Population booms in disaster-prone states are putting more property in harm’s way and driving up losses for the U.S. insurance industry, a new analysis says.
U.S. residents increasingly are moving south and west to states that are highly exposed to hurricanes, floods and wildfires, according to U.S. census data. Just six states in those regions — Texas, Florida, California, Georgia, Washington and North Carolina — accounted for more than half of total U.S. population growth since 2010.
That trend is a “major” contributor to the homeowner insurance industry’s diminished profitability in recent years, according to a recent report from ratings firm AM Best.
Explosive population growth in the South and West has spurred the development of new property, which can drive up insured losses when disasters do hit. But new buildings, people and infrastructure also can make communities more vulnerable to extreme weather, the report says. Think: fewer trees and grass to absorb extreme wind and rain, or more people and utility equipment that could ignite wildfires.
