Florida Invests in Catastrophe

The Sunshine State is putting public pension money into risky bonds that transfer risk away from insurance companies.

BY JAMES BARATTA AUGUST 7, 2024

Florida is at the forefront of climate disaster, rattled by four major hurricanes since 2017 (Irma, Michael, Ian, and Idalia), which caused the deaths of almost 300 Floridians and resulted in hundreds of billions of dollars in economic losses.

As flooding persists with regularity and warming waters facilitate increasingly severe hurricanes, the state has pursued a deregulatory approach to resuscitate its death-spiraling property insurance market. Not only have carriers fled Florida in droves, but numerous others have become insolvent amid climate catastrophe.

In a bid to entice insurers to continue providing property insurance coverage, Republican Gov. Ron DeSantis and the Florida legislature have implemented a series of reforms aimed at protecting consumers and reducing insured losses by clamping down on social inflation, the name the industry gives to perceived cultural factors that drive increases in monetary awards in litigation.

The insurance industry and its captive regulators have been quick to lay the blame on fraudsters, unscrupulous contractors, overzealous lawyers, and even gullible juries for burdening consumers, the state, and insurers with superfluous costs.
https://prospect.org/environment/2024-08-07-florida-invests-in-catastrophe/