This podcast episode discusses the rising costs of natural disasters and the question of who should bear those costs—individuals, insurance companies, or the government. The host analyzes the California wildfire crisis as a case study, highlighting the increasing loss ratios for insurers and the limitations of Proposition 103. He contrasts market-based risk management (insurance) with socialized risk management (government intervention), using examples like the Affordable Care Act and state-run residual market insurance plans. The episode concludes by emphasizing the ongoing debate about the balance between market forces and social responsibility in managing catastrophic risks, noting the significant increase in residual market plan participation (200-400% annual growth in some states).
