Climate Change Data

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Catastrophes and severe weather events, particularly hurricanes in Florida.
• Increases in the value and geographic concentration of insured property.
• Increases in the severity or frequency of claims.
• Failure of risk mitigation strategies.
• Loss of key executives or inability to attract and retain talent.
• Ineffective controls to ensure compliance.
• Failure of claims department to effectively manage claims.
• Litigation or regulatory actions.
• Highly competitive insurance industry.
• Downgrade in Financial Stability Rating.
• Breaches of information systems or denial of service.
• Inability to effectively implement or adapt to changes in technology.
• Lack of effectiveness of exclusions and other loss limitation methods.
• Changing climate conditions.

Mitigation Strategies

• Comprehensive reinsurance program.
• Rigorous underwriting and careful evaluation of policy terms.
• Loss management initiatives.
• Vertically integrated structure.
• Strong balance sheet and capital return strategy.
• Significant resources devoted to ERM program.
• Proprietary claims administration system and Fast Track initiative.
• Contesting liability and damages in legal matters.
• Organic growth strategy and expansion outside of Florida.
• Significant resources to administrative and technical controls to prevent cyber incidents.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Hurricanes, wildfires, tornadoes, tropical storms, sinkholes, windstorms, hailstorms, explosions, earthquakes

Transition Risks

• Regulatory changes, market shifts

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Catastrophes and severe weather events, particularly hurricanes in Florida.
• Inherent uncertainty in estimating reserves for unpaid losses and LAE.
• Loss of independent insurance agent relationships.
• Uncertainty of catastrophe models in predicting future losses.
• Unavailability of reinsurance at current levels and prices.
• Credit risk of reinsurers.
• Cyclical nature of the property and casualty insurance business.
• Concentration of business in Florida.
• Changing climate conditions.
• Risks associated with entering new markets.
• Loss of key personnel.
• Ineffective compliance controls.
• Ineffective claims management.
• Litigation or regulatory actions.
• High competition in the insurance industry.
• Downgrade in Financial Stability Rating®.
• Breaches of information systems or denial of service.
• Inability to effectively implement or adapt to changes in technology.
• Lack of effectiveness of exclusions and other loss limitation methods.

Mitigation Strategies

• Rigorous underwriting, careful policy evaluation, and risk cession to reinsurers.
• Continuous refinement of reserve estimates.
• Maintaining strong relationships with independent agents and offering attractive products and services.
• Using widely recognized catastrophe models and continually refining data intelligence on catastrophe risk modeling.
• Developing and implementing a reinsurance strategy to adequately protect the balance sheet and Insurance Entities in the event of one or more catastrophes while maintaining efficient reinsurance costs.
• Diversification strategy.
• Attracting and retaining talented employees.
• Implementing and maintaining effective internal controls.
• Continuous improvement and operational excellence initiatives to improve the customer’s claims experience.
• Substantially growing the claims litigation team to more effectively and efficiently protect rights in litigation, including through subrogation.
• Actively managing exposure to catastrophic events through underwriting and reinsurance.
• Investing significant resources to administrative and technical controls to prevent cyber incidents and protect information technology.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Hurricanes, wildfires, tornadoes, tropical storms, sinkholes, windstorms, hailstorms, explosions, earthquakes and acts of terrorism.

Transition Risks

• Regulatory changes

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Increased losses and LAE in the Florida personal residential insurance market due to abuses and inflated claims, including represented claims, aggressive estimates and demands from remediation and repair companies, and claims reopened years after the loss.
• Changes in Florida's claims environment and legal climate reduced the effectiveness of subrogation efforts.
• Adverse conditions in Florida produced an increased number of claims filed or reopened well after the alleged dates of loss.

Mitigation Strategies

• Implemented Fast Track initiative to expedite claims settlement.
• Increased emphasis on subrogation.
• Increased in-house legal staff to address litigated or represented claims.
• Implemented new claim settlement rules associated with 2019 Florida legislation to reduce the negative effects of claims involving assignments of benefits.
• Filed for a 12.4% rate increase in Florida to address increased claim costs.
• Made changes to new business guidelines and developed specialized claims and litigation management efforts.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Hurricanes, wildfires, tornadoes, tropical storms, sinkholes, windstorms, hailstorms, explosions, earthquakes and acts of terrorism.

Transition Risks

• Regulatory changes related to climate change.