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Is the world becoming uninsurable?

charleshughsmith.substack.com

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Re: Is the world becoming uninsurable?

#321

Post by photonthug »

> This is the intrinsic limit of political fixes: we take the risks and losses and transfer them to others lacking the political power to contest the transfer.

This hits hard and close to home. While my heart goes out to everyone that’s shouldering misfortunes, I’m wary of the “private profits, public risks” phenomenon getting even more out of control.

Obviously we can’t afford to disappoint all the people that were forced to jump into an outrageous housing market all at once, they need affordable insurance, and also still expect to 10x their property investment, particularly in coastal areas. If we don’t do this, it will be another huge blow to the shrinking middle class.

Meanwhile, the flyover states with fewer hurricanes and wildfires will subsidize coastal insurance basically due to strength of Californias market clout, and yet flyover states won’t ever see a windfall from their own rising property values. Since remote employees in flyover states often get less salary for the same work, they are already subsidizing rent for higher density areas. Regardless of where you live, everyone should recognize that this is unsustainable and divisive.

Re: Is the world becoming uninsurable?

#322

Post by bawolff »

lotsofpulp wrote: post #142
harimau777 wrote: post #127

Earlier quoted context omitted.

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.

All employee compensation, including CEO and board of directors, is included in the expenses used to calculate profit margin. Profit margin is all revenue minus all expenses.

Isn't that a bit misleading? Salaries wouldn't be included, but a lot of compensation at the very high end is based on owning stock, and dividends i assume would be part of that profit margin.

Re: Is the world becoming uninsurable?

#323

Post by jandrewrogers »

MagicMoonlight wrote: post #217

What are we betting that the Americans rebuild in wood again? It seems like they never learn. We had a single city fire like this 500 years ago and since then we haven’t… because we built the city back in brick instead of wood.

Americans used to build cities with brick and masonry. They were repeatedly destroyed by strong earthquakes, as would happen to your city if subject to similarly severe earthquakes. Americans paid for that lesson in blood.

European houses are not designed to withstand American disasters. A brick house that can survive a M8.5 earthquake, which is the safety standard where I live, will be almost purely steel structurally and very expensive to build. The brick would be decorative, which can be (and is) done on a wood frame.

Re: Is the world becoming uninsurable?

#324

Post by nejsjsjsbsb »

tobyhinloopen wrote: post #283

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.

Climate change enters the chat...

Re: Is the world becoming uninsurable?

#325

Post by phtrivier »

Former CEO of AXA, a major French insurer, famously announced that a world at +4°C would be "uninsurrable" [1].

That was 10 years ago.

It's true that most predictions about climate are wrong - most of the time, they're optimistic. (Not always, fortunately [2])

[1] https://www.leparisien.fr/economie/business/special-cop21-un...

[2] https://www.theclimatebrink.com/p/emissions-are-no-longer-fo...

Re: Is the world becoming uninsurable?

#326

Post by [deleted] »

epistasis wrote: post #57
bluedevil2k wrote: post #8

Like we see in California, when the government sets a price ceiling, insurance companies just leave. Same in Florida. If the free market truly was allowed run normally, the insurance rates in Pacific Palisades or on the Florida coast would be so high that no one could afford to live there. Is that a bad thing? If someone was living in a house near where they tested missiles, we'd call them crazy. At what point can we…

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…

[deleted]

Re: Is the world becoming uninsurable?

#327

Post by adrianN »

nejsjsjsbsb wrote: post #324
tobyhinloopen wrote: post #283

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.

Climate change enters the chat...

Even pessimistic scenarios don't predict threats to buildings (other than war, which to my knowledge never was insurable) in most areas of the world.

Re: Is the world becoming uninsurable?

#328

Post by jeffhuys »

nejsjsjsbsb wrote: post #324
tobyhinloopen wrote: post #283

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.

Climate change enters the chat...

Pole drift.

Re: Is the world becoming uninsurable?

#329

Post by jandrewrogers »

TheCapeGreek wrote: post #310
ohazi wrote: post #220

Earlier quoted context omitted.

Earthquakes. Options are wood again, or steel and concrete.

Somehow, all these nations around the world with earthquakes still have their houses standing. Why is it always whataboutism with earthquakes when presented with "don't build houses out of matchsticks"?

Countries like Japan use the same construction techniques as the western US. Few countries have earthquakes as strong as the Pacific Rim, where M8-9+ are regular occurrences. Properly designed wood-framed houses will survive that.

I’ve never seen a house in Europe that was engineered to the M8.5 earthquake standard that is mandatory where I live in the US. They used to construct houses like in Europe but they kept getting destroyed in earthquakes and were made illegal for safety reasons.

Re: Is the world becoming uninsurable?

#330

Post by Almondsetat »

Panzer04 wrote: post #259
_tariky wrote: post #230

Earlier quoted context omitted.

In Yugoslavia, in 1969, one of the biggest earthquakes occurred, destroying several cities. After that, the country’s leaders decided to change building codes. Even today, although Yugoslavia no longer exists, the countries that adopted those codes have homes capable of withstanding earthquakes up to 7.5 on the Richter scale. My main point is that if we face major natural disasters, we need to take action to mitigate…

Why bother building a better home when it's cheaper to buy insurance and rebuild later? This is why prices are important - sometimes it's sensible to build cheaper houses without these safeties if the risk isn't there, but if the risk does exist then it needs to be priced right to provide that incentive.

How about the cost of your life? If the house resists the earthquake and you are inside it, you don't die.
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