Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Friday, May 5, 2023

AI Summary. Job growth is slowing from roughly 325K to 225K per month, yet the share of prime-age adults employed sits 0.3pp above its pre-pandemic level, and both payroll and household employment exceed the Congressional Budget Office's pre-pandemic forecast despite a smaller population.

Jason Furman @jasonfurman
Date Posted:

.@jasonfurman notes “the employment-population ratio for prime age workers is 0.3pp above where it was prior to COVID,” and anticipates further rate hikes from the Fed.

Is the labor market still strong despite slowing job growth?

Core argument: Job growth is slowing from roughly 325K per month to 225K per month, according to Jason Furman's reading of the jobs report.

Job growth is slowing, from a ~325K/month pace to a 225K/month pace. Here is something truly amazing, the employment-population ratio for prime age workers is 0.3pp above where it was prior to COVID. This reflects a combination of the unemployment rate and the labor force participation rate. We're now well into the era of the mystery of the extra workers. Both payroll & household employment are well above CBO's pre-pandemic forecast, which is especially amazing given that the population is smaller than they expected due to premature deaths and missing immigrants. [This] employment situation not consistent with inflation falling from its 4.5% pace to a <3%. Overall Fed has a bit less reason to worry about rate hikes, I'll bet more coming.

Takeaways by Macro Roundup® AI

  1. Job growth is slowing from roughly 325K per month to 225K per month, according to Jason Furman's reading of the jobs report.
  2. The prime-age employment-population ratio stands 0.3 percentage points above its pre-COVID level, reflecting both the unemployment rate and the labor force participation rate, a period Furman calls the era of "the mystery of the extra workers.".
  3. Both payroll and household employment run well above CBO's pre-pandemic forecast even though the population is smaller than projected due to premature deaths and missing immigrants, Furman notes.

AI Summary. US regional banking stocks rebounded after a week of heavy losses, with PacWest Bancorp gaining as much as 40% and Western Alliance Bancorp rising 30%, amid signals that some of the selling had been overdone. Charles Schwab, whose large banking unit has concerned investors, added 4.7% after reporting outflows slowed for a third month.

Kit Rees and Rick Green Bloomberg
Date Posted:

Regional banks rebounded today after widespread selling over the course of the week. @markets

Was the selloff in regional bank stocks overdone?

Core argument: PacWest Bancorp shares gained as much as 40% and Western Alliance Bancorp rose 30%, leading a rebound in US regional banking stocks after a bruising week of losses.

PacWest Bancorp led a rebound across US regional banking stocks after a bruising week of losses, amid signals that some of the selling has been overdone. PacWest’s shares gained as much as 40% in US trading on Friday, while Western Alliance Bancorp rose 30%. Charles Schwab Corp., whose massive banking unit has been a source of investor concern, added 4.7% after an update showed outflows slowed for a third month.  The pessimism became so indiscriminate that Pacific West Bancorp, a small lender based outside Portland, Oregon, felt impelled to issue a statement to remind everyone that it’s “a separate entity with no affiliation” to the similarly named PacWest.

Takeaways by Macro Roundup® AI

  1. PacWest Bancorp shares gained as much as 40% and Western Alliance Bancorp rose 30%, leading a rebound in US regional banking stocks after a bruising week of losses.
  2. Charles Schwab Corp., whose banking unit has been a source of investor concern, added 4.7% after an update showed outflows slowed for a third month.
  3. Pessimism became so indiscriminate that Pacific West Bancorp, a small lender based outside Portland, Oregon, issued a statement noting it is "a separate entity with no affiliation" to the similarly named PacWest.

AI Summary. Satellite measurements of nitrogen dioxide and other pollutants over Russia's industrial regions show emissions down 6.2% over the past year, exceeding declines seen during the worst of the coronavirus pandemic, while Russia's official statistics reported industrial production rising 1.2% year-over-year.

Josh Zumbrun Wall Street Journal
Date Posted:

Satellite data suggests Russian economic statistics are overstating output, as atmospheric pollutants have declined significantly.

Does satellite pollution data contradict Russia's official industrial production figures?

