I have an idea* that insurance could be a “canary in the coalmine”. There’s quite a few insurance companies saying roughly ‘it’s not worth doing that business’ and pulling back. From memory there’s:
Farmers (and now AAA) in Florida
State Farm in California
Intact in Atlantic Canada
others?
The reason I think they pull back is because their actuaries say basically our rates are calculated based on flood/wild fire/other natural disaster events happening once per (say) 100 years, whereas it is now happening once every 50 ~> 25 ~> 10 ~> ?? years. It is too much exposure for our business model to continue to be profitable in that region.
As things continue to evolve, significant regions could become uninsurable, and those properties become un-sellable as a result; and at that point significant numbers of mortgages are underwater (pun intended) and we devolve in to a 2008 style financial crisis on steroids (no QE helicopter dropping dollar bills will fix climate change).
*Acknowledgement: not my original idea, appears in the The Deluge by Stephen Markley
I have an idea* that insurance could be a “canary in the coalmine”. There’s quite a few insurance companies saying roughly ‘it’s not worth doing that business’ and pulling back. From memory there’s:
The reason I think they pull back is because their actuaries say basically our rates are calculated based on flood/wild fire/other natural disaster events happening once per (say) 100 years, whereas it is now happening once every 50 ~> 25 ~> 10 ~> ?? years. It is too much exposure for our business model to continue to be profitable in that region.
As things continue to evolve, significant regions could become uninsurable, and those properties become un-sellable as a result; and at that point significant numbers of mortgages are underwater (pun intended) and we devolve in to a 2008 style financial crisis on steroids (no QE helicopter dropping dollar bills will fix climate change).
*Acknowledgement: not my original idea, appears in the The Deluge by Stephen Markley