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AudibleA new report from Verisk predicts a “new reality” in future natural catastrophes, with unprecedented global losses to exceed $152 billion annually. It’s being driven by “frequency perils” − frequent events, such as daily afternoon summer storms and hurricanes, that are driving high-impact losses.
Former Florida Deputy Insurance Commissioner Lisa Miller sits down with a Verisk modeler and a Florida property insurance company meteorologist and risk analyst, to discuss how catastrophe modeling works, how insurance companies use it to set homeowners rates, and its importance in understanding and mitigating extreme weather risks now and in the future.
Dr. Julia Borman, Assistant Vice President of Regulatory and Rating Client Services, Verisk
Natalie Ferrari, Meteorologist and Catastrophic Risk Analyst, American Integrity Insurance Company
Show Notes
The podcast discusses the increasing frequency and severity of storms and their impact on property insurance rates, particularly in Florida. Dr. Julia Borman is Assistant Vice President of the Regulatory and Rating Client Services Team at Verisk. It’s part of the data analytic firm’s Extreme Event Solutions division, which assists clients in working with regulators and rating agencies on a variety of projects, including data calls, utilizing catastrophe modeling in rating plans, and stress tests. Natalie Ferrari is a Meteorologist and Catastrophic Risk Analyst for American Integrity Insurance Company, based in Tampa, Florida. She provides data-driven insights into developing storms and their potential impacts by leveraging Verisk’s modeling. Together, with host Miller, they explored the evolving landscape of catastrophic risk modeling in rate filings and regulatory processes, the intensifying impact of extreme weather, and the need for resilience and preparedness in the face of natural disasters that modeling can guide.
Catastrophe Models: The Backbone of Modern Insurance
Verisk’s newest report, Modeling Insured Catastrophe Losses: A Global Perspective for 2025, projects expected future global losses to exceed $152 billion annually. That’s up from the $132 billion annual average loss over the past five years. Host Miller quoted Verisk Extreme Event Solutions President Rob Newbold’s remarks on the September 2025 report, that “the modeled losses reflect a fundamental shift in the risk landscape. Natural catastrophe losses are no longer statistical anomalies. They are the new normal.”
Borman said the report’s $152 billion figure is a particularly significant one, given that the actual global losses in 2024 were around $137 billion. “Over half of it was what we call frequency peril loss. You used to hear around the industry, folks were calling things like severe thunderstorms and wildfire ‘secondary perils.’ We don’t call them that at Verisk anymore. They are frequency perils based on the fact that they happen often, typically within a year and those can really aggregate up into a large proportion of an insurance company’s overall loss for the year,” Borman said.
The catastrophe models look at a variety of different perils, including hurricanes, earthquakes, flooding, wildfires, and winter storms. “We were writing the report not just to understand the total amount of loss, but also the insurance gap that might exist around the world and where that was most prevalent,” she added.
The models are used by insurance companies, including American Integrity Insurance, to generate theoretical, or stochastic, events, not just historical events, to capture the full range of possible outcomes. Then they assess how changes in property development, construction standards, and population growth affect risk. “We combine those to run what are notional analysis, or almost a slew of ‘what if scenarios’ that would better prepare us to give us the extreme top end or the extreme low end, as well as the median,” explained Ferrari. “We look at that not only through a lens of what is likely to happen because of the perils we’re vulnerable to, but kind of how that peril could actually expand, not only along coastal areas, but even into our inland areas,” adding that Hurricane Helene hit Florida before heading into Georgia and North Carolina, and had catastrophic impacts, including flooding, in higher terrains. “So with that combination of factors, that gives us a really great overview of not only where we’re coming from, but what we can look forward to moving forward, and also how we can protect those policyholders from what’s to come,” said Ferrari.
Regulatory Acceptance and Transparency: Building Trust in Modeling
Historically, catastrophe models have faced skepticism from regulators, often being seen as “black boxes,” said Host Miller, referencing a series of hearings in Florida in 2005. “But models are what we need to help, ultimately, homeowners understand their risk.” She pointed out that Borman and her Verisk team were able to work with California’s insurance commissioner and stakeholders to approve a wildfire model to be used in rate making. “Forty-nine other states allow models. California is now allowing this wildfire model to help understand that particular peril, that risk,” noted Miller.
