Erie Indemnity Company (ERIE): PESTLE Analysis [Nov-2025 Updated]

You want the 2025 outlook for Erie Indemnity Company (ERIE), so let's cut straight to the two material forces: regulation and climate. The near-term strategy hinges on managing an expected 8% rise in reinsurance costs from climate volatility while simultaneously deploying AI to cut the expense ratio by an estimated 15% over five years. We'll walk through the full PESTLE analysis-Political, Economic, Sociological, Technological, Legal, and Environmental-to give you the precise map for anticipating risks and seizing growth opportunities in this problably complex insurance market.

Erie Indemnity Company (ERIE) - PESTLE Analysis: Political factors

State-level insurance commissioner appointments influence rate approval.

For a P&C insurer like Erie Indemnity Company, which operates in 12 states and the District of Columbia, the most immediate political risk is local: the state insurance commissioner. These appointed or elected officials hold the power to approve or reject the rate increases that drive your top-line revenue.

You've seen the pressure intensify in 2025 as inflation and catastrophic losses push up claims costs, forcing insurers to seek double-digit rate hikes. The Pennsylvania Insurance Department (PID), for example, blocked a total of $210.1 million in requested annual property and casualty (P&C) premium increases in the first six months of 2025 alone. Here's the quick math: that includes $85.3 million in personal auto premiums and $13.7 million in homeowners premiums that insurers were not allowed to charge. That is a direct, material hit to the Exchange's profitability that must be offset by underwriting discipline and expense control.

The political reality is that commissioners are consumer-facing, and approving large rate increases becomes a political liability. This creates regulatory friction, which slows down your ability to price risk accurately, especially when the Exchange's combined ratio hit 108.1% in Q1 2025, up from 106% in Q1 2024. You need to factor in this regulatory lag as a permanent cost of doing business.

Congressional focus on federal disaster relief funding impacts state solvency.

The debate in Washington over federal disaster funding is not just a humanitarian issue; it's a core solvency risk for state governments and, indirectly, for private insurers like ERIE. As of September 2025, the Federal Emergency Management Agency's (FEMA) Disaster Relief Fund (DRF) was reported to be at a precarious level, with only about $8.4 billion remaining for staff deployment and aid tied to presidential major disaster declarations.

The current political environment is signaling a deliberate shift of disaster responsibility to the states, with some administration officials even floating the idea of phasing out FEMA after the 2025 hurricane season. If this happens, states will face a massive funding gap, which could force them to:

• Increase state-level taxes or fees on all insurers.
• Create or expand state-backed insurance pools, competing directly with private P&C carriers.
• Delay public infrastructure repairs, increasing the severity of future losses.

A reduction in federal support would increase the financial exposure and volatility for insurers, especially in states with high catastrophe risk, forcing a rapid re-evaluation of underwriting and reinsurance strategies. The more limited and less predictable federal recovery resources become, the greater the financial burden on the states and the private market.

Trade policy shifts don't directly affect ERIE's domestic P&C focus.

Unlike global financial institutions, Erie Indemnity Company's core business is domestic property and casualty insurance, managing the Erie Insurance Exchange, which focuses on personal and commercial lines across its U.S. footprint. The Exchange reached nearly $12 billion in premium and surpassed 7 million policies in force in 2024. This domestic-only model insulates the company from the volatility of international trade policy.

The political noise around tariffs, global supply chain rules, or foreign exchange controls has a minimal direct impact on ERIE's revenue stream. The indirect effect is still real, though: trade-driven inflation on materials like lumber and auto parts directly increases the cost of claims, which then feeds back into the state-level rate approval battles you are already fighting.

Lobbying efforts on tort reform remain a constant, high-stakes battle.

Lobbying for tort reform-changes to civil justice laws-is a critical, perpetual political activity for the entire P&C industry. The cost of the U.S. tort system was estimated to be $529 billion in 2022, and the fight against legal system abuse, including nuclear verdicts (jury awards of $10 million or more), remains a top priority in 2025.

Erie Indemnity Company maintains a political presence, evidenced by the ERIE INDEMNITY COMPANY PAC - FEDERAL. This capital is deployed to support legislative efforts, primarily at the state level, to reduce liability exposure. The political payoff for successful reform is significant: for example, 2023 tort reforms in Florida led to a 42% decrease in case filings by mid-2025, directly reducing litigation costs and social inflation for insurers operating there.

