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Insurance companies warn that mass shootings at U.S. scientific institutions could threaten the critical weather and geospatial data the industry uses to manage natural disaster risks and raise prices for consumers.
The American Reinsurance Association, a trade group, is lobbying to maintain data collection for the National Oceanic and Atmospheric Administration after telling U.S. Secretary of Commerce Howard Lutnick that it will fire more than 1,000 staff.
The agency oversees the country’s vast ocean and atmospheric conditions, including the “Hurricane Hunter” jet, which oversees the National Weather Service and provides real-time storm data critical for accurate forecasts.
The insurance company also personally raised concerns about the US Geological Survey, which was announced as part of a layoff to the federal workforce, about NASA, the U.S. Army Corps of Engineers and hundreds of additional cuts to the US Geological Survey.
Key concerns include live tracking of hurricanes, tornadoes, and residential areas, and monitoring of drought conditions using satellite and ground modeling.
“What NOAA offers is the infrastructure for facilities that produce data, including satellites, vessels, weather buoys that the insurance industry doesn’t have,” says Nutter.
Fathom’s chief scientist, Oliver Wing is a flood modeler owned by Reinurer Swissre and licenses products to insurers and brokers, including Axa and Aon. His company is particularly concerned about the potential disruptions in rainfall and tide data generated by NOAA and USGS topographical data.
“Another major concern is NOAA’s forecast, particularly hurricanes – and the “casting now” feature. If we can’t supply it to the model to give insurance clients a rough idea of what their exposure looks like, it will affect our ability to make smart, short-term business decisions,” says Wing.
“Seasonal hurricane forecasts are also very important for insurers to make medium-term decisions about capital allocation and risk transfer.”
Munich RE, the world’s largest reinsurer, told FT it doesn’t rely on individual data suppliers such as NOAA, but added that institutional information to incorporate the latest knowledge into monitoring and assessments is “very valuable.”
The insurance industry said it relied heavily on NOAA provided to generate accurate natural hazard risk models. “This is especially useful for policyholders as the more accurate the data is, the more accurate the assessment can be made,” Munich Re said.
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The head of climate analysis at a major insurance company said government agencies, including NOAA, have published peer-reviewed studies in a detailed methodology. If insurers are forced to switch to licensing data from private providers, he said his team might struggle to assess the value and accuracy of these products, as well as the consistency of data and methods across the market.
The costs of purchasing LIDAR data, hurricane predictions, and other model inputs from satellite private operators, and other surveillance equipment could be handed over to consumers, industry experts warned by increasing insurance prices.
Even historical data can be less valuable to modeling if data collection from NOAA is interrupted or slowed, Nutter said that time consistency in large, complex data sets on hazards such as hurricanes is important.
“The NOAA database goes back decades. They’ve been consistently, uniformly and neutrally collected in that they’re not politicized or commercialized,” says Nutter. “If there is a termination of a particular data source, it’s not worth much, even if historical data is still available.”
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