Delaware Insurance Commissioner Trinidad Navarro has announced that the state is participating in the National Association of Insurance Commissioners’ (NAIC) climate risk survey.
The NAIC is conducting an Insurer Climate Risk Disclosure Survey, which seeks to gauge how climate change and its various impacts would affect the insurance industry. In particular, the survey studies how climate change affects industry issues such as investment practices and mounting insurance claim frequency, as well as its influence on insurers’ finances and insurance product accessibility.
The survey was first adopted by the association in 2010 to assess insurance companies that write over $500 million in direct premium, but only the state of California continued to survey its insurance market when the threshold was lowered to companies writing $300 million in premium. California was later joined by New York, Washington, Connecticut, Minnesota, and New Mexico over the years, while the threshold steadily dropped to the current $100 million.
Now Delaware is the latest state to join the climate risk assessment effort.
“In Delaware and across the country, residents are feeling the impacts of climate change, and relying on insurers to respond to the heightened risk of damage to our properties, businesses, homes, and lives. As natural disasters occur more frequently and with more intensity, the industry must be prepared to provide rapid response,” said Commissioner Navarro. “The issues of affordability and access seen as a result of wildfires in the west and hurricanes in the south have served as ominous forewarnings of what may be to come in our own region, and through participating in the Climate Risk Disclosure Survey we can better understand how prepared Delaware insurers are for these events and what opportunities we have to protect residents from these effects.”
An official release from the insurance commissioner’s office noted that 82 insurers operating in Delaware that reported $100 million or more in 2020 premiums have been asked to respond to questions about their investment and risk management policies, as well as their processes to identify, assess, and reduce climate-related risks. The insurers will also be inquired about the actions they took to encourage policyholder mitigation efforts and engage key constituencies in climate-based discussions, as well as information about their current analysis of risk and their climate-related goals.
The surveys are due August 31, 2021. In total, more than 1,200 insurers in the participating states – representing over 70% of the US insurance market – will complete the Insurer Climate Risk Disclosure Survey. The California Department of Insurance will compile the data of all the participating states and issue a public report at a later date.