The battleground in 2025 is focused on key legislative themes across multiple states, which you must monitor closely:

Tort Reform Focus Area	Impact on ERIE's Business
Disclosure of Third-Party Litigation Funding (TPLF)	Reduces speculative lawsuits and the influence of outside capital on claim severity.
Caps on Non-Economic Damages	Limits 'nuclear verdicts' in personal injury and auto cases, stabilizing loss ratios.
Modification of Joint-and-Several Liability	Ensures ERIE is only responsible for its proportional share of fault, lowering claim payouts.

If you don't defintely support these legislative pushes, your claims costs will continue to rise faster than general inflation, putting more pressure on state regulators who are already hesitant to approve the necessary rate increases.

Erie Indemnity Company (ERIE) - PESTLE Analysis: Economic factors

Persistent high 'social inflation' drives up claims costs significantly.

You need to understand that the biggest non-weather headwind in the property and casualty (P&C) sector right now is 'social inflation' (the rise in claims costs beyond general economic inflation due to societal shifts in litigation and jury attitudes). This trend directly impacts the underlying profitability of the insurance policies issued by the Erie Insurance Exchange, from which Erie Indemnity Company derives its management fees.

This isn't just a vague threat; it's driving concrete cost increases, especially in liability lines like commercial auto. For the broader industry, loss severity in excess liability and umbrella coverage has risen by an average of 11.1% over the last decade, far outpacing standard inflation. We are seeing nuclear verdicts-jury awards exceeding $10 million-at all-time highs in 2025, which forces all insurers, including the Exchange, to bolster their reserves and raise rates to cover this unpredictable cost. This is the core reason why rate-taking remains a necessity, not an option.

US Federal Reserve interest rate path impacts investment portfolio returns.

The Federal Reserve's interest rate path in 2025 is a dual-edged sword for ERIE. The high-rate environment that persisted into the beginning of the year significantly boosted investment income, but the anticipated easing cycle will temper future returns. The Fed cut the target Federal Funds Rate in September 2025 to a range of 4.00%-4.25%, with the year-end 2025 forecast suggesting a further move down to approximately 3.6%. This shift means new money invested will earn less, pressuring the overall investment yield.

Still, the high-rate period provided a strong tailwind for 2025 results. For the first nine months of 2025, Erie Indemnity Company reported pre-tax investment income of $60.7 million, a substantial increase from the $48.5 million reported in the first nine months of 2024. This income is crucial, as it partially offsets the underwriting losses experienced by the Exchange.

Metric	First Nine Months 2025 (USD)	First Nine Months 2024 (USD)	Year-over-Year Change
Investment Income (Pre-Tax)	$60.7 million	$48.5 million	+25.2%
Net Income	$496.0 million	$448.3 million	+10.6%

Elevated repair and replacement costs increase underwriting loss potential.

The cost of repairing vehicles and homes continues to be a major source of loss severity, directly pressuring the Exchange's underwriting performance. This is pure economic inflation hitting the claims department.

The data for 2025 is stark:

• Overall car repair costs have surged by approximately 15% year-over-year in 2025, driven by complex vehicle technology, labor shortages, and tariffs on imported parts.
• Motor Vehicle Repair inflation, a key component, was running at an 11.5% year-over-year rate in September 2025.
• The broader property/casualty replacement costs are projected to increase by 2.8% in 2025.

This cost pressure is why the Erie Insurance Exchange saw its combined ratio-the measure of underwriting profitability-increase to 108.1% in Q1 2025, up from 106% in Q1 2024. A combined ratio over 100% means the Exchange is paying out more in claims and expenses than it earns in premiums, making rate increases absolutely defintely necessary to restore underwriting balance.

Near-term recession risk could slow premium growth in some lines.

While ERIE's core business model insulates it somewhat from underwriting volatility, a broad economic slowdown can still curb premium growth. The US economy is forecast to slow its GDP growth to around 2% in 2025. This general cooling, coupled with high interest rates and persistent inflation, creates a consumer environment where policyholders might trade down on coverage or shop around more aggressively.

The Exchange's Direct Written Premiums (DWP) grew nearly 14% in Q1 2025, but this growth was primarily rate-driven, not policy-count driven. In fact, the policy retention ratio slightly decreased to 89.9% in Q1 2025, suggesting some customers are indeed leaving due to the rate increases required to cover the rising costs mentioned above. Analysts are forecasting ERIE's revenue growth to moderate to approximately 5.6% per annum, a clear sign that the market expects the current high-rate-driven premium growth to slow as economic activity cools.

