What cuts, 20% layoffs at NOAA might mean to insurers

As another volatile hurricane and wildfire season looms, insurers are confronting a new risk that is not coming from the sky or the sea — but from Washington: cuts and massive layoffs at the National Oceanic and Atmospheric Administration (NOAA).

The budget cuts, along with layoffs and buyouts – totaling about 20% of the NOAA staff – along with the agency’s recent decision to stop updating its widely used Billion-Dollar Weather and Climate Disasters database, are raising concerns across the property and casualty insurance industries. Experts warn the reductions could degrade the quality of hazard modeling that insurers rely on to assess risk, set premiums, and stay solvent in an increasingly turbulent climate era.

“Cuts to NOAA and similar agencies absolutely affect insurance underwriting and prediction,” said Gregg Barrett, CEO of Waterstreet Company, a tech services provider for insurers. “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.”

NOAA, which runs the National Weather Service (NWS), has long served as a backbone for the insurance industry’s understanding of natural catastrophe trends. From satellite storm tracking to floodplain mapping and wildfire monitoring, the agency’s data provide the raw material for models used by actuaries and underwriters across the country.

That’s what made NOAA’s quiet April announcement that it would discontinue updates to its hallmark disaster cost database so troubling to the insurance industry. The Billion-Dollar Disaster Database had tracked major U.S. weather events and their economic tolls since 1980, offering a benchmark for both insured and uninsured losses. Its loss “will remove a reliable, comprehensive national record of catastrophe costs,” noted a May 2025 report by ProgramBusiness.com.

The change follows mass layoffs instigated by the newly formed Department of Government Efficiency (DOGE) and amid broader proposed funding cuts to NOAA in the White House’s fiscal 2026 budget, including reductions to satellite programs and climate research initiatives. While the full scope of cuts has yet to be finalized by Congress, insurers are already assessing the potential fallout.

'We lose precision'

“When the data gets thinner or delayed, we lose precision,” Barrett said. “That forces carriers to lean more conservative in their assumptions, which can mean higher premiums, reduced coverage, or just pulling back from high-risk areas altogether.”

DOGE had terminated or changed 189 NOAA-specific contracts, totaling $117 million with claimed savings of $35 million. The National Weather Service has been particularly affected, with hundreds of positions eliminated and vacancy rates reaching 20% in some offices with approximately 1,029 employees laid off, representing about 8.6% of its workforce. Within NOAA, the National Weather Service (NWS) has been particularly affected, losing nearly 600 positions due to layoffs and early retirement incentives.

These cuts have led to critical staffing shortages across various NWS offices, with some locations experiencing vacancy rates exceeding 35%. Several forecast offices have reduced their hours, including the elimination of overnight shifts, and have curtailed essential activities such as weather balloon launches, considered vital for accurate forecasting.

Now, the weather service is scrambling to rehire and refill some of those vacancies, planning to fill about 125 new “mission critical” roles, including meteorologists, hydrologists, physical scientists, and electronic technicians, to address the most pressing operational needs.
“From broadcasters to weather apps, meteorologists nationwide depend on the NWS’s data collection to provide accurate forecasts that all Americans rely upon,” said a statement from the Center for American Progress. “Cuts to the fundamental work NOAA and NWS provide to U.S. communities will damage public safety, economic interests, and research efforts to learn more about weather and climate.”

Meteorologist speaks out

John Morales, a South Florida meteorologist, took to the air last week to decry the federal spending cuts to NWS and NOAA during his broadcast on NBC6, saying his ability to adequately do his job is being affected.

Morales played a segment from a 2019 broadcast when he correctly predicted Hurricane Dorian was going to turn away from Florida, thus reassuring his viewers across the state.
"And I am here to tell you that I am not sure I can do that this year, because of the cuts, the gutting, the sledgehammer attack on science in general," Morales said.
Industry analysts agree that without high-quality, public hazard data, insurers may have little choice but to fall back on less refined private models or worst-case scenarios. That could accelerate current trends in insurance retrenchment. In the past two years, several major carriers have reduced or halted underwriting in high-risk states like California and Florida, citing surging reinsurance costs and catastrophic exposure.

Data concerns

“If the data isn't right or they don't have the right people get the data, it can impact, more than anything, how fast people get claims and things taken care of,” said Jon Abernathy, Director of Contractor Engagement at TAMKO Building Products, LLC, which manufactures and distributes residential roofing shingles and other building products.

Abernathy is not just worried about forecasting but also the data that may or may not be available after a storm hits. He sees a scenario where homeowners might submit claims for damaging hail when the data from NOAA don’t support it.

“The insurance company looks at the data from NOAA and says, that doesn’t match our data. And they might be wrong,” he said.

Mark Friedlander, spokesman for the Insurance Information Institute, acknowledged NOAA’s data have value, particularly for tracking uninsured losses and contextualizing the broader economic impact of natural disasters. But he emphasized that the industry also supports independent mechanisms for tracking insured losses and assessing exposure. Still, without NOAA’s broader economic context, both private and public planning could be impaired.

With extreme weather events now occurring with greater frequency and severity, the timing of the budget cuts has struck many as shortsighted. In 2023 alone, NOAA recorded a record 28 weather and climate disasters that each caused at least $1 billion in damage—more than double the annual average a decade ago.

As climate change continues to reshape risk nationwide, insurers say they need more data, not less.

“If you take away or weaken those inputs, the models suffer,” Barrett said. “And when the models suffer, so does access to affordable insurance.”

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Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].