Has the World Become Uninsurable?

TL;DR

Climate disasters, inflation, and compounding risks have shattered insurance's core assumption that the future resembles the past, making coverage unaffordable or unavailable.

Key Points

• 1.The US averaged fewer than 9 billion-dollar weather disasters per year for four decades; in 2023 alone there were 28, costing over $1 billion each.
• 2.Global insured losses from natural catastrophes exceeded $100 billion every year but one between 2017 and 2024, forcing reinsurers like Munich Re and Swiss Re to sharply raise prices and retreat from risky regions.
• 3.US construction costs are now 40%+ above pre-pandemic levels, meaning every claim is more expensive even if the number of claims stays flat; home insurance premiums jumped 10–12% in a single year.
• 4.State Farm paused new California policies in 2023, then cancelled 72,000 in March 2024; Farmers Insurance exited Florida entirely — leaving roughly 6 million US homeowners uninsured, representing $1.6 trillion in unprotected property.
• 5.Health insurance faces the same squeeze: US family premiums quadrupled between 2000 and 2023, gene therapies can cost over $2 million per patient, and in 2024 Sun Life covered 47 individual claims exceeding $3 million each.
• 6.When private insurance retreats, governments become insurers of last resort (Italy now legally requires business coverage backed by state reinsurance), but public backstops weaken price signals and encourage more building in high-risk zones, accelerating the cycle.