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89th Texas Legislative Session Kicks off Jan. 14: Key Insurance Topics on the Agenda
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The 89th Texas Legislative Session begins Tuesday, Jan. 14, commencing its 140-day term. In its new role as a legislative advocacy trade association, ICT has been meeting with legislators and staff in anticipation of the session and is actively engaged and ready to represent the interests of the property and casualty industry. We anticipate a busy session on property and casualty insurance and will provide testimony and educational materials to help resolve questions and protect the stability of the Texas market. In addition to insurance, the legislature will address many other issues, and this session may set another record for the number of bills filed.
Since November 2024, bills have been filed addressing insurance topics such as appraisal requirements, mitigation, artificial intelligence, and restrictions on tying. We also anticipate legislation regarding auto repair, rate and form regulation, litigation abuse reform, and TWIA funding. Throughout the session, ICT will provide updates and information to ensure members are informed and their priorities are addressed. Stay tuned for updates and insights as the session unfolds.
On day one, we will monitor deliberations on House rules and the selection of a House speaker and will provide updates as announcements are made. Keep up with our legislative reports and updates in the ICT Member InfoHub.
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California wildfires: Insured losses could top $30B, Wells Fargo analysis finds
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Southern California's wildfires, which have claimed lives and destroyed thousands of structures, are expected to result in insured losses potentially exceeding $30 billion, making them the most expensive wildfire disaster in the state’s history.
Key Points:
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Massive Financial Impact: Insured losses from the recent Southern California wildfires are projected to range from $20 billion to $40 billion, with a base case estimate of $30 billion.
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Significant Property Damage: The fires have caused at least 24 deaths and damaged or destroyed 12,000 structures, primarily in the greater Los Angeles area.
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Homeowners Bear the Brunt: About 85% of the losses are expected to come from homeowners' insurance, with smaller contributions from commercial property (13.5%) and auto insurance (1.5%).
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Historic Losses: These wildfires are predicted to be the costliest in California’s history, surpassing the 2018 Camp Fire, which caused $10 billion in insured losses.
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Insurance Industry Resilience: Even with total losses reaching $40 billion, analysts believe this event will have a manageable impact on insurers, with a 2% equity hit for the industry.
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Extreme weather in 2024 sent insured losses soaring to the highest in 7 years
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Global insured losses reached $140 billion in 2024, marking the highest level since 2017, according to Munich Re's latest report. The staggering losses, driven primarily by Hurricanes Milton and Helene in the U.S., reflect the intensifying toll of extreme weather events on the insurance industry.
Key Points:
- 2024 Insured Losses: Insured losses climbed to $140 billion, up from $106 billion in 2023, and more than double the 30-year average of $61 billion.
- Major Drivers: Hurricanes Milton and Helene were the costliest disasters, with insured losses of $25 billion and $16 billion, respectively, and total damages exceeding $94 billion.
- Global and U.S. Impact: Extreme weather events accounted for 97% of the losses, with flooding, wind damage, and wildfires causing widespread destruction.
- Uninsured Losses: Insured losses made up less than half of the $320 billion in total weather-related damages, highlighting a significant gap in coverage.
- 2025 Outlook: Wildfires in Los Angeles have already destroyed over 1,100 homes, with analysts warning of significant uninsured losses due to reduced insurer participation in California’s market.
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US insurance industry adds 13,300 jobs in December
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In December 2024, the US insurance industry experienced notable job growth, adding 13,300 positions, bringing total employment in insurance carriers and related sectors to over 3.049 million. This marks a significant increase compared to December 2023 and reflects a rebound from previous months' job losses. While broader US employment saw a rise in December, the insurance industry showed strong hiring trends, particularly in agencies, brokerages, and direct life, health, and medical carriers.
Key Points:
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Job Growth in Insurance Sector: The US insurance industry added 13,300 jobs in December, pushing total industry employment to over 3.049 million, a rise of 59,000 from December 2023.
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December Employment Trends: December’s increase in insurance jobs followed a 5,100-job gain in November and a decline of 1,400 jobs in October, showing a positive recovery trend.
