I wanted to write some initial thoughts based on what we know at the moment. Obviously, this is a fluid situation and predictions can change between now and landfall. I am going to assume for this post that Milton is a strong 3 hitting near Tampa, going through Orlando as Continue Reading
The Paradox of Workers Comp
Sometimes, it helps to zoom out a bit and look at the big picture. I was looking at some long term industry stats recently and stumbled on an interesting conclusion. Did you know that over the entirety of the 2000s, workers comp has had a better combined ratio than the Continue Reading
Christian McCaffrey: A Case Study In Risk Management
Risk management doesn’t just apply to insurance or investing. It is necessary in anything from managing your health (should I eat that fried Twinkie?) to managing supply chains (do we need a backup supplier?). Today I am going to discuss how risk management can help you win your fantasy football Continue Reading
Industry Cat Loads Are Still Not High Enough
Verisk recently released their updated estimates of industry cat risk. Amazingly, average annual loss (AAL) surpassed $150B, up from $100B just four years ago. Similarly, the 1 in 100 aggregate loss (PML) grew to $400B from $300B four years ago. These are stunning rates of growth beyond what we have Continue Reading
Is Private Equity Buying Into Peak NFL?
Editor’s Note: My annual NFL predictions follow at the end of this article. The NFL recently confirmed that they will let private equity buy small stakes in NFL teams. This caused much consternation that private equity will somehow ruin the NFL. Today, I will argue the opposite. Buying into the Continue Reading
The Dual Danger In Carry Trades
You’ve probably read a lot in the news recently about carry trades. Many of you may not fully understand what they are or why they matter. I’ll try to help explain that, but I also want to go beyond that and delve into how central banks enable these carry trades Continue Reading
Will FHCF Survive 2024 – Part II
Last week, I discussed why the FHCF is still in trouble going into this wind season (see here). Today, I am back to conclude the analysis with a dive inside the numbers to illustrate why the math doesn’t work. Simply put, the FHCF doesn’t charge insurers enough premium to cover Continue Reading
Will the Florida Hurricane Cat Fund Survive 2024?
Back with another edition of “what happens in Florida after the FHCF fails”! (Last year’s version here.) The good news is there were no losses last year, so the FHCF rebuilt some of the surplus lost in recent years. The bad news is they still don’t have enough money to Continue Reading
Prop Cat Is Significantly Underpriced This Year
One of the great mistakes of the financial crisis was mortgage underwriters and investors thinking they would be OK because their models told them what a bad outcome looked like and that they would be OK under that outcome. The problem, of course, was the models accounted for “normal” stress Continue Reading
Why It’s The Perfect Time For The NBA To Cut To 65 Games
With the NBA season coming to a close, the last big piece of news before next season is the finalization of the new TV contracts. We know TV revenue will go up dramatically, which creates a golden opportunity to rethink the economics of the sport. My proposal is to reduce Continue Reading