Concerned about anecdotal evidence of diminishing availability of property insurance coverage in areas subject to disasters exacerbated by climate change, the Treasury Department announced on Thursday, June 7, that it is planning to launch the first nationwide assessment of insurers’ financial exposure to climate risk.
The Federal Insurance Office (“FIO”) sent emails to insurance regulators in all 50 states asking if they gathered data regarding insurance coverage, losses and liabilities for every zip code in their state for the past five years. The emails did not request the data but inquired whether the states are able to provide such data in the future. The FIO plans to analyze the risk that insurers face from potentially paying a rising number of claims in disaster-prone areas. The data each state provides would identify the impact of climate change on protection gaps and insurance availability, particularly in at-risk markets.
As insurers are pulling out of climate-vulnerable markets, like Florida due to hurricane related claims and California due to wildfires, the Federal Insurance Office seeks to analyze the impacts of climate change in effort to mitigating that threat.