Guest column: More layoffs coming in insurance industry without reform
Here's one recent example. In August California-based
These companies don't see
The
These layoffs are only part of the story. Expect to see real estate deals fall apart over fire insurance costs. Expect to see businesses closing when they can't get or can't afford insurance in our state. Expect to see homeowners, especially seniors with paid-off homes but modest incomes, "going bare" on their homes and carrying no property insurance, exposing themselves and their heirs to massive financial risk. Insurance lubricates the economy and when it stops working the economy stops working.
There are some solutions, if the Legislature or even the current
It starts with repealing Proposition 103, the 1988 initiative governing property insurance in
Its rules are strangling the market. We don't need insurance companies begging for rate increases from the insurance commissioner, which can take years. We need agile companies that can price risk in the best and timeliest manner to meet consumer needs.
A repeal would also free up insurance companies to use whatever information they can to set their rates. They can't be tethered exclusively to the past. Past data is important but future catastrophe modeling is critical for companies to comfortably price what they consider the real, current cost of doing business in
If insurers set their own rates, it would free the
Just as the first pullbacks in insurance coverage were indicators of the future, additional pullbacks like the Farmers job cuts will not be the last. They indicate an unhealthy insurance market in
Everyone and everything are fleeing
But it's within our power to reform our insurance markets. We can't be afraid to pivot when laws prove failures and we shouldn't be defeated by rules of our own making. More insurers equal more competition and more choice for consumers. That is how to end the doom loop and is the ultimate solution to the
Sen.
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