The U.S. Department of the Treasury’s Federal Insurance Office (FIO) has released its Annual Report on the Insurance Industry, outlining key challenges and developments in the sector. The report highlights increasing pressures faced by property casualty insurers, with particular attention to the effects of third-party litigation funding.
Sam Whitfield, senior vice president of federal government relations and political engagement at the American Property Casualty Insurance Association (APCIA), commented on the findings: “The Federal Insurance Office’s 2025 Annual Report underscores the growing pressures facing the property casualty insurance sector, with an emphasis on the impact of legal system abuse. These factors are driving up costs for insurers and, ultimately, for families, who are now paying significantly more for coverage. The rise in third-party litigation funding is particularly troubling, as it inflates claims costs and contributes to a tort tax, a hidden burden of more than $5,000 per household on average, annually. That is why APCIA strongly supports federal legislation like the Litigation Transparency Act of 2025 and the Protecting Our Courts from Foreign Manipulation Act of 2025, which aim to bring much-needed transparency and accountability to this shadowy practice. Encouragingly, the FIO report also highlights the success of litigation reforms enacted in Florida, where legal filings have dropped by more than 30% and insurers have begun lowering costs or issuing refunds. These reforms demonstrate that smart, targeted legal reforms can stabilize market, reduce costs, and deliver real savings to consumers.
“The report also documents the insurance industry’s critical and constructive role in advancing resilience – through investments in mitigation, support for climate adaption, and collaboration with public agencies.
“If we want to improve affordability and availability, we must allow competitive private markets to price risk appropriately and invest in mitigation and resilience programs that reduce losses before they happen.”
According to APCIA’s description provided with this statement, it serves as a leading national trade association representing home, auto, and business insurers across various sizes and regions in the United States. The organization focuses on promoting private competition within insurance markets for consumer benefit.
