When natural catastrophes strike, disaster insurance coverage can be a lifeline for affected homeowners and communities. However, many insurance companies are pulling out of markets prone to hurricanes, wildfires, and earthquakes, leaving residents vulnerable. Why?
In this article, JS contributor Don Brown tells us that, in large part, it’s due to a phenomenon called policy-driven uncertainty, where unpredictable or reactionary regulations make investing in catastrophe insurance too risky.
In “The Capital Consequence: How Policy-Driven Uncertainty Drives Capital Flight in Catastrophe Insurance Markets,” Don Brown explores how regulatory policies in catastrophe-prone areas like Florida have driven capital away by creating uncertainty. Using economic theories, historical context, and case studies, Don’s white paper provides a roadmap for policymakers to create stability and attract much-needed capital back to these high-risk markets.
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