California E&S Insurance

Yeah, it doesn't feel good, but the alternative was likely State Farm leaving California. It's not possible to force someone to run an unprofitable business. Closing up shop is always an option. Investors want returns relative to the general market, so if State Farm doesn't deliver that, their leadership will get replaced until they do start seeing those returns while the share price plummets. Insurance needs to be a nonprofit endeavour, but at the scale required in the age of climate change disasters, it's pretty much always going to end up with only the Government being big enough to handle it. Add in the whole mortgages require insurance and we've created an unsustainable system without any clean exit. Either let insurance raise rates to levels where it's reasonably profitable to provide home insurance, back up the insurance companies with government support, or we'll suffer the consequences of having insurance companies not issuing policies. All lose:lose, but some are worse.

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