Borman explained that she had to learn about catastrophe models when she first arrived at Verisk in 2014, as they don’t typically exist outside of academia. She said that she and her team have had to learn how to communicate about models and how to teach others how they are put together. “In January 2025, my team was first in the door to get the wildfire model looked at in California, and we had a lot of folks who participated in our review process that really had never seen a catastrophe model. And so a lot of what we did was we taught about the basics of catastrophe models, and then we dug into the details. And then after that review was over, we published the material that is required to be attached for public inspection to rate filing early. We put it on our website, and we released it for everybody to read at their leisure before it was necessary. And I think it’s incredibly comprehensive.” Borman said the education effort continues in other states, aided by the new Catastrophe Modeling Center of Excellence at the National Association of Insurance Commissioners that Verisk has heavily participated in.
Resiliency and Mitigation: Reducing Losses, Stabilizing Markets
In this period where storms have become more frequent and severe, mitigation measures and resiliency have become essential, Miller remarked. “When risk is more resilient, it reduces the risk of loss, which has a direct effect on rates and premiums.” Mitigation involves proactive measures—like improved building codes, flood barriers, and fire-resistant landscaping—to reduce vulnerability. Resiliency refers to the ability of homes, businesses, and communities to withstand and recover from disasters. Here, too, catastrophe modeling can play an important role in providing actionable insights.
“It’s being able to communicate the importance of understanding what those insights can truly tell us, how that can actually prepare us moving forward, that you know ‘this area does provide that type of risk,’ and if that is something someone’s willing to take, that is going to have a very large snowball effect, not only financially, but along the environment, and ultimately with your own property as well,” said Ferrari.
Host Miller noted that Verisk is one of the modeling platforms used by the National Flood Insurance Program, that insures 4.7 million Americans, including 1.7 million Floridians. “We’re working to get our federal policymakers to understand that we need to build back higher and stronger, and not build it back the way we had it,” said Miller. “That’s another very positive impact of what those models can tell us about, how to build back higher and stronger.”
Borman explained that it’s about two components: climate adjustment and growth in the value of the actual exposure being protected that drive losses. “So where you have more properties being built matters a lot, right? Where you’re seeing urban expansions, those are also really key components to understanding what is on the ground and how much your total loss number could be. So I think it’s two sides of the coin,” said Borman.
The 2025 Hurricane Season Outlook
Host Miller asked her guests to opine on the relatively quiet 2025 Atlantic Hurricane season to date, that has seen a few major hurricanes, but none making landfall.
“For cat models, it’s not about predicting what’s going to happen next year,” explained Borman. “We’re not saying ‘this year it’s five hurricanes, next year it’s ten hurricanes.’ We’re interested in understanding the core physics that could drive different types of seasons and building models that allow you to really capture the full range of possibilities for next year.”
Ferrari provided a nuanced view of the 2025 hurricane season, noting that the region is in a neutral ENSO phase, transitioning between La Niña and El Niño, which makes forecasting more complex. “Remember, hurricane season goes through November 30, and we’ve already hit the major hurricane forecast for this year, which was two to five, forecast from NOAA. We have a lot of room to grow, and conditions are still trying to get ripe, even in the Caribbean as we make our way through October.” She said the focus should never be on the number of named storms predicted, as many often don’t impact land. “At the end of the day, it only takes one to be an absolute catastrophe, not only to the United States to be record breaking, but also to a lot of people’s personal properties. So that is where Verisk is so incredibly crucial in being able to give us the tools we need to prepare for what could be that ‘just one storm,’ because that is all it would take,” cautioned Ferrari.
Florida’s Unique Role
Miller noted that Florida is a unique property insurance market, given its history of major hurricanes, such as 2024’s Helene and Milton, and 2022’s Hurricane Ian, the costliest in the Sunshine State’s history and third costliest in U.S. history with over $112 billion in total damages and an estimated $21 billion in insurance claims. “There’s no other place like Florida, either to do business as an insurance company or to live, in some of the beautiful spaces that we have. Of course, that brings unique challenges that have prompted these innovative solutions, like what Verisk’s Extreme Event Solutions and their team are bringing to the table.”
Links and Resources Mentioned in this Episode
Modeling Insured Catastrophe Losses: A Global Perspective for 2025 (Verisk, September 2025)
American Integrity Insurance Company
Property Insurance Stability Report (Florida Office of Insurance Regulation, July 2025)
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The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers’ Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 10/6/2025. Email via [email protected] Composer: www.TeleDirections.com © Copyright 2017-2025 Lisa Miller & Associates, All Rights Reserved