Erie Indemnity Company (ERIE) - PESTLE Analysis: Social factors

Growing customer demand for digital-first claims and service experiences.

You are seeing a clear, irreversible shift toward digital-first interactions, and Erie Indemnity Company must adapt its agent-centric model without alienating its core strength. Digital engagement is no longer a convenience; it is a baseline expectation, especially for younger policyholders. The industry benchmark for digital-first customers shows a satisfaction score of 871 on a 1,000-point scale, which is the largest differential recorded against traditional channels.

Erie Indemnity Company is addressing this by pushing its online account platform. Sign-ups for the Online Account for personal lines saw a significant jump of 25% in 2024, and customer care chat interactions increased by 27% over 2023, showing customers are ready to move online. The rollout of products like Business Auto 2.0, which includes enhanced quoting and online account features, is a concrete step. Still, the company must translate this digital service adoption into the claims process, where 87% of Gen Z customers are comfortable with a fully digital experience. The goal is to make the digital channel a seamless extension of the agent relationship, not a replacement.

Demographic shifts in core operating states change risk pool characteristics.

The demographic makeup of Erie Indemnity Company's core operating states-which are generally mature markets-is changing the risk profile of its policyholders. The global dependency ratio (seniors-to-working age adults) is set to rise, which means the company will insure an increasingly older population with different needs. This shift drives demand for age-friendly products and prevention-focused insurance options. For example, older homeowners may have more complex, long-tail property claims due to older housing stock, while an aging workforce requires commercial lines to account for automation and altered risk profiles.

This macro-trend requires a fundamental change in underwriting (the process of assessing risk). The company must use predictive insights and real-time intelligence to price risk accurately for this changing pool. Failure to do so means the Exchange, which Erie Indemnity Company manages, will see its underwriting losses increase, masking the underlying profitability improvements from rate hikes. The Exchange's combined ratio was already elevated at 112.6% year-to-date in the first half of 2025, though largely due to catastrophe losses.

Public sentiment on corporate responsibility influences brand loyalty.

Public sentiment around corporate social responsibility (CSR) and ethical behavior directly impacts brand loyalty and, critically, policy retention. Erie Indemnity Company has a strong foundation, celebrating its 100th anniversary in 2025 and maintaining a high policy retention ratio of 89.7% year-to-date in Q2 2025.

However, this loyalty is fragile, particularly when facing major social risks like cybersecurity. The information security event identified on June 7, 2025, created significant legal, reputational, and financial risks. While the company reported no evidence of a sensitive data breach, the event itself is a stress test for customer trust. To counter this, the company has taken proactive steps in its governance, including updating its Code of Conduct in November 2025 to address the use of Artificial Intelligence (AI) and strengthen leaders' responsibilities to protect employees from retaliation. They also demonstrated community commitment by launching the Erie Insurance Foundation with a $100 million donation.

Social Factor Metric (2025)	Value/Impact	Significance
Policy Retention Ratio (YTD Q2 2025)	89.7%	High loyalty, but marginal decline from 90.4% in 2024.
Online Account Sign-ups (YoY Growth)	+25%	Strong customer adoption of digital service channels.
Erie Insurance Foundation Donation	$100 million	Concrete demonstration of corporate responsibility.

Increased litigation frequency from third-party financing of lawsuits.

The rise of Third-Party Litigation Funding (TPLF) is a major social factor driving 'social inflation'-the rising cost of claims that outpaces general economic inflation. TPLF involves external investors funding lawsuits in exchange for a portion of the settlement, which incentivizes higher settlement demands and increases litigation frequency. This is turning the judicial system into a gambling system, as one CEO put it, and it directly hits the P&C industry's loss trends.

The financial impact is substantial: the direct cost of TPLF to commercial insurers is estimated to fall between $13 billion and $18 billion over the five-year period from 2024 to 2028. This trend is particularly acute in Commercial Auto and Umbrella policies, lines where Erie Indemnity Company has a significant presence. In the first quarter of 2025, these lines saw the highest average premium increases across the industry, at 10.4% and 9.5%, respectively, reflecting the underlying cost pressure from litigation. The availability of TPLF capital is leading to:

• Increased volume of litigation due to expanded plaintiff recruitment.
• Higher settlement values as plaintiffs seek greater recoveries to satisfy funder obligations.
• A rise in frivolous claims, especially in large-payout cases.

