The Trump administration’s decision to discontinue the National Oceanic and Atmospheric Administration’s (NOAA) billion-dollar disaster database has raised concerns among insurers who rely heavily on federal climate data to assess catastrophic risks. The database, which tracked extreme weather events with damages exceeding $1 billion, was a critical resource for the insurance industry.
Impact on Insurers
Brian Espie, chief underwriting officer at Kettle, expressed concerns that the database shutdown will increase the cost and complexity of underwriting across the sector. “Kettle was built around a proprietary wildfire model, and much of our data sources are from public, government-supported entities,” Espie said. “NOAA is the largest supplier of it.” The loss of this centralized resource leaves a significant data gap for underwriters.
Historical Context
According to NOAA, between 1980 and 2024, the US experienced 403 weather and climate disasters with total damages exceeding $1 billion each, amounting to a cumulative cost of over $2.915 trillion. This data was crucial for insurers to model and understand catastrophic risks, especially as the industry faces mounting wildfire and weather losses.
Shift to Private Vendors
Without NOAA’s database, insurers are turning to private vendors who are launching satellite networks and proprietary tools to fill the vacuum. However, Espie warned that this shift will come at a cost: “If [insurers] are able to obtain the same data, it’s going to come from private sources who naturally are going to charge more for it.” Kettle has spent several months building redundancies, anticipating NOAA’s move, which requires going to more sources, paying more for data, and investing internally in data aggregation.
Consequences for Policyholders
The increased costs for insurers will likely be passed on to policyholders. “Anytime you increase costs for insurers, those costs get borne out by the policyholders,” Espie said. “Over time, that is going to make insurance more expensive for homeowners and business owners.” While investors in private climate data firms may benefit, the broader impact will be felt by those seeking insurance coverage.
