Sean Kevelighan, Chief Executive Officer at Insurance Information Institute | Insurance Information Institute
Calls for legislative intervention in Illinois regarding homeowners' insurance pricing could potentially decrease both the affordability and availability of coverage, according to a new report by the Insurance Information Institute (Triple-I). The Issues Brief suggests that focusing on mitigation, resilience, and collaboration between policymakers and the insurance industry would be more effective long-term solutions.
Sean Kevelighan, CEO of Triple-I, said, "While calls for rate regulation may appear politically appealing, it is critically important to appreciate that recent increasing insurance rates are a reflection of the risk, rather than the cause." He explained that premium increases are due to escalating costs from natural disasters, inflationary pressures, and legal system abuse. Kevelighan also noted that Illinois residents pay less than the national average for insurance due to a competitive marketplace. He warned against manipulating actuarially proven pricing methods as it could jeopardize the state's market.
The report indicates that premiums are rising nationwide. However, Illinois homeowners' insurance remains more affordable than the national average and nearly as accessible as Utah's—the most affordable state. Factors contributing to rising premiums include climate-related disasters, demographic shifts, increased labor and material costs, and global inflationary pressures affecting rebuilding expenses.
Legislative proposals limiting insurers' ability to set rates based on risk might reduce market participation and coverage options for Illinois residents. Instead, Triple-I recommends investing in risk mitigation efforts, supportive infrastructure, reforms to curb lawsuit abuse, and adopting strategies effective in other jurisdictions.
In 2021, Illinois’ property/casualty insurance sector contributed approximately $41.9 billion to the state's GDP and supported over 155,000 direct jobs. It also played a role in funding public infrastructure through bond investments.
Since its founding in 1960, Triple-I has been a trusted source of information on risk and insurance issues. It represents diverse members accounting for nearly half of all U.S. property/casualty premiums written.
Information from this article can be found here.
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