Climate Change Several Catastrophic (CAT) events had devastating impacts in the U.S. in 2024 and the beginning of 2025. › Hurricane Helene (Sept 24, 2024): Estimated total insured losses of $10.5 to $17.5 billion. Primarily a heavy flooding event with 30 inches of rainfall over three days in Western North Carolina. › Hurricane Milton (Oct 5, 2024): Estimated total insured losses of $17 to $28 billion. Originally headed for the highly populated Tampa Bay area, the storm made a turn south to a less populated area. › California Wildfires (Jan 7 - 31, 2025): Estimated total insured losses of $35 to $45 billion as 14 destructive wildfires swept the Los Angeles metropolitan area. › Convective Storms (All of 2024): Estimated at $100 billion. Storms have become increasingly severe and have extended geographically into the upper Midwest. Due to the corrective actions taken in 2023 and 2024, along with positive investment income in 2024, carriers were better positioned to handle these events. As a result, these events only had a modest impact. January 2025 reinsurance treaties, often an indicator of overall pricing, were favorable. Reinsurance pricing remained flat but with higher attachment points and tighter event definitions. Reinsurers have shifted from Frequency Protection to Severity Protection, with retention levels remaining generally aligned with those from 2024. Insurance for Habitational Properties remains challenging, with higher retentions established in 2023/2024 and continuing into 2025. The fragile softening on rates applies here. Insurance for office buildings presents fewer challenges, as some vacancy issues have subsided with businesses gradually returning to their office settings most workdays. The strict carrier scrutiny on replacement cost valuation seen in 2023 and 2024 has leveled off in 2025. However, recent tariffs have introduced uncertainties regarding the cost of building materials. It’s crucial to monitor your Extra Expense Limit on Equipment Breakdown coverage, as import costs and supply chain disruptions may impact the replacement cost of equipment.
Our Recommendations: › Be proactive about valuations. › Address all recommendations from loss control visits. › Close open claims to the extent possible. › Take preventative measures to reduce repeated similar claims. › Create a Water Mitigation Plan (a map of shut-off valves).
› Implement a Business Continuity Plan to reduce business interruption. › Keep records of building upgrades (roofing, electrical, HVAC). › Conduct reserve studies to fund future capital improvements. › Communicate all of the above in your renewal submissions
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