By Preeti Vasishtha
Economic uncertainty. Rising catastrophe risks. A growing threat of cyber risk. Increasing underinsurance and the ongoing challenge of ensuring accessible and affordable insurance. These are just some of the concerns weighing on the leaders of National Association of Insurance Commissioners (NAIC), and with good reason.
In an uncertain U.S. economy, marked by inflationary pressures and global disruptions, the insurance industry faces significant challenges. For one, during such periods, insurers have historically seen reduced premium growth as businesses and individuals scale back coverage, while claims—particularly fraudulent and liability-related ones—often increase.
According to a July 2024 McKinsey & Company article, “Navigating shifting risks in the insurance industry,” from 1980 to 2010, the U.S. averaged five billion-dollar natural disasters (wildfires, floods, hurricanes, and more) annually; from 2011 to 2022, that number tripled to 15, with 28 events in 2023 alone—events that are increasingly impacting insurability and affordability for property and casualty carriers.
And a critical issue that makes recovery harder for many homeowners after disasters such as fires is underinsurance, according to Coverage Neglect in Homeowners Insurance, a recent joint study by the University of Colorado Boulder and University of Wisconsin–Madison.
Insurers, who have access to large amounts of sensitive data that need protection, are also facing increased cyber risk exposure, as threats grow in sophistication and frequency, according to McKinsey. Among the data at risk are health and medical records, lists of insured items and properties, and wealth and assets under management.
No wonder, then, that Jon Godfread, Eric Dunning, Nathan Houdek, and Scott White—the four insurance commissioners and NAIC leaders interviewed for this issue’s cover story, “Charting the Future of Insurance”—remain focused on these issues. In the first of a wide-ranging, two-part interview, they discuss how they are working to ensure a resilient and responsive insurance system, from strengthening consumer protections, to enhancing interstate collaboration, to leveraging data-driven oversight. NAIC President Godfread sums it up well. “The insurance industry is built on trust—policyholders need to know their coverage will be there when they need it most,” he says. “That responsibility is what drives our work every day.”
That same commitment to trust and accountability is reflected in the experiences of Academy members, whose work bridges technical excellence and public service. “The Academy Advantage” brings forward the voices of longtime members who describe how their engagement with the Academy has sharpened their skills, broadened their perspectives, and opened doors to participate in policymaking and public service. Whether through committee work, public policy engagement, or professional development opportunities, the Academy offers its members pathways for growth that both complement and enhance workplace experiences. And in “Positioned for Impact”, early-career actuaries explain how Academy membership sets them up for opportunities in professional engagement and public policy impact, which can significantly shape an actuary’s career path.
Rounding out the issue is the final installment of “The Dynamics of Market Forces”, which invites us to explore the applicability of supply and demand that can help practicing actuaries not only analyze economic pricing but also assess the impact of tax policies, government intervention, and producer behavior.
Collectively, these articles highlight the critical role of the NAIC in addressing the complex challenges facing the insurance industry, and emphasize the Academy’s commitment and the central role actuaries play in maintaining public trust through analytical rigor and professional accountability.
Many of today’s most pressing public policy issues require the sound application of actuarial principles. As economic volatility, regulatory shifts, and evolving risks demand sharper insight and responsiveness, the Academy assists public policymakers at all levels by providing leadership, objective expertise, and actuarial advice on risk and financial security issues. In doing so, it reinforces the trust stakeholders place in actuarial guidance across markets, systems, and decisions that affect society at large.