bitcoinmiser

@PunterJeff @natbrunell @StateFarm I'm sure once @natbrunell 's mom get educated on the impact of Katrina on reinsurance, real risk premiums, M2 growth, and how the wars and weak bond markets affect @StateFarm, she'll feel much better about having to sell her house.

The insurance market landscape is fascinating. Over the last 15 years, there was an explosion in insurtech underwriting (computer based algorithms, with large data sets). The large insurance carriers, with large balance sheets and the best tech consistently undercut the smaller regional insurance carriers. The largest companies were able to do this, because they were able to spread the reinsurance risk and cost across larger geographies, which came with economies of scale. Consumers did the rational thing and moved to the lower cost carrier (such as State Farm), likely what your Mom may have done. The challenge with this, is that the competitive landscape actually suppressed the true "risk" premium because there was a race to acquire the most market share, as opposed to accurately pricing risk. Companies were able to do this in a time of prosperity for bond & equity markets, which was a buoy for financial results despite risk underwriting losses. The confluence of factors all happened at the same time in the late 2000's and 2010's, post Katrina hurricane season, where there was a 15 year stretch of very little catastrophic activity in the reinsurance market. The high reinsurance rates, post Katrina, also ushered in a new wave of capital (Insurance linked Securities), which was hungry for high yield, diversified risk profiles to add to portfolios post GFC. This new capital coming into the reinsurance market also artificially lowered the "True Risk" reinsurance rates. ALL of this, in conjunction with the risk-free rate being near zero for all of the 2010's created perfect conditions for artificially low insurance premiums for consumers. SO, This change in premium is actually a slingshot back to a more accurate real risk premium across the US. AI has compressed competitive advantages, regional insurers are dying rapidly, large carriers need to be profitable to afford risk transfer & keep the engines running. There's also a few other factors at play, M2 growth, explosive jury verdicts, large tail catastrophe events (CA WF, Floods, Covid property damage, Ukraine war, weak bond market, etc). Happy to chat on the pod about this, any time.

My mom’s @StateFarm homeowner’s insurance in Illinois just jumped 30% from last year. No claims. No disasters. No change in risk. This is how people on fixed incomes get pushed out of their homes. If you’re an insurer who can beat this - reach out. And if you’ve been hit with the same price increase, share this and call it out!

@AdamBLiv @AdamBLiv Check my math: STRC 's market cap is ~5B, or ~0.007% of the global fixed income market. If they get 1% of it, MktCap is ~746 billion, which at current prices could fund the purchase of roughly 10–11 million BTC (i.e., effectively the entire Bitcoin supply).

IBIT outflows since the largest Bitcoin nominal price drop in history on February 5th vs inflows since the Iran War on February 28th. Signal: