Odd Lots - Why Home Insurance Markets in California and Florida Imploded

Episode Date: March 21, 2024

In recent years, we've seen home insurance premiums soar by historic amounts. Not only have prices gone up, but in some instances, we've seen national carriers simply announce that they're abandoning certain states. So, what's behind the mess? Why isn't competition causing markets to come into balance? What is the role of state insurance regulators? On this episode we speak with two guests who help us understand the problem. Amias Gerety is a partner at QED Investors, and a board member for the insurance company Kin. RJ Lehmann is the editor-in-chief for the International Center for Law & Economics. The two of them discuss insurance from both the financial side and the regulatory side. They explain where things have gone wrong and the prospects for market stabilization.See omnystudio.com/listener for privacy information.

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That's vanguard.com slash audio. All investing is subject to risk vanguard marketing corporation distributor. Bloomberg Audio Studios. Podcasts Radio News. Hello and welcome to another episode of the Odd Lots podcast. I'm Joe Wisenthal. And I'm Tracy Allaway. Tracy, it's funny that like in all the coverage of finance generally, you know, we talk about banking, we talk about brokerage, we talk about deals, etc. There's not a lot of talk about insurance. I know. It's so weird. I feel like it's kind of a blind spot for financial journalism.

And I'm sure I'm going to get a lot of tweets and emails from dedicated. insurance correspondence. Who do their jobs wonderfully? Yes. But there should be more of them. Yes. That's basically what we're saying. It's a huge pool of capital. And also it has real life consequences, right?

I think those aren't discussed enough. Like there's a sort of feedback loop where insurers are often deciding what is economically acceptable in terms of risk. And so their decisions have actual impact on, you know, people's lives and the way we behave where we live, things like that. It's interesting to think about like the similarities between insurance and deposit banking, because both industries are basically, I give an institution an amount of money and I expect at some point to get it all back. And in the meantime, that company that I gave it to gets to lend it out or invest it or something like that.

The difference is with banking, you sort of like get the money back whenever you want it. with insurance on the other hand. When something bad happens. It'll probably happen at some point in your life. You just have no idea when. It'll unfortunately almost always be when a very bad incident that you want to insure against. But yeah, it really is interesting how there's this huge thing. And as you say, it touches every aspect of life.

In many cases, dictates even what people can and can't do. But it's like we know so little about like there's so little talk about it. It's the lesser known supply shock. Let's put it that way. Recently, we did that episode on the Fed's preferred measure of inflation, and we weren't talking in that about the insurance component and the impact that's been having on the headline number. Right. So this is the one aspect of insurance that has gotten a fair amount of coverage over the last several years, which is that in certain states, particularly California and Florida and maybe some others, there have been these huge upward shocks to the cost of covering your home. We actually talked about this with the Howard Hughes CEO last autumn where he was talking about their insurance surge. But I have to say, like, in my head, like, I still don't totally understand what's driven these huge spikes in premiums, particularly for homeowners insurance.

So I think what's confusing about this whole discussion is you see two very different headlines. So on the inflation side, you see things like, oh, the cost of insurance is surging in Florida and California. California. It's unaffordable to live in those specific places or specific areas within those states. But on the other hand, you also see headlines that say things like insurers are 60% behind in terms of pricing from where they need to be. And insurers say the market is uneconomic. They can't make the numbers work. And so you're left kind of head scratching. Well, is this about insurers trying to cover extra costs? Is it price, Is it that there's something fundamentally too risky about this particular line of business?

Is it political posturing? This is the other thing that happens here in California and Florida. They have very particular regulatory systems around insurance. It's really hard to disentangle what's actually going on. Completely. And there's always this question. Anytime you see an insurer like pull out of a state, like I never understand that like, why don't just price it higher?

Like, or it's like, oh, this is. uninsurable. Yeah. No, certainly, like, there's some risk that someone will desire to be compensated for, but yet you see this line uninsurable. I do think, obviously, in the case of Florida and California, we've seen disasters. Of course, we've seen various wildfires over the last several years in California. Florida hit by a number of hurricanes, so there's a climate change element.

But in my mind, I do not feel like I understand the whole story of why, at least in a handful of states, homeowners insurance premiums have spiked at levels that like basically it feels like no one has seen before in history. Yeah. And at the same time, the insurers say they can't make any money. I was just looking at a little article from credit sites saying that the majority of the top 20 underwriters of Californian retail home and auto insurance at this point have either entirely withdrawn or significantly curtailed their participation in the state given profitability

challenges. So there's clearly something going on. The pool of available insurers seems to be dwindling, but the question is why. Yes. I think we really need to dig into this further and get a better handle on like how these markets, these heavily regulated markets, but these markets, how they actually work and how insurers think about managing risk and how prices are determined and how capacity ebbs and flows. So it's time to give it the outlawed treatment. Yeah, this is an episode we've been meaning to do for a while and to compensate for not doing it for months, we actually have two guests, two perfect guests for you. So we are going to be speaking with first, someone who is on the business side of insurance, someone who's actually involved in regular operations and

can talk about how prices are determined and how supply is determined. And then we're going to be speaking with someone who has a better, deeper understanding of the regulatory side. So we are going to first be speaking with Amayas Garrity. He is a partner at QED. investors. It does a lot of fintech investing. And he is on the board of Kinn, which is a direct to household insurance company. So, Omias, thank you so much for coming on the odd lots. My pleasure. Why don't you tell us first, like, what do you do? What's your background? And what do you do in this space of home insurance? So I'm on the board of a direct-to-consumer home insurance company called Kinn. And Kinn really focuses on exactly this problem of what do we do in catastrophe-affected areas.

What do we do with the incredible, you know, change that we're dealing with in terms of hurricane and windstorms and ultimately fire? What's a direct-to-consumer insurer? How does that differ from a normal insurance model? So one of the really important elements of the structure of the insurance market is that almost everybody gets their insurance through an agent. And it actually really impacts the economics of the industry because agents are typically paid commissions around 15 percent. And also, because of that, all of the insurance companies' access to information actually comes through agents. So with the kin model, one of the reasons why we think this direct-to-consumer makes more sense is, one, you get actually more economics to play with. So you can spend that money on data science.

