Louisiana’s struggles with property and auto insurance have reached a critical level, pushing leaders to implement reforms aimed at stabilizing the market. But with the state’s exposure to hurricanes, climate impacts and shifting global insurance dynamics, the future remains uncertain.
As we head into 2025, Louisiana businesses need to stay informed about trends likely to impact their coverage and costs. Here, our “insurance meteorologists,” if you will, are Tim Temple, Louisiana’s Commissioner of Insurance, and Ben Albright, CEO of the Independent Insurance Agents & Brokers of Louisiana. Both were asked recently to share their thoughts on the top insurance issues on the horizon.
Navigating the Cost Crisis in Property and Auto Insurance
“The state of insurance in Louisiana is undeniably challenging,” said Temple. “Homeowners, private passenger auto, and commercial rates are making life difficult for families and businesses.”
With some of the highest premiums in the nation, many businesses are struggling to afford essential coverage, while others have delayed expansion plans or considered relocating due to cost pressures.
Temple has championed a wave of regulatory changes to try to turn the tide.
“Since taking office in January, we’ve made significant reforms aimed at creating a more competitive marketplace,” he said.
Although there has been progress on property insurance reform, the auto insurance market remains largely stagnant.
“On the auto side, I don’t see any significant changes on the horizon,” said Albright. “The Legislature and the governor have not made the transformational kinds of changes necessary to turn those loss trends around.”
Without deeper legal reforms, Albright warned that high costs will likely persist.
Hope on the Horizon?
The 2025 legislative session could bring further reforms targeting Louisiana’s insurance market, particularly in commercial property and auto insurance. Temple noted that high commercial rates are deterring new businesses from setting up in Louisiana and even prompting some established companies to leave. To combat this, he plans to push a legislative agenda that addresses the underlying issues of high losses and market inefficiencies.
One major proposed change involves increasing transparency in Louisiana’s auto insurance claims process. New reforms could enable defendants to disclose the actual amount paid for medical procedures in court, not just the billed amount.
“This transparency would help reduce auto insurance premiums by curtailing inflated costs,” Albright explained.
On the property insurance side of things, the increased frequency and intensity of storms is pushing both state leaders and insurers to prioritize resilience as a risk mitigation strategy.
“If we want to continue our way of life in New Orleans and the rest of the state, we must focus on building more resilient homes, businesses and infrastructure,” Temple stressed.
For businesses, this focus on resilience offers both a challenge and an opportunity. Insurers are starting to favor properties that meet high construction standards, particularly those with Fortified roofs and other structural reinforcements.
“You’ll see insurance companies competing more aggressively for better-constructed buildings, while older structures will become more expensive to insure,” Albright explained. Fortified properties bring proven reductions in risk, which in turn makes them more appealing to insurers and helps stabilize costs.
However, Temple and Albright agreed that it’s unlikely property insurance premiums will return to their pre-2020 levels.
“The market was underpriced for the risks we now face,” Albright said.
While prices could come down as more competition enters the market, the reality of climate change means higher rates may be here to stay. For businesses, investing in resilience now could help manage future costs and keep coverage accessible.
Global Market Shifts and Reinsurance Trends
Louisiana is heavily reliant on reinsurance to cover the risk of severe storms, but global market shifts have driven up costs in recent years. Temple warned that the high cost of reinsurance often results in higher premiums for Louisiana policyholders, though he was hopeful for some relief in the upcoming renewal season.
“Hurricanes Francine, Helene and Milton caused less damage than anticipated, which could mean fewer rate increases for 2025,” Albright said. However, the unpredictable nature of global reinsurance markets means businesses should brace for possible increases if another major storm strikes.
If a business owner wants lower auto costs, they need to demand that legislators and Gov. Jeff Landry pass reforms allowing medical cost transparency in court.
– Ben Albright, CEO of the Independent Insurance Agents & Brokers of Louisiana
Amid this uncertainty, Temple emphasized the importance of diversification in risk management.
“Reinsurance is a global market, and while we have no control over events outside Louisiana, we must control what we can within our state to improve the marketplace,” he said. By fostering resilience and exploring innovative coverage models, Louisiana can help shield its businesses from the volatility of the global market.
Emerging Risks for 2025: Cybersecurity and Infrastructure Challenges
In addition to natural disasters, Louisiana businesses are facing new threats in the digital age. As Albright pointed out, cyberattacks are becoming a significant risk, especially for small businesses.
“Cyber insurance still doesn’t get enough attention, even though around half of cyberattacks target small businesses,” he said. A data breach or ransomware attack could shut down a company, making cyber insurance essential for businesses with sensitive customer information or critical computer systems.
Cyber insurance goes together with strong internal practices, Albright noted, as “95% of cybersecurity breaches are attributed to human error.” He urged business owners to work with their teams to learn best practices, such as identifying phishing attempts and maintaining secure passwords. For businesses, taking proactive steps to mitigate cyber risk can lead to more affordable insurance rates and a better line of defense against costly disruptions.
Insurance Access and Affordability for Small and Minority-Owned Businesses
The high cost of insurance is especially challenging for small businesses, particularly those owned by minorities or located in vulnerable communities. Temple acknowledged that recent premium increases have taken a toll. Here, both Temple and Albright highlighted how resilience-focused programs can help reduce costs. The Louisiana Fortified Roofs Grant Program, for example, offers grants for homeowners to install fortified roofs that can withstand hurricane-force winds.
“For small businesses in vulnerable communities, a fortified roof can provide both physical and financial protection,” Albright said. Additionally, eligible homeowners can submit their fortified roof certificates to insurers for premium discounts, which can help keep coverage affordable.
On the auto side, Albright advised businesses to advocate for legislative reforms that would increase transparency in the insurance claims process.
“If a business owner wants lower auto costs, they need to demand that legislators and Gov. Jeff Landry pass reforms allowing medical cost transparency in court,” he said. These efforts could benefit small business owners facing high auto insurance premiums, particularly those operating in areas with high accident rates and claim frequency.
Preparing for a Changing Insurance Landscape
As Louisiana heads into another year of insurance challenges, the insights of experts like Temple and Albright reveal both the obstacles and opportunities that lie ahead. Much like meteorologists tracking a hurricane, they’re working to help businesses prepare for an evolving storm of costs, climate impacts and regulatory changes that could shape the future of the state’s insurance market.
“Insurance is a vital part of Louisiana’s resilience,” Temple said. Just as communities prepare for the worst during hurricane season, businesses can take proactive steps to fortify themselves against rising insurance costs and emerging risks. Whether it’s by advocating for legislative reforms, investing in resilient infrastructure, or tightening up cybersecurity practices, Louisiana’s businesses have some tools they can use to weather the storm.
As Temple and Albright emphasize, the outlook may be challenging, but adaptation and resilience will be essential.
