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Idalia could become another multi-billion dollar superstorm


Hurricane Idalia upgraded to a Category 3 storm Wednesday morning, bringing torrential rains and damaging winds of up to 125 miles per hour as it tracks toward the Florida coast. Gulf Coast officials in Florida, Georgia and the Carolinas have issued emergency warnings, as the region prepares for yet another “multi-billion dollar event for the insurance industry”.

Last September, Hurricane Ian, a Category 4 storm, hit Florida, causing nearly $100 billion in damage. Such disasters are becoming more common – and more expensive – every year, sending insurance costs skyrocketing for homeowners and businesses.

Insurance companies are still reeling from Ian. Some companies doubt they can continue to weather such storms, while others have limited their operations in the state. One of their main gripes: National regulations prevent them from raising prices for customers, they say, forcing them to say no to new policies.

Florida’s woes reflect a national problem, a situation that is expected to intensify as climate change triggers more extreme weather events. The Insurance Information Institute, an industry trade group, estimates that state P&C insurers have suffered cumulative underwriting losses of more than $1 billion over the past three years.

The picture is also bleak elsewhere:

  • State Farm, the nation’s largest insurer, said it would stop selling homeowners insurance in California, a state that has been hit by wildfires in recent years. Allstate also said it had stopped selling home and commercial insurance policies there, citing worsening weather risks and rising construction costs.

  • American International Group plans to cut home insurance sales in New York, Delaware, Florida, Colorado, Montana, Idaho and Wyoming after restricting new business in California.

Not everyone sees these markets as hopeless. The Florida insurance regulator has just approved Orion180 as the new insurer for the state. “We view Florida as an attractive insurance market for long-term profitable growth,” said Kenneth Gregg, the company’s founder and CEO. And Berkshire Hathaway has been betting big on the Florida reinsurance market this year.

One possible incentive: Premiums in the state have skyrocketed, with the average Florida homeowner now paying $6,000 a year. (However, this rise in premiums also drove down property values, causing more homeowners to forfeit their coverage.)

It seems likely that what is called a “protection gap” is widening. Last year, insurance covered only 60 percent of the $165 billion in total economic losses from weather-related disasters in the United States. This widening gap is becoming a major concern for federal regulators, who fear it leaves large swathes of U.S. homeowners and businesses vulnerable to risk. next super storm.

A decline in job offers could encourage the Fed. The Department of Labor said there were 8.8 million job openings in July, the lowest level since March 2021. Economists said that would likely be interpreted as a good sign from of the Fed, which will discuss further interest rate policy measures at a meeting next month. ; the central bank will also take into account employment data due out on Friday.

The White House names an initial batch of drugs that will be subject to Medicare price negotiations. Authorities have unveiled the long-awaited list of 10 drugs, which will be subject to a landmark new program designed to cut Medicare costs. Drugmakers have opposed the plan, including in court, and Republicans have criticized the initiative, calling it an excess of government power.

Military leaders take power in oil-rich Gabon. Officers claiming to represent the African country’s main security forces said they were nullifying the results of last weekend’s election, less than an hour after the incumbent president won a third term. A successful coup would mark at least the ninth military takeover in West and Central Africa in the past three years.

CNN is expected to name its next leader soon. Warner Bros. executives Discovery, the news network’s parent company, selected Mark Thompson, former CEO of The New York Times and director of the BBC, for the job, according to the Times. The move aims to restore order to CNN, which has been rocked by unrest, including the ousting of its last chief, Chris Licht.

Wednesday was the last day of Commerce Secretary Gina Raimondo’s visit to China, where she sought to promote trade between the two superpowers while standing firm on limits on technology exports imposed in the name of national security. American.

The Times’ Ana Swanson, who covers international trade and economics and who traveled with Raimondo, answered DealBook’s questions about the trip – as she traveled 215 miles per hour on a train from Beijing to Shanghai .

What is the state of mind, given the current tensions between Washington and Beijing?

The atmosphere is cautious but quite warm. It seems that the two sides are happy to talk again, after a very difficult period for relations between the United States and China during the “balloongate”. So there’s a sense of a thaw, but also an acknowledgment of how many difficult issues there are in the relationship and that American and Chinese interests are often fundamentally contradictory.

How does Raimondo manage to balance business interests and national security in her conversations with Chinese officials?

Raimondo focused on promoting business ties that have nothing to do with national security – such as skincare products, amusement parks and group tourism – but employed harsh rhetoric on technological controls and national security.

She didn’t say much about the large number of products that fall somewhere in between: things like cars, steel, and solar panels that are strategically important to the United States. Here, she has a more complicated mandate. Some American companies thrive on trade with China, while others are harmed or weakened by Chinese practices.

What, if anything, will this change in the future relationship between the United States and China?

Some describe this as a turning point in US-China relations. But Raimondo said on Tuesday that the direction of the relationship will depend on how well China follows through on things like improving its treatment of American companies. “Actions speak louder than words,” she said.

Marc Friedmana Sacramento real estate developer, expressing his doubts about the success of a group of Silicon Valley tycoons in their plans to build a dream city in Northern California.

Bitcoin jumped 7% on Tuesday on hopes that a favorable federal court ruling could pave the way for the crypto industry’s long-held dream of a new mainstream investment product tied to cryptocurrency.

Bitcoin was trading just below $27,500 on Wednesday morning, after breaking above $28,000 on Tuesday, its highest level in two weeks. Crypto bulls bought it after the U.S. Court of Appeals for the District of Columbia ruled that Grayscale Investments, the world’s largest digital asset manager, should be allowed to offer a spot Bitcoin exchange-traded fund which could potentially be traded on a traditional stock market.

This is a blow to the SEC, who has taken a hard line on the crypto investment product industry and applications, especially since the collapse of crypto exchange FTX last year.

That said, the agency has approved Bitcoin-focused funds — but only those focused on futures contracts that track cryptocurrency price swings, starting in 2021. The agency has rejected numerous requests to introduce an ETF holding it -even Bitcoin, arguing that the Bitcoin market is prone to fraud and manipulation. , leaving investors vulnerable.

In its ruling, the appeals court found the SEC’s record of approvals to be “arbitrary and capricious”.

The crypto industry has been waiting for this for a decade. Cameron and Tyler Winklevoss, the founders of crypto exchange Gemini, first proposed such a Bitcoin fund in 2013. Since then, Wall Street stalwarts like BlackRock and Fidelity have filed similar requests without success.

Grayscale’s case against the SEC has been closely watched by crypto executives: Approval would mean investors could buy shares in a Bitcoin fund rather than owning the digital asset itself.

But the dream will be postponed at least a little longer. The agency has 45 days to seek a review of the ruling, and an SEC spokesperson said it is considering next steps.



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