You can spend that money on aerial photography. And then also because the environment is changing so quickly and knowing what's going on in a house is so much more knowable. now that you actually would prefer to get your information through data science than through an independent agent like looking at a roof and saying, I don't know, roof looks pretty good. So big picture, we've all seen these stories about, oh, it's so hard to get insurance in a state like Florida or people seeing their premiums jump 35 or 50 or 60% in a year. Just let's start big picture. How would you describe the problem or just the market environment of the last few years?

Yeah, so the problem is pretty straightforward, which is insurance is there to protect people from losses that are going to happen pretty infrequently. But if you just think about the math, right, so Hurricane Ian two years ago, right, about $20 billion of losses, so $25,000 claims-ish. And, you know, if that's going to happen every 20 years, you're going to need to pay just for that one storm probability, $1,200. bucks. Okay. And this is... Wait, 1200 bucks a year. Twelve hundred bucks a year. Okay. Right. And so what we're dealing with is a pretty, and we all know

that climate change is real. So if you go back in history, typically the last 40 years or so, there were about eight billion dollar events per year. So where the insurance industry deals with a billion dollars of loss from one event. In the last five years, the average was 16. So the change is real. and the cost of insurance is real. But at the same time, you know, if you look across, you know, these markets, the costs are going up, but we also have house prices going up. We have inflation. So over the last 10 years, you know, the national data actually only goes through 21.

But the price increase has been a little bit higher than inflation, but not a lot higher than inflation. And I think this is partly what we're all dealing with is we're coming to grips with a bunch of different forces coming and hitting homeowners in exactly the same time in the same way. Joe, did you know the most expensive hurricane of all time was 1938 in New England? I can't remember if that's inflation adjusted or not. It must be. Yeah, it must be. That's a good fact to it. Yes, you're welcome. There's a really good book about it called Sudden Sea, the Great Hurricane of 1938. But okay, wait a second. So whenever we have these conversations about insurers, a lot of the numbers here kind of blow my mind because as

Joe just mentioned we talk about insurance premiums going up by sometimes insane amounts. I was reading a Bloomberg article that came out recently and it was the owner of a business, I think in Colorado, who was paying $40,000 and his insurance premium jumped to $400,000 a year. And he thought it was a typo initially. And then I read analysis from people like the strategists over at credit sites. and they say that they think insurers may be 60% behind in terms of pricing where they actually need to be. And then I look at the numbers behind the amount of capital that's actually flowing into the insurance industry where, you know, it's not just people paying premiums. It's also stock. It's also bonds that are being issued. These just seem like insane numbers that don't seem to match up.

What is happening here? So two things. One is that always the question is how do we get this price right? And so a lot of times what people feel is I can't get insured, but what's actually going economically is I can't get insured at that price. Right. The price you want. Right. The price that you want. I think there's also some dynamics where fire is scarier in a lot of ways compared to hurricane and wind. Partly this. This is a dynamic, which is the hurricane increase has been quite extreme, but also relatively linear, right? So there are more storms. They tend to be a little bit more severe. But fire has been a little bit more of a tipping point. So if you were living in Colorado, you probably didn't think about fire risk as like a really

important part of your home insurance until only the last 10 or 15 years. Oh, I see. So there is a more of a tipping point dynamic with fire as compared to hurricane where it's just culturally understood that if you live in Florida, you're going to deal with hurricanes. If you live in the Carolinas, you're going to deal with hurricanes. So just on the pricing point, one thing I wonder about all the time is what do the pricing models actually look like? And again, that 60% estimate that I mentioned is based on the actuarial models of insurers. Like, this is what their model says they should be charging currently

based on, I assume, forward projections of what the weather is going to be. But of, of course, course, the question always is, if you're having forward projections, if you're forecasting something, I mean, insurers are for-profit enterprises. Why not say that the risk of catastrophic events is much higher and therefore we need to charge this particular amount? You're trying to discern the future. It's not like anyone is going to be able to say, no, you're wrong. Well, first of all, a lot of the price comes from the reinsurers. And the reinsurance prices have been increasing, but it's been a roller coaster ride. So if you look at like a history of reinsurance prices since 94, so think about Hurricane Andrew as kind of, you know, for those of us who were Gen Xers, like this is the time

in which we started to really think about hurricanes. So, you know, early teenage years for me, the price shot up post Andrew. Then it came down steadily. Shot up again in Katrina came down steadily. And then in the last five years has shot up again. So even though the trend is up, it's very boom and bust in terms of reinsurance prices. And that also you see the same dynamic with home insurers. And this goes back to your earlier question about having an independent agent. So if you are an insurance carrier and you think you need to raise prices, but 100% of your clients are intermediate through an agent, if you're the first carrier to raise prices, all of your customers will move.

Oh, there's a first mover disadvantage. There's a first mover disadvantage. So everybody needs to reprice, but they're very afraid of repricing because of the insurance agents. And then the last thing, and this is what you see happening in the debate in California right now, is that in California until very recently, it was literally not allowed to take into account future casts. And so there are a bunch of different things going on that make that repricing very messy. Today's show is brought to you by Vanguard. To all the financial advisors listening, let's talk bonds for a minute.

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You said there's not really so much a shortage of insurance so much as a shortage of insurance at the price that people think they should pay. But we do get these stories, right, of insurers saying we're just out of this market. Yeah. And I think we've seen it a lot in California, I think in Florida as well. You've seen it in Florida as well. So what goes into that decision? We're an insurer's like, we're not in this market.

Yeah. Because that is a real thing, right? Absolutely. And that too is kind of the fractal geometry of the thing, right? So at the level of your house, you're saying, like, I think this price is crazy. I can't get anyone to insure my house at a price that makes sense. And then at the level of the state, the insurers are going to the regulators and saying, well, if you don't let me raise my prices by X, I'm going to pull out entirely. And so what you see in these kind of big crackups with large insurers pulling out is usually a dialogue or, you know, a disagreement about the regulatory framework and how quickly they can raise prices.

