As someone who has spent their career in the insurance industry, I can’t begin to describe how hard I geeked out over this one. Well written JVL.
Historically speaking, the government is already involved in insuring catastrophic risks. A good example is the national flood insurance program but a more recent one is the Terrorism Risk Insur…
As someone who has spent their career in the insurance industry, I can’t begin to describe how hard I geeked out over this one. Well written JVL.
Historically speaking, the government is already involved in insuring catastrophic risks. A good example is the national flood insurance program but a more recent one is the Terrorism Risk Insurance Act (TRIA). After 9/11, the insurance/reinsurance industry recognized that it couldn’t withstand another 9/11 style attack with the related level of losses. The federal government stepped in and agreed to reinsure terrorism losses if companies opt in to TRIA coverage when they buy their commercial insurance. It’s a great example of the private sector and the government working together. Yes, it socializes the losses but there are some risks too large for the insurance market to handle on its own. Fires in California and hurricanes in Florida are likely at this level and may require a TRIA style arrangement. The quickest way to get communities back on their feet is to provide certainty. There is definitely a private/public role here.
As someone who has spent their career in the insurance industry, I can’t begin to describe how hard I geeked out over this one. Well written JVL.
Historically speaking, the government is already involved in insuring catastrophic risks. A good example is the national flood insurance program but a more recent one is the Terrorism Risk Insurance Act (TRIA). After 9/11, the insurance/reinsurance industry recognized that it couldn’t withstand another 9/11 style attack with the related level of losses. The federal government stepped in and agreed to reinsure terrorism losses if companies opt in to TRIA coverage when they buy their commercial insurance. It’s a great example of the private sector and the government working together. Yes, it socializes the losses but there are some risks too large for the insurance market to handle on its own. Fires in California and hurricanes in Florida are likely at this level and may require a TRIA style arrangement. The quickest way to get communities back on their feet is to provide certainty. There is definitely a private/public role here.