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I think the evidence is we’re not going to deregulate our way out of this challenge, and we’re not going to price-increase our way out… Yes, increased price for insurers helps keep them in markets for the short and midterm. But in the long term…the magnitude of the climate-driven losses are overrunning the ability to price increase…
Dave Jones, director of the Climate Risk Initiative at UC Berkeley’s Center for Law, Energy and the Environment
During an on-stage conversation between insurance industry leaders at the 2023 10X Los Angeles Summit, former California Insurance Commissioner Dave Jones described the need to mitigate the impacts of climate-driven weather in order for the state to remain insurable. His point has been clearly illustrated by news headlines the last couple years since the summit.
Among the greatest risks to homes in California is the surging frequency and intensity of wildfire. Based on recent trends, the cost of recovery from these disasters is continually outpacing the viability of the insurance business. Fifteen of the 20 largest wildfires in California history have occurred since 2000, and the state’s record for annual disaster costs has been broken three times over in the last seven years.
Earlier this year, the Palisades, Eaton, and Hurst fires blazed for weeks on the outskirts of Los Angeles and together became the single costliest fire event in state history. Insurer losses are estimated between $28 to $52 billion—but the actual total economic loss is estimated to be around five to nine times that amount.
The record-breaking cost of extreme weather in recent decades has also had regulators in Louisiana and Florida searching for solutions to insurance industry pullbacks in their states—while the country at large watches closely for answers as disaster risks everywhere visibly increase. In this episode, Dave Jones reflects on recent regulatory changes to try to lure major underwriters back into the California market and the potential courses of action for regulators and the industry as climate-driven losses trend upward each year.
Related articles and resources
Watch Dave’s discussion with insurance executives at our 2023 summit in Los Angeles
“Climate change increased the likelihood of wildfire disaster in highly exposed Los Angeles area” (worldweatherattribution.org, Jan. 2025)
“Powell predicts a time when mortgages will be impossible to get in parts of US” (Yahoo Finance, Feb. 2025)
“California’s 2018 wildfires caused $150 billion in damages: study” (Phys.org, Dec. 2020)
“10X Insurance Series: California Attempts to Reverse Insurer Exodus” (Ten Across Conversations, Oct. 2023)
“10X Insurance Series: Louisiana Grapples with Growing Natural and Financial Risk” (Ten Across Conversations, Oct. 2023)
“10X Insurance Series: Retaining Florida’s Insurability Has National Implications” (Ten Across Conversations, Oct. 2023)
Guest Speaker
Dave Jones is director of the Climate Risk Initiative at UC Berkeley’s Center for Law, Energy and the Environment, a think tank identifying and evaluating policy proposals that can address the impacts of climate change in California and elsewhere. His experience regulating the largest insurance market in the United States informs his policy analysis. During his time as California Insurance Commissioner from 2011 to 2018, Dave led the implementation of a National Association of Insurance Commissioners Climate Risk Disclosure Survey, launched a Climate Risk Carbon initiative requiring insurers disclose their fossil fuel investments, and founded the international Sustainable Insurance Forum.
