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Budget and staffing cuts to U.S. government disaster-response and climate-monitoring programs – with more gutting proposals on the way – have insurance leaders and consumer advocates warning of grave consequences for the availability, affordability, and stability of insurance coverage across much of the U.S.

The reductions have already targeted the Federal Emergency Management Agency (FEMA) and the National Oceanic and Atmospheric Administration (NOAA)—two agencies that play a behind-the-scenes but foundational role in how property and casualty insurers assess, price, and absorb catastrophic risk.

The budget cuts to those core agencies, including the National Weather Service, have already had fatal consequences. Tornadoes that swept through Kentucky and Missouri in May killed 28 people—many of whom may not have received prompt warnings due to agency understaffing.

FEMA itself has been left “flying blind” due to the budget cuts, according to hurricane meteorologist John Morales. President Trump has floated abolishing the agency altogether and recently fired its director for defending its mission. Strategic planning has been canceled, staff have been laid off en masse, and the agency’s core flood insurance program—the NFIP—may lapse as early as September unless Congress acts.

Industry analysts say scaling back these agencies could force private insurers to take on greater exposure, especially in high-risk flood, fire, and hurricane zones. That could trigger higher premiums, reduced access to coverage, and more pronounced redlining of vulnerable areas.

Budget cuts ‘affect insurance underwriting’

“Cuts to NOAA and similar agencies absolutely affect insurance underwriting and prediction,” Gregg Barrett, CEO of the WaterStreet Company, a tech services provider for insurers, told The C.O.R.E Group, and insurance advisory company. “These organizations provide the baseline data we use to model risk: storm patterns, flood mapping, wildfire trends, etc. Without that, our ability to predict and price accurately starts to erode.”

Barrett added that when the data “gets thinner or delayed, we lose precision,” and that can lead carriers to adopt more conservative assumptions—translating to higher premiums, reduced coverage, or withdrawal from high-risk regions altogether.

FEMA’s NFIP currently serves more than 4.7 million policyholders, most of them in areas where private flood coverage is either unaffordable or unavailable. If the NFIP is downsized or phased out, experts say that responsibility would shift to the private market—if it is willing—or to state governments that may not be prepared to take it on.

Insurers would likely reevaluate underwriting practices in coastal and inland flood zones, and the result could be higher rates, more limited coverage, or total market withdrawal. Areas with high exposure and low income may be hardest hit.

Reinsurance rates could be affected

Without FEMA to help absorb post-disaster losses, reinsurers would face more frequent and more severe payouts. That could push reinsurance rates higher, especially in catastrophe-prone states. In turn, primary carriers may pass those costs down to policyholders or limit exposure in those regions.

To offset rising risk loads, some insurers may lean further into catastrophe bonds and insurance-linked securities (ILS), transferring more risk to capital markets. However, market volatility and investor caution around worsening climate impacts could limit the scalability of these tools.
NOAA supplies much of the meteorological and climate data that feeds catastrophe models used by insurers and reinsurers alike. Budget cuts could delay updates to flood maps, reduce monitoring coverage, or erode data quality—all of which would degrade insurers’ ability to price risk accurately.

Industry observers say that without prompt and reliable federal data, insurers will err on the side of caution—leading to broader risk corridors, higher premiums, and a more limited insurance market for high-risk properties.

FEMA’s role in post-disaster coordination—debris removal, shelter coordination, temporary housing, and infrastructure support—also helps streamline insurance claims and recovery.

Without it, carriers may face higher administrative burdens and more complex loss scenarios, leading to longer claims resolution timelines and rising overhead costs.

Industry executives note that insurers could face increased litigation in disasters where property access is delayed, recovery efforts are fragmented, or liability is unclear.

States may need disaster insurance programs

In FEMA’s absence, states may be compelled to establish disaster insurance programs, like Florida’s Citizens Property Insurance Corp. But experts warn that most states lack the funding, infrastructure, or political consensus to quickly implement such solutions—especially at the scale needed.

This decentralization could lead to inconsistent disaster coverage across states, creating challenges for national carriers trying to support cohesive underwriting strategies.

Federal flood insurance is often a requirement for securing federally backed mortgages in high-risk zones. If FEMA and the NFIP are rolled back, banks may be unwilling to lend in these areas, leading to declining property values and stalled real estate transactions. This would further limit insurability and economic viability in those regions.

With FEMA potentially receding, more attention would fall on the private insurance market’s role in disaster recovery. Consumer advocates, including the nonprofit Insurance Fairness Project, have warned that carriers are already retreating from high-risk zones—and federal cuts could accelerate that trend.

The group noted that Washington’s proposed pullback through budget and staffing cuts would place an even greater burden on private insurers, local governments, and homeowners already struggling with affordability and access.

