Industry groups urge mitigation, data collection and building standards to blunt rising insurance costs

Two national trade groups told the committee the Arkansas market reflects broader national strains and that mitigation and data are key to long-term relief.

Robert Gordon, senior vice president at the American Property Casualty Insurance Association, said AM Best downgraded the personal-lines sector to negative and pointed to rising replacement costs, increased weather severity and contraction of insurer/reinsurance capital as the primary drivers. "Insurers' core business is protecting people and helping them recover from catastrophic losses," Gordon said, and added that mitigation reduces claims frequency and severity over time.

Ward Tisdale of the National Association of Mutual Insurance Companies reiterated that insurers fund much mitigation research (including IBHS work on hail and impact-resistant shingles) and described programs in Alabama and other Gulf states that provide grants for wind/roof fortification financed by industry funds. Both witnesses urged a coordinated NAIC data collection effort; the committee and Insurance Department agreed to pursue a zip-code-level data call to better target any mitigation incentives or regulatory changes.

Gordon and Tisdale said short-term consumer steps include shopping and reviewing deductibles, while long-term solutions focus on building codes, mitigation funding and insurer underwriting changes. Both agreed to provide the committee with examples and supporting data.