Senate committee investigating Florida’s state-backed home insurance company as private insurers flee

An aerial picture taken on September 30, 2022 shows the only access to the Matlacha neighborhood destroyed in the aftermath of Hurricane Ian in Fort Myers, Florida.

(Outlet: CNN Business) The US Senate Budget Committee is launching an investigation into whether Florida’s state-backed home and property insurance company has enough money in the bank to withstand future disasters, as scientists warn warming oceans and sea level rise are making storms more destructive. Fears about a possible federal bailout are not unfounded, Benjamin Keys, a real estate professor at the Wharton School of the University of Pennsylvania, told CNN. “They absolutely have a reason to be concerned; the exposure is enormous,” Keys said. “1.3 million of the riskiest policies in the riskiest state, full stop. It’s correlated exposure – if a hurricane hits your house, it hits my house.”Read More

The Value of Corporate Purpose

A wiper clears soap off a sudsy windshield, revealing a blue cloudy sky.

(Outlet: Harvard Business Review) Instead of conceiving of the firm as a collection of managers writing contracts specifying roles and tasks and then struggling to get workers to comply, we need to develop theories that better match the organizations we lead, study, advise, and report on, argues Witold J. Henisz, Vice Dean of the ESG Initiative at the Wharton School.Read More

Gulf Coast residents grapple with home insurers as climate disasters worsen

Debris sits outside of damaged homes after Hurricane Delta made landfall in Holly Beach, La., Oct. 11, 2020.

(Outlet: ABC News) As climate disasters grow more costly, insurers aren’t paying policies. “The insurer’s goal is to collect more in premiums than they pay out in claims,” said Ben Keys, University of Pennsylvania Wharton School of Business professor of real estate and finance. “We’re seeing higher costs of materials, higher costs of labor, and those are growing faster than inflation.”Read More

Fire prone California homeowners left behind as insurance companies drop coverage

A home burns as the Camp Fire rages through Paradise, Calif., on Nov. 8, 2018.

(Outlet: ABC News) As climate change continues to cause disasters across the country, some people in the most high-risk areas that have already seen massive destruction say they are being left behind. Experts say the situation has been compounded for a number of reasons, including insurers arguing that the risk of doing business there is just too high due to the elevated risk of wildfires and California laws that restrict how the insurance companies can price out their policies.Read More