The Treasury Department’s Federal Insurance Office (FIO) has begun the initial phases of the process of collecting data from insurers to assess climate-related financial risk to consumers.
FIO’s data collection will obtain previously unavailable insurance data at a ZIP Code level from the largest homeowners insurance providers that collectively underwrite around 70 percent of homeowners insurance premiums nationwide.
The data is critical to understanding how climate-related financial risks impact individuals and families, particularly given recent insurer pullbacks and premium increases in several states. In 2022, insurance covered only 60 percent of $165 billion in total economic losses from climate-related disasters.
“Americans are facing growing challenges from extreme weather events caused by climate change,” Secretary of the Treasury Janet Yellen said. “The Treasury Department’s insurer data collection is the first of its kind and will provide critical information at a local level to assess the increasing impacts of climate change on household budgets. The resulting data and analyses will help policymakers inform potential approaches to improving insurance availability and affordability for consumers.”
FIO has begun the process by providing public notice on its intent to proceed with the data collection. It is also submitting the data collection request to the Office of Management and Budget for approval and public comment.
It should be noted that FIO has streamlined and refined its data collection request to facilitate a more effective implementation of the collection. The changes were based on feedback from numerous stakeholders, including the National Association of Insurance Commissioners (NAIC) and state insurance regulators. The changes to the data collection proposal are intended to help establish a national baseline for analytics at a ZIP Code level, while also reducing the burden on small insurers.
FIO officials said they will continue to engage with the NAIC, state insurance regulators, and other stakeholders on this initiative going forward.