Universal Insurance Holdings, Inc. has announced the successful conclusion of a state review of its claims data related to Hurricane Irma, which occurred in September 2017. The Company refuted all allegations of fraudulent submission, and the matter has been formally dismissed by the state. The Company successfully commuted its Hurricane Irma losses in 2023 with full transparency, and all parties were in complete agreement with the result. The Company is pleased that the state acknowledged its cooperation, noting that the Company “fully and completely cooperated” with the state and provided all requested information. Today’s resolution is within an accrued amount established by the Company more than two years ago. As a result, there is no current or future financial impact to the Company or its subsidiaries. The review arose when a former employee in the Company’s claims operation who left the company in mid-2018 and who had no involvement in or familiarity with the Company’s data analytics team or Florida Hurricane Catastrophe Fund (“Fund”) reporting procedures alleged that the Company improperly included certain non-Irma claims in preliminary reports submitted to the Fund. The assertions contain numerous fundamental factual inaccuracies and gross mischaracterizations. The Company’s estimated Hurricane Irma losses during the former employee’s tenure remained well below the Fund threshold. Further, the Fund has an extensive multi-year interim reporting process in which data is subject to review and examination. The Fund also has a thorough final analysis known as commutation in which the Fund and insurer evaluate loss data to determine a full and final settlement. This process, which is standard for all insurers, resulted in the parties’ mutual commutation agreement. The Company recognized throughout the review that the underlying assertions lacked merit and were frivolous. The Company monitors and tracks claims data on a daily basis. Over time, information about each claim evolves as the insurer gains information about the cause and origin of the loss. This inherently means that some claims initially identified as hurricane claims are later determined to not be associated with the hurricane, and conversely some claims intentionally or unintentionally not reported as hurricane claims are determined to be associated with a storm. The Company commenced a comprehensive review of its Hurricane Irma data prior to and during commutation. This extensive analysis resulted in the Company’s reassessment of approximately one percent of its Hurricane Irma claims. Today’s conclusion includes the state’s full and final dismissal of the former employee’s assertions. The Company has agreed to pay certain fees and costs associated with the review to avoid costs of litigation. Hurricane Irma was the single largest loss event in the Company’s history. Florida’s pre-reform laws and resulting abuses that generated an excessive litigation environment drove the storm’s costs from an initial estimate of $450 million to $2 billion. “We are pleased the review has come to a close and the state dismissed the case,” said Chief Executive Officer Stephen Donaghy. “We look forward to continuing to serve Floridians as market reforms are leading to more affordable home insurance options for consumers.” About Universal Universal Insurance Holdings, Inc. (NYSE: UVE) is a holding company providing property and casualty insurance and value-added insurance services. We develop, market, and write insurance products for consumers predominantly in the personal residential homeowners lines of business and perform substantially all other insurance-related services for our primary insurance entities, including risk management, claims management and distribution. We provide insurance products in the United States through both our appointed independent agents and our direct online distribution channels, primarily in Florida. Learn more at universalinsuranceholdings.com or get an insurance quote at Clovered.com. Stay informed and ahead of the curve — explore more industry insights and program opportunities at ProgramBusiness.com.

A newly released report by Bain & Company, Bridging the Protection Gap: Affordability, Access, and Risk Prevention, outlines the evolving dynamics of the global insurance industry. Authored by Sean O'Neill, Andrew Schwedel, Daniel Jones, and Tanja Brettel, the report explores how insurers are navigating rising costs, shifting customer expectations, and emerging risks while positioning for future resilience.

Growth Pressures and Market Headwinds

Recent growth in the insurance sector — particularly in property and casualty (P&C) and life insurance — has largely stemmed from premium rate increases and favorable interest rates. However, Bain emphasizes that this momentum is unlikely to continue. Profitability in key areas such as personal auto and property lines has come under strain due to increasing claims costs and regulatory pricing constraints. At the same time, life insurance products are losing relevance, especially among younger consumers.

A significant concern is the widening protection gap: by 2030, only one-quarter to one-third of damages from natural disasters are expected to be insured. Life insurance coverage is projected to remain below 50% for mortality risks. Addressing these gaps will require solutions focused on both affordability and consumer engagement.

Six Strategic Themes for Insurers

The report identifies six core themes that insurers must address to overcome current challenges and deliver long-term value:

1. Responding to Shifting Customer Priorities

Affordability remains a major barrier in P&C insurance, particularly in regions affected by climate-related disasters. In many U.S. states, premiums have climbed sharply while regulatory restrictions prevent price adjustments that reflect rising risks. In life insurance, demographic trends and changing savings behavior are reshaping demand, requiring more flexible and portable products aligned with today’s workforce.

2. Tackling Emerging Risks Through Prevention and Innovation

The frequency and severity of natural disasters, cyberattacks, and new transportation technologies are reshaping risk models. Innovations like smart home systems, telematics, and wearable health tech offer insurers opportunities to reduce claims through prevention. However, public-private partnerships will be essential to manage systemic risks such as climate events and cyber threats.

