Demonized

Even though Dave Chappelle is known for punching down in his comedy sets, I was unprepared for his Saturday Night Live monologue in January that conflated fire insurance with the cold-blooded murder of UnitedHealthcare CEO Brian Thompson.

Seated on a stool and smoking, Chappelle said of the wildfires then ripping through Los Angeles, “A lot of poor people were affected. A lot of these people found out the week of the fires that they lost their fire insurance. Luigi is like, ‘You’re welcome.’” Of Luigi Mangione, who has been charged with fatally shooting Thompson, Chappelle said, “That kid did almost plan the perfect crime. Only thing he forgot was to shave his eyebrows.”

Thompson’s murder triggered little outrage toward Mangione, but at insurers for practices such as prior authorization and limits on benefits.

Here is Sen. Elizabeth Warren’s (D-Mass.) reaction to the killing: “People can only be pushed so far.”

Warren added (in Politico): “The visceral response from people across the country who feel cheated, ripped off, and threatened by the vile practices of their insurance companies should be a warning to everyone in the healthcare system.” She had no criticism for those who lionize Mangione.

Had Democrats maintained control of the U.S. Senate in the November elections, Warren would chair the Senate banking committee, which has jurisdiction over our industry. Wow.

A survey by Emerson College found that 41% of respondents between ages 18 and 29 found Thompson’s shooting to either be “somewhat” or “completely” acceptable, a percentage far greater than any other age group. Older age groups among the 1,000 people surveyed were less likely to say it was acceptable.

Animus toward the industry is not a new thing, but this feels more dangerous than ever before—at least in my 37 years in the industry. And in the context of wildfires and non-renewals in California, the heated public debate over healthcare seems likely to expand into the U.S. property insurance sector.

According to a Jan. 19 commentary in The Wall Street Journal, “Americans want neither the rationing that comes with government-run insurance, nor the risk management that comes with private insurance.”

The title of the piece, appropriately, was “The World is Getting Riskier. Americans Don’t Want to Pay for It.” Pivoting from health insurance to property and casualty catastrophic coverage: “California is a microcosm of what happens when insurance breaks down: Either households face potential ruin, or the public is handed a financial time bomb.”

On Jan. 30, I was visiting Los Angeles with longtime industry exec Jerry Sullivan (of GJS Re), and we watched together a “Virtual Wildlife Insurance Town Hall,” featuring elected California Insurance Commissioner Ricardo Lara. I didn’t take notes, but the gist of the message was that he and his department are all that are keeping insurers from massively denying claims and screwing their clients. Even though California has been a cluster for years as the department refuses to allow insurers to adequately price for risk, it was nonetheless demoralizing to hear little but vilification of the industry.

Even then-Vice President Kamala Harris, in her last week in office, said: “Many insurance companies have canceled insurance for a lot of the families who have been affected and will be affected, which is only going to delay or place an added burden on their ability to recover.”

David Sampson, president and CEO of the American Property Casualty Insurance Association, responded: “It is false, wrong, and dangerous to even insinuate that insurers are abandoning their customers, and it’s especially concerning coming from a former California statewide elected official who should know the law…. Insurers are committed to protecting the safety of those affected and providing expedited relief to their policyholders for the covered losses.” Good for him.

For the public, the question becomes whether insurance is “a private market good, or is it social protection, to make sure everyone has the resources to recover from disaster?” Carolyn Kousky, an economist specializing in risk and founder of the nonprofit Insurance For Good, said in the Journal piece.

Council officer Eric Leavitt (of the Leavitt Group, of course), is prepared to address that question: “The Reddit crowd’s narrative that has emerged (especially in light of the killing of Brian Thompson) is that insurance is social protection instead of a private market good and that insurers are breaching the ‘public good’ by not performing their duty to provide that protection. The ‘social protection’ argument generally is divorced from the economic realities that come with the private capital upon which the insurance market is reliant—i.e., premium adequacy for risk assumed.”

That won’t change the discourse, though, Leavitt added. “The outrage from that group is maybe more muted than it otherwise would have been because of the socioeconomic profiles of the bulk of those who experienced loss [in Los Angeles], most notably in the Pacific Palisades fire. But, make no mistake, P&C and health insurance carriers are going to continue to be negatively focused upon for a while…these narratives don’t generally die down quickly.”