FIO Report on Homeowners Insurance Faces Industry Pushback
The U.S. Treasury’s Federal Insurance Office (FIO) recently released a report, which it claims is the “most comprehensive data on homeowners insurance in history.” The report examines the availability, affordability, and nonrenewal rates of homeowners insurance.
Like a prior U.S. Senate committee study and hearing on climate change’s impact on homeowners insurance, the insurance industry is disputing the FIO’s findings. Jimi Grande, senior vice president of federal and political affairs for the National Association of Mutual Insurance Companies (NAMIC), called the FIO’s efforts “failed and flawed.”
“The analysis notes the multiple factors contributing to the increased cost of providing coverage – including inflation, population shifts, and litigation – but focuses almost exclusively on climate issues, to the detriment of understanding what is really impacting consumers and insurance markets that serve them,” Grande said.
David A. Sampson, CEO of the American Property Casualty Insurers Association of America (APCIA), said the FIO report “provides an incomplete explanation about the affordability and availability of insurance.”
“Insurance availability can be best improved by allowing competitive private markets to appropriately price risk according to expected costs, while reducing government rate suppression and policy from constraints,” Sampson added. “Insurance affordability is best addressed through improved mitigation and resiliency programs. APCIA and our members have been supporting dozens of climate mitigation and resiliency programs that can help reduce climate-related losses and make insurance more affordable.”
The data powering the FIO’s report came from the National Association of Insurance Commissioners (NAIC). However, NAIC terminated its data-sharing arrangement with FIO late last year amid concerns about the quality of the data FIO had on hand, according to Sampson. NAIC stated that any conclusions drawn from the FIO’s data would be “incomplete and misleading.”
The debate over data collection methods goes back to when FIO was instructed to work with states to assess insurance coverage. Initially, FIO planned to have P/C insurers submit ZIP-code-level homeowners insurance underwriting data to assess climate risk. The office changed course and announced in March 2024 that it would coordinate with NAIC to gather the data.
The resulting report, released shortly before a new presidential administration took office, spans over 70 pages and includes information from 2018 through 2022, aggregated at the ZIP code level. According to the FIO, average nationwide homeowners insurance premiums increased 8.7% faster than inflation during the period, and nonrenewal rates increased. Consumers in high-risk ZIP codes saw higher premiums and were nonrenewed more often.
The FIO acknowledged the lack of data for 2023 and 2024, years during which “public data suggests premiums and nonrenewals increased significantly in some states.
