146 ZJ Taylor
The size of the residential insurance business in Florida is a function
of how and where the state has urbanised in the post-World War II era.
Real estate became a core driver of the state’s economy, the profitability
of which has generally exceeded longstanding concerns about the state’s
fragile, hurricane- and flood-prone coastal geography (Audirac et al. 1990;
Catlin 1997). Over this horizon, local ‘growth machines’ took root, which
became structurally reliant on sustained development to generate property
tax receipts, real estate-related jobs, and related service-sector employment
(Taylor 2020). At the same time, federal government programs and regulations subsidised post-war urbanisation through growth-inducing and environmental risk-reducing infrastructures (as in the federal highway system,
or Army Corps of Engineers projects), through the widespread (but not
universally accessible) expansion of mortgage markets, and other spatially
redistributive practices, which disproportionately favoured Florida and
other ‘sunbelt’ states (Bernard & Rice 1983).
The substantial human, ecological, and economic devastation wrought
by hurricanes, including Andrew (1992), those of the 2004 and 2005 Atlantic
hurricane seasons, and Irma (2017), have focused attention on Florida’s
environmental precarity more generally, and on the fragility of the real
estate-driven political economy built thereupon specifically. Re/insurance
became the de facto ‘fix’ for Florida’s risky real estate dilemma for two
closely related reasons according to Taylor (2020). First, federal government
housing finance regulations institutionalised the use of multi-peril property insurance within the residential property finance market, creating a
structural role for insurance within the US housing finance system. Second,
decades of pro-growth urban governance in Florida saw rates of building
in catastrophe-prone areas far exceed the use of land use controls, building codes, and infrastructure investment to curtail the rise of catastrophe
exposure in the built environment. Not only did Florida become economically dependent on ecologically fraught patterns of development, it did so in
ways which relied on re/insurers to finance property catastrophe risk, in the
absence of meaningfully integrated and comprehensive urban environmental risk management. An executive at a major engineering, construction,
and design firm in Florida reflected this sentiment in an interview about
contemporary resilience planning efforts in the state:
So far, there hasn’t been much discussion about the real players in this:
the re/insurance industry. […] Eventually, you can have all the politics and
all the plans you want, but this private sector will eventually have to come
to the table. If they come to the marketplace too quickly, they’ll destroy
value in the market, which is not the value of a resilience program.
(Interview 2018-A)
The Florida market has presented industry-defining challenges and
opportunities to global re/insurers and state public policymakers
The size of the residential insurance business in Florida is a function
of how and where the state has urbanised in the post-World War II era.
Real estate became a core driver of the state’s economy, the profitability
of which has generally exceeded longstanding concerns about the state’s
fragile, hurricane- and flood-prone coastal geography (Audirac et al. 1990;
Catlin 1997). Over this horizon, local ‘growth machines’ took root, which
became structurally reliant on sustained development to generate property
tax receipts, real estate-related jobs, and related service-sector employment
(Taylor 2020). At the same time, federal government programs and regulations subsidised post-war urbanisation through growth-inducing and environmental risk-reducing infrastructures (as in the federal highway system,
or Army Corps of Engineers projects), through the widespread (but not
universally accessible) expansion of mortgage markets, and other spatially
redistributive practices, which disproportionately favoured Florida and
other ‘sunbelt’ states (Bernard & Rice 1983).
The substantial human, ecological, and economic devastation wrought
by hurricanes, including Andrew (1992), those of the 2004 and 2005 Atlantic
hurricane seasons, and Irma (2017), have focused attention on Florida’s
environmental precarity more generally, and on the fragility of the real
estate-driven political economy built thereupon specifically. Re/insurance
became the de facto ‘fix’ for Florida’s risky real estate dilemma for two
closely related reasons according to Taylor (2020). First, federal government
housing finance regulations institutionalised the use of multi-peril property insurance within the residential property finance market, creating a
structural role for insurance within the US housing finance system. Second,
decades of pro-growth urban governance in Florida saw rates of building
in catastrophe-prone areas far exceed the use of land use controls, building codes, and infrastructure investment to curtail the rise of catastrophe
exposure in the built environment. Not only did Florida become economically dependent on ecologically fraught patterns of development, it did so in
ways which relied on re/insurers to finance property catastrophe risk, in the
absence of meaningfully integrated and comprehensive urban environmental risk management. An executive at a major engineering, construction,
and design firm in Florida reflected this sentiment in an interview about
contemporary resilience planning efforts in the state:
So far, there hasn’t been much discussion about the real players in this:
the re/insurance industry. […] Eventually, you can have all the politics and
all the plans you want, but this private sector will eventually have to come
to the table. If they come to the marketplace too quickly, they’ll destroy
value in the market, which is not the value of a resilience program.
(Interview 2018-A)
The Florida market has presented industry-defining challenges and
opportunities to global re/insurers and state public policymakers