“If you had to pick a canary-in-the-coal-mine industry to measure the extent to which climate change is real, I think insurance is probably the best one I can think of. The balance sheets—they’re not going to lie.”

Climate change is the fundamental driver behind insurers abandoning California, Florida and more than 200 zipcodes elsewhere in the U.S.

2/🧵

Part of what's going on is that regulators can't keep up with the rate at which our climate is changing and the degree to which it's leading to increased payouts.

They're trying to keep policies affordable for regular homeowners and business owners.

But what they're finding out is, sometimes they can't.

Increasingly, some properties are so at risk that the only alternative is the state-funded insurer of last resort.

3/🧵

So guess who is paying to rebuild properties all across the nation when they're destroyed by climate change-driven extreme weather?

You are.

You, the taxpayer.

As one source put it to me, we're socializing the cost of rebuilding where we probably shouldn't.

4/🧵

Others in the insurance industry are coming up with new ways to deal with the problem of extrem weather -- better data and algorithms, internet-of-things connected sensors, you name it.

But at the end of the day, while this can help some homeowners stay, and some businesses recover from catastrophe, nothing can stop the future abandonment of some properties -- and whole swaths of our nation.

Experts in risk -- insurers -- are among those most keenly aware of this.

https://www.wsj.com/business/entrepreneurship/climate-change-ai-california-texas-insurance-1d993873?st=odorqgionf38o90&reflink=desktopwebshare_permalink

5/5

@michaelgemar @mimsical

Insurance companies staying silent?

They are increasing premiums to cover losses.

When the risk is to great they will stop covering the risk.

If the corporation can't afford the insurance and the corporation has higher losses due to climate change, who should by lobbying? The insurance company?

@michaelgemar

They are increasing premiums on "property owners" because the risk is higher and losses are higher.

When the State says to the insurance company "you can't increase rates anymore" the insurance company pulls out of the State until the State recognizes the risk. That says a lot.

@KayseeColorado @michaelgemar

I think the posters point is that large industries *routinely* lobby in the order of hundreds of millions of dollars to get things they want.

I also have not seen this industry doing the same.

@pixelpusher220

I guess I see it as when an insurance company tells a state they are not going to write new policies in an area because the risk is to high, they kinda cut to the chase. Just saying.

The point is that there is surprisingly little record for the insurance industry speaking out publicly about our and their perspectives in a changing climate. Compare this to other industries that are very swift in pressuring politics even before they see their business model in danger*.

Even more puzzling: Insurers have an important role and power as asset managers (they have *a lot* of money laying around) combined with highly insufficient policies for sustainable investment.
It's like if they were structurally not able to stop sawing off the branch they are sitting on. Lack of internal capacity to add 1+1? Different departments? Ideological short-sightness? Short-term shareholder profits over long-term perspective?

Hey, this is more or less the same as our governments or corporations in general. But with the difference that insurers have a reputation of knowing in theory how to use data... 🤔

@KayseeColorado @pixelpusher220

@trisweb @earthworm @KayseeColorado Id think it depends on the perspective of the observation. For a given insured asset, sure it makes sense.

When you stop selling your product in entire states due to the risk, that's a fundamental threat to your future business.