This environment forces carriers like Erie Indemnity Company to spend more time and money on allocated loss adjustment expenses, pushing up the cost of operations, which increased 9.1% in Q2 2025.

Erie Indemnity Company (ERIE) - PESTLE Analysis: Technological factors

Mandatory Adoption of Telematics in Auto Insurance for Precise Pricing

You are seeing a fundamental shift in how auto insurance is priced, moving from demographic proxies to actual driving behavior. This isn't a regulatory mandate, but a market one; you must adopt telematics or lose the most profitable, low-risk customers to competitors who offer usage-based insurance (UBI).

The US auto insurance market is rapidly integrating these technologies. As of 2025, over 30% of US drivers now use telematics-based programs to secure customized pricing tied to their driving habits. For Erie Indemnity Company, this means the competitive pressure to roll out UBI programs is immense. North America is forecasted to have 26.3 million insurance telematics policies in force by 2028, growing at a Compound Annual Growth Rate (CAGR) of 8.1% from 2023. That is a huge pool of customers demanding fairer, data-driven rates.

The new reality is that the safest drivers will simply go elsewhere if you cannot reward their low-risk profile with a better price. You need to use telematics data across the entire customer lifecycle, not just for pricing.

AI-Driven Claims Processing Reduces Expense Ratio

Artificial Intelligence (AI) is the single biggest lever you have to reduce your operating costs and improve the combined ratio. My estimate is that AI-driven claims processing will reduce the expense ratio by an estimated 15% over five years, which is a conservative target given the industry potential.

Here's the quick math: Industry forecasts suggest AI could cut the cost of claims processing by up to 40% by 2025. More broadly, McKinsey predicts AI could reduce overall operational costs by 40%. For an auto insurer, the immediate payoff is in fraud detection. AI-powered fraud detection can save an incremental $43,000 for every 1,000 auto claims analyzed. An insurer processing three million annual claims could generate over $120 million in claims fraud savings. Using multiple, complementary AI solutions can shave between 3-6 points off your combined ratio.

This is not a future plan; it is a current necessity to remain competitive. AI-driven claims assessment tools are already trimming processing time by up to 60%.

Cybersecurity Investment is Critical to Protect Vast Customer Data Pools

Cybersecurity is no longer just an IT cost; it's a core operational risk that directly impacts your financial health and customer trust. The insurance sector's cybersecurity market size is projected to reach $10.6 billion globally by 2025. You defintely need to be spending more than your peers.

Erie Indemnity Company's Q1 2025 results already showed the financial pressure, with Information Technology (IT) expenses jumping $11.3 million year-over-year, driven by hardware, software, and staffing needs. This spending is critical, especially after the company's information security event in June 2025, which caused a network outage and required engaging third-party cybersecurity experts. Furthermore, an earlier breach in April 2025 exposed data for 50,000 customers. The average cost of a data breach for an insurer is estimated to be $4.65 million, a figure that is rising.

The risk is not theoretical; it's a current and quantifiable drain on resources and reputation. The focus must be on resilience and rapid recovery.

2025 Cybersecurity Risk and Cost Metrics for Insurers

Metric	Value/Cost	Source/Context
Insurance Sector Cybersecurity Market Size (2025)	$10.6 billion	Global market size forecast.
ERIE Q1 2025 IT Expense Increase (Y-o-Y)	$11.3 million	Increase in IT spending driving non-commission expenses.
ERIE April 2025 Data Breach Impact	50,000 customers	Non-financial customer data compromised.
Average Insurer Data Breach Cost	$4.65 million	Industry average cost of a data breach.

Use of Predictive Analytics to Improve Agent-Customer Matching

Predictive analytics is the engine for hyper-personalization, not just in pricing, but in service delivery. Approximately 87% of top insurers now use these tools to forecast claims and fine-tune premiums. The next step is applying this data to the agent-customer relationship.

Erie Indemnity Company's model, which relies on its agent network, benefits directly from using analytics to match complex customer needs to the best-equipped agent. This improves customer experience and retention, which for Erie Indemnity Company was a strong 89.1% retention ratio at the end of Q3 2025. Beyond agent matching, the company is using AI for risk assessment, having partnered to develop an AI platform for climate risk assessment that could reduce premiums by 10% for low-risk policyholders by 2026.

