Well, it’s turned out to be a light hurricane season (though, yes, it’s not over) so I thought I would, belatedly, join all the others doing their 20 year Hurricane Katrina retrospective. The main difference is I will tell it primarily from my perspective, which is less about the human Continue Reading
Hurricane Milton – The End of the Florida Insurance Experiment?
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
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
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
Decoding Insurer Speak
One of my main roles as an investor was trying to assess the difference between what companies said and what they were actually telling you with their actions. Company scripts for investor calls rarely directly answered your questions. I had to read between the lines or listen for what was Continue Reading
The Dangers of Owning A Home In California
I’ve previously written why one should never live in Seattle. The risk of an unprecedented earthquake is too high and you can’t diversify the risk. While California obviously has significant quake risk as well, thankfully, the potential magnitude is less and the tsunami risk is not concerning, so you have Continue Reading
How Man Exacerbates Man Made Climate Change
There are two types of man made climate change. We’re all familiar with one – the impact of human activities on the climate due to rising carbon levels. The second though is often overlooked. It’s how humans take actions that make the effect of a warmer climate worse. When it Continue Reading
Will The FHCF Survive 2023?
Last year, I wrote after Hurricane Ian that the FHCF may collapse due to the size of the loss. While the Fund has not gone bust yet, it is perilously close. What follows is an update on the FHCF’s financial condition, its ability to handle further losses, and a projection Continue Reading