Wednesday, September 6, 2017


Bloomberg reports that small companies have taken up a large portion of Florida's home insurance business after the giants,  disliking their losses during 2005 when many storms hit Florida, pulled back.

This is a subset of the 'Fireproof Hotel' problem that RtO has so often commented on.

You can make a lot of money with a bit of luck -- an investment in Universal Insurance Holdings since 2005 has returned several times what an investment in Apple would have. However, eventually the unprotected hotel burns down and you're left with nothing.

People in Hawaii have forgotten, for the most part, but that's what happened in 1992. HEI had written a huge portion of local hurricane insurance. After Iniki,  it simply refused to pay.

Universal claims it has resources and reinsurance to cover any losses. I have not looked at its books, but I can recognize a company violating normal boundaries of prudence in insurance underwriting, and I am ready to bet that will turn out not to be correct.


  1. I have a huntch about Texas and Florida not enforcing immigration laws too thoroughly the next couple of years...

  2. They never have. The dirty secret is that immigration depends on employers who want cheap labor. It has always been that way.

    The rightwingers whip up the rubes with anti-immigrant talk but their businesses depend on immigrants.

    That's the whole reason no legislation passes, especially not electronic ID.