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Is the world becoming uninsurable?

(charleshughsmith.substack.com)
476 points spking | 2 comments | 17 Jan 25 00:32 UTC | HN request time: 0s | source
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tobyhinloopen ◴[17 Jan 25 07:13 UTC] No.42734903[source]▶
American, living in area prone to natural disasters: "Is the WHOLE WORLD becoming uninsurable?"

The answer is obviously "no" since there are other parts of the world that don't live on a hurricane highway nor build houses made from firewood in an area prone to wildfires.

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chillfox ◴[17 Jan 25 14:14 UTC] No.42737687[source]▶
It’s possible that solve the hurricane problems with proper building regulations and lower the risk of huge wildfires with controlled burning. But the US as always prefers to pretend that there’s nothing to be done when other parts of the world has figured it out.

We have cyclones here similar to the hurricanes in the US and usually it just blows over some trees maybe causes a power outage. The absolute worst I have experienced was 3 days without power. I have never seen a house destroyed by a cyclone here.

As for wildfires, they do unfortunately claim a few houses most years.

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pclmulqdq ◴[17 Jan 25 14:37 UTC] No.42737935[source]▶
As the governments in the US get increasingly incompetent, insurance prices are going to have to rise. Government services are largely there to protect you during black swan events, so if those services get less and less effective, you're going to need more insurance for those events.
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crawftv ◴[17 Jan 25 15:07 UTC] No.42738273[source]▶
This was the whole issue. California made it illegal for insurance companies to raise rates, so the insurance companies stop renewals. Leaving everybody uninsured. Homeowners couldn't buy insurance at any price.
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wrfrmers ◴[17 Jan 25 15:40 UTC] No.42738768[source]▶
Public insurance. For housing, healthcare, maybe even cars (since the coprorate political complex insists that we HAVE to drive everywhere). At some point, we have to accept that the middlemen are siphoning value, not providing any. Vanguard it and let elected admins set the codes.
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hallway_monitor ◴[17 Jan 25 15:44 UTC] No.42738851[source]▶
It does seem like it's time to stop letting this "industry" profit off the misfortune of its customers. Making all of these a public service instead of private industry makes sense at this point.
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MajimasEyepatch ◴[17 Jan 25 16:14 UTC] No.42739432[source]▶
The profit margins on insurance are usually pretty slim. Insurance companies are generally not well differentiated from one another, so they have few avenues to compete other than on price. A state-run insurance plan also has to operate at a profit/surplus or else it will have to be subsidized by the taxpayers. The effect is the same either way.
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onlypassingthru ◴[17 Jan 25 18:55 UTC] No.42741934[source]▶
Slim from a percentage of total premiums but substantial when looking at the absolute dollar amount of profits. It's all relative to the size of the pie.
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1. bruce511 ◴[17 Jan 25 19:28 UTC] No.42742270[source]▶
The absolute value is only meaningful when compared to the amount of capital invested.

Its also only meaningful when measured over a long period which takes good years and bad years into account.

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2. MajimasEyepatch ◴[18 Jan 25 00:50 UTC] No.42744772[source]▶
Also, when margins are slim, a major event (like a series of wildfires in one of the biggest cities in the US) can wipe out those profits. A responsible insurer can withstand one bad year. But if those major events start happening with more frequency, then one bad year becomes a series of bad years. Reinsurance premiums for the insurer go up, meaning that taking on risk is more expensive, and they’ll eventually have to decide between raising their own premiums to unsustainable levels or pulling out of risky markets.