‘Protection gap’ poised to grow

“What’s happening is what [former US Treasury Secretary] Janet Yellen referred to a couple of years ago as the ‘protection gap’ that is poised to grow,” said Jordan Haedtler, policy advisor at the Insurance Fairness Project. “Because placing more of the burden for disaster relief on state and local governments doesn’t necessarily eradicate the need to help households and businesses recover from disasters.”

The group has also urged lawmakers to consider the downstream effects on mortgage markets, housing stability, and recovery efforts in underserved communities.

For decades, FEMA and NOAA have helped stabilize America’s risk landscape—providing not only financial and logistical support but also the climate and weather data that underpins the insurance sector’s risk modeling.

If those supports are weakened or withdrawn, private insurers may face a new era of uncertainty and heightened exposure. While innovation in catastrophe financing and parametric coverage may help fill some gaps, most experts agree the transition would be rocky—and felt most acutely in the places least able to bear the cost.

Some ‘states go bankrupt without FEMA’

“Those states go bankrupt without FEMA,” said Rep. Jared Moskowitz, a former emergency management chief in Florida—one of the most hurricane-prone states in the nation and a top recipient of FEMA aid over the past decade.

As insurance companies pull back, more Americans are going without coverage. The Consumer Federation of America estimates that $1.6 trillion in home value is now unprotected. That puts not just individual families at risk, but entire local economies, housing markets, and mortgage systems.

The Insurance Fairness Project notes that more than 40 consumer and climate advocacy groups have petitioned Congress to protect FEMA and extend the NFIP, calling the program “the main — and sometimes only — flood insurance option available to most homeowners in flood-prone areas.” Without it, they warn, “families that need to protect their homes and assets from inevitable flooding” will be left defenseless.

“The Trump administration seems to be doing away with agencies that many local governments rely on, as well as a wide range of businesses from agriculture to the insurance industry itself for CAT modeling and for disaster preparedness and disaster recovery,” said Haedtler. “So, the building use, building codes, and land use and all of the standards that go into those policy decisions are eroded by weather forecasting being more limited.”

Ripple effects already visible

The ripple effects are already visible. Insurance claim delays following wildfires in California and Hurricane Helene in the Carolinas have prompted protests and lawsuits. Local officials in blue states have accused the federal government of selectively denying aid—another echo of Trump’s first term, when politics sometimes dictated disaster response.

There is some hope within the insurance industry that technology and innovative strategies will fill some of the void left in the wake of the government cutbacks.

“To adapt, the industry must rethink catastrophe strategies by partnering with private data providers, expanding scenario planning, and leveraging scalable, AI-driven disaster response systems,” said Don Okolie, global head of insurance underwriting at Genpact, a US information technology services and consulting firm. “Generative AI and advanced analytics are already stepping up to solve this issue.”

Okolie says 69% of insurers, according to research, are now using these technologies to drive growth through faster workflows, personalized underwriting, and improved risk predictions.

With 60 million Americans living in hurricane zones, the stakes are massive. When families cannot rebuild, communities hollow out. Housing markets slump. Mortgage defaults rise. And insurers, already retreating, are unlikely to return.

As the clouds gather offshore, one thing is clear: the real disaster may be the one our system is no longer equipped to handle.

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The Senate-passed version of what is called the “big beautiful bill” will have an outsized impact on health care, removing millions from the Medicaid rolls, tightening requirements for Affordable Care Act eligibility and impacting the finances of health care facilities in rural and low-income communities.

Reaction from various factions of the health care community continued the day after Senate passed the bill in a 51-50 vote with Vice President JD Vance casting the tie-breaking vote.

The House passed its own version of the bill in May and is expected to consider the Senate’s version today. The bill cuts approximately $930 billion from Medicaid over the next decade, risking coverage loss for roughly 11.8 million adults by 2034. In addition, the bill did not include an extension of the enhanced tax credits that allow people to purchase coverage on the Affordable Care Act exchanges. Those enhanced tax credits will expire at the end of this year unless Congress acts.

AHIP: Not too late to change course

AHIP,  the trade association representing U.S. health insurers, issued a statement saying that the bill “could result in the biggest rollback in health care coverage in the country’s history.”

The statement further said the combined impact of the policies in the bill “will destabilize state Medicaid programs and undermine countless local health care systems.

“Due to new red tape and barriers to enrollment and re-enrollment, people losing eligibility for Medicaid will find an individual market with less choice and higher premiums. The potential expiration of the current health care tax credits later this year would compound the disruption.

“Taken together, these policies could result in the biggest rollback in health care coverage in the country’s history. That would mean millions of American families lose affordable access to primary care and pharmacies. The emergency room – the costliest and least coordinated site of care – would become the front door of the health care system for millions of people. The bulk of these costs would simply shift to uncompensated care payments and to those who are insured.”

