In this article from The Insurer, Guy Carpenter’s Jonathan “Jake” Clark, Managing Director, tells an investment panel at the ClimateTech Connect conference in Washington, D.C., that states have largely ceded their risk-management capabilities to FEMA, the Federal Emergency Management Agency.
“They rely completely on debt and post-event financing to protect against problems, and that’s just falling back on taxpayers,” Jake said. “Roughly 40% of economic losses aren’t being picked up by an insurance solution or insurance product.”
He explained how Guy Carpenter has been working to engage with multiple states, and the firm has found that few have the resources to manage their own risk.
“We’ve been trying to talk to a lot of them. None of them have the budget for risk transfer, or very few of them do,” Jake continued. “Most of them are not buying nat-cat-related exposure. They’re just relying on dollars from FEMA, and that’s got to change.”