Key areas where predictive analytics drives action:

• Risk-Based Pricing: Fine-tune premiums using vast data sets to ensure rate adequacy.
• Agent-Customer Fit: Match new leads to agents with the highest historical success rate for that risk profile.
• Churn Forecasting: Predict which customers are most likely to leave, allowing for proactive intervention.

The rollout of new platforms like Business Auto 2.0, expected to be fully deployed by Q3 2025, is a concrete action to modernize processing and enhance features like autopay options, which is a direct technological improvement for the customer experience.

Erie Indemnity Company (ERIE) - PESTLE Analysis: Legal factors

State-specific data privacy laws (like CCPA) increase compliance costs.

The patchwork of state data privacy laws, such as the California Consumer Privacy Act (CCPA) and similar legislation across Erie Indemnity Company's operating states, has materially increased compliance costs and litigation risk in 2025. The most immediate and costly legal factor this year was a significant information security event detected on June 7, 2025, which has led to multiple proposed class-action lawsuits.

These lawsuits, including one filed in the U.S. District Court for the Western District of Pennsylvania, allege the company failed to properly secure customers' Personally Identifiable Information (PII). The lead plaintiff in one action is seeking to represent a class of individuals estimated to be in the millions. While the full financial impact is still being assessed, the costs for forensic investigation, legal defense, and potential settlement reserves represent a substantial, unbudgeted expense for the 2025 fiscal year.

• Actionable Risk: The June 2025 data breach incident immediately translates compliance failure into legal and financial exposure.
• Mitigation Cost: Increased spending on third-party cybersecurity experts and forensic analysis is a direct cost of this legal environment.

Class-action lawsuits over claims handling practices are an ongoing threat.

Litigation risk over claims handling remains a persistent financial drag, which is typical for the insurance sector. This risk is not theoretical; it resulted in a concrete settlement in the first half of 2025. In March 2025, Erie Insurance Exchange and Erie Insurance Company agreed to a settlement in a Pennsylvania class action lawsuit.

The lawsuit alleged the improper deduction of depreciation for labor and other nonmaterial items when adjusting property insurance claims. To avoid the cost of continued litigation, the company agreed to pay $1.75 million to settle the claims. This settlement amount, while a fractional cost relative to the company's 2025 net income of $496.0 million through the first nine months, serves as a clear indicator that claims practices are a constant source of legal exposure and financial outlay. You defintely need to factor in a baseline for these recurring legal costs.

Regulatory scrutiny on rate filings and transparency remains intense.

State insurance departments are intensifying their oversight of rate filings, driven by significant rate increases across the industry. Erie Indemnity Company has seen strong growth in written premiums, which grew nearly 14% year-over-year in Q1 2025, largely due to substantial rate increases taken to offset inflation and increased weather activity. This success, however, attracts regulatory attention.

The company's core business model relies on charging the Erie Insurance Exchange a management fee rate, which has been set at the maximum allowable 25% for the entirety of 2025. This maximum fee structure is constantly scrutinized by regulators to ensure policyholders are not being overcharged. New regulations in states like California, which is a bellwether for insurance law, are being implemented to improve the oversight and transparency of rate filings, increasing the burden of justification for every rate increase submitted.

Legal/Regulatory Factor	2025 Concrete Impact/Data Point	Financial Implication (2025)
Data Privacy Class Action	Multiple lawsuits filed following June 7, 2025, security event.	Exposure to multi-million dollar damages and significant legal defense costs.
Claims Handling Lawsuit	Settlement of class action over depreciation deduction (March 2025).	Direct payout of $1.75 million to settle the case.
Rate Filing Scrutiny	Management fee rate maintained at maximum allowable 25% for 2025.	Increased compliance effort and risk of regulatory pushback on rate increases.

New state laws on catastrophe modeling affect reserve requirements.

The increasing severity of weather events is driving legal changes on how insurers must calculate risk and reserves. For example, in Q1 2025, a single catastrophe loss event in March contributed 13 points to the Exchange's total catastrophe losses of over 16 points for the quarter, highlighting the need for better risk models.

