The reinsurance industry is built on data. Weather and climate data, according to Frank Nutter (pictured), president of the Reinsurance Association of America, isn’t coming from private labs or venture-backed startups – the majority is coming from federal government agencies.
“The industry is very reliant upon information that comes from federal government agencies,” Nutter said. “The private sector is not terribly well equipped to replace it.”
With proposed budget cuts to agencies like NOAA and the National Science Foundation, reinsurers face the risk of losing access to foundational weather and climate datasets. Nutter didn’t mince words about the impact. “If [the private sector] replaces it, it's going to replace it in ways that are commercially viable, which changes the character of that information.”
He added that federal agencies provide not just data, but the infrastructure – satellites, observation systems, and historical archives – that private companies can't easily replicate. And even if they could, commercial models often come with legal risks that government sources don’t face. “If some private company predicts a hurricane... or misses the prediction, they may be exposing themselves to liability,” he said. “The government doesn’t have that problem.”
One example stood out. NOAA’s Billion-dollar Disaster Report – a widely used reference point for catastrophe trendlines – is being decommissioned. The analyst behind it was quickly hired by Climate Central, a nonprofit, to continue the work. Nutter cited this as a sign of how vulnerable the current system has become. “It starts to become kind of patchwork, if you will, if that's the way this goes,” he said.
Data integrity isn’t a side issue – it’s core to how risk is priced. According to Nutter, the industry’s most profound shift hasn’t been inflation or capital constraints. It’s how the sector has had to re-evaluate its entire approach to risk modeling.
“Over the last two or three years... the reassessment of risk... would appear to be the most significant,” he said. The driving force? A mix of climate-driven volatility and human behavior – more homes and infrastructure being built in high-risk zones.
While inflation and geopolitical risks matter, Nutter made clear that natural catastrophe risk remains the defining concern. “Risk assessment is what they do,” he said of reinsurers. “And a re-evaluation of risk over the last few years is probably the most significant driver of the business decisions that the companies are making.”
That reassessment has shifted industry expectations. Where $100 billion in losses was once considered exceptional, it’s now the baseline. “The industry is looking at $100 billion loss year as being normal,” Nutter said, referencing data from Swiss Re and Munich Re. “And I think Swiss Re said that $150 billion is not out of the question in the foreseeable future.”
Long labeled as “secondary,” perils like wildfire and convective storm activity are no longer on the periphery. “Those things that are causing losses in the billions of dollars, but not the $60, $70 billion event kinds of things, are significant,” Nutter said.
While major hurricanes still dominate long-term cycle planning, these smaller, frequent disasters are hammering loss ratios and pushing modelers to adapt. “The modeling approach has focused increasingly on secondary perils because of the impact it's having on the bottom line,” he said.
It’s also changing how reinsurers choose to deploy capital, with underwriting shifting in response to these more consistent mid-level losses. And as losses mount, so does scrutiny on the tools used to project them – tools that, once again, rely heavily on the consistency and availability of public-sector data.
Reinsurers may assess and price risk, but they can’t enforce the mitigation measures needed to lower it. “The reinsurance industry doesn't have the legal authority to mandate or incentivize mitigation measures,” Nutter said. “But government does.”
That gap has led to an increasing emphasis on partnerships – especially at the community level. “Wildfire and flood are not really individual property mitigation opportunities,” he said. “They are community-level.”
Nutter pointed to organizations like the Institute for Business and Home Safety, which traditionally focused on individual property protections, now speaking up about broader resilience planning. “They’re talking about community action... kinds of things that are going to reduce risk,” he said.
The challenge, however, is making sure reinsurance remains affordable and available in these higher-risk zones – without reliable, centralized data, that equation becomes harder to solve.
“If some data set that's meaningful is decommissioned or is no longer supported,” Nutter said, “the curation of that data becomes a product or a service that [private firms] can't provide.”