AHIP called for Congress “to change course and keep coverage and care stable and affordable for low-income people and working families.”

Health care facilities could be harmed

KFF, an independent source for health policy research, polling and news, reported that the Senate plan would tear federal spending on Medicaid and ACA marketplaces by about $1 billion over the next 10 years, a move that would harm the finances of hospitals, nursing homes and community health centers. Such facilities would have to absorb more of the cost of treating uninsured people — and may force them to reduce services and employees, as well as close facilities.

The GOP’s plan would curtail a practice, known as provider taxes, that nearly every state has used for decades to increase Medicaid payments to hospitals, nursing homes, and other providers and to private managed-care companies.

States often use the federal money generated through the taxes to pay the institutions more than Medicaid would otherwise pay. (Medicaid generally pays the lowest fees for care, compared with Medicare, the program for people over 65 and some with disabilities, and private insurance.)

Hospitals and nursing homes say they use these extra Medicaid dollars to expand or add new services and improve care for all patients.

Republican senators tacked a $50 billion fund onto their version of the bill to cushion the blow to rural hospitals.

ACA reenrollment affected

Those who have health insurance through the ACA marketplace would find it more difficult to enroll in and retain their plans.

Marketplace policyholders would be required to update their income, immigration status, and other information each year, rather than be allowed to automatically reenroll — something more than 10 million people did this year. They would also have less time to enroll; the bill shortens the annual open enrollment period by about a month.

The CEO of one agents association said these requirements could have an impact on low-income Americans who rely on the ACA for coverage and the agents who work with them to keep them covered. The removal of automatic reenrollment could lead to loss of coverage, said Ronnell Nolan, president and CEO of Health Agents for America.

“Your agent has to touch you during open enrollment, or you have to touch the plan or policy to remain in coverage,” Nolan told InsuranceNewsNet. “You can’t just automatically be reenrolled. Our understanding is that was put in the bill to keep those who are in the country illegally from getting coverage. But this Senate bill went a bit further.”

Senators ‘should be ashamed’

“Every senator who voted in support of this big, bad budget bill should be ashamed of both the process and the policy,” said Anthony Wright, executive director of Families USA, a health care consumer advocacy organization.

“All Americans should remember this vote with horror about what the Senate is willing to do to our health coverage, our costs, and our care, all to give even bigger tax breaks to billionaires and big corporations. Senators voted to push and price millions of Americans out of health coverage, to raise our costs, and to upend the health system on which we all rely. While the Senate managed to drag this disastrous bill across the finish line with backroom bullying and unseemly side deals for states, this ugly process produced an even uglier bill, historically unpopular with voters on both sides of the aisle—and for good reason.

“This bill betrays Americans who voted for affordability, not for a budget that would raise health costs in both public and private coverage. This bill betrays the promises made by the President and by Senators to not touch Medicaid or slash away at our health care system and social safety net.”

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Ten years ago, John Hancock took a chance. In an industry rooted in actuarial tables, underwriting decisions, and death benefits, the Boston-based life insurer asked an unusual and bold question: What if we could build customers – and profits – by providing benefits not just for dying, but for living well?

The answer was Vitality—a data-driven, behaviorally guided wellness program that has since evolved into what Hancock President and CEO Brooks Tingle calls “a fundamental rethinking of the life insurance business.”

“We were in an industry where things weren’t changing much,” Tingle said in a recent interview marking the program’s 10-year milestone. “You’d buy a policy, tuck it away, and someday your heirs might benefit. But in a modern, digital economy, that just didn’t make sense.”
Instead, Hancock envisioned something more interactive. Inspired by auto insurers that rewarded safe drivers and homeowner policies that provided discounts for security systems, Hancock flipped the life insurance model. The company began rewarding people who exercised, ate healthier, got regular checkups, and took preventative health measures.

And it worked.

The data paints a powerful picture

Since its 2015 launch, Vitality has collected a mountain of data—on steps taken, fruit and vegetable purchases, preventative screenings, and now, early cancer detection. That data paints a powerful picture:

• Vitality members walk twice as many steps daily as the average American.
• 52% lowered their blood pressure to healthy levels—compared to 25% nationally.
• 63% improved cholesterol, and nearly half lowered their Body Mass Index (BMI).
• Mental wellness also surged, with users logging more than 5 million minutes on the meditation app Headspace in 2024 alone.

