Is the world becoming uninsurable? • Hacker News Board

Re: Is the world becoming uninsurable?

#151

Post by jart » Fri, Jan 17, 2025, 5:02 AM UTC

colechristensen wrote: post #15

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…

You can't live in places where your home is going to get destroyed every couple of decades by wildfires, floods, or hurricanes. There are more of these places now because of climate change and a lot of people are going to have to migrate over the next century, like huge global migrations. Insurance can't/won't allow a bunch of people to deny this reality any more (or at least much longer). LA is going to be pretty un…

Yes and before they migrate due to climate change, they'll sell their charred lots to some fascist with the willpower to clear the brush, fill the reservoirs, and deploy fire fighting drones. Then everything will go back to normal. God protects only the strong.

Re: Is the world becoming uninsurable?

#152

Post by Sabinus » Fri, Jan 17, 2025, 5:05 AM UTC

floatrock wrote: post #77

franciscop wrote: post #56

I'm not sure I follow this: "why are we subsidizing people to rebuild in places that are clearly no longer habitable" Does/Why would the insurance assume the subsidy is for people rebuilding in the same place? Money is fungible and so it doesn't need to be in the same place, at all. What I'd expect is that insurance for those hard-to-insure places would skyrocket and thus a new balance would be achieved.

You would expect that in a rational market. But go down a reading hole about flood insurance. tl;dr: in many places in the US, the only company that offers flood insurance is the US government because everyone else has pulled out. And people do tend to use the money to rebuild in the same location -- reasons as varied as "I like my beachhouse" to "my entire community was born and lived in this parish and I aint leavi…

>people are whispering "managed retreat" without actually being able to say it outloud around polite company, we are starting to see programs like "we'll make you whole in case of a flood, but you aren't allowed to rebuild on the lot if you take our payout". But those buyouts are often met with yells of "government is taking my property!" because again, no one wants to face the stark reality of managed retreat.

I know politics is famous for elites abusing it for their own benefit, but sometimes the population is truly not ready for something that the elites understand is utterly necessary and that's not a bad thing. The risks and benefits of an elite class, I guess.

Re: Is the world becoming uninsurable?

#153

Post by Newlaptop » Fri, Jan 17, 2025, 5:06 AM UTC

bruce511 wrote: post #122

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

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…

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

United Healthcare alone made $23,000,000,000 in profit in 2023. Health insurance companies have collectively made $371 billion in profits since the passage of the Affordable Care Act.

Property & Liability insurance (home, car, etc) have relatively modest profit margins, but health insurance companies absolutely are making huge profits.

Re: Is the world becoming uninsurable?

#154

Post by dilyevsky » Fri, Jan 17, 2025, 5:06 AM UTC

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…

Much more practical solution is more aggressive defensible spaces, cracking down on gardens, and proper management of fire reservoirs

Re: Is the world becoming uninsurable?

#155

Post by fsckboy » Fri, Jan 17, 2025, 5:07 AM UTC

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.

>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.

that's not a sophisticated analysis. it would be like saying mcdonalds is unecessarily expensive because executive pay, and cars, and dry cleaning, etc. etc. yet, if you tried to found a competitor, you'd have all those same expenses. even charities have to pay management.

insurance companies make money because their aggregate risk is less than your individual risk, and you really don't want your individual risk so you are willing to pay them extra, a premium, to get them to shore up your downside. After that it's like any other company selling any other thing.

Re: Is the world becoming uninsurable?

#156

Post by lazide » Fri, Jan 17, 2025, 5:08 AM UTC

Sabinus wrote: post #131

Daz1 wrote: post #104

Earlier quoted context omitted.

>Plenty of places have had catastrophic droughts, famines, and plagues. Nearly half of Europe died a few times from plagues. Most natives in America were absolutely wiped out from disease and other issues. Tens of millions died of famine in China last century. Tsunamis washed away and killed hundreds of thousands in Indonesia and Japan this current century. Conveniently you selected pre-technology examples. How curio…

Technology can't save you from famines when there isn't enough sunlight to grow crops for a season or two. One good supervolcano and civilization might collapse or at least take such a hit as to be utterly transformed. Billions dead, etc.

Literally grow lights and nuclear reactors? (Or plain old gas turbine generators)

Technology is the only thing that can save anyone from that type of situation. Prayer sure wouldn’t help!

Re: Is the world becoming uninsurable?

#157

Post by novok » Fri, Jan 17, 2025, 5:08 AM UTC

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…

Health insurance's issue is probably how it induces pure waste everywhere as everyone has to play this dance of ever escalating paperwork which consumes a lot of labor. It's not profit, it's waste. Same with the ever increasing amount of admin. Why is that admin increasing? I estimate insurance or requirements created by insurance is part of the cause.

There is also a lot of other smells of a lack of a competitive market. Very opaque pricing, limits to how many hospitals can be opened in a region, needing paperwork to push against that limit, limits in residency slots, the entire hazing ritual of residency in the first place, limits in opening medical schools, ever escalating requirements to become a doctor, restrictions against doctor owned hospitals or clinics, the fact something like an epipen is still not out of patent and not having many clones by now, large barriers to make medical devices and medications, while simultaneously having great issues with generic drug quality, a horrible food system compared to Europe, while simultaneously having a much harder regulatory state medically compared to europe, etc.

Re: Is the world becoming uninsurable?

#158

Post by nradov » Fri, Jan 17, 2025, 5:08 AM UTC

lotsofpulp wrote: post #109

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

These are all the publicly listed health insurers in the US, with public financials, so the numbers come from the 10-Q and 10-K reports filed with the SEC. Note that the first one, United Health, has slightly higher profit margins than the rest because UNH has an enormous business selling healthcare itself, not just insurance (they own a lot of doctor groups and outpatient clinics and employ a lot of doctors and nurs…

Some Blue Cross Blue Shield Association members are for-profit corporations now.

As for UnitedHealth Group, much of their profit comes from a large software business which is separate from their insurance, care delivery, and PBM businesses. If that software business was spun out it would be one of the 20 largest US tech companies.

Re: Is the world becoming uninsurable?

#159

Post by energy123 » Fri, Jan 17, 2025, 5:13 AM UTC

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…

  > "we are quite good at adaptation in the face of adversity."

Historically, much of this "adaptation" was achieved via migration. If your vision for the future includes mass migration away from the equator into the cooler north, then okay, we are on the same page as to one of the plausible outcomes.

Re: Is the world becoming uninsurable?

#160

Post by nullc » Fri, Jan 17, 2025, 5:14 AM UTC

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…

What evidence do you have that these fires have anything to do with climate change? They appear to be adequately explained by the known behavior of the region, and to the extent that they're not the radical increases in habitation and the systematic suppression of small fires is enough to cover any gap.

Ironically there is a great case that varrious environmental groups that vigorously opposed controlled burns are among the greatest proximal human causes of the current situation. If careful analysis concluded so, would you support seizing their assets for use as disaster relief?