Sunday, December 03, 2006

Insurance Industry as Environmental Activist

The Washington Post has a good story insurance adjustments for climate change. The author could have done a better job of parsing out how much this is actually focused on climate change and how much is just a reaction to the insurance industry getting pasted by Katrina (or whether and to what extent those are actually different stories). I'm also a little curious as to why the insurance industry refuses to offer insurance at all to high risk areas rather than just raise prices to cover the increased risk. Risk markets are, in general, pretty interesting stuff. I'm looking forward to my insurance course next semester.

Having recently visited the Outer Banks in North Carolina, I find it a little shocking that the insurance industry is just now waking up to the fact that it is a disaster waiting to happen. It is essentially just a big sand bar sitting off the coast that people have built houses on. I can't say I have a lot of sympathy for people who view one of those houses as a good vehicle for retirement investment. Might as well take that money to Vegas...

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