Treasury’s Federal Insurance Office Advances First Insurer Data Call to Assess Climate-Related Financial Risk to Consumers

Following last year’s consultation on a proposed new data collection from property and casualty insurers to assess climate-related financial risks to consumers in the United States (EventID 17819), the U.S. Department of the Treasury has now published an update on this matter. Specifically, the Treasury notes that its Federal Insurance Office (FIO) will proceed with the data collection and has submitted a corresponding request to the Office of Management and Budget (OMB) for approval and public comment. The proposed data collection has been somewhat refined based on feedback received from the National Association of Insurance Commissioners (NAIC) and state insurance regulators, with a focus on creating a national baseline for ZIP Code-level analytics while minimizing the burden on small insurers.
As noted before, the data collection will encompass current and historical data (back to 2017) of insurance companies on their underwriting activities and the claims that have been made during same time, each per Zip Code. The data will allow the Office to assess
– the exposures of insurance companies to physical climate-change risks based on their total insured properties;
– the change of claims that have been made throughout the past few years indicating enhanced exposures in certain geographical areas;
– the level of insurance coverage throughout the U.S. and possible gaps in this context; and
– the affordability of insurance coverage.
Secretary of the Treasury Janet L. Yellen emphasizes the importance of this data collection to assess climate change impacts on households and inform potential solutions to improve insurance availability and affordability. The initiative also aligns with President Biden’s Executive Order on Climate-related Financial Risk and FIO’s statutory mandates to monitor insurance industry aspects and assess access to insurance products, especially for traditionally underserved communities and consumers.