Tingle said gathering actuarially credible mortality data takes time: “We need thousands of outcomes before we can publish definitive results,” but he has seen enough. “All the indicators show that engaged members in the program are experiencing lower mortality rates,” he said.
One of Vitality’s most meaningful shifts has been from prevention to early detection. In partnership with companies like GRAIL (makers of the Galleri multi-cancer blood test), Prenuvo (full-body MRI screening), Nutrisense, and Function Health, the program now helps members discover life-threatening illnesses before symptoms arise.

Tingle recalled one customer who credited Vitality with “saving my life twice”: once after Galleri detected throat cancer, and again when a Prenuvo scan uncovered a second, unrelated tumor.

That kind of impact, Tingle said, makes the case for the program better than any marketing campaign.

Early detection ‘a big part of what we offer’

“These early detection tools are now such a big part of what we offer,” he said. “And that’s where it becomes immediate. Helping someone live two or three years longer is abstract—especially to someone in their 30s. But helping them catch stage one cancer instead of stage four? That’s transformative.”

Despite its success, few competitors have followed suit.

“I’m frankly disappointed more haven’t,” Tingle said. “Every insurer should be asking themselves: are we a passive claims payer, or an active risk manager?”

Vitality members not only live healthier, they engage more. Some who typically interacted with the company once or twice a year now log in 20 to 30 times a month.

That creates opportunity for retention, upselling, and deeper customer relationships.

Rewards for workouts top premium discounts

“You might think the premium discount would be the most popular feature,” Tingle said. “But the most loved part? The games. Spin-the-wheel rewards for workouts. A tic-tac-toe-style game for grocery shopping. Small things. But they drive consistent, joyful interaction.”

It is also where behavioral science meets business.

“We’re not trying to turn anyone into a marathoner,” he said. “But small, repeated choices—walk a bit more, eat a bit better—accumulate over time. That’s where real change happens.”
Tingle is unapologetic about the business case behind all this.

“Let’s be honest,” he said. “We make money by collecting and investing premiums. The longer people live, the more time we have to do that. I would say to every policyholder: yes, I want you to live a long, healthy life—because it’s good for you and good for me.”

Independent surveys back it up: Nine out of 10 consumers say they prefer Vitality-style policies. Seven in 10 say it would make them more likely to buy life insurance. “And one in four say they chose Hancock specifically because of this program,” Tingle added.

What’s next for Vitality?

Looking ahead, personalization is the next frontier.

“Everyone’s path to a better life is different,” Tingle said. “One person may need to move more; another may need to sleep better. Someone else may be managing diabetes. We’re designing the program to tailor incentives accordingly.”

Technology is making it possible. “There wasn’t even an Apple Watch when we started,” Tingle said. “Now we have customers telling us it saved their lives.”

Artificial intelligence is also on the radar. “Not to replace doctors,” he said, “but to help deliver smarter, more customized experiences—suggesting actions, screenings, or behaviors based on individual health profiles.”

For all its technological tools and actuarial credibility, Vitality’s secret ingredient may be simple human empathy. Tingle lost his mother to lung cancer at 65, despite her textbook-healthy lifestyle. “That’s why I’m passionate about early detection,” he said. “Sometimes it’s not about choices—it’s about luck, or genes.”

That is what Vitality tries to catch.

“This isn’t just a product,” he said. “It’s a relationship. It’s a way to say to our customers: ‘We’re in this with you.’ ”

A decade in, the message seems to be getting through.

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The Senate passed its version of what is called the “big beautiful bill” that includes deep cuts to Medicaid while allowing the enhanced Affordable Care Act tax credits to expire at the end of this year.

The Senate bill cuts approximately $930 billion from Medicaid over the next decade, risking coverage loss for roughly 11.8 million adults by 2034. Medicaid recipients who are non-disabled, childless adults aged 19–64 must complete 80 hours per month of work, community service or education in order to remain eligible. In addition, recipients must verify their eligibility every six months.

The bill removes a key funding source for hospitals by lowering the cap on Medicaid “provider taxes” in states that expanded Medicaid under the ACA. The cap is lowered from 6% to 3.5%, phasing down from 2027 to 2031.

It also sharply limits state directed payments by 10% annually until capped at 100% of Medicare rates in expansion states – meaning lower reimbursements. These changes threaten hospital revenue, particularly in rural and low-income areas. Nearly 400 independent rural hospitals in the U.S. could be pushed to the brink of closure, according to a Families USA analysis.

ACA coverage could become more expensive as a result of the bill, with the enhanced ACA tax credits due to at the end of the year. The Senate bill does not renew these, potentially increasing the uninsured rate.

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The Senate passed President Donald Trump’s controversial budget today, which makes significant changes to tax policy and extends the 2017 Tax Cuts and Jobs Act.

The so-called “One, Big Beautiful Bill” passed on a 51-50 vote after three Republicans defected, requiring Vice President JD Vance to break the tie and send the bill back to the House for final approval but where the outcome remains uncertain.

