Today's Headline
Neptune Flood Research Group Releases Analysis on the Flood Underinsurance Crisis in the United States
Flood risk is rising rapidly across the United States due to the increasing frequency and intensity of climate-driven weather events. Yet, millions of American homeowners remain financially exposed due to insufficient or non-existent flood insurance coverage.
Research from the Federal Reserve Bank of Philadelphia exposes the staggering scale of this problem: of the $24.4 billion expected annual flood losses to single-family homes, approximately 70% (or $17.1 billion) are uninsured.
The latest issue by Neptune Research Group explores the extent of the nation's flood underinsurance crisis. The findings are clear: underinsurance is not limited to those without a policy. Nearly 85% of all at-risk single-family homes in the U.S. lack sufficient coverage, facing thousands of dollars of uninsured loss annually, underscoring the financial risk homeowners carry.
Coverage gaps are widespread and persistent:
- 77% of at-risk single-family homes outside FEMA high-risk flood zones, or Special Flood Hazard Areas (SFHAs), have no flood insurance
- 52% of total expected flood losses inside SFHAs are uninsured
- Over 90% of low-income households are underinsured, with uninsured expected losses often exceeding 20% of annual income
- Behavioral, economic, and informational barriers (including limited awareness, affordability concerns, and skepticism about climate impacts) contribute significantly to this shortfall. Critically, nearly 90% of homes that would financially benefit from purchasing flood insurance remain underinsured.
News
Auto insurance rates drop after years of increases, but will relief last?
After years of soaring premiums, Florida drivers are finally seeing some relief—at least when it comes to auto insurance.
In a rare turn of good news, Florida’s top five auto insurance groups—which together cover nearly 80% of the state's insured drivers—are cutting rates by an average of 6.5% in 2025. Some companies are slashing rates by as much as 11.5%, signaling what state leaders say is a much-needed shift toward market stability.
“It’s good news for the wallets of every Floridian, as we're all trying to make ends meet and succeed in life,” said Florida Insurance Commissioner Mike Yaworsky. “It's another sign that we're moving in the right direction. I hope to see it continue.”
The rate reductions mark a dramatic turnaround from just two years ago, when auto insurance premiums in Florida spiked more than 30%, driven largely by litigation costs and fraud.
Now, state officials say a package of legislative reforms passed in 2022 and 2023 is delivering results.
“The auto market, we’re seeing real stability emerge once again after a couple of years of pretty significant increases,” Yaworsky added.
Among the key reforms were efforts to limit lawsuit abuse, a major driver of insurer losses. According to state data, Florida’s personal auto liability loss ratio—a metric that measures how much insurers spend on claims compared to premiums collected—has dropped from 80.5% to just 53.3%, the lowest in the nation.
Financial Results
American Property Casualty Insurance Association: WHAT YOU CAN DO ABOUT THE COST OF INSURANCE WHEN EVERYTHING IS GETTING MORE EXPENSIVE
The cost of living has been rising for years and continues to go up. Increasing costs impact everyone and make it extremely challenging to run a small business, raise children, or support your aging parents. Insurance is no exception – the price of insurance is determined by the cost of everything else. This includes everything that goes into repairing and rebuilding homes and vehicles and even recovering from injuries.
David A. Sampson, president, and CEO of the American Property Casualty Insurance Association (APCIA) breaks down why insurance costs are rising and what consumers can do to lower their premiums. He also shines a light on which states are taking the right steps toward lowering costs.
WHAT IS DRIVING UP OUR INSURANCE COSTS?
- Inflation hit the U.S. economy hard starting in 2021. Month to month, inflation remains elevated, even if it's slowed down quite a bit from the 40-year record high a few years ago. Insurance rates are a lagging indicator for inflation. The inflationary spike of 2021 to 2023 began rippling through the insurance sector in 2022. There was a slowing, in some states, of rate increases in 2024. CONTINUE
Q2 Commercial Insurance Rates Reverse Seven-Year Climb as Global Competition Intensifies
Fourth consecutive quarterly decline signals major market shift, with U.S. casualty rates bucking the trend, Marsh reports.
