What's Driving Price Inflation? Among Other Things, Uninsurable Climate Risk; Brookfield Reinsurance Abandons 9 States

Ed. - Links at original.

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Ed. (Fed Chair Jerome Powell) has recently found himself in a firestorm of controversy, both from young climate protestors who heckle some of his speeches to enact climate policies and from MAGA and the minority GOP Senate, which accuse him of implementing climate change policies. Though targeted by both since he was confirmed, he recently made news when he spotlighted an overlooked contributor that persistent inflation is due to climate change, creating an increasingly uninsurable market.

In congressional testimony, he emphasized that home and automobile insurance losses have increased for the last few years, as any homeowner or renter should know that insurance costs have surged. Powell emphasized in congressional testimony that various types of insurance, including home and car insurance, have experienced substantial surges in recent years. That, he says, has impeded the Fed from meeting its 2% inflation target.

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Forbes writes on the real estate market and climate change: "There continues to be a contentious debate, even now, as to the existence of climate change. But there are certainly marked changes taking place in the climate and the world in which we all live. These developments are having an impact in the real estate market as well, touching every aspect of the industry, from rising prices to the decline in popularity of specific regions. Higher temperatures lead to more extreme weather systems and an increase in large-scale incidents, from massive hurricanes to wildfires, from gale-force storms to flooding. Where the real estate market is concerned, these incidents are making it tougher to manage the costs and condition of property on a yearly basis."

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According to Newsweek's reporting, Brookfield Asset Management Reinsurance Partnership is pulling out of nine states: Arkansas, California, Colorado, Louisiana, Minnesota, Oklahoma, South Carolina, South Dakota, and Washington. The reason? Uninsurable Peril. In Florida, major Insurance companies have already left. They are leaving homeowners dependent on smaller, less dependable companies. The Washington Post wrote on a study led by researchers at Harvard University, Columbia University and the Federal Reserve Board, is yet to be peer-reviewed but was published on SSRN, a website for scholarly papers, in December. It states that new insurers which are replacing the traditional ones in high-risk areas are "less diversified, hold less capital, and 20 percent of them become insolvent.". Researchers noted a " lax insurance regulatory environment."

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https://www.dailykos.com/stories/2024/4/17/2229138/-Fed-Chair-Jerome-Powell-reveals-the-cause-of-persistent-inflation-economy-is-becoming-uninsurable?pm_campaign=front_page&pm_source=trending&pm_medium=web