Odd Lots
Why Home Insurance Markets in California and Florida Imploded
Mar 21, 2024
Amias Gerety, a partner at QED Investors and board member of Kin, along with RJ Lehmann, editor-in-chief at the International Center for Law & Economics, discuss the turmoil in home insurance markets in California and Florida. They explore soaring premiums and the abandonment of markets by national insurers, attributing these issues to climate change and regulatory challenges. The duo also tackles the impact of roofing fraud and considers how new technologies could help stabilize the struggling insurance landscape. Expect insights that clarify this complex industry situation!
01:10:14
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Quick takeaways
- Insurers face challenges in pricing accurately in high-risk areas due to climate-related incidents, leading to premium fluctuations.
- Insurers focus on improving claim experiences and risk mitigation to build trust with policyholders.
Deep dives
Challenges in Insuring Climate Risk
Insurers face the challenge of pricing premiums accurately in high-risk areas like California and Florida, where extreme weather events are becoming more frequent. With the surge in climate-related incidents like wildfires and hurricanes, insurers struggle to balance the need to adjust prices while ensuring affordability for policyholders. Complex factors like poorly priced areas, underpricing historically, and varying regulatory frameworks complicate the task of modeling risks accurately, leading to significant fluctuations in premiums and insurers pulling out of markets.
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