Global commercial insurance rates declined 4% in the second quarter of 2025, marking the fourth consecutive quarterly decrease and ending seven years of quarterly rate increases, according to the Marsh Global Insurance Market Index.
The global rate environment reflects a dramatic reversal from the hard market conditions that dominated the insurance landscape for nearly a decade. While most regions experienced significant declines — with the UK dropping 6% and the Pacific region falling 11% — the U.S. market remained flat in Q2, suggesting more complex underlying dynamics, according to Marsh.
U.S. property insurance led the decline domestically, dropping 9% for the second consecutive quarter as insurers competed aggressively for business and benefited from decreasing reinsurance costs. This contrasted sharply with casualty lines, which surged 9% nationally, driven primarily by persistent challenges in auto liability and umbrella coverage, the report said.
Revenue rises 9.1% at Brown & Brown - Business Insurance
Total revenues at Brown & Brown rose 9.1% in the second quarter to $1.29 billion, with 3.6% organic revenue growth, the commercial insurance broker reported Monday.
Second-quarter net income declined 10.1% to $231 million.
Revenues in its retail segment rose 7.9% to $697 million, with 3.0% organic revenue growth.
Programs segment revenue rose 6.1% to $381 million, with 4.6% organic growth.
The wholesale brokerage segment saw revenues rise 14.5% to $182 million, with 3.9% organic revenue growth.
In commercial insurance pricing, “…rates for most lines moderated even further in the second quarter, and in some cases, more than we expected,” President and CEO J. Powell Brown said on the broker’s earnings call Tuesday morning. Rates in the admitted property/casualty market “continue to moderate down,” he said.
In the excess and surplus lines market, property rates were generally down 10% to 20% in the first quarter and the trend continued throughout the second quarter, with rates down 15% to 30%.
“We saw more pressure on rates at the end of the quarter,” Mr. Brown said.
Commentary/Opinion
Property insurance apocalypse: Some progress, no immediate relief
During Orinda homeowner Yasaman Nazmi Lee’s home-insurance saga — one of millions playing out across California as the age of mega-fires drives insurers to pull back from coverage and raise prices — there was bad news, then good news. But even the good news was not great.
Nazmi Lee’s insurer, Travelers, threatened to drop her $8,700-a-year coverage policy last year. Then it agreed to renew — for a staggering $13,000. Since other insurers were quoting up to $30,000, Lee re-upped with Travelers. She trimmed the pricey premium to $11,000 by boosting her deductible to $25,000.
In a state where housing affordability is a top concern, this year was supposed to offer homeowners rocked by policy non-renewals and steeply rising insurance costs a ray of hope, if not some relief. Spurred by Gov. Gavin Newsom, elected Insurance Commissioner Ricardo Lara spent last year pushing changes to state regulations to appease insurers who argue the rates they’re allowed to charge haven’t kept up with wildfire risks and costs.
“There is a point at which I think people are going to rethink living in the state,” Nazmi Lee said. “My greatest disappointment here is with Governor Newsom and our local elected officials for not doing enough.”
Regulations
Auto insurance associations, companies report Q2 lobbying disclosures
The American Property Casualty Insurance Association (APCIA)spent $1.7 million lobbying a variety of issues during the second quarter, according to lobbying disclosures filed with the Clerk of the United States House of Representatives.
APCIA lobbied multiple issues that revolve around vehicles, including autonomous vehicles, towing regulations, and safety management systems. These issues are listed without specific bill numbers.
Specific bills include H.R. 1566, Right to Repair; H.R. 2662, Automobile Insurance Costs; and S. 1379, Automobile Insurance Costs.
APCIA also lobbied for more than 25 bills focused on natural disasters, with a majority of those revolving around wildfire mitigation. Other bills the organization lobbied for focused on tax laws, such as the Corporate Alternative Minimum Tax and Third Party Litigation Financing Tax.
The National Association of Mutual Insurance Companies (NAMIC) also spent $435,663 in lobbying during the second quarter. READ ON
Research
Connecting the Dots: Claims Ecosystems Drive Customer Satisfaction - Datos Insights
The insurance claims process is a critical touchpoint between insurers and their policyholders.