Senate Majority Leader John Thune of South Dakota spent the night reaching for last-minute agreements between those in his party worried the bill’s reductions to Medicaid will leave millions without care and his most conservative flank, which wants even steeper cuts to hold down deficits ballooning with the tax cuts.

It’s a pivotal moment for the Republicans, who have control of Congress and raced to wrap up work with just days to go before Trump’s holiday deadline Friday. The 940-page “One Big Beautiful Bill Act,” as it’s formally titled, has consumed Congress as its shared priority with the president.

At the same time, House Speaker Mike Johnson of Louisiana has signaled more potential problems ahead, warning the Senate package could run into trouble when it is sent back to the House for a final round of voting, as skeptical lawmakers are being called back to Washington ahead of Trump’s Fourth of July deadline.

Trump acknowledged it’s “very complicated stuff,” as he departed the White House for Florida.

“We’re going to have to see the final version,” the president said. “I don’t want to go too crazy with cuts. I don’t like cuts.”

Senate’s tax changes

Tax changes include:

• Income tax brackets from the 2017 Tax Cuts and Jobs Act (12%, 22%, etc.) are made permanent, including inflation indexing through 2029.
• Raises the standard deduction to $15,750 (single), $23,625 (head‑of‑household), and $31,500 (married filing jointly), retroactive to 2025 with inflation adjustments.
• Temporarily increases the SALT deduction cap from $10,000 to $40,000 (indexed) through 2029, then reverts to $10k in 2030. A 30% phase‑down applies above certain incomes.
• Eliminates federal income tax on certain tips and overtime pay, fulfilling a Trump campaign pledge.
• Makes the 20% pass‑through deduction (Section 199A) permanent and broadens income phase‑in thresholds for eligibility.
• Removes the overall limitation on itemized deductions (formerly the “Pease limitation”) and introduces a new cap mechanism.
• Solidifies corporate tax benefits—bonus depreciation, R&D incentives, interest deduction limits—as permanent instead of temporary.
• Sets the Child Tax Credit at $2,200 per child (up from $2,000), permanent but less generous than the House version’s $2,500.
• Enhances the business tax credit available for employer-sponsored child care (details to follow via Senate Finance).
• Creates tax-exempt savings accounts for children with a $1,000 federal seed and a $5,000 annual cap.
• Increases the federal estate and gift tax exemption to $15 million per person ($30 million for couples), indexed to inflation beginning in 2026.
• Exempts 50% of capital gains (up to $15 million) on certain small business stock held for 3+ years.

Fiscal conservatives said the cuts didn’t go far enough and complained the legislation adds $3.3 trillion to the national deficit over a decade and requires a $5 trillion increase in the debt ceiling.

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As a major international cybercrime organization known as Scattered Spider sets its sights squarely on the insurance industry, a former FBI agent and current head of cyber practice at Kroll is warning insurers to shore up their defenses.

“Awareness is key because oftentimes Scattered Spider is effectively exploiting people who are not security experts, but who are in very important and sensitive positions and help-desk-type environments. Their job is to facilitate access for people, so it’s kind of against their nature to not do that, but awareness is key, getting them trained up,” Adam Malone, global head, acute events in Kroll’s cyber risk practice, said.

Scattered Spider first emerged around 2021, when it began targeting major companies. It later began targeting insurance companies in 2023 but went quiet for about a year after U.S. law enforcement was able to make some arrests and disrupt their operations.

But now, the criminal organization is back. It’s already suspected of being behind a series of cyber attacks on U.S. insurers like AFLAC, Philadelphia Insurance Company, and Erie Insurance — all within just the last two to three weeks.

“Recently, we saw them come back on the scene targeting retailers in Europe, primarily the U.K., a couple of big cases suspected to be Scattered Spider. And now, the industry has started to notice a trend targeting insurance. One thing about Scattered Spider is they typically do stick with the sector for some period of time, for various reasons, before they move on to other victim types,” Malone said.

But the good news is insurers do have methods to protect against potential attacks, such as ensuring they have adequate training and internal cybersecurity plans in place. They can also leverage services like those provided by Kroll to have expert support in making sure their defenses stack up.

Scattered Spider’s unique threat

Scattered Spider poses a unique threat because it’s primarily English-speaking and exceptionally competent in social engineering. There have been signs that some of this group’s perpetrators are American young adults, which Malone described as an “unusual” and “worrisome” trend.

“Scattered Spider essentially was a group of people who formed this criminal group who were primarily English speakers and had very good skills in social engineering. They also had a lot of hands and feet that could do things like use identity theft to gain access to stolen phones and SIM cards, could call and speak with help desks in native English, and were good at impersonating people,” he explained.