Core argument: Satellite-detected pollution in Russia's industrial regions fell 6.2% over the past year and 1.2% over the six months ended in April, a larger decline than during the worst of the coronavirus pandemic.

Here is a data point that is hard for Russia to fake: pollution emitted by its factories and detectable by satellites in outer space. Rather than showing an economy that suffered an initial shock and has since stabilized, this data reveals an industrial sector that, for the most part, has declined even further as the war has continued. This unusual bird’s-eye view of Russia’s economy comes courtesy of the European Space Agency’s Sentinel-5P satellite, launched in 2017. To monitor the release of pollutants into the atmosphere, the satellite has a cutting-edge Tropospheric Monitoring Instrument, known as Tropomi, which can detect gases such as nitrogen dioxide, ozone, formaldehyde, methane and others. Over the past six months, urban pollution in Moscow and St. Petersburg has begun to increase (partially a reflection of traffic) but pollution in industrial regions has continued to drop, off 1.2% over the six months ended in April and down 6.2% over the past year—more than during the worst of the coronavirus pandemic. By contrast, Russia’s official measure showed industrial production rose 1.2% in March from a year earlier.

Takeaways by Macro Roundup® AI

  1. Satellite-detected pollution in Russia's industrial regions fell 6.2% over the past year and 1.2% over the six months ended in April, a larger decline than during the worst of the coronavirus pandemic.
  2. Russia's official measure showed industrial production rising 1.2% in March from a year earlier, contrasting with satellite pollution data indicating an industrial sector that has declined further as the war has continued.
  3. The European Space Agency's Sentinel-5P satellite, launched in 2017, carries the Tropospheric Monitoring Instrument, known as Tropomi, which detects gases including nitrogen dioxide, ozone, formaldehyde and methane, offering a data point that is hard for Russia to fake.

AI Summary. Survey data indicate anti-immigration views across Western countries have declined since their 2016 peak, with the sharpest shifts in the US, Canada and Britain, where the share favoring strict limits or a ban on immigration more than halved from 66% to 31%. Reported discomfort with other races and faiths is also low.

John Burn-Murdoch Financial Times
Date Posted:

Opposition to mass immigration seemingly peaked in the West in 2016. @jburnmurdoch

Have anti-immigration views declined across Western countries since their peak?

Core argument: The share of Britons saying immigration should be strictly limited or banned outright fell from 66 per cent on the eve of the EU referendum to 31 per cent last year, more than halving.

Remember the rise of the right? First Brexit, then Trump, then a wave of rightwing populism broke over Europe. There were dozens of news articles on the “rising tide of anti-immigrant sentiment.”  Except it turns out that in the west, 2016 was a high water mark for such views. This is true of almost all western countries, but the most dramatic shifts have come in the US, Canada and, in particular, Britain, where the share of people saying there should be strict limits — if not an outright ban — on immigration has more than halved from 66 per cent on the eve of the EU referendum to 31 per cent last year. We see similar shifts in the general public’s attitude towards members of other ethnic groups and faiths. Just 3 per cent of Americans and 2 per cent of Britons say they would not want someone of a different race as a neighbour, with only Sweden scoring lower across the developed world. Discomfort with people from other faiths falls to just 3 and 1 per cent in the US and the UK respectively.

Takeaways by Macro Roundup® AI

  1. The share of Britons saying immigration should be strictly limited or banned outright fell from 66 per cent on the eve of the EU referendum to 31 per cent last year, more than halving.
  2. Across almost all western countries, 2016 marked the high water mark for anti-immigration views, with the most dramatic shifts since in the US, Canada and, in particular, Britain.
  3. Just 3 per cent of Americans and 2 per cent of Britons say they would not want a neighbour of a different race, with discomfort about people of other faiths at 3 per cent in the US and 1 per cent in the UK.

AI Summary. Assembly theory, developed by researchers at the University of Glasgow and Arizona State University, argues that complex molecules cannot simply emerge by chance because the number of possible atomic combinations is too vast, so an actual step-by-step pathway must exist for making them. The theory seeks to explain existence through objects' histories rather than timeless physical laws.