Oh, yeah. There's always a discussion about whether or not this is political posturing because they want the actual regulation to be changed. But what happens when an area, this is an extreme statement, but if an area becomes uninsurable, so if the bulk of insurers decide to move out of particular counties in California, things like that, what happens to home owners, business owners, car owners? Totally. So in both Florida and California, which are sort of the furthest along vanguard states for this kind of catastrophe risk, both of those states have.

public insurers of last resort. And so they will give you insurance at a price that is underwritten by the state. Now, there's complicated rules about what the state has to charge, but those get very political. And in Florida, for example, this has followed a little bit of that same boom and bus cycle that we've seen with reinsurance rates. So currently, citizens in Florida has about 1.2 million policies. This is the state insurer. So the state-sponsored insurer today, has 1.2 million policies in Florida. That's about 25% or more of the state. That's actually significantly up from five years ago, almost 3x up, but it's down from when it's last peaked in 2011. Oh. So there is this dynamic of waxing and waning. What we're seeing in California

is just a straight upward tick. Now there, it's only about 3% of the state, but in the counties that are worst off, it's about 20%. In Florida, didn't they start cracking down on the roof scandals as well? Wasn't that part of it where like these roofing frauds were so prevalent that they were actually boosting premiums for everyone in the state? Yeah, that was a really significant issue. So this issue, Tracy, is called assignment of benefits where you could come as a roofer. You could come to, you know, Tracy's house post-hurricane and say, hey, I'll, I'll

I'll take care of this, and then you assign your benefit to me, and now I'll go deal with the insurance company on your behalf. Now, the challenge of this is that there's a bunch of different things going on, but one of the things had to do with what were the terms under which you could litigate, what were the terms under which the insurance company had to pay the lawyer's fees, and whether assignment of benefits was possible. And Florida has done a series of reforms to try and pull that in. The other piece, going back to the direct-to-consumer element here, this is all the way.

also a place where from where we sit, we do think there's a ton of opportunity for technology and for companies to do better because the reason why there was assignment of benefits is because homeowners were frustrated. And so like at kin, after a storm, every single policy holder gets a text message. And within a couple of days, we'll do aerial imagery and say, hey, look, you might have had to evacuate, but here's an aerial image of your house. Would you like to start your claim? So there's a bunch of things that you can do to make the system better. But yeah, there was a pretty significant reform effort in Florida. Sorry, what was the basics of the scam?

Okay, so the basics of the scam are your house is damaged. I'm a roofer. Instead of you contracting with me and then you following up with the insurance company, you assign your benefits to me. I do the work. You know, maybe the price is the right price. Maybe it's a much higher price. And then I, with your legal rights, sue the insurance company.

And in that context, right, you've got big players on both sides. There was a litigation finance dynamic here. There were hedge funds getting into the market to finance lawyers because there were dynamics in the Florida market where if there was any settlement at all, the insurer had to pay the legal fees. Oh, yeah. So there was a bunch of incentives built into the system that made it very advantageous to sue, even if you weren't being, you know,

truthful about the amount of cost that it actually took to fix the house. My impression was also that in addition to all these legal peculiarities that you just described, it was just really common. Like you would get a knock on your door and it would be a roofer going like, hey, do you want a new roof? No worries. I'll take care of it for you. All you have to do is sign away, you know, the right to file a claim and then sue your insurer. Yeah.

And this goes back to this idea of are we using the best in modern technology? or not, right? If I have an aerial image of your house two weeks before the storm and two days after, my ability to know whether that's a roofing scam or a proper claim goes way, way up. If, you know, the last time I saw your house was an independent insurance agent coming to sell you the policy five years ago, it's a lot harder to defend against the exact same facts. And so there's a lot of room in the insurance market for things to get better in addition to the fact that we've got to find ways to get the regulations right and ultimately model the climate correctly. So something I'm interested in is, you know, Florida and many parts of California. I mean,

actually the whole country, but there's two states that have just seen these incredible, like, real estate booms. I mean, Florida is always in a real estate boom. But they're an incredible price, especially over the last five years and the post-COVID environment. And so you're in a situation, which may be like so someone, you know, bought their house in 1995 for, I don't know, 200. thousand dollars and now it's worth two million dollars or something like that and so the homeowner is paying insurance on a two million dollar house even if that's right if it's much bigger yeah that's exactly right and if you think about how much florida home insurance has gone up yeah right if you're a homeowner what you feel is oh my gosh florida home insurance over the last three years has gone up

nine percent a year but what you don't recognize because you're the homeowner is tampa real estate has gone up 10 percent a year just on this sort of similar point, particularly in the sort of inflation that we've seen. I mean, I imagine just the cost of repairs, even on a given structure, given we know labor shortages and cost shortages, et cetera, just the actual process of putting a roof back on or whatever must be much more expensive than you used to be. Yeah, that's right. And this is part of what disrupts the industry. But that should come out in the wash, right? We see that in the inflation data. We see the premiums going up. about the same rate of inflation. In fact, over the 10 years from 2011 to 2021, Florida home insurance went up less than inflation, but since it's gone up a little bit faster.

I realized we probably should have asked you this earlier, but what's the pitch to investors in insurance companies now, whether it's through buying equity or, you know, buying something like a cat bond, something like that? it used to be that you have these uncorrelated returns. Natural disasters don't really have anything to do with the market. But if natural disasters are happening on a more frequent basis, then it seems like some of that correlation argument sort of falls by the wayside. Yeah. I mean, there is a sense in which reinsurance costs are like almost everything else we see affected by interest rates because there is capital scarcity in the world when the risk

free rate is five and a half percent. And also, the reinsurance markets happen on an annual basis, just like the home insurance markets happen on an annual basis. So there's a lot of friction and slow movingness that is built into the system. So the average home insurer in Florida will place their reinsurance, you know, somewhere between March and June. If you think about that from a capital allocation perspective, if you're a reinsurer, you're making that decision, okay, what are we going to bid on? What capacity do we want to give to this market? You're making that decision as a bureaucratic matter, not like naturally fluctuating with the prices. So you definitely have this idea that, and by the way, what's on the reinsurer's balance sheets?

A bunch of bonds. Right. They should be making more money. No, but those, no, because those bonds repriced down when rates go. Right. So Tracy, to your point, your intuition exactly right, that you had both a kind of climate shock over the last couple of years and you had a capital supply shock over the last couple of years. and you had a capital supply shock over the last couple of years as bonds repriced on insurers' balance.

That's interesting. That's great. Talk to us more about that capital supply aspect. So, oh, they take a hit on their balance sheet because their bond portfolio is down. So does that mean just the sheer amount of dollars that they can then lend out? Talk to us about that, I guess, like supply chain of dollars and how it feeds down to the end homeowner? Yeah. So the supply chain of dollars is, you know, like everything, it's kind of simple, right?

you've got large pools of capital looking for return. In reinsurance, those are an increasingly diverse mix, insurance-length securities, cap bonds, captive reinsurers, you know, hedge funds can go into it directly. You can, you know, there's a bunch of different things you can do. But they all come back to this idea that I'm sitting on a pool of capital. I'm trying to figure out what's the best way to get return for that capital. And that return is in a world of low interest rates, right? This climate risk is extremely attractive because it's,

it's uncorrelated and it provides a rate of return that is sort of set by the actuarial tables, not set by, you know, global macro. In a world where rates go way up, now that implied hurdle rate, right, the actuarial return is going to be still the same, right? It's basically set by what's the risk of a storm and what's the right way to price that. But then as the risk view rate goes way up, you know, what else should I do with this dollar? Did I just buy treasury? Should I buy corporates?