The group began with different types of crimes but eventually partnered with ransomware groups to facilitate getting access into companies — and ransomware attacks can “bring a company to its knees for a matter of weeks, if not months.”

What insurers should watch out for

Malone, who also leads Kroll’s global digital forensics, incident response and intelligence functions, cautioned insurers that Scattered Spider’s specialty is in using company technology against itself.

“Their goal is to gain access to corporate assets masquerading as a corporate employee, typically or ideally an IT employee. They’re very good at using social engineering tactics — phone calls, text messages, spoofed domains to act like help desk or IT people in a company and gain access to people’s accounts and multi-factor capabilities to log in with very little difficulty into corporate networks,” he said.

They can even trick a cell phone provider into sending them a SIM device or SIM chip, enrolling a phone onto someone’s account and allowing them to bypass a lot of the legitimate controls companies have deployed.

Once they gain access to a company’s system, they very quickly use generalized IT knowledge that the company has documented against them. For example, they may consume intelligence from internal knowledge bases or ticketing systems, gathering usernames and passwords that are documented in manuals or policies and coding documents to facilitate their access.

“They pivot very quickly to trying to find the most sensitive information in an organization. Oftentimes, that’s regulated information or sensitive financial information that they will take in order to extort the company to increase their chances of being paid. And then, the last thing they’ll do is deploy ransomware,” Malone said.

Preparation is the best defense

To ensure they’re best prepared to rebuff a cyber attack, insurers should work with cyber experts within companies or through vendor relationships and empower them to develop a robust security plan.

Malone suggested insurers:

• Think about what a cyber attack would look like and what bad actors would do
• Assess and test their internal controls to see how effective those are
• Plan out how they would respond to an attack (whether to pay ransom, how much to pay, who signs off, etc.)

“But all that comes second to education, having good policy, making sure people understand the controls that are in place and follow procedures appropriately and if they see something, say something,” Malone said.

Insurers can also work with companies like Kroll, which can help test their defenses, understand how to protect their most sensitive data and prepare overall.

Kroll is an international financial advisory services and risk management firm founded in 1932 and based out of New York, NY. It ventured into the cyber aspect of business in the early 2000s and currently sits on over 80 cyber insurance panels to provide specialized services and advice.

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Regulators and actuaries are considering a data change to better account for a puzzling mortality degradation in individuals ages 80 and older.

The Life Mortality Improvement Subgroup of the Mortality and Longevity Oversight Advisory Council wants to switch from general population data to insured population data. The two datasets are fairly similar up until age 80, when insured population mortality improvement sharply drops.

Mortality improvement rates represent how much mortality rates are expected to decline over time. They’re typically expressed as a percentage reduction in mortality per year and are widely used in life insurance, pensions, and actuarial science to estimate future longevity.

“We would expect that continued medical advances would result in at least some improvement at these ages, but we are actually seeing small rates of deterioration,” the subgroup wrote in a request for comment. “One suggested possibility is that this is due to the impact of the life settlements market on insured data, leading to decreased lapses at older insured ages and therefore more impaired lives in this segment of the population.”

Represented by Marianne Purushotham, corporate vice president for statistical analysis and modeling for LIMRA, the subgroup briefed members of the Life Actuarial Task Force Thursday.

The proposal received one comment letter, from the American Council for Life Insurers. Brian Bayerle, chief life actuary for ACLI, said the trade group supports using the credible data that is the “most relevant.”

“We would be concerned if there was an effort to go down a path of just taking the worst of the two between the general population and the injured population [data],” Bayerle added.

In its letter, ACLI attempted an explanation for the degradation of mortality among the insured population aged 80 and above.

“There could be a few possible causes, including the impact of life settlements, and the possibility that the insured population is more likely to get access to better treatments earlier in life, so there may be more ‘survivors’ that will ultimately have shorter life expectancy,” wrote Bayerle and Colin Masterson, senior policy analyst at ACLI.

Long-term mortality trends

The Society of Actuaries Research Institute discussed long-term mortality trends during recent podcasts. Stubbornly high mortality continues to baffle actuaries five years after the COVID-19 pandemic. A late-2024 Swiss Re Research Institute report concluded that excess mortality is likely to persist for as long as another decade.

Excess mortality is a data point that insurers watch very closely. SOA researchers debated income inequality and disease trends, and the impact on mortality going forward. Several studies point to rising income inequality as a major worldwide trend.

It is also a major factor in mortality, said Al Klein, principal and consulting actuary at Milliman, during an SOA podcast.

“Higher-income individuals tend to have better education, better access to healthcare, engage in healthier behaviors, and live longer,” Klein said. “Lower-income individuals face more financial barriers and less access to care, have higher levels of stress and increased exposure to environmental hazards because of the neighborhoods they live in, and don’t live as long.”

