AM Best Warns Insurers Could Face Risk Modeling Challenges After NOAA Ends Disaster Data Updates

AM Best has cautioned the insurance industry about potential challenges in catastrophe risk modeling following NOAA’s decision to retire its long-standing disaster database. The database, which tracked U.S. climate and weather events causing $1 billion or more in damages, will no longer be updated beyond 2024. AM Best says this move could complicate how insurers analyze and price risk associated with secondary perils.

Secondary perils—such as wildfires, severe convective storms, and inland flooding—are becoming a dominant source of catastrophe losses, especially in North America. According to Sridhar Manyem, senior director of industry research and analytics at AM Best, losing an agreed-upon public data source will make it harder for insurers to trend losses, assess reinsurance needs, and understand the gap between insured and economic losses.

The ratings agency also warned that the change may impact parametric catastrophe bonds, some of which depend on NOAA measurements to trigger payouts. If other federal datasets were also discontinued, the industry could face even greater uncertainty. Manyem noted that private-sector data providers may eventually fill the void, but building the credibility and consistency needed for wide adoption could take years.

AM Best’s statement underscores the growing concern within the insurance sector over data continuity and reliability. As the industry faces increasingly frequent and severe secondary peril events, a stable and trusted data infrastructure is critical for maintaining sound underwriting, reserving, and reinsurance strategies.