Whatever it is, that sort of gets a little bit more competitive. And then the last thing, of course, is that reinsurance markets do have this unfortunate boom-bust dynamic. Right. So one of the great stories about, you know, Berkshire Hathaway is that they wrote reinsurance after Hurricane Andrew. Right? So they took basically no losses in Hurricane Andrew.

And then they came into the market. There was very little reinsurance capacity. And so they wrote reinsurance into Florida in the wake of Hurricane Andrew. So these stories are relatively common. And you see this actually. There was a sequence of three years where reinsurance got super expensive in Florida. And over the last year, it's actually come down and flattened a little bit because make people make money. Oh, then the capital piles in.

So you mentioned investments. So you have this pool of money and obviously you can invest it in different things, whether it's corporate debt or treasuries. You also mentioned technology earlier on. What levers do insurers have to pull in a situation where risks are going up, expenses are going up, in some areas of the country, they're still limited in terms of how much of a premium increase they can pass on. How do they go about reducing costs? So the first thing is insurance is all about getting the price right. And while it is hard to model, it's not impossible to model, right? So as you said earlier, right, we're all capitalists here.

We can sort of figure out, okay, well, next year we think the chance of a hurricane is a little bit higher than it was 10 years ago. So we can adjust the price for that. So the first thing is getting the price right. And we have seen a lot of innovation around just understanding that climate science and building that into the system. The second thing is... Wait, can you expand on that a little bit more?

because as someone who spends a certain amount of time in New England nowadays, I feel like the weather forecast still leaves something to be desired. Yes. So the weather is hard to predict. But climate is not. The climate, you know, moves in ways that are, you don't care whether the hurricane comes on Tuesday or Thursday. You care about what's the probability of a hurricane this year. Now, even within that, right, we had Hurricane Ian and then last. year was a more mild year. So it's not that they're so good at predicting the where and the when, but we can see the trends. And so you start with that. The second thing you start with is just

actually getting much more sophisticated about the interactions between the house and the weather. Right. So houses can be hardened, building codes, roofs. Think about California, fire breaks, right? Like, do you have a bunch of shrubbery in your lawn or do you have a bunch of pebbles? Like, These actually make a real difference to your risk of catastrophe. And so at least at kin, what we see is that it really matters which house on the block you underwrite. Some of the houses are just naturally harder or they're shaped a little bit differently relative to where the water might come. I learned that word today, Joe, hardened, like the idea of protecting houses in this way. And now I have this idea in my head of like these hard houses walking around going out.

I'm so hard. Like, you can't get me. Well, you raised that. Like, you know, sometimes when people are talking about health insurance, like, oh, the health insurance should give you incentives, like go to the gym or whatever. And my understanding is that that stuff doesn't really work that much. But I guess, like, with technology, in theory, are you able to say, like, a homeowner comes to you? And you say, okay, it'd be this price.

But if you do X to your property, it could be this price. Yeah. So it's probably not quite that much of a negotiation. Okay. implicitly it is, right? How old is your roof? Okay. What are your shingles? Do you have tile or tar? And so these kinds of things are directly impacted in price. And then sometimes, I mean, we're not investors in any of these companies, but we have seen home insurers in California say like, literally you come to us, we underwrite your house, and then we're going to tell you what to do

with your backyard. Oh. And then we're going to. Some are trying to do that. Some are trying to do that. They say abs are made in the kitchen. Cool. But who has time for three hours? of meal prep and a fridge full of Tupperware. That's why I started using Factor. Factor delivers fresh, never frozen, ready to eat meals that are dietician designed for balanced science-back nutrition. No prep, no cleanup.

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one, as long as you're willing to rub salt in your wounds. Discoverhelifax.ca.ca. You mentioned fire. As you said, like the sort of like hurricane risk over time has been sort of linearly going up. Fire has been sort of less predictable. There have been a little bit more of a tipping point issue, I would call it. Does the industry feel like it has a good way of modeling fire risk? Or at this point, because it's sort of hitting this tipping point, do the insurers or the reinsurers, like, need a larger margin of error, a bigger cushion due to the sort of the tipping point or the novelty of the risk? So there's two issues that make this question a little bit hard

to answer. The first is that California is historically underpriced, as we talked about earlier. So the average home insurance cost premium in California is only about $30 more than the national average. And again, this is 2021 data, so it's probably moved a bit. But that is kind of interesting. It demonstrates to Tracy's point earlier that California is more behind, whereas in Florida, it's more like $2,400. So the first thing is the gap between. between what California is charging and where insurers want to be is so vast that it's a little bit of a little bit harder thing. On top of that, I do think fire is harder to model. A lot of the work modeling it is around these topographical models, right?

So where are you relative to the wind? Where are you relative to the hills? Where are you relative? And I think there's definitely a lot of work still to be done there. But right now, it's a little bit hard to tell how much, whether the margin really is on just getting the price right or the margin is on better. modeling. But either way, you come back to Tracy's word of hardening the house, hardening the house is going to make a big difference. Oh, I would have thought for California, maybe it's drought conditions or something like that, where I guess 2023 was a historic

drought in that state and then flipping into 2024, I think we've seen a historic amount of rain. So maybe the hope was that fire premiums would start to come down, but I guess that's not the case. That's never the case. And price never goes down. It could be. I mean, we've seen this again, in Florida, you see this like premiums went way up, right? 10 years ago or 13 years ago, we hit a peak of people moving into the public option, came down, come back up. I think with California, it's a little too early to know. You mentioned people going into the public option.