Philip Ball Quanta Magazine
Date Posted:

Assembly theory estimates an “Assembly Index” for various substances by measuring the complexity of their molecular structures. Since biological entities tend to have high complexity, this theory offers a possible test for extraterrestrial life.

How do complex molecules come into existence rather than by chance?

Core argument: Lee Cronin of the University of Glasgow developed assembly theory from his intuition that complex molecules cannot simply emerge into existence because the combinatorial space of possible atomic combinations is too vast.

Assembly theory started when Lee Cronin of the University of Glasgow in Scotland asked why, given the astronomical number of ways to combine different atoms, nature makes some molecules and not others. It’s one thing to say that an object is possible according to the laws of physics; it’s another to say there’s an actual pathway for making it from its component parts. “Assembly theory was developed to capture my intuition that complex molecules can’t just emerge into existence because the combinatorial space is too vast,” Cronin said. Sara Walker of Arizona State University, meanwhile, had been wrestling with the question of life’s origin — an issue closely related to making complex molecules, because those in living organisms are far too complex to have been assembled by chance. Something, Walker mused, must have guided that process even before Darwinian selection took over. Called assembly theory, the idea underpinning the pair’s strategy has even grander aims. As laid out in a recent series of publications, it attempts to explain why apparently unlikely things, such as you and me, even exist at all. And it seeks that explanation not, in the usual manner of physics, in timeless physical laws, but in a process that imbues objects with histories and memories of what came before them.

Takeaways by Macro Roundup® AI

  1. Lee Cronin of the University of Glasgow developed assembly theory from his intuition that complex molecules cannot simply emerge into existence because the combinatorial space of possible atomic combinations is too vast.
  2. Assembly theory distinguishes an object being possible under the laws of physics from there being an actual pathway to make it from its component parts, seeking explanation in processes that give objects histories rather than in timeless physical laws.
  3. Sara Walker of Arizona State University links life's origin to the making of complex molecules, reasoning that those in living organisms are too complex to have been assembled by chance and that something must have guided the process before Darwinian selection took over.

Monday, May 8, 2023

AI Summary. The authors estimate that firms whose workforces are more exposed to being made more productive by generative AI tools outperformed less-exposed firms by over 40 basis points in daily excess equity returns in the two weeks after ChatGPT's public release. The outperformance was about 40 basis points daily in industry-neutral portfolios, indicating it is not solely an industry composition effect.

Andrea Eisfeldt, Gregor Schubert and Miao Ben Zhang National Bureau of Economic Research
Date Posted:

A @NBERpubs study presents evidence on the market impact of LLMs. Firms with top quintile exposure to AI outperformed firms with lowest quintile exposure to AI by over 9% from Dec 1 to Mar 31. @andrea_eisfeldt @gregorschub @rainozhang

Do firms with AI-exposed workforces earn higher equity returns?

Core argument: Firms whose labor forces are more exposed to productivity gains from tools like ChatGPT outperformed less-exposed firms by over 40 basis points in daily excess returns during the two weeks after ChatGPT's public release.

We measure the impact of a major event in the advancement and dissemination of Generative AI technology, namely, the public release of ChatGPT, on equity returns at the firm level. Our key finding is that the arrival of ChatGPT had a sizable positive effect on the value of firms whose labor forces are more exposed to Generative AI and related Large Language Models (LLMs). Firms with higher exposure to the release of ChatGPT, as measured by the exposure of their labor force to being made more productive by tools like ChatGPT, outperform firms with lower exposures by over 40 basis points in daily excess returns during the two weeks following its release. Notably, these return differences are not only due to differences in labor force exposures across industries. Returns of firms with high labor force exposures also outperform firms with low exposures by about 40 basis points daily in industry-neutral portfolios.

Takeaways by Macro Roundup® AI

  1. Firms whose labor forces are more exposed to productivity gains from tools like ChatGPT outperformed less-exposed firms by over 40 basis points in daily excess returns during the two weeks after ChatGPT's public release.
  2. In industry-neutral portfolios, firms with high labor-force exposure to Generative AI outperformed low-exposure firms by about 40 basis points daily, indicating the return differences are not only due to cross-industry differences in exposure.
  3. The public release of ChatGPT had a sizable positive effect on the equity values of firms whose labor forces are more exposed to Generative AI and related large language models.

