There’s a big important bailout no one is talking about. To be fair there’s so many pigs at the trough it's hard to follow all the action. But don’t take your eyes off what’s happening with the insurance industry. It’s setting an awfully important precedent for climate change 🧵
Turns out businesses thought their insurance coverage offset interruption losses during the Covid crisis. That’s what insurance is for right? But they didn’t read the fine print & insurers are denying everything in sight. Now it's a political problem politico.com/news/2020/03/2…
House lawmakers thought that wasn’t cool & told insurers they should cover those losses. State regulators - where most insurance is regulated - defended the industry. So now we have a problem - what to do? Create a federal bailout program and let insurers manage it duh!
But here’s the rub. Insurers aren’t only denying those suffering from this crisis. They’re already doing it w/ our other looming crisis - climate change. For example CA regulators are already forcing insurers to not drop homeowners impacted by wildfires wsj.com/articles/calif…
But of course climate impacts will get worse, as will this behavior including insurers pouring gas on the proverbial fire with their investments. Last week CT - insurance capital of the world - revealed its insurers had invested $221 B in fossil fuels insureourfuture.us/updates/2020/4…
The top 30 insurers operating in CT have over 10% of their premiums invested in fossil fuels. A crazy decision given how badly fossil fuels have outperformed the market - in the wrong direction - since the crisis hit insight.factset.com/sp-500-project…
CT State Senator & co-chair of the Committee @MattLesser who released the report said "Climate Change will have a massive impact on all aspects of life...including expanding our vulnerability to emerging infectious diseases and pandemics” Indeed. Now back to our federal drama
The fact is we’re setting a powerful precedent for insurers. Now is not the time to create a bailout program w/out regulating the behavior making the covid & climate crises worse. If we fail the decision will come back to haunt us in the next inevitable financial crisis
