The latest U.S. government shutdown, the longest in U.S. history, ended on November 12, 2025, after 43 days. During this period, 1.4 million civilian federal employees went without pay, and roughly half of them were furloughed. The main dispute was over the extension of health insurance subsidies under the Affordable Care Act, which expire at the end of 2025. Congress ended the government shutdown without including an extension of these subsidies.
The most impacted industries from the government shutdown were travel and tourism, healthcare and diagnostics, and manufacturing and infrastructure. In the insurance space, impacts were felt in the health insurance sector, especially as open enrollment began November 1st amidst the shutdown period.
The P&C insurance sector was largely unaffected by the shutdown, as insurers in the sector do not rely heavily on the federal government. “The states regulate insurers, so even the regulatory process is unaffected,” Piper Sandler investment banking analyst Paul Newsome said in an interview with S&P Global. However, the biggest impact in the P&C sector is arguably the halting of new and renewal flood policies by the National Flood Insurance Program (NFIP), which left many homeowners dangerously exposed, especially those living in high-risk zones.
Congress passed a short-term funding bill (HR 5371) to reauthorize the program through January 30, 2026. The bill also retroactively reauthorizes the NFIP back to October 1, allowing insurers to issue policies with effective dates during the lapse and allowing any claims made during the lapse to be processed and paid.
What this means for actuaries:
Congress has passed 33 short-term NFIP reauthorizations since 2017, according to the NAIC. Each time the NFIP lapses, it brings a renewed focus to alternative solutions in the market, such as private flood insurance. Over the last few years, more flood coverage has been provided by the private flood insurance sector, taking up 27% of the premium in this segment in 2024, compared to 13% in 2016. In addition, according to AM Best, data related to the top three flood-prone states — Florida, Texas, and Louisiana — has shown that the private flood insurance segment has consistently outperformed the NFIP, with a lower loss ratio in eight of the past nine years.
Private flood insurance has faced several barriers, however, including a higher price point compared to the NFIP’s subsidized rates and a lack of access to NFIP data on flood losses and claims. A comprehensive view of the flood insurance market and considerations for actuaries can be found in a paper written by the Congressional Research Service during the reauthorization in 2023: “Private Flood Insurance and the National Flood Insurance Program.”
Sources:
- https://www.npr.org/2025/10/24/nx-s1-5581505/government-shutdown-federal-employees-paycheck.
- https://www.kcci.com/article/affordable-care-act-government-shutdown/69106413.
- https://news.ambest.com/newscontent.aspx?refnum=269851&altsrc=170.
- https://www.casact.org/sites/default/files/2023-05/6U_Horn_Webel_Private_Flood_Ins_and_the_National_Flood_Ins_Prog.pdf.
- https://www.spglobal.com/market-intelligence/en/news-insights/articles/2025/10/many-large-us-insurers-trade-in-the-green-as-shutdown-continues-93448301.
- https://www.insurancejournal.com/news/national/2025/11/10/846936.htm.