AI Summary. Banks with the fastest deposit growth over the prior five years saw the largest percentage losses in market capitalization, a pattern the author uses as a proxy for less "sticky" deposits. The author notes this correlation may reflect bank size and is not conclusive evidence.

Aswath Damodaran Musings on Markets
Date Posted:

.@AswathDamodaran suggests that the “stickiness” of a bank’s deposit base has strong explanatory power for overall resiliency. Banks with the highest deposit growth in the past five years (suggesting low stickiness) have tended to see big declines.

Do banks with the fastest deposit growth lose the most market value?

Core argument: Banks with the largest deposit growth over 2017–2022 — the author's proxy for the least sticky deposits — showed the biggest percentage losses in market capitalization.

It is banks with the least stick deposits that should have seen the biggest declines in market capitalization. My proxies for deposit stickiness are limited, given the data that I have access to, but I used deposit growth over the last five years (2017-2022) as my  measure of stickiness (with higher deposit growth translating into less stickiness): The results are surprisingly decisive, with the biggest market capitalization losses, in percentage terms, in banks that have seen the most growth in deposits in the last five years. To the extent that this is correlated with bank size (smaller banks should be more likely to see deposit growth), it is by no means conclusive evidence, but it is consistent with the argument that the stickiness of deposits is the key to unlocking this crisis.

Takeaways by Macro Roundup® AI

  1. Banks with the largest deposit growth over 2017–2022 — the author's proxy for the least sticky deposits — showed the biggest percentage losses in market capitalization.
  2. The author uses five-year deposit growth as a proxy for deposit stickiness, with higher growth taken to mean less sticky deposits, while noting the proxy is limited by available data.
  3. Because deposit growth may be correlated with bank size, with smaller banks more likely to see deposit growth, the author calls the evidence inconclusive though consistent with deposit stickiness being the key to the crisis.

AI Summary. Small banks account for 30% of banking-sector assets and 40% of lending, and face higher funding costs, lower asset prices from higher interest rates, and greater regulatory scrutiny. Tightening bank credit conditions are argued to impose a significant drag on the economy.

Torsten Sløk Apollo
Date Posted:

Torsten Sløk @apolloglobal notes the credit crunch will have a meaningful economic impact as small banks are responsible for 40% of lending.

Do pressures on small banks impose a significant drag on the economy?

Core argument: Small banks account for 30% of banking sector assets and 40% of lending, so the negative economic impact from the ongoing banking crisis is going to be significant.

Bank credit conditions are tightening, and the negative impact on the economy from the ongoing banking crisis is going to be significant because small banks account for 30% of assets in the banking sector and 40% of lending, and small banks are facing three headwinds from 1) higher funding costs, 2) lower asset prices because of higher interest rates, and 3) more regulatory scrutiny.

Takeaways by Macro Roundup® AI

  1. Small banks account for 30% of banking sector assets and 40% of lending, so the negative economic impact from the ongoing banking crisis is going to be significant.
  2. Small banks face three headwinds: higher funding costs, lower asset prices caused by higher interest rates, and more regulatory scrutiny.
  3. Bank credit conditions are tightening as the banking crisis continues.

AI Summary. The Bank for International Settlements reported that banks' cross-border claims fell by $1.4tn in a single quarter, slowing year-on-year growth to 6%, driven by lower bank credit and a drop in the market value of banks' derivatives. Dollar credit to emerging market and developing economies shrank by 4%.

BIS Staff Bank for International Settlements
Date Posted:

New @BIS_org data shows a contraction in dollar credit outside the US of at least $1.4T in Q4 of 2023.

Are banks' cross-border claims and dollar credit to emerging economies contracting?

Core argument: Banks' cross-border claims fell by $1.4 trillion in Q4 2022, slowing year-on-year growth to 6%, with lower bank credit and a drop in the market value of banks' derivatives and other residual instruments contributing to the decline.

