By Anthony Cappelletti
General Insurance Insights, June 2025
Welcome to the June 2025 issue of General Insurance Insights, the SOA’s biannual newsletter for those with an interest in general insurance (GI). This issue includes an article that I wrote, “Early Start to California Wildfires in 2025.” In this article, I explore the issues from the catastrophic wildfires in California at the start of this year. Also in this issue is another article I wrote, “FSA 2025 — Decision,” in which I outline the latest news regarding GI courses and how the GI courses can be used to meet the education requirements of the U.S. Qualification Standards for signing the NAIC Annual Statement.
There were several major storms in the central United States during the month of May. Over 70 tornadoes from March 16 to March 20, with many of them in Kentucky and Missouri. Total damage could be as high as $11 billion, based on preliminary estimates from AccuWeather. More severe weather is expected to continue for the central United States. This could be a tough year for U.S. property insurance due to weather events.
While the California FAIR plan increases its policy count due to wildfire claims, Florida’s state-run Citizens Property Insurance will be moving over 15,000 policies to two insurance companies in the market. This being at the request of those two insurers. So, as one state insurer of last resort grows, another one shrinks. We can only hope that Florida doesn’t experience any major hurricanes. Otherwise, the state-run property insurer of last resort in Florida will once again experience growth in policy count.
Continuing my thoughts with U.S. property insurance and catastrophes, the reauthorization cycle continues for the National Flood Insurance Program (NFIP). Since 2017, the program has been kept operational through an unprecedented sequence of temporary extensions, each lasting between several weeks and 12 months. Another temporary extension will expire on Sept. 30, 2025. Once again, I anticipate another temporary extension when it expires. In February, FEMA borrowed another $2 billion from the U.S. Treasury because of hurricanes Helene and Milton in 2024. This increases the NFIP’s debt to $22.5 billion. At a certain point, something long-term is required that would benefit all the program’s stakeholders. This would require some changes to the program to make it sustainable, without a never-ending growth in debt. Can legislators agree on anything long-term over the near future regarding the NFIP? In my opinion, it doesn’t look like it.
Global trade got a little complicated earlier this year with the United States imposing significant tariffs on its trading partners. Announced tariffs for some countries were either delayed, increased or decreased. In some cases, trade deals were made with the United States (e.g., China, United Kingdom). In others, countries would impose counter-tariffs (or at least threaten to impose them). It will be interesting to see how this could affect automobile insurance, as automobile (and auto parts) manufacturing is a global business.
French President Emmanuel Macron recently stated[1] that it is important for European regulation in the banking and insurance industries to be more synchronized with the regulatory environment in the United States and the United Kingdom. As capital requirement regulations diverge, competition will be affected, and there will be regulatory arbitrage.
The use of AI is quickly affecting how tasks are accomplished. I would be interested in hearing from our readers to see how AI is affecting their work. Share your stories with me, and I’ll include them in a future article (I can keep it anonymous). I’ll say that I have been experimenting with AI to rewrite paragraphs for me. It’s not a time saver, but it occasionally provides me with ideas on how to better organize my thoughts. And if you’re wondering, I didn’t use it in this article. If I did, it would probably sound better when reading it. But this intro is my way of jotting down my own random thoughts in my own way. I wouldn’t want AI to change that.
You will note that this issue is light on articles. There is a reason for this. It all has to do with the implementation of the revised SOA Fellowship pathway. Many volunteers and SOA staff devoted much of their time to ensure that the syllabi for all the courses were finalized. This task took a fair bit of time for everyone involved. One of our goals for the new pathway is to provide more focused study materials. I wrote several new study notes (and edited some older ones) for three of the GI courses. Unfortunately, this meant that I had less time to write articles, or seek authors for articles, for this issue of General Insurance Insights.
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 on upcoming issues of this newsletter. 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.