Can we rely on property insurance data results even if states opt out?

Even if some states decide not to participate in a national effort to collect data on property insurance markets, the results of the initiative will still help regulators improve availability and affordability of coverage, a leading state official said.

The National Association of Insurance Commissioners last month launched a 90-day property and casualty market intelligence data call that seeks to collect zip-code-level information on about 70 data points – including premiums, policies, claims, losses, limits, deductibles, non-renewals and coverage types – from more than 400 insurers.

But at least one state – Louisiana – is not responding to the data call. Several others could opt out, consumer advocates have said.

The NAIC will not release a list of participating states, Connecticut Insurance Commissioner Andrew Mais (pictured above, left) said Friday. But he stressed that the number of states submitting data won’t affect the reliability of the results because NAIC will be able to gather data from the insurance companies it’s surveying.

Mais, who is NAIC president this year, said the goal is to assess 80% of the national homeowners’ property insurance market, and the organization is on track to do that.

“We are confident that the data is valid,” Mais told reporters Friday when releasing NAIC’s climate resiliency strategy. The data collection is central to the strategy, which is the first collective effort by states to address the effects of severe weather and climate-related disasters on property insurance.”

“We are confident that the data will accurately describe both state markets and individual markets,” Mais said. “We are confident that the data and information we are getting will provide state insurance regulators with the insight and allow us to properly regulate our markets.”

Louisiana: No; Florida: Maybe

Louisiana is opting out of the data call because Insurance Commissioner Tim Temple is concentrating on shepherding insurance reforms through the state’s legislature.

“Louisiana’s property insurance market is in crisis, and Commissioner Temple and the LDI are focused this year on regulatory and legislative efforts that will attract insurers to our state and stabilize the market,” John Ford, a spokesman for the Louisiana Department of Insurance, said in a statement.

Florida has not yet decided whether it will participate in the data call. Florida Insurance Commissioner Michael Yaworsky (pictured above, center) said the state has been compiling statewide aggregate data and posting it on its website for more than 20 years in addition to collecting data on direct claims and other marketplace information.

“Florida may or may not provide its own data set from its system that is compatible and conforming to the NAIC data call that ultimately goes into the NAIC database,” Yaworsky said in an interview with IB. “We’re kind of working through that now. Because we have such a long-standing set of data-collection tools in place, we don’t necessarily want to create a secondary and completely disparate data set. We want to make sure the messaging is clear on what data we have.”

‘Glaring hole’ in national collection effort?

But the integrity of the NAIC’s data call will be undermined if states that have been hardest hit by hurricanes and other climate-related disasters stay on the sidelines, said Carly Fabian (pictured above, right), insurance policy advocate at Public Citizen.

“While [Yaworsky] appears eager to be seen as transparent, dodging a national data collection effort because it will reveal climate impacts suggest Florida regulators are still running away from reality,” Fabian said. “Since Florida is dependent on small insurers that won’t be covered by other states, this creates a glaring hole in what should be a national collection. The results…will be skewed by not including a state that is uniquely impacted by climate disasters.”

“We anticipate, at this point, releasing insights from the data call in the second half of 2024,” Mais said. “Part of the question is how long will the analysis take.”

More illumination of mortgage than insurance market

Fabian also has concerns about how the NAIC will analyze the data and the level of detail it will reveal. But NAIC’s targeting of zip-code-level data “is a step up from state-level data,” in terms of the insight it provides about property insurance markets, Fabian said.

Even with the NAIC data call, the insurance-industry data is not nearly as abundant or accessible as mortgage data that is provided through the Home Mortgage Disclosure Act data browser, Fabian said.

“Comparatively, you don’t see that in insurance,” Fabian said. “You have an insurance industry that’s opaque and a quasi-regulatory body that’s opaque as well.”