Navigating Insurance Data Gaps: A Collaborative Approach to Address Local Protection Challenges

NAIC's Data-Driven Strategy to Identify Local Insurance Gaps

The National Association of Insurance Commissioners (NAIC) is taking a proactive approach to identify gaps in the data collected from insurers, particularly concerning insurance availability and affordability. With the increasing frequency and severity of weather events, rising reinsurance costs, and inflationary pressures, property insurance has become more challenging for many regions in the U.S. The NAIC recognizes that these dynamics can vary significantly within small geographic areas, leading to localized protection gaps even in generally healthy insurance markets.

State Regulators' Efforts to Fill Data Gaps

Under the leadership of Alan McClain, Arkansas insurance commissioner and chair of the NAIC Property and Casualty Committee, insurance regulators from at least 30 states have begun efforts to identify where data is lacking. The goal is to develop a data template that establishes a long-term, robust data collection strategy, enabling regulators to more nimbly respond to inquiries related to their property markets. This approach contrasts with the U.S. Treasury's Federal Insurance Office (FIO) proposal last year, which aimed to collect data related to insurers' underwriting metrics and policy information.

Collaboration and Data Utilization

The Insurance Information Institute (Triple-I) responded to the FIO's Request for Information (RFI) by arguing that the proposed data call was duplicative and could lead to misleading conclusions. Triple-I suggested that FIO could secure the necessary information from existing, publicly available data without placing an additional burden on insurers. The NAIC echoed these sentiments, emphasizing the importance of collaboration and expressing concern over FIO's unilateral process. In a June 2023 report, FIO acknowledged the industry's and NAIC's efforts but noted that these efforts are fragmented across states and limited in several critical ways. FIO's report makes 20 recommendations, proposing areas of focus for future work by state insurance regulators and the NAIC.

For readers, it is crucial to stay informed about these developments and understand the importance of data in risk management. Engaging with local regulators and insurance providers can help ensure that your community's insurance needs are adequately addressed. Additionally, leveraging publicly available data can provide valuable insights into insurance availability and affordability trends.