Donald Trump did not hesitate to do not like national intervention in most cases. However, the free market forces seem to be increasingly untenable in the face of his government existence. As the world's warmth and weather become more extreme, the traditional commercial insurance system looks like a feasible way to prevent fires, floods and other natural disasters.
This month, some of the most fashionable areas in Los Angeles have caused the damage of the end of the world to destroy about 17,000 buildings, and it is estimated that the loss will be between 20 billion and $ 30 billion. According to the world's largest reinsurance company Munich Re -data, floods, wildfires, severe thunderstorms and other so -called non -peak danger lost $ 13.6 billion in losses. This is the huge growth of the world's largest reinsurance company. It is $ 10 billion. About half of the total is insurance.
However, with the increase in losses and the rise in premiums, the economics of commercial insurance arrangements began to break. This has happened directly in many climate disaster hotspots, because the rise in insurance costs makes it unbearable. In some people, such as California, the slower second -order effect is working, because regulatory supervision of regulatory amounts strives to promote insurance companies and reinsurance companies to withdraw from the market. According to an estimation of a Citi Group, reinsurance companies (usually insurance companies purchased insurance companies) will not absorb 3 % of the insurance losses of the Los Angeles fire, which is a small part of the typical proportion.
State -owned California fair plans do provide naked cover for homeowners. But there is a big gap on the cover. The Federal Emergency Management Association also plays a role in such disasters and operates a national flood insurance plan that helped Florida homeowners after Hurricane Milton last fall. However, just like private sector insurance companies, FEMA's flood insurance company (National Flood Insurance Plan) also has to increase prices to maintain its solvency. Even with a large number of taxpayers support, although the flood insurance rate has doubled, the US government's accountability office estimates that although the U.S. government's responsibility office estimates that GAO is estimated that only 4 % of American families have flood coverage.
If commercial operators cannot make numbers running, and the taxpayer's funding plan is under pressure under the extension of government budgets, which options are feasible?
ConsorCio DeresaRacióndeseguros in Spain believes it may have answers. State -owned insurance companies are not an emergency support for failed business markets, but cooperate with private sector insurance companies. By obtained a 7-euro percentage of the property per 100,000 euros in business policies, it will raise 700 to 800 million euros per year to prevent extreme risks, including natural disasters and terrorism. Last fall, the flood breaking in the Valencia region in the east is expected to trigger more than 3.5 billion euros of CCS expenditures. Even so, due to years of profitable operations, it will still retain more than 7 billion euros.
Similar versions of public and private insurance partnerships operate elsewhere elsewhere. For example, the New Zealand Nature Insurance Plan covers the top 300,000 floods provided by commercial insurance companies, fires and storm damage. British flood re -insurance underwriters conduct flood insurance in high -risk areas, and funded covering through reinsurance premiums and industry taxes. (There are indeed similar structures in the United States, for example, Florida citizens' non -profit organizations depend on the combination of premiums and taxes, although it is destructive because it focuses on high -risk countries rather than diversified risks nationwide.
Such plans are positively resolving the basic and increasingly serious disadvantages of commercial insurance underwriting: as data finishing and analysis become more and more complicated, the ability to determine risks is improved to a certain extent, so that the initial concept of risk storage concepts It is urged to break through. If you know where the whirlwind might be hit, there is a commercial incentive measure, don't give it to people in these regions first.
In terms of climate risk, it is clear that some risk measures should be taken. House builders should not build new houses on the original flood. The fire should be built into the known wildfire spots. However, as the increase in climate risk and actuarial analysis becomes more and more complicated, it may be that business intelligence and risk are blind. The public -private partnership of government operations (although not government -funded) plans is the only feasible Model society. As doubts about climate change and big government, do not expect the new US president to become an early adopter.
patrick.jenkins@ft.com