Plans by the Trump Administration to outsource the federal government's climate research supercomputer will add significant cost to an already stressed US homeowners insurance market as US and international insurers and reinsurers face uncertainty regarding access to foundational data that helps measure and model extreme weather losses.
"When the scientific foundation for understanding natural hazard risk is weakened, insurers must assume wider loss distributions and higher tail risk, which translates directly into higher premiums for consumers," a letter from the American Academy of Actuaries to the acting director of the National Science Foundation states. "Beyond price, the availability of insurance depends on insurers' confidence in their ability to understand and manage risk."
The February 9 letter responds to NSF's announced plan to dismantle the National Center for Atmospheric Research, or NCAR, and relocate its resources. The agency said it is seeking "transformative and creative concepts" for atmospheric observational platforms, cyberinfrastructure and computing capabilities, and training for modeling and forecasting.
As part of that process, NSF is "exploring options to transfer stewardship" of the NCAR-Wyoming Supercomputing Center (NWSC). In a subsequent announcement, NSF confirmed that management and operations of the NWSC "are expected to transition to a third-party operator."
According to the letter, the move "would remove a cornerstone of the nation's open, scientific infrastructure for tracking and understanding weather and climate risk."
The actuarial group frames NCAR's continuity as both a scientific and economic imperative. "NCAR's continuity is not only a scientific necessity, but an economic one," the letter states. The Academy adds that the closure would strip away carefully maintained, publicly accessible, science-based data and modeling tools that insurers depend on to assess systemic climate risk and protect policyholders.
Catastrophe Modeling at Risk
The Academy's most pointed warning centers on catastrophe models—the analytical engines behind pricing, reserving, and capital adequacy in property and casualty markets.
"NCAR has long supplied the foundational capabilities that enable catastrophe modeling and climate-informed pricing and reserving in the property and casualty insurance sector," the letter explains. Any disruption "would materially degrade these capabilities, heighten uncertainty in risk assessments, and undermine the stability and affordability of insurance coverage for U.S. consumers."
The Academy details how actuaries depend on NCAR's datasets "covering atmospheric dynamics, climate variability, and extreme event frequency," describing them as "particularly foundational to the catastrophe models used in property and casualty insurance." Without those resources, "the insurance industry faces increased uncertainty and greater challenges in accurately assessing and pricing risk."
The letter extends that concern to long-term assumptions embedded in underwriting and capital planning. NCAR research enables actuaries "to evaluate changes in hurricane intensity, wildfire spread, and precipitation patterns, factors that materially affect loss costs and risk margins."
Climate risks "often occur together across regions and insurance lines, amplifying the potential for widespread losses," the Academy notes. NCAR's integrated models help insurers anticipate these "interconnected risks and extreme scenarios." Without them, "the industry risks underestimating total exposure," potentially leading to "inadequate capital reserves and higher volatility in pricing and insurance availability."
For actuaries, however, the issue is less about administrative structure and more about continuity and credibility. "In all financial arrangements, uncertainty carries a positive cost," the Academy writes. As uncertainty grows, "some insurers will reduce exposure or withdraw from high-risk areas altogether."
The letter closes with a direct appeal to the adminstration.
"We strongly encourage the NSF reconsider its plan to dismantle the NCAR, as doing so is very likely to negatively impact the industry, insurance coverages, and outcomes for the American public."