Unequal access to healthcare is another concerning issue likely to drive adverse mortality trends, said Eric Pickett, actuary and chief content officer at Club Vita, a data analytics company.

“It’s not just about having health insurance,” Pickett said. “It’s also about health care utilization. Some populations, even if they have insurance, may not access care as frequently due to cost concerns, cultural barriers or lack of healthcare facilities in their area.”

Disease a driver

Chronic diseases, such as cardiovascular disease and cancer, will continue to be a “dominant driver” of mortality, SOA actuaries agreed, with trends influenced by both lifestyle choices and medical advances.

Cardiovascular disease remains the number one cause of death worldwide. But steady medical treatment progress combined with healthier eating and sharp declines in smoking drove down heart disease deaths for many years. That trend has since leveled out.

Diabetes, cancer and infectious diseases are the other big mortality drivers. In the latter case, Pickett noted, viruses can be “effectively managed” via vaccination programs. Or, should be, he noted.

“Widespread immunization has significantly reduced deaths from diseases like measles and polio,” Pickett said, “but vaccine hesitancy and new virus and viral mutations remain challenges for disease control.”

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The Supreme Court ruled Friday that an Affordable Care Act provision requiring insurers to cover certain preventive care is constitutional.

In a 6-3 decision authored by Justice Brett Kavanaugh, the justices upheld the authority of the U.S. Preventive Services Task Force and protected access to preventive care for an estimated 150 million Americans.

At issue in the case of Braidwood Management v. Kennedy was a provision in the ACA that requires private health insurers and companies to cover preventive services and drugs such as HIV preventive drugs, known as PrEP. The provision also requires coverage of cancer screenings, vaccines, sexually transmitted disease screenings, gestational health screenings and birth control.

Braidwood contended that this requirement violated the company’s religious freedom and beliefs.

Preventive Task Force

Another issue in the Braidwood case is whether the Preventive Task Force that decides which services must be covered under the ACA is constitutionally sound.

The justices found the secretary of the Department of Health and Human Services has the authority to appoint and fire members of the Preventive Services Task Force; their work is “directed and supervised” by the HHS Secretary so they do not need to be confirmed by the Senate. The court reinforced the ability of the HHS secretary to exert control over the panel’s recommendations.

“Task Force members issue preventive-services recommendations of critical importance to patients, doctors, insurers, employers, health care organizations, and the American people more broadly. In doing so, however, the Task Force members remain subject to the Secretary of HHS’s supervision and direction, and the Secretary remains subject to the President’s supervision and direction,” Kavanaugh wrote for the majority. “The structure of the Task Force and the manner of appointing its officers preserve the chain of political accountability that was central to the Framers’ design of the Appointments Clause.”

The task force is composed of medical experts who serve four-year terms on a volunteer basis. They are appointed by the HHS secretary and are supposed to be shielded from political influence.

The plaintiffs argued the USPSTF mandates are unconstitutional because the task force’s members are “inferior officers” who aren’t appointed by the president or confirmed by the Senate.

The ACA specifies four main categories of preventive care for all adults as well as for women and children in particular:

1. Services with an A or B rating in the current recommendations of the U.S. Preventive Services Task Force.
2. Immunizations recommended by the Advisory Committee on Immunization Practices.
3. Preventive care and screenings for infants, children, and adolescents in comprehensive guidelines supported by the Health Resources and Services Administration.
4. Preventive care and screenings for women’s health specified in the HRSA guidelines.

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EXL exec Sumit Taneja says for many insurers, a legacy mindset is what is holding the industry back from making rapid strides in implementing AI.

Taneja, EXL’s SVP and global head of AI consulting and implementation, noted that some companies have implemented individual use-cases for AI, but many still struggle to see a bigger-picture view. He explained that EXL last year held a few AI sessions with American insurers where this issue became evident.

“We could see the insurers almost switching off because they just could not relate to where this will go and is it practical also. So, we had to actually tone down some of that and suggest more incremental steps where there will be a vision to reach in two, three years,” he said.

Insurers ‘think very linearly’

In his opinion, this is because many insurers still “think very linearly” due to the way workflows and processes in the industry have been historically designed and utilized for years. He suggested insurers pivot away from this mindset and instead think about how they can embed AI in their day-to-day working instead of just having one standalone application that’s not part of their core workflow.

“They just can’t think multiple things will happen in parallel… It will probably take much longer to get people out of that thinking that multiple things you used to do can actually happen now in parallel,” Taneja said.

Legacy systems, data limitations

Foundational challenges like multiple legacy systems and unstructured data also are limiting American insurers’ ability to adopt and scale AI, according to Taneja.

