Jerry Theodorou is the Director of the Finance, Insurance & Trade Policy Program. Jerry develops and advances effective free-market public policy solutions to complex issues where federal and state governments have intervened. In this episode, he weighs in on what social inflation is, climate change insurance, and questions the ethical role insurance plays in the nuanced complexities of our society.

Key Takeaways

• A little bit about Jerry and his extensive career.
• What is social inflation and its impacts?
• What is human life worth? What are pain and suffering worth? How do you really put a price on these things?
• Companies that overpay for something in fear of the consequences hurt everyone, including the surrounding economy.
• What should you know about litigation funding?
• Jerry weighs his thoughts on how climate change is impacting the insurance industry.
• People are questioning whether the country Kuwait will be inhabitable in a few years.
• Risk management is what this industry is all about, and with big data readily available, it becomes easier to calculate that risk and charge a fair price for it.
• There's an argument being made currently that credit-based insurance scores are discriminatory. The facts are if you discriminate against others, you are less competitive.
• Jerry shares his thoughts on how the industry will adapt to our changing world in the next five years.
• The insurance industry has been the one funding and supporting our infrastructure. Jerry explains what roles the bonds market plays in all of this.
• What does Jerry wish he'd learned about sooner in his career?

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Quotes

"People are talking a lot about inflation these days with 6% over-year inflation, but that's economic inflation, which is driven by supply and demand. Social inflation is rising loss cost for reasons not driven by economic factors."

"Institutional investors are looking for diversifying asset classes that are uncorrelated to credit and debt markets, and [litigation funding] is quite lucrative, but there are some ethical problems."

"Something is happening. There are still climate change deniers, but the facts are air temperatures are rising and sea levels are rising."