Do insurers in places like Florida see that public option as a competitor to their business? Yes, but most of the time the state's set these up so that you have to prove that you couldn't get insurance. And that's obviously ends up being a price question as well. And so, for instance, I believe in Florida, the rule is, if a Florida carrier is willing to quote you within 20% of the citizens price, the public price, then you no longer become eligible. So that's how they manage it. So the states generally don't want to be in this business. And so they try to set up situations where citizens is or the fair plan in California is an insurer last resort rather than a competitor. Just out of curiosity from the

perspective of like a startup tech forward insurer, how do people believe you that you'll pay out? I mean, you know, it's like companies I've heard of all state or AIG or whatever. It's like, yeah, they probably have the money and it's good. Kin comes along. And, I don't know what it is, and maybe it looks like an app or something like that. Like, is there an FDIC equivalent of insurance where it's like, okay, they have that FDIC stamp, so I feel comfortable that they'll, like, hold my money? Like, how do you, how is that a step? Yeah.

So there's not an FDIC, but it is, it is highly regulated, right? And it's a combination of insurance regulation and then rating agencies. And so there are insurance-specific rating agencies. And so that's why if you actually pay attention to the insurance ads that you'll get, they'll say, you know, rated by AM Best or rated by Demotech, which is the sort of predominant Florida-specific rating agency. But going back to the first part of Joe's question, how do you convince customers that you're going to pay out? Because this seems to be the focus of nearly every insurance commercial in existence. And insurance is also still one of the industries where word of mouth actually matters.

So people will say, I had a good experience with this insurer when I was filing my claim. You should go with it too. How do you go about having that discussion with people for an industry where the incentives are not necessarily aligned? The insurer wants to make money and the customer wants to get as much as they can out of putting their money into premiums. Yeah. So I think you hit the nail exactly on the head, which is the dynamic is actually less about the financial strength and more about the customer experience. And that's where, you know, for us, we put a lot of effort into this idea of how. How do I give people the customer experience that when they come to us with a claim, they actually feel satisfied.

Now, naturally, customer satisfaction post-claim always drops. That's just like a rule of life, but by how much? And so I talked about like this thing about people left their homes after Ian. And we sent them text messages that said, here's an aerial image of your house. We're sorry to tell you that your roof is destroyed. Would you like to start your claim now? an incredibly positive experience for someone usually. The other dynamic here is just, you know, within Kin, we actually did it as a capital structure issue as well. So Kin uses what's called a

reciprocal. So the carrier itself is a non-profit owned by the policyholders. And then the technology company is what's called an attorney in fact. So the technology company is managing the pricing, the underwriting the consumer response. But the carrier itself, the risk, is all born as if it were a mutual. So we have done some interesting things. And that's why people like mutuals in the insurance industry. And so the carrier pays a fee, presumably, to the technology company. Exactly. As you mentioned, what was the peak year for Citizens 2011? Yeah, 2011. So it sounds like, even though there's a ton of focus on what's going on in Florida right now, what's going on in California, et cetera, that it's not necessarily a death spiral dynamic. That we,

have these crazy moves, but it doesn't mean they happen in perpetuity and that the nature of the business is such that you could just have years where things swing wildly. Yeah, that's right. I mean, unfortunately, insurance does have a little bit of this boom and bust dynamic. And that's why, you know, when we think about it, you know, when we're sitting in the boardroom, we're talking about strategy from the perspective of insurance. It's all about getting the price right. So you've been talking a lot about that boom bust cycle. And in some respects, that makes a lot of sense, because you're dealing with nature and extreme events within the weather or the climate. And so you could see how one year will be terrible and then the next year will be bad. And the insurance

industry is kind of trying to catch up or react to those events all the time. But is there stuff that could be done to try to smooth that boom bust cycle? So from the perspective of the actual insurance carriers that are dealing with homeowners, that's actually their core mission, right, is that there's going to be a little bit of a boom and bust cycle when you think about what's capital market's appetite to buy climate risk? And similarly, there's going to be bad years and good years when it comes to the question of what's the weather going to be like, what's the hurricane? And the whole point of insurance is to act as the buffer between those things. And so even though I talk about this boom and bus cycle, that's really more about access to capital,

in pricing, and it is the role of both insurance regulators and insurance companies to keep that customer interface smooth. So that's why you see a lot of pressure on both sides, but it comes out in price, right? It comes out in how do we serve our customers and then increase the prices as necessary to make it actuarially sound? And that's really the whole mission of insurance, but it puts a lot of pressure on both sides. Amias Garrity, thank you so much for coming on AdLOTS. That was fascinating. My pleasure. That was our conversation with Amayas Garrity, partner at QED Investors. And now we are on to our second guest. We're going to be speaking with R.J. Lehman. He is the editor and chief for the International Center for Law and Economics. R.J., thank you so much for coming on all thoughts. Thank you for having me. Why don't you tell us a little bit, I guess, why are we telling you, what is your background and sort of like,

your work and understanding the sort of regulatory environment for home insurers. Sure thing. My background is I was a journalist. I was a business journalist like y'all. There's hope for us. There's hope. Insurance was my beat. And I recommend it to anyone who is considering going into financial journalism. Insurance is the best beat. It touches everything. And although there are parts of it that are dry, you have the greatest panoply of potential. objects to expound upon. So I was a journalist. I entered think tank land back in 2012. I co-founded a group called the R Street Institute with Eli Lauer. Initially, R. Street was overwhelmingly insurance focused. It is diversified over the years. I led their insurance program as long as I

was there, which was until late 2020. Most notably, I produced for them an annual report card of the 50 states with respect to their insurance regulatory environment, ranking who was doing a good job, who was in need of improvement. California in particular was always near the bottom because of the system in California. Florida, over the years, had been, by the time I left R Street and stopped doing that report card, had been creeping up from the very bottom to towards the top, but they've certainly had some challenges in the past few years. So one thing I always wonder when we have these insurance discussions, I think there's a tendency to look at the current system and feel like it was inevitable. And this isn't just regarding insurance, but a lot of things in the financial system. But how is it that we

ended up in a place where insurance premiums are regulated, especially in places like California and Florida. And we have this mix of, like, private insurance companies, but also, again, in places like Florida, a public backstop. So why are they regulated goes back to basically antitrust law? Just after World War II, there was a famous Supreme Court case that determined that insurance was interstate commerce. The Congress responded by passing a law called the McCarran-Fergson Act that acknowledged that case and acknowledged that it was interstate commerce, but nonetheless left it to the states to handle regulation of the business of insurance. And insurers, particularly back then, used to file rates collectively. The reason this was an antitrust concern was because they used

underwriting bureaus where they shared data because no one insurer was large enough to know what the correct rate should be. And that was collusion. And so the states initially just accepted or rejected rates from the industry as a whole. And individual insurers only differed in how much they charge for marketing expenses and things like that for their agent force. That system kind of broke apart by the late 70s when insurers started, especially the larger ones in the personal lines, which is home and auto, basically, started having enough data on their own to make credible actuarial projections

without using a rating bureau. And that's when you started to have actually more complicated regulatory systems, because rather than just accept or reject a rate for the whole industry, you had to look at each individual company's filing. And so initially, what most states did was leave it to the market in most cases to determine what the best rate would be. But some states in the AED started having issues with rates climbing up. There was concern about, especially in auto, more than homeowners. there was concern about profiteering and gouging. And so some states responded by having a more intense, what's called prior approval regulatory system.