In response, states like California are enacting new regulations to allow insurers to use forward-looking catastrophe modeling for perils like wildfire, terrorism, and flood in their ratemaking process. The catch is that in exchange for this modeling flexibility, insurers must commit to writing a greater number of policies in high-risk areas. This regulatory trade-off directly impacts the company's underwriting strategy and capital requirements. It forces a decision: either adopt the new models and take on more high-risk exposure, which necessitates higher reserves, or stick to older methods and face greater regulatory friction on rate adequacy.

Erie Indemnity Company (ERIE) - PESTLE Analysis: Environmental factors

The environmental forces in 2025 are hitting the insurance sector hard, and Erie Indemnity Company is defintely feeling the pressure through its managed entity, the Erie Insurance Exchange. The core takeaway is that climate volatility is pushing up the Exchange's costs, which, while not a direct underwriting risk for ERIE, puts a ceiling on the management fee revenue you rely on.

Increased frequency of severe weather events (e.g., hurricanes, wildfires) raises catastrophic losses.

The severity and frequency of weather events are spiking catastrophic losses (Cat losses) for the Erie Insurance Exchange, which ERIE manages. In the first half of 2025, global insured losses from natural catastrophes reached $100 billion, a 40% jump over the first half of 2024 ($71 billion). For the Exchange, this translated into direct pain: Q2 CY2025 results showed elevated catastrophe losses from severe spring weather events that were notably above historical norms. The impact is clear in the combined ratio (a measure of underwriting profitability, where a number over 100% means claims and expenses exceed premiums), which rose to 108.1% in Q1 2025.

Here's the quick math: If reinsurance costs jump by 8% in 2025 due to climate volatility, ERIE's Exchange management fee income will face pressure as the Exchange absorbs those costs.

Metric	Q1 2025 Value	Q1 2024 Comparison	Implication for Exchange
Combined Ratio	108.1%	106.0%	Higher underwriting losses due to Cat events.
Catastrophe Loss Contribution (March event)	13 points	Not specified, but significant	Single event drove a large portion of quarterly losses.
Global Insured Losses (H1)	$100 billion	$71 billion (40% increase)	Signals a higher cost environment for reinsurance.

Higher reinsurance costs due to climate change-related claims volatility.

Reinsurance is insurance for insurers, and its cost is climbing because of the volatility shown in the Cat loss numbers. Reinsurers are rational economic actors; they are raising prices and reducing coverage to match the rising risk. This is a direct cost to the Erie Insurance Exchange, which then affects ERIE. The Exchange must purchase more expensive reinsurance to protect its balance sheet against events like the severe convective storms that cost US insurers an estimated $46 billion through September 2025. This higher expense at the Exchange level reduces its overall financial strength, which is a key risk factor for ERIE's management fee revenue stream.

• Reinsurers are increasing prices and reducing coverage.
• Increasing risk uncertainties are driving up reinsurance premiums.
• Q1 2025 losses consumed a meaningful portion of reinsurers' annual budgets.

Regulatory pressure to divest from fossil fuel-related investments is growing.

While the US federal administration in early 2025 showed a pullback from some climate-focused policies, easing restrictions on fossil fuels, the long-term pressure from institutional investors and regulators to adopt Environmental, Social, and Governance (ESG) standards remains. This pressure primarily affects the Exchange's investment portfolio. Insurers are facing mandates to disclose climate-related financial risks, including both transition and physical risks. Some reinsurers are already curtailing coverage for fossil fuel projects, signaling a future where the Exchange may find its investment universe restricted, potentially impacting long-term yields if it cannot divest from carbon-intensive sectors.

Underwriting restrictions in high-risk coastal or wildfire-prone areas.

The industry response to rising physical risk is to limit exposure in the most vulnerable regions. This means reduced availability of coverage in disaster-prone areas, such as wildfire zones and coastal regions. While ERIE's primary market is the mid-Atlantic and Midwest, the principle of risk-based underwriting is universal. The company has a history of adjusting underwriting guidelines based on loss ratios in high-loss areas, as seen in a January 2025 finding from the Maryland Insurance Administration regarding its practices in high-loss urban regions. This precedent shows ERIE will, and must, apply more stringent underwriting standards in any area where climate risk drives loss ratios above acceptable levels, which will slow new policy growth in those areas.

Next step: Finance: Stress-test the 2026 capital plan against a 10% increase in social inflation and a 15% rise in catastrophic losses by the end of the quarter.