No. 123: State-Sponsored Insurance

Climate change risks over the past few decades are driving insurance companies to drop accounts and leave states for more profitable pastures, and the wildfires in California are another inflection point. You may have noticed your insurance premiums going up considerably depending on where you live, and I expect we'll see a growing state responsibility to cover the shortfalls in insurance coverage.

I also have a fantastic featured job this week for an aspiring consultant, and we're digging into the history of the social enterprise movement. Let's jump in.

~ Greg

What we're reading

Damages from the Los Angeles wildfires are expected to exceed tens of billions of dollars and test insurers' ability to service the state's population. (Grist)

• Insurers around the country have been pulling out of high-risk areas: it's just not profitable.
• I'm most familiar with the exodus of insurers in Florida since I used to live there. The state set up an insurer of last resort in 2002 called Citizens that was meant to offer coverage when a homeowner could not get a policy with another insurer.
  • In effect, hurricane risk was higher than your typical insurance company wanted to take on, so the state had to cover the gap. This is the pattern we'll see in California as well.
  • Citizens is the largest insurance provider in the state, and unlike a traditional insurer, insolvency is not an option; Citizens can raise premiums to cover outstanding claims.
  • Insurance costs in Florida have skyrocketed. It sounds cliche, but it's no joke: rates increased 42% in 2023 alone to an average of $6,000 per year.
• Turning our attention towards California, they have a similar situation as a result of wildfires.
  • Cases range from dropping accounts, leaving the state, and requesting approval to increase rates by upwards of 50%.
  • Insurance premiums have been artificially low because California prevents companies from using forward-looking models and pricing in reinsurance when setting premiums.
  • California is working on reforms, but they will go into effect later this year.
• Why this story now? Although Florida and California fill headlines, they're not the only states with climate change risks. Colorado has a new wildfire insurance backstop for example.
  • It seems to me that insurance companies need to be able to factor in the real risks of covering homeowners but have the state or independent delegate ensure those calculations aren't predatory. When all is said and done, we'll need to reckon with the realities that the America we built is at more risk than we realized.

Job of the week

I have a hunch that you are going to love the featured job this week from Measure Meant, a sustainability consultancy – and Certified B Corp – in Spokane, WA. They are looking for a Sustainability Consultant / Project Associate to join their team of three, and it's exactly the kind of work you'd want in a consulting role: ownership of a variety of projects, values-aligned community stakeholders, and the opportunity build your industry knowledge.

One thing that stood out to me were the minimum qualifications, which make this role accessible to a diverse set of backgrounds. You really get the sense that they value different perspectives and are trying to build a team where the whole is greater than the sum of its parts. I'd highly recommend checking this one out – the first round of applicants are being considered next week!

Community roundup

• Thailand was a leading destination for plastic waste from Europe and North America, but activists have successfully campaigned for an end to plastic imports. The ban goes into effect this month. (The Guardian)
• Speaking of plastics, a number of states have been suing companies over their messaging on plastics recycling. One of the most notable examples was when California sued Exxon last year. Now, Exxon is fighting back with their own lawsuit, arguing that California and a group of nonprofits engaged in a smear campaign. (Grist)
• More people are investing in solar panels due to risks that the solar panel tax credit could be eliminated in the new administration. (NPR)
  • This is similar to risks that an electric vehicle tax credit may be eliminated under lobbying pressure from Tesla.
• Elephants are evolving to have shorter tusks as a result of poaching efforts. (The Guardian)
• The Great Salt Lake is shrinking, and a new analysis shows where the water has gone: 71% of what would have replenished the lake has been diverted to agriculture, and 80% of that is going to crops used primarily to feed livestock. (Inside Climate News)
  • I'm reminded once again of the impact of meat production on the planet – not that I don't eat it myself. It just seems like we get the double whammy: the impacts from raising the livestock itself, plus the impacts from the supply chain that feeds them.
• You probably know that the Supreme Court heard arguments about TikTok this week over concerns about Chinese influence. Along those lines, the Commerce Department has released a new rule that essentially bans Chinese vehicles, both software (starting model year 2027) and hardware (starting model year 2030). (The Verge)
  • It's not easy to change a supply chain overnight and is almost certain to impact brands you are familiar with: Volvo and Polestar are owned by Chinese company Geely, and many other companies source parts from China. This is almost certain to affect electric vehicle production.

Hot job opportunities

• Director of Development – Shasta Land Trust – Redding, CA
• Junior Marketing Manager – Trade Marketing – Maria Nila – New York, NY
• Executive Director – Big Apple Performing Arts – New York, NY
• Account Manager – Butler/Till – Remote
• Head of Digital Innovation – Thesis – Portland, OR
• Manager, Asset Management (North America) – New Forests – San Francisco, CA
• Distributor Account Coordinator – Allbirds – San Francisco, CA
• Product Manager – Cariloop – Remote
• Jr. Customer Success Manager – MiiR – Boise, ID or Seattle, WA
• Commercial Account Manager – Electrify America – Remote

Resource of the week

One of the things I've discovered as I've learned more about social enterprise is that what feels relatively new – the cresting of a cultural intersection between business and social impact – planted its roots decades, even hundreds of years ago. It does feel like we're in the zeitgeist, but it helps to know where we came from.

In that spirit, I'm pointing you towards a history lesson (er...blog post) from MovingWorlds on philanthropy and more recent developments like Certified B Corps and impact investing. Although this post was written in 2018, it remains relevant today. Social enterprise is on an exponential trajectory, and as you've seen in this newsletter, there are plenty of job opportunities for those aiming to align their work with their values.

Test your knowledge

Last week, I asked you when the Americans with Disabilities Act was signed into law. It was not so long ago: President George H.W. Bush signed it in 1990, and amendments to it were signed by President George Bush in 2009.

It goes back to what I said last week: much of what we consider fundamental social progress has only recently found its way into law. If that sounds a touch depressing, I'd offer a different perspective: we will see positive change over and over again in our lifetimes.

We use a number of terms in the social impact space to discuss the balance between purpose and profit, and this week we're turning an eye towards conscious capitalism:

Who coined the term "conscious capitalism"?

Email me your guess, and I'll send one lucky winner a couple of One Work stickers!

I am watching the policy shift unfold at Meta and wondering if we're seeing what decades of corporate consolidation has done to consumer branding: drifting wherever the political winds blow...less focused on where we want to be and more on where we are right now.

It's not just Meta of course, and it will be interesting to watch how the social impact community evolves to meet the moment. You can find me on LinkedIn and Threads.