California did this in 1988 by a ballot initiative called Prop 103. Florida does not have the same prior approval system as California, but what Florida was challenged with was after Hurricane Andrew, a number of companies simply had not been charging enough and were rendered insolvent, especially regional. and domestic companies. Some of the larger companies want to get out of the state altogether. Florida responded by creating these entities, what are called residual markets, insurers of last resort.

Florida is kind of unique in two respects. One is most states do have some kind of residual market for auto and for home, but it's usually like an assigned risk pool. If you can't get coverage, then you will be assigned to an insurer. And those assignments will be made based on, insurer's overall market share. In Florida, you have two entities, the Florida Citizens Property Insurance Corporation, which is a freestanding homeowners insurer, capitalized by the state, backed by the state, it competes in the market, and the Florida Hurricane Catastrophe Fund,

which is a state-backed reinsurer. There's no other state that has anything quite like that. So the reinsurer, every insurance company doing business in Florida has to buy their first layer of reinsurance from the state itself. And that was both because there was concern that reinsurers were taking excess profit, but also because reinsurance rates can fluctuate wildly. And so the idea was to try to make it a little bit more stable. Two things. A, I like that you mentioned that everyone should cover insurance. because I think both Tracy and I have talked about this. Like, people talk about banks all the time, Wall Street banks, et cetera. And like, it is sort of remarkable, generally, how little coverage there is of insurers and what they're doing.

It's also the essence of finance, right? Like estimating and pricing risk. And then the other thing I think that's really important that you mentioned here is it's funny that like there's, I don't know, it's funny. But, you know, a lot of the concern right now is about pricing too high and price gouging and profiteering. But pricing too low is also very, as you say, problematic because you don't want someone, an entity coming in and taking tons of market share and then not having the capacity to pay out when the hurricane hit. So, you know, you mentioned that as part of your former job, you would create these rankings of each of the state's insurance. What goes into that ranking? What makes for a good or a bad in your view?

And I think maybe, you know, Arstreet is sort of a, you know, free market bent organization. But from your view, when you're creating these rankings, what constitutes a good or a bad insurance regime? So my perspective was that there were certain tasks that it was important for a department to perform. It wasn't seeking no regulation. The two most important were solvency, doing solvency review and the other is consumer protection. I mean, it is certainly true that in the marketplace, some consumers are abused, some insurer. might give you the runaround and not pay claims timely and appropriately. And there's a role for a regulator to examine those cases.

So we tried to emphasize in our rankings those states that we thought were doing those two tasks in particular very well. And we would ding states for mostly price regulation. Because solvency regulation is kind of a separate regime than price regulation. if there is a competitive market, then I do think the market is the best price regulator. And insurance historically, in fact, there has long been greater problems of companies seeking market share. And so underpricing their product to gain market share, maybe to sell you other products. Maybe you sell auto and then you also tie in homeowners and life and possibly some banking services.

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to let the salt cure whatever ails you. Halifax could be the break that finally leaves you feeling like you took one, as long as you're willing to rub salt in your wounds. Discoverhelifax.ca. First of all, what information are they working from when it comes to figuring out what's a reasonable or acceptable price for insurers to actually charge? And then secondly, like, how do they come to that judgment?

Like, where does the information come from and then what strikes them as a reasonable premium increase? Yeah. It is overwhelmingly past lost data. In all states, that's true. The states do differ in what factors they will allow a company to consider. And in the mix of factors, how much weight you can place on any single one. I mean, to give you an example, race is not permitted to be used anywhere. That wasn't always true.

there was a time when it was an actual factor that insurance companies and various kinds of insurance used. You cannot use race anywhere. It doesn't matter if it's actually credible or not. You certainly lost costs, things like the rising cost of both labor and replacement parts for auto or materials for homes are things that you can reflect in your rates. And in homeowners, in particular, over the last 25 years or so, many companies have started using. using off-the-shelf catastrophe models. So a catastrophe model takes information about climate and residential patterns and projects forward

what the maximum probable loss might be. That's different than a pure loss cost approach where you just look at what you paid in the past. So in California, that's particularly relevant because Prop 103 does not allow you to project forward. You can only use, what is your average, that you've paid out over the past 20 years in determining what your rate should be. Well, in 2017 and 2018, California had these massive wildfires.

So the industry from 1991 to 2016 in the state of California had made $10 billion total in underwriting profits over that 25-year period. In 2017 and 2018, they lost $20 billion. So they more than doubled all the money they had made in the prior 25 years. So if the future doesn't look like the past and climate change and residential patterns are both reasons that the future might not look like the past, not being able to project forward is a real problem. So is California the only state that doesn't allow for these sort of more forward-looking

projections of how damages might change? California is the only state that bars the use of catatine. astrophie models altogether. Other states do have controls on how much weight you can place on cat models and crafting your underwriting and rate setting. Florida is kind of unique in that it actually, the state created its own cat model. So not only does it have a state-backed homeowners insurer and a state-backed reinsurer, it also has a state-back cat model, and it uses its cat model to judge the results of private cat models. So did you say that California was the 50th, it was the worst? It not always.

It depended on the year, but it was sometimes the worst. So we have seen these stories over the last couple of years about various name brand insurance companies saying we're leaving the state. So what is it? I mean, is it just, talk to us generally. Is it just about their inability to sort of use these cap models? Like, what is the environment or the situation that caused, I guess your rankings were legit if they're like now they're running out of it. Sure. I guess you're vindicated.

But overall, what is the situation that caused them to be ranked so low in your models or in your ranking and that now we see insurance fleeing the state? The reason California is different, it does have a prior approval system. It's not the only state that has that. It doesn't allow catastrophe models to be used. It doesn't allow anything to be used that was not specifically enumerated in this ballot initiative, Prop 103, that was passed 1988. There basically were no catastrophe models in 1980.