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Overall US Employment: Total nonfarm payrolls in the US increased by 256,000 in December, while the unemployment rate remained steady at 4.1%.
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Strong Sectors in December: The health care, government, and social assistance sectors saw the highest job growth, while durable goods manufacturing experienced the largest losses.
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Positive Outlook for Labor Market: Experts, like Stephen Cooper, highlighted the recovery in employment growth over the last four months of 2024, cautioning against drawing conclusions from short-term data but acknowledging the positive trend.
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Frustrated Clear Lake residents discuss skyrocketing homeowners insurance rates, demand regulations
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Jenna and Brian Smith cherish their La Porte home, where countless family memories have been made over the past 11 years. However, with their homeowners insurance provider dropping coverage and premiums skyrocketing, they, like many Texans, are grappling with the challenge of finding affordable and reliable insurance.
Key Points:
- Rising Premiums: The Smiths face a $10,000 annual premium from the only insurer willing to cover their home, more than double their current rate.
- Dwindling Options: Many homeowners in La Porte and surrounding areas report being unable to find insurers willing to provide coverage due to proximity to water and other perceived risks.
- Community Concerns: Nearly three dozen residents attended a Clear Lake town hall to voice concerns about rising premiums, limited options, and lack of legislative action.
- Legislative Advocacy: Organizer John Cobarruvias emphasized the need for laws that prioritize consumer rights, reasonable deductibles, and solutions like Alabama's Fortified program, which incentivizes weatherproofing homes to lower premiums.
- Lawmakers' Absence: Frustration grew as invited state representatives Dennis Paul and Mayes Middleton did not attend the town hall, despite constituent concerns and repeated invitations.
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Can Texas Insurance Handle Another Major Disaster?
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KTRH Local Houston and Texas News
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The Texas Windstorm Insurance Association (TWIA) is becoming the primary option for many Texas coastal homeowners, but questions remain about its ability to handle a major disaster like a Category 5 hurricane. Concerns about TWIA's financial stability have grown after Hurricane Beryl.
Key Points:
- Cash Reserve Depletion: TWIA has already used about 50% of its cash reserves following Hurricane Beryl, according to insurance expert Ron Snouffer.
- Premium Increase Proposal: TWIA sought state approval for a 10% premium increase last fall to address its financial shortfall.
- State-Backed Bonds: If reserves run out, TWIA can sell state-approved bonds to raise funds, a backup solution previously implemented.
- Long-term Viability Concerns: Snouffer cautioned that reliance on bonds is not sustainable, and rising costs could eventually leave many coastal homeowners uninsured.
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Check out all things ICT!
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Litigation Costs Drive Claims Inflation
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Join us for an insightful webinar with Martin Boerlin of SwissRe - Explore the complex forces driving claims inflation in the U.S. commercial casualty insurance sector. Over the past five years, losses surged by 11% annually, reaching $143 billion in 2023—33% more than global natural catastrophe insured losses. Martin Boerlin will delve into social inflation, the societal trends and legal dynamics fueling skyrocketing liability claim costs. Discover how factors like large verdicts, litigation funding, and emerging risks impact insurers and businesses. Gain insight into SwissRe's groundbreaking social inflation index, the implications of these trends internationally, and strategies for navigating this challenging landscape.
Register here
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The Insurance Council of Texas (ICT) is on the lookout for knowledgeable and engaging speakers for our 2025 events! We are looking for experts to discuss industry trends at our upcoming gatherings, including:
- Quarterly ICT Webinar Series
- Workers' Comp Conference: September 15-16, 2025
- P&C Insurance Symposium: September 17-18, 2025, in Austin, TX
We’re seeking speakers to cover critical industry trends, topics such as:
- Emerging topics and innovations
- Legal developments affecting insurance
- AI and technology: challenges and opportunities
- Resiliency strategies for businesses and communities
- Insights on the future of the insurance industry
If you have suggested topics, would like to request a speaker or would like to present at one of ICT's events, click here to let us know.
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