3. Reimagining Customer Engagement

Digital channels and embedded insurance are changing how consumers research and purchase coverage. Insurers are experimenting with partnerships and social media strategies to reach target audiences, particularly younger consumers better. In life insurance, more effective targeting and streamlined customer journeys are critical to boosting engagement and conversion rates.

4. Leveraging AI and Unstructured Data

The insurance industry is undergoing a transformation driven by artificial intelligence and a surge in unstructured data—from call logs to dashcam videos. Bain anticipates significant gains in affordability, access, and operational efficiency through widespread AI adoption. However, realizing this potential requires rethinking traditional workflows and investing in new capabilities.

5. Preparing for the Retirement Cliff

An aging workforce threatens to disrupt key insurance functions such as underwriting and claims. The report stresses the importance of accelerated training, AI tools for productivity, and reskilling to offset looming retirements. Insurers must adapt job roles to reflect an increasingly data- and AI-driven environment.

6. Expanding Use of Alternative Capital

Alternative capital solutions—such as insurance-linked securities and collateralized reinsurance—are gaining traction as insurers seek to manage capital more efficiently. Bain notes that while regulators generally support these instruments, private capital alone may not be sufficient for addressing extreme events. Deeper collaboration with governments remains crucial.

Looking Ahead: A Call for Proactive Transformation

Bain concludes that insurers are at a strategic inflection point. The firms that modernize their products, adopt AI at scale, and retool their workforce will be better positioned for sustainable growth. These efforts, if successful, will not only improve insurer performance but also enhance societal resilience in the face of growing risk.

Get the latest insurance market updates and discover exclusive program opportunities at ProgramBusiness.com. 

Beginning April 3, new 25% tariffs on auto imports are expected to affect multiple layers of the automotive and insurance industries. While positioned as a move to bolster domestic manufacturing and generate an estimated $100 billion annually, the tariffs will likely introduce new cost pressures across the vehicle lifecycle — from imported parts and repair expenses to downstream impacts on claims and premiums.

The implications are particularly important for insurance professionals. With repair costs expected to rise due to the global nature of auto part sourcing, insurers may face an increase in claims severity that could ultimately lead to higher rates. Dealerships and repair shops are also anticipating operational challenges as they manage limited inventories and rising overhead.

What follows is an overview of how these tariffs may influence repair economics, dealership dynamics, and insurance pricing in the months and years ahead.

What the Tariffs Cover

The new tariffs primarily target imported vehicles and auto parts, including engines, transmissions, powertrain components, and electrical systems. With about 60% of auto replacement parts in the U.S. sourced from countries like Mexico, Canada, and China, many routine repairs could become more costly almost immediately. These tariffs will apply not only to new imports but also to the foreign-made components already embedded in the supply chain.

Impact on Vehicle Repairs

Because many U.S. vehicles—domestic and imported alike—rely on globally sourced parts, consumers will likely see rising repair bills. Industry experts note that the costs may hit sooner than expected, especially for parts already under price pressure due to limited availability. Small business owners in the repair sector are preparing to pass along these increases to customers, citing thin profit margins and limited alternatives.

For example, a Georgia-based repair shop owner reported an order for a vintage German part was canceled because of tariff concerns, leaving no domestic replacement options. With many foreign cars on the road, repair shops anticipate significant disruptions.

Dealership Challenges

Dealers, especially those focused on the economy or used vehicles, may also feel the strain. Not only could the cost of importing cars rise, but preparing used cars for resale — often involving foreign-made replacement parts — could also become more expensive. Some dealerships are exploring ways to stock up on parts in advance, though this presents risks if tariffs are later rolled back or modified.

Transparency and customer communication will become even more critical as prices adjust across the market. While some buyers may rush to secure vehicles before price hikes, longer-term pressures on inventory and margins remain.

Insurance Premiums in the Spotlight

The effect of tariffs isn’t limited to upfront car or repair costs. Insurance premiums are also expected to climb—but on a delayed timeline. Industry associations estimate that auto insurance claim costs could rise by $7 to $24 billion annually as repairs become more expensive. Although these increases might take a year or more to reach policyholders due to rate-filing procedures, the upward trend in premiums is already well underway.

Auto insurance premiums rose 14% and 12% in 2023 and 2024, respectively. Before these tariffs were introduced, another 7% increase was projected for 2025, and the actual rate may now be even higher.

A Cost Chain Reaction

While the administration projects the tariffs could generate $100 billion annually and incentivize domestic manufacturing, economists and industry experts caution that global supply chain disruptions will affect more than just new car prices. From repair bills to insurance premiums, the total cost of car ownership may rise in the coming months, regardless of where a vehicle was originally built.

Get the latest insurance market updates and discover exclusive program opportunities at ProgramBusiness.com.