Today is Tuesday, 06 August 2024.
Some time ago our post “Insurance: Impacts of Billion-Dollar Weather and Climate Disasters” gave some perspective of what is going on in the United States (US) insurance market.
Just to name a few highlights, there were indications of major insurers in US reducing writing new policies or spiking premiums due to more destructive wildfires, stronger hurricanes or struggling to cover the increasing cost of rebuilding after climate disasters. Specially in states like California, Florida and Louisiana.
One US bipartisan Senate Committee is conducting hearings about the consequence of climate change from a regulatory perspective in their country.
On March 2023 they organized the hearing “A Burning Issue: The Economic Costs of Wildfires” and now, more recently on June 5 2024 the hearing was about “Riskier Business: How Climate Change is Already Challenging Insurance Markets”. With much more specific details about a concerning trend.
“It looks like an insurance market that is swirling the drain … A New York Times investigation found that the insurance industry lost money on homeowners coverage in 18 states last year … the U.S. experienced 28 billion-dollar extreme weather events … Climate risk makes things uninsurable” informed one US Senator, member of that Committee.
“Sounds eerily like the run-up to 2008” added him, referring to the housing market before the 2008 meltdown.
Click at the image below to read precisely what the Senator said, including worrying numbers. In just 2 pages.
By the way, worth mentioning that this same US Senator is behind the North American equivalent to the European Carbon Border Adjustment Mechanism (CBAM). Recall this post.
If you want to read the other testimonies of this hearing related to the U.S. insurance markets, you can click here. Among them one Florida Resident, one Professor of Finance Harvard Business School and one State Insurance Commissioner.