The property and casualty insurance industry is experiencing a fundamental shift in claims handling, driven by evolving customer expectations and technological advancement. Traditional approaches that treated claims processing as a series of disconnected steps among insurers, claimants, and service providers are giving way to integrated ecosystems that deliver enhanced outcomes for all stakeholders.
This report examines the evolving P/C claims ecosystem, focusing on the technological innovations and customer-centric approaches that are reshaping the industry. The research methodology combines an extensive literature review, an analysis of industry reports, and insights from recent studies on customer satisfaction and retention in the auto insurance claims and repair journey. This report is based on a white paper sponsored by CCC Intelligent Solutions.
Clients of Datos Insights’ Property & Casualty service can download this report.
Tim Baum is a seasoned technology executive with a history of leading both startups and large corporations in delivering complex strategic technology programs for business transformation.
InsurTech/M&A/Finance💰/Collaboration
US and Canada insurance M&A deals hit the brakes
Insurance agency merger and acquisition activity in the US and Canada declined in the first half of 2025, with 319 deals announced, according to data from OPTIS Partners.
That marked an 8% drop from the 345 transactions recorded during the same period last year.
Despite the overall slowdown, activity picked up in the second quarter with 168 deals, an 11% increase compared to Q2 2024.
Most transactions involved US-based sellers (305), while Canadian brokerages accounted for 14.
“The M&A market is likely at a new normal. We expect about 750 to 800 deals annually going forward,” said Steve Germundson, partner at OPTIS Partners, an investment banking and financial consulting firm focused on the insurance distribution sector. “Larger firms will continue to look for bigger transactions to fuel needed growth, and the number of buyers will shrink as some of yesterday’s active buyers become tomorrow’s sellers.”
ServiceNow Leaders Launch Plutus backed by Moneta Ventures to Accelerate Modernization for Insurance
A team of former ServiceNow leaders, (Kara (Donato) Anderson, Abhishek Bajpai and Chirag Jindal) have announced the launch of Plutus, a bold new entrant into the ServiceNow partner ecosystem focused on delivering Agentic AI solutions tailored for the insurance industry. The startup has secured pre-seed funding from Moneta Ventures, underscoring strong investor confidence in its vision to transform insurance carriers and brokers using ServiceNow.
"In my role as a Product and GTM leader at ServiceNow, I had the privilege to engage with Insurance leaders globally, and it was clear to me that the marketplace demands both purpose-built, packaged solutions to accelerate time to value and the experienced talent to deliver these solutions," said Chirag Jindal, CEO and Founder of Plutus.
"Hearing first-hand how customers are overwhelmed with 'AI noise', we developed a methodology for incremental consumption of AI that utilizes our large-scale transformation backgrounds, relentless focus on change management and adoption, and experienced technical talent," adds Jindal.
Recommended Events
ClimateTech Connect is back 🌎 April 8th-9th-2026 | Washington DC
Last year the Inaugural ClimateTech Connect (CTC) conference convened leaders from across the climate adaptation & resilience community—insurance, financial services, government, technology and academia joined us for two days of masterclass content, an electrifying product expo and innovation stage, pitch competition and plenty of immersive networking.
CTC is returning to DC April 8th and 9th 2026 with a more expansive conference and expo. Register now and save up to 50% off the 2026 ticket prices.
Deadline for early bird rates is this Thursday, July 31st 2025.
As extreme weather events are growing in frequency and severity, all businesses and organizations need to develop mission critical climate risk mitigation and resilience strategies. ClimateTech Connect delves into the dynamic intersection of climate resilience and cutting edge technology
We look forward to seeing you in April!
Podcast Sponsor
Audio Version - 'Connected: The Podcast' --- Sponsored by Pulse Podcasts
The ‘Connected’ Podcast by Alan Demers and Stephen Applebaum, is a condensed audio version of the day's ‘Connected' newsletter, a daily scan of all the happenings in the world of Insurance & InsurTech News.
Pulse Podcasts: Introduce a new way for your audience to hear your voice! We are a podcast creation service that helps businesses turn their written content, like blog posts and news articles, into beautiful podcasts. Our platform writes the script, records the voices, and mixes the audio to create engaging content for your audience. It's affordable and has super-fast turnaround!
LISTEN AND SUBSCRIBE BELOW