Unexplainable Is insurance doomed?
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Oct 9, 2024 Umair Irfan, a Vox correspondent, joins Joe Scuba, an insurance executive from New Orleans, and Carolyn Kuski from the Environmental Defense Fund, to explore the crisis in the insurance industry amid climate change. They discuss soaring premiums and the emotional toll on homeowners as properties become uninsurable. The conversation highlights the outdated risk models used by insurers, the dire need for policy reforms, and the potential for the insurance sector to invest in sustainable practices, offering a glimmer of hope amid the storm.
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Hurricane Andrew's Impact
- Karen Clark challenged established risk models at Lloyd's of London, predicting a $60B loss from a Miami hurricane.
- Her models were validated by Hurricane Andrew, causing insurer bankruptcies and reshaping risk assessment.
Insurance as a Climate Change Barometer
- Insurance is the first economic sector where climate change effects become tangible for most people.
- Rising insurance rates are an early warning sign, often preceding visible damage from extreme weather.
Joe's Insurance Struggle
- Joe Scuba, an insurance executive in New Orleans, struggles to afford home insurance due to rising rates.
- Despite living above sea level, his premiums increased sharply, highlighting widespread affordability challenges.