Notes in General
By Anthony Cappelletti
General Insurance Insights, December 2024
Welcome to the December 2024 issue of General Insurance Insights, the SOA’s biannual newsletter for those with an interest in general insurance (aka, GI, property and casualty insurance, or P&C). This issue includes several articles of interest to GI actuaries. The first article is one that I wrote, CrowdStrike Disruption: A Lesson in What Can Go Wrong with IT and, Does Insurance Cover This?” The title of this article aptly explains what is being considered. The second article is “FSA 2025—Regulatory Update” by Stuart Klugman, FSA, CERA, Ph.D., in which he provides updates on how the SOA’s FSA changes relate to meeting regulatory requirements to practice as a general insurance actuary in the United States. Also included is “General Insurance Research Update” in which I provide information on the latest SOA research relating to general insurance.
In late September, Hurricane Helene formed in the Gulf of Mexico and came ashore in Florida as a catastrophic Category 4 hurricane (on the Saffir-Simpson Hurricane Wind Scale). It continued northward through Georgia, South Carolina and North Carolina. Helene was responsible for the deaths of over two hundred people. According to Verisk Analytics, insured losses “will range between USD 6 billion to USD 11 billion.” This was a devastating event. But less than two weeks later, while residents were still recovering from Helene, Hurricane Milton developed in the Gulf and headed straight for Florida. On Oct. 7, it registered as a Category 5 hurricane with winds stronger than Helene, and a path aiming for the Tampa, Florida area. The Tampa metro area has a population of over three million. On Oct. 9, Milton made landfall just south of Tampa as a Category 3 hurricane with winds of over 100 miles per hour. Some fatalities have been reported and many tornados caused by the hurricane have been reported. Milton also produced storm surges and torrential rainfall. Flooding occurred along the storm’s path. Power was out for millions of residents. As I write this, many details have not been reported. Initial loss estimates for insurers range widely from $25 billion to $60 billion.[1] At the low end, it would be the 10th costliest hurricane in the United States (for insured loss). At the high end, it would be the second costliest. Either way, this is an extreme event. Early reports indicate that this will not be at the high-end of the range of estimates.[2]
The Florida home insurance market is already experiencing affordability and availability issues. These two major hurricanes coming two weeks apart will exacerbate this situation.
Of course, wind isn’t the only danger from major hurricanes. There is flooding from storm surge and extreme rainfall. Helene caused flooding along the U.S. Southeast. Milton has also caused significant flooding through much of Florida. The government-run National Flood Insurance Program (NFIP) is already in a weak financial position. Flood losses from these hurricanes that are covered by NFIP policies will weaken it further. Legislators will be forced to make changes. It’s nearly certain that legislators will increase the NFIP’s borrowing authority from the federal government to ensure that the program can pay out all the claims from these hurricanes.
Regarding the NFIP, its reauthorization cycle continues. Since 2017, the program has been kept operational through an unprecedented sequence of temporary extensions each lasting between several weeks and 12 months. The prior temporary extension expired on Sept. 30. As anticipated, it was replaced by another temporary extension. This one is for three months, expiring Dec. 20, 2024. A longer-term reauthorization is required for stability of the program. Additionally, a longer-term reauthorization should also include reforms to benefit all the program’s stakeholders. Can legislators accomplish this after the election? Experience over the past five years tells me the answer is no. However, NFIP losses from hurricanes Helene and Milton may be the impetus for real changes to be made over the next year.
Our goals with General Insurance Insights are to keep readers informed on topics of interest to GI actuaries and to develop the GI actuarial community within the SOA. We welcome your feedback and ideas to help us achieve these goals. If you have questions, feedback, or ideas regarding this e‑newsletter, feel free to contact me.
I would also like to take this opportunity to inform our readers that we are always looking for volunteers in general insurance at the SOA. Please visit the SOA Volunteer Opportunities Database. The database includes all open volunteer opportunities at the SOA. If you do not see a GI exam committee or GI research committee volunteer opportunity in the database and are interested, contact me directly. We can always use new volunteers. In addition to this, we are also looking for ideas on GI continuing education offerings and authors (or ideas) for articles in upcoming issues. Let me know if you would like to contribute.
Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries, the editors, 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] Experts Predict Impacts of $25B+ Milton Hit to Insurers (insurancejournal.com), Hurricane Milton Insured Loss Could Be $60 Billion, Similar to 2022’s Ian: RBC (insurancejournal.com),
[2] Milton Brings Winds, Flooding to Florida But Damage May Not Be As Heavy as Feared (insurancejournal.com)