Boomhauer: Property insurance prices will rise and carrier equity returns will suffer.
Dr. Judson Boomhauer · How climate disasters are shaping insurance markets · Apr 10, 2025 · at 6:46
Dr. Judson Boomhauer discusses the economic fallout of recent climate disasters on property insurers and their investors.
0:00 / 0:11exact quote · 11.9s
720p mp4 · rendered on demand · StarZero watermark
“What is likely in the short run is that prices are going to need to go up. Returns to the equity investors in these companies that, that have equity investors are not going to be good.”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Dr. Judson Boomhauer
Boomhauer: Major property insurers are not expected to fail near term
“We're not at the point yet where You know, we expect major failures of property insurers.”
Boomhauer: Proprietary insurer catastrophe models are impossible for objective third-party evaluation.
“Almost all of the models that are applied by insurers today are developed by for-profit private companies. It makes them all a little bit of a black box. It makes them all basically impossible for objective third parties to evaluate”
Boomhauer: Rising frequency of outlier weather events stresses insurance markets
“We've I think, and it's also not so much Any individual exceptional event, it's the rate at which the exceptional events are coming, right? We're having a lot of them things that used to be complete outliers are happening with greater and greater frequency, an…”
Boomhauer: Insurer market withdrawals are ad-hoc reactions to imperfect disaster data
“There is also absolutely a sense of kind of reactiveness here that something bad happens and let's get out of the place where the bad thing is happening. And that I agree that there's this ad hoc, a little bit of an ad hoc sense to it, but fundamentally I thin…”
Boomhauer: Limited liability creates a moral hazard for insurers against buying reinsurance.
“One question that you might ask if you're an insurance company is, well, reinsurance is expensive and difficult to buy. Why should I care if I, as a company can't pay my claims in a given year, then I'm going to go bankrupt and that's terrible for my policyhol…”