“Not that they are not keen to do it, but there are many foundational problems that the insurance companies have, which limits them to accelerate. One is the multiplicity of admin systems, and second is their data landscape is still very siloed. Unstructured data has not been managed properly, so using some of that data for AI is still a few months or maybe a year away,” Taneja said in an interview with InuranceNewsNet.

He noted that many insurers have yet to realize the full extent of what AI can do for them, with most using it for simple automation or marketing. This aligns with the results of EXL’s recently released 2025 Enterprise AI Study, which found the U.S. insurance industry has increased adoption of machine learning but still lags behind when it comes to generative AI.

“I think we are still scratching the surface of what AI can deliver to insurance. At the same time, I will caveat it out and say the adoption with respect to GenAI and Gen Tech is still early days,” Taneja said.

Study finds slow adoption

The EXL Enterprise AI Study surveyed C-suite and senior executives in insurance, banking and finance, retail, utilities and healthcare around the world. That included 50 U.S. insurance executives and decision-makers.

Looking at the U.S. results alone revealed a disconnect between how insurers think they are doing with AI and how they measure up to other industries. While 24% of American insurers surveyed said they believe they are “far ahead” of peers with AI adoption, only 10% were actually considered AI leaders when compared to other industries.

Fifty-eight percent of U.S. insurers surveyed have started using machine learning AI solutions. This kind of AI is typically used for solutions like claims automation or fraud detection. However, only 38% reported adopting GenAI — the lowest adoption rate among all industries surveyed. GenAI is the type of technology used for chatbots or simulating customer service interactions.

Just under 90% of insurers acknowledge that scaling AI is “very important,” with 60% planning to pilot GenAI claims in the future and 46% actively rolling out GenAI pilots in underwriting.

“I’ve not seen a lot of AI at end-to-end being deployed as of now. There are enough bigger companies who we are helping; you’re seeing them moving in that direction. But it’s still maybe a couple of years away where we will see a large underwriting area or a large claims area has been completely transformed,” Taneja said.

Foundational challenges

Aside from understanding the scope of what AI can achieve, Taneja emphasized that insurers must address the issue with legacy systems and data silos if they hope to increase their adoption.

“The legacy systems they have in their ecosystem and the data silos are limiting their ability to scale faster, and I don’t see that changing very soon,” he said.

As an example, he mentioned one insurer that has 28 policy admin systems, none of which support the infrastructure needed to implement AI.

“I don’t know how they can even think of reimagination unless they get to a migration from their 28 to two or three admin systems over the next three, four years before they will really see value,” Taneja said.

Similarly, having that many legacy systems impacts data being readily accessible by AI because even just one customer exists in multiple different systems.

For insurers like this, he said, they would have to first invest in data warehouses and platform modernization before being able to implement and scale AI solutions — and that could be “very limiting for large insurers.”

EXL Service is a global data analytics and digital operations and solutions company based in New York. Founded in 1999, it now has a team of 1,500 data scientists and operates in a wide range of industries.

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Senate Parliamentarian Elizabeth MacDonough struck out against the major Medicaid provisions in the “big beautiful bill,” warning senators that bill’s passage may be at risk.

MacDonough rejected a plan to cap states’ use of health care provider taxes to collect more federal Medicaid funding. This proposal would have generated hundreds of billions of dollars in savings to offset the cost of making President Donald Trump’s corporate tax cuts permanent, according to a Democratic summary of the parliamentarian’s ruling.

The decision could force Senate Majority Leader John Thune, R-S.D., to reconsider his plan to bring the Senate bill up for a vote this week.

The cap on health care provider taxes was projected to save hundreds of billions of dollars over the next 10 years, but it would have forced states to shoulder substantially more of the cost for Medicaid coverage.

The parliamentarian ruled that Sect. 71120 of the bill covering health care provider taxes violates the Byrd Rule, which determines what legislation is eligible to pass the Senate with a simple-majority vote on the budget reconciliation fast track.

Republicans could get around the parliamentarian’s rulings by holding a simple-majority vote on the floor to establish a new precedent, expanding the scope of what is eligible under reconciliation.

They also could try to rewrite the cap on health care provider taxes in a way that meets the parliamentarian’s approval.

But the parliamentarian’s decision appears to be a setback that could delay a vote on the bill.

Other provisions now at risk include several GOP proposals to exclude undocumented residents from Medicaid by withholding federal funds from states that make them eligible for benefits.

The parliamentarian also ruled early Thursday against a Republican proposal to prohibit plans from not getting certain Obamacare payments if they cover abortion. There are 12 states that currently require such coverage and insurers have worried they don’t have enough time to implement the payment change before the start of open enrollment.

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