88, they were in their infancy. In auto, people weren't really using credit yet, which is now a common thing to use in auto insurance, and so you can't use it in California. Also, Prop 103 created this system called the intervener system, where private parties, consumer advocates, every time an insurer files a rate, whether it's an increase or not, is actually only somewhat relevant. But anytime an insurer files a rate, files a form, these private parties get to object. and you have to go through a hearing process to get that rate, which even if it's ultimately approved, that can take up to two years. So it is very inflexible system. And insurers have made due with it because California is one-fifth of the country, and so you don't want to exit

the California market unless, you know, the circumstances are really bad. But it is terribly brittle. you cannot change these rules without either a new proposition to be passed by the voters, and the voters are not going to pass something that raises their insurance rates, or the legislature by supermajorities in both chambers can make adjustments to Prop 103, but only if they, in the view of the court, forward the purpose of Prop 103. So you can't undo anything that's in the statute, but you can make tweaks. So there's been some effort in California over the last year, the insurance commissioner, recognizing that there's a problem, a serious problem of not having insurance available, has taken some emergency regulatory actions that would permit in some limited circumstances, things like being able to use cat models, being able to reflect the cost of reinsurance, which is another thing that Prop 103 doesn't specifically allow. But it's going to take the legislature taking action for any of those things to be permanent.

minute. So one of the things I always think about when we talk about insurance premiums going up and the regulatory regime that sort of limits them in places like California or limits those increases. So the idea of having expensive insurance is partly it's supposed to deter you from doing stupid things, right? It's supposed to shape your behavior to some extent. So when it comes to things like climate change, you're disincentivized from building a house in a place that's prone to floods or in a place that is now prone to wildfires. How do regulators balance that aspect of this entire question? Awkwardly. It's the short answer. Regulators are chosen in different ways in different states. So as you might imagine, ones that are directly elected, and there's about 11 of

those are probably most attuned to public sentiments as opposed to the nuts and bolts of, say, solvency. And so those who are appointed will vary. Some are appointed in kind of unusual ways. In the state of Florida, we have this weird system called the cabinet where the four directly elected executive officers have to vote together on who to appoint and also who to remove. So the Florida insurance commissioner is actually unusually insulated. If he has the vote of either the CFO or the governor basically cannot be removed. Flood, which isn't actually underwritten very much by private parties, it's mostly underwritten by the federal government, there is a direct relationship between where and how you build and the flood risks that are being generated. Wildfire,

is a little bit stranger because there are various tipping points. Like if I built more densely in a flood plane, I'm going to have more flood risk because there's more people there. There's more structures there. You're covering the ground. If you build more densely in an area of wildfire, initially you may be having more properties exposed to the risk, but after a certain point, you actually are reducing the risk because wildfire is generated in less dense places. In, in essence, it sounds silly, but you can choose to get rid of the trees. Yeah, if we pave over all of California, there will be wildfires. If everyone moves to a wildfire risky area, then the wildfire risk goes down.

It disappears. Yeah. So it's not correlated linearly in the same way with that risk as it is with flood. But obviously, there are things that you can do in terms of creating defensible space around a property, making sure that you don't have wood decks and, and, and, and, and, and, and, you know, wood roofs and, you know, fire retardant materials, sprinklers, et cetera, these can all contribute. But it's not as simple as saying, you know, charging more yields the more environmentally responsible solution, not necessarily. It depends on the particulars. That's extremely interesting. So Florida, you mentioned that it had over the years climbed up

the rankings. That being said, you know, we've all seen these headlines over the last couple year is just about these like eye popping insurance premium increases for homeowners in the state of Florida and increased dependence on citizens, the public option backstop. Why don't you explain that? So what did Florida do to prove its rankings? And yet, you know, still it feels like just intuitively and maybe the market justifies it, but it feels like there's a problem still. Take you back to 2006. Florida had just had in 2004, four. Four. major hurricanes, two category threes, two category fours, make landfall in one year. In 2005, they had Hurricane Wilma. That was also the year of Hurricane Katrina, which did massive damage

and kind of took the reinsurance markets for a loop. Florida was a basket case back then, and essentially any remaining major national homeowners insurers that were doing business in Florida left. Citizens became the largest, not only the largest insurer in Florida, but one of the top 10 in the country. So Charlie Christ was elected in 2006, been a Republican on an insurance reform platform, the state legislature in early 2007, passed this platform, which included rolling back rates, making it much easier to join citizens, doubling the size of the Hurricane Catastrophe Fund. And this was basically a bet that in Florida, no realistic assessment of what Florida did in 2007 would say that the state, if it got a major hurricane, could finance those costs

because it put enormous costs on potential costs on the state. But Charlie Crist, and he said this in congressional testimony, made the bet that the federal government would pass a national catastrophe fund that would bail out Florida, if need be. So what Florida did in the intervening years and why they were improving was they did allow rates to rise. They shrank the size of citizens significantly. The cat fund was put on better financial footing. But what allowed this to happen was a very lucky streak, which is that between Wilma in 2005 and Hurricane Irma in 2017,

Florida had no major hurricanes. And the historic record doesn't show that ever happening before. So the market's got much more solid just based on good luck. more or less. There were still problems, notably the litigation environment in Florida deteriorated significantly. It's a very attractive place for the trial bar. As you can see, if you drive our hideways and see many billboards advertising the services of our local trial attorneys, and I have no objection to them. But in the last decade and in half, 9% of all homeowners insurance claims originated in the state of Florida, but 80% of all homeowners insurance lawsuits.