Banks’ cross-border claims fell by $1.4 trillion in Q4 2022, slowing the year-on- year (yoy) growth rate to 6%. Both lower bank credit (i.e., loans and holdings of debt securities) and a drop in the market value of banks’ derivatives and other residual instruments contributed to the decline. Global cross-border bank credit (i.e., loans and holdings of debt securities) fell by $749 billion, or $400 billion on a seasonally adjusted basis. Euro-denominated credit declined by $231 billion after expanding earlier in the year. Cross-border bank credit to emerging market and developing economies (EMDEs) fell by $179 billion in Q4 2022 due to weaker dollar lending. Credit to the Asia-Pacific region contracted the most. The BIS global liquidity indicators (GLIs) show a large contraction in dollar credit to non-banks in EMDEs in Q4 2022. Dollar credit to EMDEs shrank by 4%, a rate last seen during the Great Financial Crisis of 2007–09.

Takeaways by Macro Roundup® AI

  1. Banks' cross-border claims fell by $1.4 trillion in Q4 2022, slowing year-on-year growth to 6%, with lower bank credit and a drop in the market value of banks' derivatives and other residual instruments contributing to the decline.
  2. Global cross-border bank credit fell by $749 billion in Q4 2022, or $400 billion on a seasonally adjusted basis, with euro-denominated credit declining by $231 billion after expanding earlier in the year.
  3. BIS global liquidity indicators show dollar credit to emerging market and developing economies shrank by 4% in Q4 2022, a rate last seen during the Great Financial Crisis of 2007–09, while cross-border bank credit to these economies fell by $179 billion.

AI Summary. The expiration of Title 42, a pandemic-era policy that allowed the U.S. government to swiftly expel citizens of several countries back to Mexico, is expected to bring tens of thousands of migrants to the border. The federal government expects as many as 13,000 migrants a day after the measure lapses, up from about 6,000 on a typical day.

Miriam Jordan and Michael Shear New York Times
Date Posted:

Brownsville, Laredo and El Paso have declared states of emergency in advance of President Biden’s decision to end Title 42 which allowed the Federal government to rapidly expel migrants who arrive illegally.

Brownsville, Laredo and El Paso have declared states of emergency in advance of President Biden’s decision to end...

Will the end of pandemic-era expulsion policy double daily border crossings?

Core argument: The federal government expects as many as 13,000 migrants to arrive daily immediately after Title 42 expires, up from about 6,000 on a typical day.

Barring a last-minute legal challenge, the Trump-era policy known as Title 42 will expire at 11:59 p.m. Eastern on Thursday. It was put in place three years ago under the premise of preventing the spread of Covid-19. Border agents, state and local officials and even President Biden’s top aides in Washington are all bracing for the arrival of tens of thousands of migrants in the coming days. Already, people have begun crossing into U.S. border towns, anticipating the end of Title 42, which since 2020 has allowed the government to swiftly expel citizens of several countries back to Mexico. Three cities in Texas — Brownsville, Laredo and El Paso — have declared a state of emergency. No one is certain what will happen after Thursday. The federal government is expecting as many as 13,000 migrants each day immediately after the measure expires, up from about 6,000 on a typical day.

Takeaways by Macro Roundup® AI

  1. The federal government expects as many as 13,000 migrants to arrive daily immediately after Title 42 expires, up from about 6,000 on a typical day.
  2. Title 42, the Trump-era policy that since 2020 allowed the government to swiftly expel citizens of several countries back to Mexico on the premise of preventing Covid-19 spread, expires at 11:59 p.m. Eastern Thursday absent a last-minute legal challenge.
  3. The Texas cities of Brownsville, Laredo and El Paso have declared a state of emergency as border agents, state and local officials, and President Biden's top aides brace for the arrival of tens of thousands of migrants.

AI Summary. The American Redistricting Project projects that the 2030 census will shift US House seats and electoral votes toward lower-tax states, with California losing five seats, New York three, and Illinois two, while Texas and Florida each gain four. Georgia, North Carolina, Tennessee, Arizona, Utah, Idaho, and Delaware are each projected to gain one.

