S - you are the best , most readable analyst out there . With online gambling , Bitcoin and living in dodgy climate areas society seems addicted to overt and disguised gambling everywhere .
The management of mutuals is hard . I previously referred to the energy industry mutual OIL blowing up spectacularly as a result of Katrina / Rita . In my opinion they are not fit for purpose to insure systemic risks . They eventually implode and resemble a sticking plaster for gangrene .
If a smallish city Valencia can get rocked by a DANA then conurbations globally need to seriously reassess precautions required .
if we built houses intended to last 100 or 200 years we would not build them on dunes, in flood plains, or perched on the sides of mountains where the habitat has been formed by being regularly burnt over.
houses in the past 50 years have become a disposable luxury consumable item while the insurance industry is still structured as if houses were intended to be permanent.
it is not surprising that traditional insurers are giving up on many locations in the US - because buyers and builders have reneged on the implied promise of a house being expected to last indefinitely absent random very bad luck.
this is part of a larger trend in which the word "insurance" is now used to refer to expected wealth transfers in time rather than rare transfers due to randomness - health insurance being the prime example.
But the policy question behind your article is whether propping up a luxury market in disposable homes - often second or third homes on beaches and mountains - is an activity the government should be doing at all.
it may be that building and furnishing expensive disposable houses is good for GDP and employment - but when i see new houses that have almost no chance of standing in 100 or 200 years - and think of still beautiful buildings built 200+ years ago - it feels like our cultural lack of regard for the future is a bigger issue that a failure of our insurance regulatory schemes.
great summary - I've tracked a lot of companies in harms way during severe weather events. Other than a few exceptions, the market reaction has been swift but easily recovered within a few days or weeks. As a result, the sustainable investing community has been like the 'boy that cries wolf' on climate risk at least for markets. For individuals, its been much different either through personal financial damage or gov (tax) driven bailouts. It will be instructive to see how the financial pain works its way out. It was tough to see any particular financial pathway for the 45 million acres that burned in Canada in 2023.
This is a good explanation, but California is the fourth largest economy is the world. The nine county Bay Area is the 17th largest economy in the world. I live in Berkeley, and you can probably count on all your fingers and toes the number of houses that have sold for under 1M over the past year (this is a city of 120,000.) The fire department won't provide rescuing for anyone who lives at the top of the hills because the streets are so narrow and the firemen will not be safe. Frankly, I think if you can afford a house this expensive, you should be able to self-insure. There are many high income people in the Bay Area (including four of the wealthiest people in the world.) Last year local cities started pushing clearing all brush on lots. I believe they do that in Oakland too. The one thing I don't seem them doing for prevention is getting rid of the eucalyptus. They even use goats to eat brush in the regional parks... The water company is pushing native plants. Finally, the climate crisis is here.
Wow. Thanks for the explanation. Many of us have been wondering.
thanks, Jennifer!
S - you are the best , most readable analyst out there . With online gambling , Bitcoin and living in dodgy climate areas society seems addicted to overt and disguised gambling everywhere .
The management of mutuals is hard . I previously referred to the energy industry mutual OIL blowing up spectacularly as a result of Katrina / Rita . In my opinion they are not fit for purpose to insure systemic risks . They eventually implode and resemble a sticking plaster for gangrene .
If a smallish city Valencia can get rocked by a DANA then conurbations globally need to seriously reassess precautions required .
Appreciate the kind words, Gerrard.
great article.
if we built houses intended to last 100 or 200 years we would not build them on dunes, in flood plains, or perched on the sides of mountains where the habitat has been formed by being regularly burnt over.
houses in the past 50 years have become a disposable luxury consumable item while the insurance industry is still structured as if houses were intended to be permanent.
it is not surprising that traditional insurers are giving up on many locations in the US - because buyers and builders have reneged on the implied promise of a house being expected to last indefinitely absent random very bad luck.
this is part of a larger trend in which the word "insurance" is now used to refer to expected wealth transfers in time rather than rare transfers due to randomness - health insurance being the prime example.
But the policy question behind your article is whether propping up a luxury market in disposable homes - often second or third homes on beaches and mountains - is an activity the government should be doing at all.
it may be that building and furnishing expensive disposable houses is good for GDP and employment - but when i see new houses that have almost no chance of standing in 100 or 200 years - and think of still beautiful buildings built 200+ years ago - it feels like our cultural lack of regard for the future is a bigger issue that a failure of our insurance regulatory schemes.
great summary - I've tracked a lot of companies in harms way during severe weather events. Other than a few exceptions, the market reaction has been swift but easily recovered within a few days or weeks. As a result, the sustainable investing community has been like the 'boy that cries wolf' on climate risk at least for markets. For individuals, its been much different either through personal financial damage or gov (tax) driven bailouts. It will be instructive to see how the financial pain works its way out. It was tough to see any particular financial pathway for the 45 million acres that burned in Canada in 2023.
This is a good explanation, but California is the fourth largest economy is the world. The nine county Bay Area is the 17th largest economy in the world. I live in Berkeley, and you can probably count on all your fingers and toes the number of houses that have sold for under 1M over the past year (this is a city of 120,000.) The fire department won't provide rescuing for anyone who lives at the top of the hills because the streets are so narrow and the firemen will not be safe. Frankly, I think if you can afford a house this expensive, you should be able to self-insure. There are many high income people in the Bay Area (including four of the wealthiest people in the world.) Last year local cities started pushing clearing all brush on lots. I believe they do that in Oakland too. The one thing I don't seem them doing for prevention is getting rid of the eucalyptus. They even use goats to eat brush in the regional parks... The water company is pushing native plants. Finally, the climate crisis is here.