<p>KeywordsThe $200 Billion Gap: Climate, Catastrophe, and the Broken Insurance Market</p><p><br></p><p>Climate risk, market failure, insurance regulation, reinsurance, Department of Insurance (DOI), catastrophic risk, fair plan, Community Development Reinsurance Institution (CDRI), resiliency, parametric insurance.</p><p><br></p><p>Summary</p><li><p>There is a $200 billion gap between climate disaster losses and what is actually covered, signaling a market failure in the insurance system.</p><p><br></p></li><li><p>The insurance market is broken because it relies on historical data for pricing, but climate change has made the future fundamentally unpredictable.</p><p><br></p></li><li><p>The three key groups dictating how insurance goes are the insurance company, the consumer, and the Department of Insurance (DOI), with reinsurance sitting on top for catastrophic risks.</p><p><br></p></li><li><p>When insurance companies are substantially underpriced due to changing trends, they must ask the slow-moving DOI for rate changes, which can lead to public hearings.</p><p><br></p></li><li><p>When large rate increases are suppressed or costs (like reinsurance) cannot be priced in, companies like State Farm exit the marketplace, leaving a void (e.g., in California and Florida)</p></li><p><br></p><p>Chapters</p><p><br></p><p>00:00 Introduction: The $200 Billion Gap and Market Failure 01:34 Host&#39;s Health Update and Podcast Promotion </p><p>02:15 The Background: The Broken Market and the Three Authorities (Insurer, DOI, Consumer) </p><p>03:12 The Role of Reinsurance for Catastrophic Risk </p><p>05:19 Actuarially Sound Rates and Regulation on Profit Margins </p><p>06:40 The Department of Insurance (DOI) and Approving Rates/Forms </p><p>08:50 Why the System is Failing: Historical Data vs. Current Trends </p><p>09:35 Underpricing, Rate Changes, and the Threat of Insolvency/Market Exit</p><p>10:19 Case Study: State Farm Exiting California and Reinsurance Costs </p><p>12:08 Florida&#39;s Market Failure and the Void Left by Admitted Carriers</p><p> 13:43 The Insured&#39;s Tug-of-War and Desire for Reasonable Prices </p><p>14:49 The Supply Crisis: Lack of Data Drives Up Price </p><p>15:47 The Insurer of Last Resort: Fair Plans and Citizen Risk 17:26 Problems with the Fair Plan: Underfunded and Politically Vulnerable </p><p>18:13 The Core Problem: Trapped in a Vicious Cycle of Loss and Hikes </p><p>20:18 Suppressing Premiums and Incentivizing High-Risk Development </p><p>22:00 Discussion of the Community Development Reinsurance Institution (CDRI) </p><p>23:08 CDRI&#39;s Goal: Transforming to a Proactive System by Incentivizing Resilience </p><p>23:38 Example: Florida&#39;s Hurricane Home Hardening Grant Program </p><p>25:52 CDRI Model: Public-Private Partnerships for Societal Impact </p><p>28:17 CDFI Metric: $1 Public Funding Attracts $8 Private Investment </p><p>29:22 Innovative Products: Quixent&#39;s Sunshine Guarantee (Parametric Warranty)</p><p>32:22 Innovative Products: EV Star (Coverage for Charging Stations) </p><p>34:10 EV Star&#39;s Role in Improving EV Adoption and Range Anxiety </p><p>35:01 Final Thoughts and Wrap-up </p>

Venture Step

Dalton Anderson

THE SOCIAL CONTRACT IS BROKEN: WHEN INSURERS AVOID RISK AND REGULATORS SUPPRESS PREMIUMS

NOV 19, 202536 MIN
Venture Step

THE SOCIAL CONTRACT IS BROKEN: WHEN INSURERS AVOID RISK AND REGULATORS SUPPRESS PREMIUMS

NOV 19, 202536 MIN

Description

<p>KeywordsThe $200 Billion Gap: Climate, Catastrophe, and the Broken Insurance Market</p><p><br></p><p>Climate risk, market failure, insurance regulation, reinsurance, Department of Insurance (DOI), catastrophic risk, fair plan, Community Development Reinsurance Institution (CDRI), resiliency, parametric insurance.</p><p><br></p><p>Summary</p><li><p>There is a $200 billion gap between climate disaster losses and what is actually covered, signaling a market failure in the insurance system.</p><p><br></p></li><li><p>The insurance market is broken because it relies on historical data for pricing, but climate change has made the future fundamentally unpredictable.</p><p><br></p></li><li><p>The three key groups dictating how insurance goes are the insurance company, the consumer, and the Department of Insurance (DOI), with reinsurance sitting on top for catastrophic risks.</p><p><br></p></li><li><p>When insurance companies are substantially underpriced due to changing trends, they must ask the slow-moving DOI for rate changes, which can lead to public hearings.</p><p><br></p></li><li><p>When large rate increases are suppressed or costs (like reinsurance) cannot be priced in, companies like State Farm exit the marketplace, leaving a void (e.g., in California and Florida)</p></li><p><br></p><p>Chapters</p><p><br></p><p>00:00 Introduction: The $200 Billion Gap and Market Failure 01:34 Host&#39;s Health Update and Podcast Promotion </p><p>02:15 The Background: The Broken Market and the Three Authorities (Insurer, DOI, Consumer) </p><p>03:12 The Role of Reinsurance for Catastrophic Risk </p><p>05:19 Actuarially Sound Rates and Regulation on Profit Margins </p><p>06:40 The Department of Insurance (DOI) and Approving Rates/Forms </p><p>08:50 Why the System is Failing: Historical Data vs. Current Trends </p><p>09:35 Underpricing, Rate Changes, and the Threat of Insolvency/Market Exit</p><p>10:19 Case Study: State Farm Exiting California and Reinsurance Costs </p><p>12:08 Florida&#39;s Market Failure and the Void Left by Admitted Carriers</p><p> 13:43 The Insured&#39;s Tug-of-War and Desire for Reasonable Prices </p><p>14:49 The Supply Crisis: Lack of Data Drives Up Price </p><p>15:47 The Insurer of Last Resort: Fair Plans and Citizen Risk 17:26 Problems with the Fair Plan: Underfunded and Politically Vulnerable </p><p>18:13 The Core Problem: Trapped in a Vicious Cycle of Loss and Hikes </p><p>20:18 Suppressing Premiums and Incentivizing High-Risk Development </p><p>22:00 Discussion of the Community Development Reinsurance Institution (CDRI) </p><p>23:08 CDRI&#39;s Goal: Transforming to a Proactive System by Incentivizing Resilience </p><p>23:38 Example: Florida&#39;s Hurricane Home Hardening Grant Program </p><p>25:52 CDRI Model: Public-Private Partnerships for Societal Impact </p><p>28:17 CDFI Metric: $1 Public Funding Attracts $8 Private Investment </p><p>29:22 Innovative Products: Quixent&#39;s Sunshine Guarantee (Parametric Warranty)</p><p>32:22 Innovative Products: EV Star (Coverage for Charging Stations) </p><p>34:10 EV Star&#39;s Role in Improving EV Adoption and Range Anxiety </p><p>35:01 Final Thoughts and Wrap-up </p>