Michael Barone Washington Examiner
Date Posted:

Michael Barone argues the ongoing population shift to the sunbelt may give the GOP an edge in the electoral college by 2030 with states Trump won in 2016 and 2020 having 247 electoral votes, 23 shy of the 270 needed to win.

Will the next census shift House seats toward lower-tax states?

Core argument: The American Redistricting Project forecasts California losing five House seats in the 2030 census, after the state gained seats in every census from 1850 to 2000 and lost just one in 2020.

Republicans stand to make much bigger gains in the census in 2030. That’s the news from the American Redistricting Project’s forecast, based on extrapolations from 2022 Census Bureau estimates. ARP shows California, which gained seats in every census from 1850 to 2000 and lost just one seat in 2020, losing five seats in 2030. It shows New York losing three seats and Illinois two seats. It also shows large-scale flight to low-tax states, with Texas and Florida each projected to gain four House seats in 2030 and Georgia, North Carolina, Tennessee, Arizona, Utah, Idaho, and Delaware one each. In 2016, the balance between the consistently Trump and consistently Democratic electoral votes was precisely even, 232-232. The 2020 reapportionment would have changed that just slightly to 235-231, with the switching states dropping from 74 to 72 electoral votes.

Takeaways by Macro Roundup® AI

  1. The American Redistricting Project forecasts California losing five House seats in the 2030 census, after the state gained seats in every census from 1850 to 2000 and lost just one in 2020.
  2. The American Redistricting Project projects Texas and Florida each gaining four House seats in 2030, with Georgia, North Carolina, Tennessee, Arizona, Utah, Idaho, and Delaware gaining one each, and New York losing three and Illinois two.
  3. Consistently Trump and consistently Democratic electoral votes were evenly split 232–232 in 2016, and the 2020 reapportionment would have shifted that to 235–231, with the switching states falling from 74 to 72 electoral votes.

AI Summary. Average annual homeowners insurance costs about $1,900 nationwide but roughly $4,000 in New Orleans and $5,000 in Miami, with US premiums up 12% in a year and expected to keep rising. Insurers, facing about 20 billion-dollar disasters a year, are adopting pricing models that incorporate warming-climate costs and withdrawing from risky areas, shifting exposure to state-backed plans.

Benjamin Keys New York Times
Date Posted:

Benjamin Keys notes homeowners’ insurance premiums jumped 12% between 2021-2022 as the insurance industry responds to a sixfold increase in the number of large loss events since the 1980s. @wharton

Benjamin Keys notes homeowners’ insurance premiums jumped 12% between 2021-2022 as the insurance industry responds to a...

Are homeowners insurance premiums rising as insurers reprice climate risk?

Core argument: Average U.S. homeowners insurance costs $1,900 a year, rising to $4,000 in New Orleans and about $5,000 in Miami, according to Policygenius, an online insurance marketplace.

The average cost of homeowners coverage has reached $1,900 a year nationwide, but it’s $4,000 a year in New Orleans and about $5,000 a year in Miami, according to Policygenius, an online insurance marketplace. After recent years of paying out claims for about 20 disasters a year with damages of over $1 billion, a sixfold increase from the 1980s, insurers are getting serious about new pricing models that incorporate the costs of a warming climate. Across the United States, premiums jumped 12 percent from 2021 to 2022, according to Policygenius estimates, and they are expected to continue to rise.  Ten insurers have gone belly up in Florida in just the last two years. And in many cases, insurers are pulling back in risky areas, leaving state-backed insurance plans holding the bag.

Takeaways by Macro Roundup® AI

  1. Average U.S. homeowners insurance costs $1,900 a year, rising to $4,000 in New Orleans and about $5,000 in Miami, according to Policygenius, an online insurance marketplace.
  2. Insurers have paid claims for about 20 disasters a year with damages over $1 billion, a sixfold increase from the 1980s, and are pursuing new pricing models that incorporate the costs of a warming climate.
  3. U.S. premiums rose 12 percent from 2021 to 2022 by Policygenius estimates and are expected to keep rising, ten Florida insurers have failed in two years, and insurers pulling back from risky areas leave state-backed plans holding the bag.