Oh, that's funny. You know what? I quoted that exact statistic to Joe yesterday after we recorded our conversation. But yeah, that is a stunning statistic. It is. It is. So we weren't quite as healthy as probably we should have been given our good luck. But that lucky streak did allow capital to accumulate and for a more robust market to evolve. That market still always had problems because it was reliant heavily on companies that only do business in Florida and only wrote homeowners. So not diversified at all. And they were relatively small, relatively thinly capitalized. Then Irma came in 2017. We had Michael in 2018. We had Ian in 2022. We had Dalia last year. And those were just the knockout blow for like what was for these thinly,

we've had a dozen that have gone in solven in the last couple of years. There are many more that are teetering. There needed to be a significant adjustment. And that's what you've seen is rates have risen significantly. Now the average homeowners rate in Florida is estimated to be about $6,000 a year, which is probably double the next state. And I'm not even certain what that next state would be. It's been wrenching. I do think we're to a better place, at least in terms of availability, that right now, insurer, looking at the Florida market, would say those rates are attractive. And if I have a clean balance sheet, maybe I'll start writing business there, even if I haven't in many years. But it's going to be a painful adjustment for sure. recent steps in Florida aside. And I realize I'm talking very generally about insurance in the U.S. and it varies state to state, as you pointed out. But if we have a situation where insurers are pulling out of markets because they say they can't raise premiums because of these regulatory limits, and meanwhile,

the risk of catastrophic events is increasing. And then what ends up happening is people lean on either, you know, state or federal insurance, whatever backstop might be in place there, why not cut out the middleman and just have a public insurance entity? Well, as we were sort of alluding to earlier, if you underpriced the risk, and that would be the assumption here, right, is that the reason that private companies would not write this business, but the government entity would, is because they are underpricing the risk, then that is just shifting the problem to the taxpayer. And you can make that decision. Sure. That's a policy decision that has been made in many contexts. It's certainly the way the crop insurance program works is that it's a subsidy. It's an explicit subsidy for our farmers.

Whether this should be something subsidized, whether building beach homes is something that we want as a matter of public policy to subsidize. I don't, but, you know, someone can make that case. it's a democracy. Someone believes that. And so, you know, that's where we are. Is the Florida's stayed-backed reinsure? Is that re-reinsured at all? It's reinsurance all the way down.

Re-reinsurance does exist, right? Yes. And a bit is the answer. There's largely through catastrophe bonds that the cat fund has issued, and those are a form of reinsurance. There isn't much facultative. or treaty. I'm not aware of any currently with the Farley-Cat Fund, but I will admit that I haven't looked at their balance sheet in a couple of years. What is your prescription for both states would be?

It sounds like California has to do much more, but it does seem like Florida has issues with the fact that it has to be a solely, you know, these sort of undiversified companies definitely seems like an issue. Like, what would be the ideal reforms we're looking at? In both cases, I think the ideal reform is to bring down the level of risk, which means shifting investment to the front end to mitigation. And both states do that to some extent. Florida could do much more in helping to raise properties in places where they're at risk of flood, ensure that the building codes are appropriately measured to the size of the risk. California's regulatory environment ultimately will have to be a thing that the people of California are leveled with about what is realistic

and possible over the long term. And that's a democracy challenge because no one wants to pay more. To be fair, in California, they do actually pay less, although they in Hawaii are the most expensive states, certainly for the cost of housing, they pay less than one would predict. And that is a function of the regulatory environment. In Florida, that's not true. In fact, if anything, it may be current rates. We're probably peaking out at a level that will naturally come down with more competition. But we'll have to wait and see on that.

RJ Lehman, thank you so much for coming on Oddlods. That was great and clarified a bunch of things for us. So really appreciate you taking the time. Absolutely. Thank you. Tracy, those conversations cleared up a lot of things for me. Let's just start there. Yes, I have been wanting to dig a little bit more into the Florida fraudulent roof replacement schemes for a while. That was really fun. That was really fun. There were so many interesting things.

First of all, like, I think one thing that helps crystallize for me the huge surge in insurance premiums is A, not only the increase in climate risk, but B, just the surge in home values themselves, because it doesn't matter, as we talked about, like you might have bought your home in the 1980s, but to replace it, you have to replace it at $2024. And so if you are in a boom state, which many people have been, particularly if you've been in Florida or California over the last several years where home prices have gone nuts, it just makes sense just sort of mathematically right there that your premiums are going to go up. Absolutely. I also thought the differentiation in the way some of these disasters happen is also interesting. So the idea that forest fires are

maybe a little bit different in nature to something like a hurricane. They wipe out a lot more. They can occur sort of unexpectedly. I mean, obviously, you can determine how dry the weather is what the fire risk conditions are at any one time. But you don't necessarily have a good handle on whether a single power line is going to come down or whether, I don't know, a crazy person starts a fire on purpose or a camper starts accidentally burning brush. Then, I guess, it's factoid about like fire risk where it's like if you build in an area in which there is fire risk, like, okay, maybe your insurance premiums go up. But if everyone builds in an area where there's fire risk and you just clear cut all of the trees, then the risk goes down, which is sort of, I guess it's

funny in some way, not necessarily funny. Ha ha, ha, but funny perverse. I think also just in, you know, talking with RJ, the sort of the diversity of state models. And so the fact that we really do have in every state has an insurance commissioner, and every state has its own rules about how pricing works, I think contributes to the difficulty understanding this market. Absolutely. And also just the cyclical nature, the sort of boom-bust cycle of insurance, it feels like, and the degree to which some of the capital behind the insurers, so the reinsurers is kind of cyclical. There are so many moving parts here. I'm really glad that you brought up the reinsurers part because, you know, one of the things,

and we talked about it a little bit on our recent inflation episode with Omer and Skanda, is these sort of backdoor ways in which higher Fed rates can contribute to higher inflation. And so here this sort of a bias, as he explained it, it's like the Fed hikes rates, the reinsurers take losses on their bond portfolio. The reinsurer then has less money, less capacity to back home insurers. So then they hike up their rates, and the home insurers hike up their rates. and the home insurers hike up their rates. And so this sort of very backdoor way in which higher rates almost linearly flow through

right to higher consumer prices. Yeah. And no one ever really talks about it except us. All right. And the insurer and the. And the dedicated insurance reporter who probably talked about this, but don't get enough attention. Yes.

That is a very good point. All right. Shall we leave it there? Let's leave it there. This has been another episode of the All Thoughts podcast. I'm Tracy Alloway. You can follow me at Tracy Alloway. And I'm Jill Wisenthall.

You can follow me at the stalwart. Follow our guests. Amias Gerrity. He's at Amias M.G. And R.J. Lehman, he's at Ray Lehman. Follow our producers, Carmen Rodriguez at Carmen Erman, Dashobn, at Dashobatt, and Kail Brooks at Kilbrooks. And thank you to our producer, Moses Ondom.

And for more oddlots content, go to Bloomberg.com slash oddlots, where we have transcripts, a blog, and a newsletter. And if you enjoy oddlots and want to chat with fellow listeners, 24-7, check out the Discord. Discord.g.g. And don't forget, if you like Oddlots, if you want more insurance content, then please leave us a positive review

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