This article is the first in what will be a recurring series appearing in every issue of the General Insurance (GI) Community newsletter. This is where I will briefly address current issues of interest to GI actuaries. They represent my thoughts on these issues that may stimulate discussions within the GI Community. [1]
The Aging Workforce
Recently, I read an article in The Independent that reported that over 23% of the U.S. workforce is aged 55 or older representing a 17.3% increase over the last decade. In comparison, the total workforce increased by 11.3% over the same period. The article focused on retirement strategies and ways for employers to handle the demographic shift. This got me thinking that there are many issues that may arise from this, some of which affect GI products.
The first one I can think of is Workers Compensation (WC). Older workers tend to have a lower frequency of workplace accidents due to experience. However, those over 55 would tend to take much longer to recover from an accident. Additionally, all things being equal, those over 55 may have more severe injuries than those under 55. It will be interesting to see how this is currently affecting WC loss cost trends and how they may look five years from now.
Harvard Business School, BiGS, April 22, 2026
An aging workforce also means that there are more aging drivers commuting to work. This could affect loss costs for automobile insurance. Here, I’m thinking more of those aged 65+ where driving skills tend to diminish on average.
I checked to see if the proportion of the workforce aged 65+ was also significantly increasing. The Center for Disease Control (CDC) provides some interesting statistics using data from the U.S. Bureau of Labor Statistics (BLS). The data is up to 2014 with projections thereafter. The consensus is that the percentage of the total workforce aged 65+ working full time is growing significantly. Baby boomers are all over 60 years of age.
This issue is not limited to the United States. Many countries have workforces that are older than that in the United States including Germany, Italy, Japan, Spain, France, and the United Kingdom. There are likely more GI products that may be affected by the aging workforce. However, I’ll let you think of what those GI products may be.
The Increasing Risk of Floods
In May of this year I visited New Orleans, Louisiana. A city known for its ability to party. But that’s not why I was there. It was work related. In some of my limited spare time, I was able to act like a tourist. My travels had me on foot, in the streetcar and using ride-share.
Walking around, I noticed a lot of streets in certain areas buckled, broken or in the process of being repaired. An Uber driver mentioned that a lot of it has to do with their elevation below sea level. And they will never forget the devastation of Hurricane Katrina.
With a shift in climate occurring, it’s possible that the sea level will rise. This could have a significant effect on New Orleans and any other cities that are in a similar situation. The GI industry and GI actuaries have a role to play in educating the public and politicians what the expected costs are for different scenarios of a rising sea level. Decisions must be made soon to have a plan of action before the next catastrophe occurs.
The Increasing Use of AI
Artificial Intelligence (AI) continues to be a hot topic of discussion. From commercial use by companies to personal use by individuals, the use of AI is everywhere. The insurance industry is no exception.
AI can be used in many facets of an insurer’s operations. It can increase efficiency and perform analyses quicker than those done without it. Talk of AI has now shifted to Agentic AI. Agentic AI is an AI model that functions autonomously (or mostly autonomously) with little human intervention.
This will have an effect on the GI actuarial profession. My thought on this is that all actuarial work done by AI should be reviewed by an actuary, much like an actuary reviews the work done by their actuarial staff.
I’d like to know your thoughts on how AI will affect the actuarial profession. Also, do you think the proper use of AI should be included as a topic in an actuarial exam? If so, which exam?
An additional note on AI—new large AI data centers are being built in many locations with even more in the planning stages. This is to meet the growing demand for AI. These data centers will use increasingly more energy and water to operate. The amounts of energy and water used will be significant. One has to wonder what effect this will have.
Rebuilding After the 2025 California Wildfires
In January of 2025, the state of California suffered its greatest losses from wildfires. We are now 18 months from that event. Every level of government made statements about how the devastated areas would be rebuilt. That was apparently easier said than done.
Rebuilding faces many challenges. So many in fact that some areas may not be rebuilt for many years. This article from NBC News sums it up: of the estimated 13,000 homes destroyed in the fires a year earlier, fewer than a dozen have been rebuilt.
The U.S. National Flood Insurance Program
In the January 2026 issue of the GI Community newsletter, I reported that there was a government shutdown in the United States. Congress was no longer able to pass any acts while in the shutdown, including the reauthorization of the National Flood Insurance Program (NFIP).
Government operations started piecemeal after weeks of a total shutdown. The NFIP was set to expire on Sept. 30, 2025. There was an agreement to provide the NFIP with a very short-term reauthorization with an expiry date of Jan. 30, 2026.
Then, on Feb. 3, 2026, the NFIP was given a temporary reauthorization with an expiry date of Sept. 30, 2026. The NFIP technically had its operations suspended for a few days. This only slightly delayed the issuing of new and renewal policies.
The NFIP appears to be running on the following cycle: numerous attempts to reform the program with a long-term reauthorization (which fails), enacting a temporary reauthorization of the program, and occasionally dealing with the potential lapsing of the program through a government shutdown.
Will this cycle continue over the next few years without any substantive changes to the program?
I hope that these topics can inspire discussions within the GI Community. We welcome your feedback and ideas. If you have questions, feedback, or ideas regarding this e-newsletter, feel free to contact me.
This article is provided for informational and educational purposes only. Neither the Society of Actuaries nor the respective authors’ employers make any endorsement, representation or guarantee with regard to any content, and disclaim any liability in connection with the use or misuse of any information provided herein. This article should not be construed as professional or financial advice. Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries or the respective authors’ employers.
Anthony Cappelletti, FSA, FCIA, FCAS, is a staff fellow for the SOA. He can be contacted at acappelletti@soa.org.
Endnotes
[1] In past issues, my “random thoughts” were included within the introductory articles. From this point forward, they will be included as a separate article in each edition.