The recent decision by the Trump administration to shut down the National Oceanic and Atmospheric Administration’s (NOAA) weather and climate disasters database has raised significant concerns in the insurance and risk management sectors. This database has long been a vital resource for insurers, brokers, and risk analysts, and its sudden removal is creating a worrying gap in essential data just as hurricane season approaches.
Industry experts are sounding alarms about the implications of this data loss. Brokers and insurers rely heavily on NOAA’s database to inform their pricing, risk models, and underwriting processes. Blake Giannisis, a leader in North American property practice at Hub International, expressed his worries, noting that brokers are increasingly adopting analytical approaches similar to underwriters. The absence of NOAA’s data tools, which have been instrumental in their work, leaves many professionals feeling uncertain about how to proceed.
In the early days of his second term, President Trump has implemented sweeping changes across federal agencies, including significant cuts to research programs. This decision to eliminate NOAA’s database has sparked a rush among climate and environmental researchers to save critical datasets related to flood hazards, greenhouse gas emissions, energy production, and environmental justice.
As the U.S. enters the hurricane season, which is predicted to be above average but slightly less active than the previous year, the timing of this data loss is particularly concerning. Giannisis pointed out that the visual maps NOAA provided, which showcased billion-dollar events, were invaluable tools for presentations and analyses. The loss of such a trusted data source impacts not just his work but the entire industry.
Without NOAA’s centralized data, insurance professionals will need to turn to proprietary data sources, which can be costly. Some firms with in-house analytics may try to replicate NOAA’s findings, but this is not a feasible option for everyone. Giannisis noted that many insurers will need to hire additional staff or outsource to private vendors to fill the gap left by NOAA.
Scott Popilek, an Atlantic region leader at Risk Strategies, echoed these sentiments. He emphasized that the insurance industry relies on historical data to predict future events and set appropriate risk pricing. He warned that the lack of reliable data could lead to higher premiums and some insurers potentially refusing coverage altogether.
While alternative data sources like NASA and the National Weather Service exist, they may not fully replace NOAA’s comprehensive and standardized offerings. The consistency and trustworthiness of data are crucial, and proprietary sources may not always be transparent about their methodologies, leading to potential biases in data interpretation.
In the short term, brokers and insurers are expected to mix private vendors, public agencies, and their own innovations to bridge this data gap. As Giannisis put it, all eyes are on the coming months, especially with the hurricane season just beginning. The industry is bracing for the challenges that lie ahead as they adapt to a new reality without NOAA’s critical data support.