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Is the world becoming uninsurable?

charleshughsmith.substack.com

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Re: Is the world becoming uninsurable?

#121

Post by altairprime »

Animats wrote: post #107

Not uninsurable, but buildings are going to have to become tougher. It's happened before. Chicago's reaction to the Great Fire was simple - no more building wooden houses. Chicago went all brick. Still is, mostly. The trouble is, brick isn't earthquake resistant. Not without steel reinforcement. I live in a house built of cinder block filled with concrete reinforced with steel. A commercial builder built this as his…

Note that brick is much worse than wood for wind-stoked wildfires; think ‘explosive fiery-hot shrapnel’ rather than just catching on fire like wood.

(This is not a contradiction of your point, just a useful related factoid for the modern era.)

Re: Is the world becoming uninsurable?

#122

Post by bruce511 »

wuiheerfoj wrote: post #80
Aurornis wrote: post #72

Earlier quoted context omitted.

> Unfortunately these discussions almost never go well, because it seems that most people have at best a surface level understanding of what insurance is and how it works, and everyone is convinced that it's a full scam and insurance companies are fabricating everything I have the exact same experience when discussing anything insurance related: People have wild assumptions about how much profit insurance companies a…

>When you point out that, for example, health insurance profits are low single digit percentage of overall healthcare costs Do you have any source for this? I’m assuming (because HN) that you had the USA in mind, and it doesn’t pass the sniff test for me given that US insurance fees are more than single digit percentages higher than other high quality care countries with privatised healthcare systems

Insurance fees are not high because the insurance companies are making huge profits.

They're high because providers are making huge profits.

Now granted, they may ultimately be the same thing, but that's a different discussion [1]

In the context of housing (fires, hurricanes etc) insurance is expensive because housing is expensive to build.

[1] insurance companies have to invest their income somewhere. It makes sense to choose companies will high returns. Which includes some health care providers. Which can basically change whatever they like because of structural reasons that have been well discussed.

Re: Is the world becoming uninsurable?

#123

Post by AlexandrB »

x0x0 wrote: post #41
greenthrow wrote: post #25

An hour in and nobody in these comments is addressing climate change? The risks of drought and the resulting fire or hurricanes and floods is much higher than it has been in recorded history in these areas because of climate change. Should people be forced to abandon their homes because the fossil fuel companies lied and misled the public and bought out our governments for the last 50 years? IMHO we should be seizing…

> The risks of drought and the resulting fire or hurricanes and floods is much higher than it has been in recorded history in these areas because of climate change I saw an article on npr [1] which basically agrees with the chart on the blogpost. I 1980, there were 3 disasters a year that cost $1B, inflation adjusted. In 2024, 24. The second chart in the npr article is pretty terrifying. [1] https://www.npr.org/2024/…

Without accounting for population growth in high risk areas this is meaningless. If the population and housing units in a floodplain doubles, a $500M 1980s disaster becomes a $1B 2024 disaster. That's not to mention the above-inflation increase in the cost of housing which probably bumps these numbers up as well.

Re: Is the world becoming uninsurable?

#124

Post by lotsofpulp »

jfengel wrote: post #111
wuiheerfoj wrote: post #80

Earlier quoted context omitted.

>When you point out that, for example, health insurance profits are low single digit percentage of overall healthcare costs Do you have any source for this? I’m assuming (because HN) that you had the USA in mind, and it doesn’t pass the sniff test for me given that US insurance fees are more than single digit percentages higher than other high quality care countries with privatised healthcare systems

Part of the problem is that the existence of the middle man adds a lot of costs: insurance company salaries, their executives, doctor's office billing coding, advertising, etc. The shareholders take home only a fraction. But a lot of money gets spent that simply doesn't need to be. Other countries avoid the deadweight loss of the middle man.

The genius of the US way is that the politicians avoid the heat when healthcare coverage is denied. Whereas UK and Canadian politicians have to answer to their constituents.

Of course, now that getting murdered is on the table, the US health insurance executives might want to up their compensation.

Re: Is the world becoming uninsurable?

#125

Post by Sabinus »

macinjosh wrote: post #61
csomar wrote: post #51

Earlier quoted context omitted.

Sure. Because the response of a failure in governance is more government? What you are proposing is "unfair". You are essentially suggesting that the rest of the country subsidize a subset who wants to live near high-risk areas. Me too want to live in a dense forest and also have my house by the edge of the river. You could make the argument for this for healthcare, since no one can choose which illness he is born wi…

People choose to smoke, overeat, engage in risky activities that can cause injury near and long term (Rock climbing, riding motorcycles, football, MMA). Why should society pay for these choices?

After a society brings in universal healthcare coverage, more rules discouraging smoking, overeating, and engaging in risky activities often follow. Which is either a nice way to get the people of the country caring about each other's health, or an awful government overreach depending on your political bent.

Re: Is the world becoming uninsurable?

#126

Post by luisfmh »

My only hope for climate change is that insurance companies start lobbying to have a more predictable environment since risk models works better when things aren't chaotic, and that gives a monetary incentice for companies to do better

Re: Is the world becoming uninsurable?

#127

Post by harimau777 »

Aurornis wrote: post #72
epistasis wrote: post #57

Earlier quoted context omitted.

I've been trying to talk to people locally, a place with lots of homes built in the woodland-urban interface, about the risks of climate change and how insurance will have to change. Unfortunately these discussions almost never go well, because it seems that most people have at best a surface level understanding of what insurance is and how it works, and everyone is convinced that it's a full scam and insurance compa…

> Unfortunately these discussions almost never go well, because it seems that most people have at best a surface level understanding of what insurance is and how it works, and everyone is convinced that it's a full scam and insurance companies are fabricating everything I have the exact same experience when discussing anything insurance related: People have wild assumptions about how much profit insurance companies a…

The profit margin doesn't include things like CEO salary, correct? I could see a scenario where the issue is still corporate greed just not greed that's measured by profit.

Re: Is the world becoming uninsurable?

#128

Post by asciimov »

Animats wrote: post #107

Not uninsurable, but buildings are going to have to become tougher. It's happened before. Chicago's reaction to the Great Fire was simple - no more building wooden houses. Chicago went all brick. Still is, mostly. The trouble is, brick isn't earthquake resistant. Not without steel reinforcement. I live in a house built of cinder block filled with concrete reinforced with steel. A commercial builder built this as his…

When I briefly lived in Oklahoma I found it frustrating that they use stick frame construction for homes and apartment buildings. Even when we know how to build much safer wind resistant houses.

What I thought was worse was once a tornado rips up a neighborhood builders are allowed to build replacement stick framed homes.

Re: Is the world becoming uninsurable?

#129

Post by [deleted] »

api_or_ipa wrote: post #11

Every era has it's Malthusian alarmists and without fail, each has been proven wrong by exactly the same thing the author decries and says won't work this time: technological change and adaption. There's no reason to think this time will be any different. Will some places become uninsurable? Sure, plenty of places over time have become uninsurable. Will the whole world became uninsurable? Absolutely not, because we a…

[deleted]

Re: Is the world becoming uninsurable?

#130

Post by itake »

purplezooey wrote: post #90

It’s hard to view insurance as a viable business when overpaying executives has become the norm. Take State Farm, for instance: its CEO was awarded $50 million in compensation over just two years — 2022 and 2023. The industry is rife with waste and high barriers to entry.

Lets pretend the CEO made $0 over 2 years and that $50m goes to what?

- $350 annual bonus to the 67,000 employees?

- Lower the cost of the 91 million policies by $0.27 per year each?

- Cover an additional 50 homes in California?

Where should it go?

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