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Last-Resort Insurers Grapple with Increasing Exposure

Law360 Insurance Authority

Insurance pools meant to serve as backstops for consumers shut out of traditional markets are grappling with increased exposure to natural disasters, according to experts and market data, a trend that observers say is concerning as climate change intensifies storms.


Whether the commissioner's regulatory strategy will help secure those commitments is an open question, and experts say that given the slow process of enacting regulations, it could still take years for their potential effect to take hold.

Alan Rubin, a lobbyist who co-leads Blank Rome's Severe Weather Emergency Recovery Team, told Law360 that insurers and last-resort insurers could benefit from issuing green bonds to help finance resilience projects in high-risk areas. Major insurance companies and reinsurers like Munich Re already have such programs in place, raising billions of dollars for sustainability and clean-energy initiatives.

"It's hard to get people over the hump, in terms of getting it done, but there are projects like that, and it makes a huge amount of sense," Rubin said in an interview.

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"Last-Resort Insurers Grapple with Increasing Exposure," by Eli Flesch was published in Law360 Insurance Authority on April 4, 2024.