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Sat next to a re-insurance guy on a plane and took the opportunity to ask him why rates for almost everything have been skyrocketing over the past 15 years or so.
I’m not saying we aren’t being g milked as consumers, which seems to be the default position of most industries, but his explanation made lots of sense. In a nutshell, insurance companies used to be able to spread their risk predictably throughout the country…i.e. fire season out west, hurricane season in the south, Midwest tornadoes and hail, etc. Increasingly they are unable to do this because the risk has moved to everything, everywhere, all the time.
He used my city as an example. We used to have a very weak tornado once every few years, at most. Now we are seeing at least one strong tornado that kills people and causes lots of damage almost every year. This is going on with almost all risks he said.
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