Key Barriers to Closing the Insurance Protection Gap Identified in Industry Poll

Economic losses from natural disasters exceeded $368 billion in 2024, yet only $145 billion was insured, leaving a staggering $223 billion protection gap. Despite the urgent need for better coverage solutions, a recent industry poll by Reinsurance News found that collaboration efforts face significant barriers. The survey revealed that 21% of respondents cited conflicting priorities as the primary obstacle, while 12% pointed to data gaps and another 12% to regulatory hurdles. However, the majority—55%—believed that all these factors combined pose the greatest challenge.

Major disasters, such as Hurricane Helene in the U.S., which caused $75 billion in damages and 243 fatalities, and Hurricane Milton, the costliest insured loss event of the year at $20 billion, underscore the urgent need for better coverage strategies. Additionally, rising flood risks in Europe and underinsured wildfires in California highlight the widespread difficulties in securing adequate protection.

Experts emphasize that bridging the gap requires strengthened collaboration between insurers, regulators, and homeowners. Industry leaders argue that regulatory flexibility—such as allowing insurers to adjust pricing models—could prevent market withdrawals and ensure broader coverage availability. While the challenges are complex, a coordinated approach remains essential to narrowing the insurance protection gap.