Dear friend,
Imagine you and I are poker buddies who meet up to play a regular game every Friday night.
Nothing flashy, just small stakes. We’ve been playing for years — it’s really a social thing — we have a few drinks and a few laughs and no-one loses too much.
Then one night we have a few drinks too many — after all it is Friday — and it all gets a bit out of hand. Instead of pennies, we start playing for big money.
I end up losing $10,000 to you and write you a hefty IOU before slinking off home.
The next morning I wake up with a hangover to you banging on the door, demanding either the cash or the keys to my brand new car. You drive away in my car.
Stunned, I put it down to experience and resolve never to play poker for high stakes, and certainly never to play again when I’m drunk.
I forgive you and even thank you for teaching me a valuable lesson about reckless gambling. I don’t bear a grudge and call you up the following Thursday to fix up another Friday game.
You answer: “Sorry Mark, I’m not playing any more!” and hang up abruptly.
What am I supposed to think? You are a supposed to be my friend — we go way back. We’ve been playing poker together for years. Frankly I’m shocked — I feel cheated and don’t know if I want to see you again.
If you asked me for another game now I’d probably tell you to get lost.
Well that is what Florida is doing to the property Cat market.
Florida is not going to play any more.
And we thought Florida needed friends. Clearly it believes it can do without such niceties.
The move to double the Cat Fund whilst halving its deductible is a great example of a government being extremely generous with its people’s money.
But unlike something like nuclear terrorism this risk is insurable and there is a competitive market out there to service it. Subsidising this business is irresponsible.
Where is the disincentive to build in unsuitable areas now? It has been removed at the stroke of a pen.
Florida is like a pin in a 100-pin bowling alley – the ball went down the gutter last year — but hang on, what’s that big black thing thundering down the lane?
The sunshine state might one day regret having played Russian roulette with its future.
With the realistic disaster scenario currently set at $100bn, a $40bn hurricane is not a very unlikely event — in fact it looks like a nice primary and first excess to me!
State bond default, mass insurer insolvencies, and tax rises all on top of devastation and death.
Do they really think the voters are going to thank them for that?
Qui sème le vent, récolte la tempête.
Allez — on to the news
Mark Geoghegan, Editor