best-in-class insurtech solutions that are part of the Guidewire Marketplace and the PartnerConnect ecosystem."
"The successful implementation of Guidewire ClaimCenter, combined with the migration to Guidewire Cloud, not only modernizes our claims organization, but improves the customer experience, making it faster and easier to process claims for our clients," said Markel Chief Claims Officer Jamie Carsey.
"The migration also gives us access to improved data and insights to help us drive business decisions, providing an overall better experience for everyone."
Climate/Resilience/Sustainability
Climate could force massive losses in property value amid migrations
Where are the winners and losers of the coming great climate migration?
Americans are likely to continue moving to areas with risky climates, even as other places are abandoned, and more resilient places welcome newcomers.
As natural disasters and extreme weather events become more common, the U.S. real estate market will lose more than a trillion dollars in value as Americans move away from riskier areas and toward those expected to be more resilient, a new report finds.
But the great climate migration of the coming decades won’t be linear. Americans will likely continue to flock to many of the areas that face the most peril, as local amenities and favorable economic conditions outweigh the mounting costs of climate risk.
Announcements
EagleView and Verisk Join Forces to Streamline Property
EagleView, a leading provider of aerial imagery and insights, and Verisk (Nasdaq: VRSK), a leading global data analytics and technology provider, today announced the formal integration of EagleView Assess™ into Verisk’s industry-leading Xactimate® and XactAnalysis® platforms for property claims management.
EagleView Assess uses simple-to-fly, fully autonomous drones to deliver clear and consistent property imagery, precise measurements, AI-powered damage detection, and automated workflows to streamline insurance claims and document storm-related damages to determine the scope of repairs. With this new integration, roof reports and imagery from EagleView Assess will be available within:
For policyholders, EagleView Assess provides an improved experience by driving faster resolution of claims. While working with their insurance carriers, policyholders can more easily schedule roof inspections. Further, the imagery captured by EagleView Assess provides an objective record of damages helping eliminate the need for potential re-inspections and enabling faster decisions to help successfully bring claims to a close.
“As an organization that supports 24 of the top 25 insurance companies in the United States, EagleView understands the challenges carriers face. This collaboration is a direct response to wanting to best meet the needs of the insurance industry,” said Piers Dormeyer, CEO of EagleView. “I can’t wait to have our partners and new customers explore how powerful this integration will be.”
With this integration, Verisk customers can make requests from Xactimate and XactAnalysis projects for an “EagleView Assess Roof.” After the order is completed, EagleView’s 3D Roof Measurements, the corresponding Sketch® file and the images used to create the measurement report are uploaded to the user’s project. Custom status notifications can be sent so users can review and evaluate critical claims handling information.
Webinars/Podcasts/Interviews
Insights from the C-Suite on Delivering Seamless Customer Experiences in an Interdependent Claims Ecosystem
Insurance carriers deliver value through an interconnected ecosystem. From collision repair and towing to rental, salvage, and medical services, carriers rely on a network of partners to restore their customers' lives after a claim.
However, this dependency introduces challenges. A recent study from CCC found that customers often don't recognize – or differentiate – between the roles of insurers and repairers, yet they hold carriers accountable for the repair experience.
How can insurers navigate these complexities, boost collaboration across the ecosystem, and deliver seamless experiences that drive satisfaction and retention?
Join our panel of industry leaders – including former insurance CIO and current Datos Senior Principal Analyst, Deborah Zawisza; Michelle Raue, Chief Claims Officer, Preferred Mutual; Paul Stachura, former CCO of State Auto, and former Allstate CCO, Eric Brandt – as they unpack findings from CCC’s Moments of Truth report and explore strategies for creating cohesive customer journeys when so much of the process is beyond insurers’ control.
Data Privacy
Smartcar Report Highlights Disconnect Between Drivers and Vehicle Connectivity Solutions
Smartcar has released its 2025 State of Connected Car Apps report, uncovering a significant gap between driver expectations and the connected car ecosystem today. The report reveals that while drivers are eager to adopt technology to address vehicle-related pain points, many are unaware of the benefits and availability of vehicle connectivity.
“By working together to address the pain points surfaced in this report, the automotive industry can help drivers maximize connected car technology for safer, more affordable, and sustainable mobility.”
Surveying over 1,000 drivers across the United States and Europe, the report examines drivers’ familiarity with automaker connected services, their most valued software features, and receptiveness toward data sharing.
Key findings include:
- Low connected services adoption: 76% of drivers are not subscribed to their automaker’s connected services, highlighting low market penetration and perceived value. However, 67% of connected services users are eager for more features and willing to pay a premium for enhanced offerings.
- Third-party app usage: 56% of drivers use third-party apps for tasks like insurance, maintenance, and EV charging, reflecting a preference for solutions that enhance convenience, security, and cost-effectiveness.
- Cost sensitivity: Cost remains a barrier, with 65% of respondents citing high prices as a reason for not using connected services or related applications.
Los Angeles Wildfires
CDI says "serious questions" over State Farm's financial condition
Over $1 billion in claims already as insurer asks for 22% premium increase
California’s largest homeowners’ insurer, State Farm, has petitioned state regulators for an urgent 22% rate hike, a move that underscores the deepening instability in the state’s insurance market. The request, submitted on Monday, reflects growing financial pressures as wildfires and other natural disasters continue to drive insurance costs upward.
Over the past few years, an increasing number of Californians have struggled to obtain or maintain affordable insurance. Many major providers have withdrawn from the market or sharply increased rates, citing rising risks. The latest wave of fires in Los Angeles, which left 12,000 homes in ruins, has only exacerbated concerns for both insurers and policyholders weighing whether to rebuild.
Financial toll of wildfires on State Farm
State Farm has already paid over $1 billion in claims related to the latest Los Angeles fires and expects further payouts, making this disaster one of the most expensive in its history. The company, which insures over a million homes in California, has warned that continued risk exposure requires significant rate adjustments to ensure financial stability
InsurTechs Highlight New Approaches to Wildfire Insurance
Years before the January 2025 Palisades and Eaton fires sparked in high-wind conditions in Southern California, growing to rank among the top three most destructive in U.S. history, InsurTechs focused on insurance coverage issues for wildfire-prone regions.
Executives of three—Delos Insurance Solutions, Kettle and Faura—shared their perspectives on the peril overall and discussed how the latest fires could affect insurance moving forward during interviews that took place before the fires were contained.
Read some of the insights they shared.