4 ms·

Yet those in the know keep building there. Weird isn’t it?

mattnewton 5mo ago
They are betting they can sell the bag before the music stops.
estearum 5mo ago
Uhh... "those in the know" are the actuaries and if you were to take away the subsidies provided for homeowners and developers to deny basic mathematical facts, the entire area would be totally unbuildable already.
- incompatible 5mo ago
  They can still get insurance for flooding?
  - estearum 5mo ago
    Yes with the help of US taxpayers. https://www.floodsmart.gov/ https://www.floodsmart.gov/
    - incompatible 5mo ago
      Funny, I thought the USA was paranoid about this kind of socialism. I guess they are on the hook for some big and inevitable payouts.
      - estearum 5mo ago
        USA loves socialism in most forms that benefit landowners
- misiti3780 5mo ago
  i work in insure tech, in the E&S space, which is where all of the flood and wind polices gets placed. Actuaries have nothing to do with it --- the cost of hurricane insurance comes from Moody's RMS and Verisk AIR, the only two CAT models the carriers and re-insurance companies use. Actuaries price the non-cat risk.
  - estearum 5mo ago
    This is mostly a pedantic point that it's not actuaries doing the pricing, but a different set of risk analysts using a different suite of tools, right?
    - misiti3780 5mo ago
      It's two monte carlo models that get refreshed every few years.
      - estearum 5mo ago
        [Edit] The following comment can be read very snarkily but that is not the intention. I'm legitimately interested + curious: Very interesting! Does it affect the point that insurers (even if not actuaries) put a high price on this risk and that the price is subsequently suppressed by government insurance subsidies?
        misiti3780 5mo ago
        Local governments have obvious incentives to encourage building, but the state of Florida itself does subsidize flood and hurricane insurance. If you own a house or building in Florida and have a mortgage, you're required to carry it. Here's how a policy gets priced: You go to a retail broker with your info. They pass it to a wholesaler, who puts the submission out into the market for quotes. Any carrier or MGA that wants the business prices the CAT and AOP (non-CAT) portions separately. Actuaries build models for the AOP side, while Verisk and Moody's model the CAT portion. Those two numbers get added together, plus some fees — and that's your annual premium. From there, the insurers buy reinsurance on their portfolios. The reinsurers run those same models, do their magic, and come up with their own price. Just an example, because no major hurricanes have hit the south east in a while, premiums are down 30% right now. All of the insurance companies are getting squeezed.

They are betting they can sell the bag before the music stops.

Uhh... "those in the know" are the actuaries and if you were to take away the subsidies provided for homeowners and developers to deny basic mathematical facts, the entire area would be totally unbuildable already.

incompatible 5mo ago
They can still get insurance for flooding?
- estearum 5mo ago
  Yes with the help of US taxpayers. https://www.floodsmart.gov/ https://www.floodsmart.gov/
  - incompatible 5mo ago
    Funny, I thought the USA was paranoid about this kind of socialism. I guess they are on the hook for some big and inevitable payouts.
    - estearum 5mo ago
      USA loves socialism in most forms that benefit landowners
misiti3780 5mo ago
i work in insure tech, in the E&S space, which is where all of the flood and wind polices gets placed. Actuaries have nothing to do with it --- the cost of hurricane insurance comes from Moody's RMS and Verisk AIR, the only two CAT models the carriers and re-insurance companies use. Actuaries price the non-cat risk.
- estearum 5mo ago
  This is mostly a pedantic point that it's not actuaries doing the pricing, but a different set of risk analysts using a different suite of tools, right?
  - misiti3780 5mo ago
    It's two monte carlo models that get refreshed every few years.
    - estearum 5mo ago
      [Edit] The following comment can be read very snarkily but that is not the intention. I'm legitimately interested + curious: Very interesting! Does it affect the point that insurers (even if not actuaries) put a high price on this risk and that the price is subsequently suppressed by government insurance subsidies?
      - misiti3780 5mo ago
        Local governments have obvious incentives to encourage building, but the state of Florida itself does subsidize flood and hurricane insurance. If you own a house or building in Florida and have a mortgage, you're required to carry it. Here's how a policy gets priced: You go to a retail broker with your info. They pass it to a wholesaler, who puts the submission out into the market for quotes. Any carrier or MGA that wants the business prices the CAT and AOP (non-CAT) portions separately. Actuaries build models for the AOP side, while Verisk and Moody's model the CAT portion. Those two numbers get added together, plus some fees — and that's your annual premium. From there, the insurers buy reinsurance on their portfolios. The reinsurers run those same models, do their magic, and come up with their own price. Just an example, because no major hurricanes have hit the south east in a while, premiums are down 30% right now. All of the insurance companies are getting squeezed.