Idalia Could Become Another Multibillion-Dollar Superstorm

A stormy forecast for insurance

Hurricane Idalia strengthened to a Category 3 storm on Wednesday morning, packing soaking rains and destructive winds of up to 125 miles per hour, as it lumbers toward the Florida coastline. Officials along Florida’s Gulf Coast and in Georgia and the Carolinas have issued emergency warnings, as the region braces for yet another “multibillion-dollar insurance industry event.”

Last September, Hurricane Ian, a Category 4 storm, slammed into Florida, inflicting nearly $100 billion in damage. Such disasters are becoming more common — and more costly — each year, sending insurance costs soaring for homeowners and businesses.

Insurance companies are still reeling from Ian. Some firms doubt they can continue to cope with such superstorms, while others have limited their business in the state. One of their big complaints: State regulations prevent them from raising prices for customers, they say, forcing them to say no to new policies.

Florida’s woes reflect a nationwide problem, one that is expected to intensify as climate change unleashes more extreme weather events. The Insurance Information Institute, an industry trade group, estimates that property and casualty insurers in the state have had cumulative underwriting losses of more than $1 billion for the last three years.

The picture is bleak elsewhere, too:

State Farm, the country’s largest insurance provider, said it would stop selling homeowners’ coverage in California, a state that has been battered by wildfires in recent years. Allstate also said it had stopped selling new home and commercial policies there, citing worsening climate risks and rising building costs.

American International Group plans to curb home insurance sales in New York, Delaware, Florida, Colorado, Montana, Idaho and Wyoming, after restricting new business in California.

Not everyone views these markets as hopeless. Florida’s insurance regulator just approved Orion180 as a new insurer for the state. “We view Florida as an attractive insurance market for profitable growth over the long term,” said Kenneth Gregg, the company’s founder and C.E.O. And Berkshire Hathaway has bet big on Florida’s reinsurance market this year.

One possible enticement: Premiums in the state have spiked, with the average Florida homeowner now paying $6,000 a year. (However, those rising premiums have also brought down property values, pushing more property owners to forego coverage.)

A so-called “protection gap” seems likely to grow. Last year, insurance covered just 60 percent of the $165 billion in total economic losses from climate-related disasters in the U.S. That widening gap is becoming a major concern for federal regulators, who worry it leaves big swaths of American homeowners and businesses vulnerable to the next superstorm.


A drop in job openings may hearten the Fed. The Labor Department reported that there were 8.8 million job openings in July, the lowest level since March 2021. Economists said that would likely be interpreted as a good sign by the Fed, which will weigh new moves on interest rate policy at a meeting next month; the central bank will also factor in jobs data scheduled for release on Friday.

The White House names a first batch of drugs set for Medicare price negotiations. Officials unveiled the long-awaited list of 10 medicines, which will be subject to a landmark new program meant to reduce costs for Medicare. Drugmakers have pushed back against the plan, including in court, and Republicans have criticized the initiative as government overreach.

Military leaders seize power in oil-rich Gabon. Officers claiming to represent the major security forces of the African country said they were canceling the results of last weekend’s election, less than an hour after the incumbent president won a third term. A successful coup would mark at least the ninth military takeover in Western and Central Africa in the last three years.

CNN is expected to name its next leader imminently. Executives at Warner Bros. Discovery, the news network’s parent company, have selected Mark Thompson, a former C.E.O. of The New York Times and head of the BBC, for the post, according to The Times. The pick is meant to restore order at CNN, which has been rattled by turmoil, including the ouster of its last chief, Chris Licht.

The on-the-ground view of Raimondo’s trip to China

Wednesday was the last day of Commerce Secretary Gina Raimondo’s visit to China, where she has sought to promote trade between the two superpowers while holding firm on technology export limits imposed in the name of American national security.

The Times’s Ana Swanson, who covers trade and international economics and has been traveling with Raimondo, answered DealBook’s questions about the trip — while zipping along at 215 miles per hour on a train from Beijing to Shanghai.

What has the mood been like, given the current tensions between Washington and Beijing?

The atmosphere is cautious but fairly warm. It seems like both sides are pleased to be talking again, after a very rocky period for U.S.-China relations during “balloongate.” So there is somewhat of a sense of a thaw, but also recognition of how many difficult issues there are in the relationship, and that often U.S. and Chinese interests will fundamentally conflict.

How is Raimondo balancing business interests and national security during her conversations with Chinese officials?

Raimondo has focused on promoting business ties that have nothing to do with national security — like skin care products, amusement parks and group tourism — but employed tough rhetoric about the technology controls and national security.

She didn’t talk as much about the huge number of products that fall somewhere in the middle: things like cars, steel and solar panels that are strategically important to the United States. Here, she has a more complicated mandate. Some U.S. businesses thrive on trade with China, while others are harmed or undercut by Chinese practices.

What, if anything, will this change about the U.S. relationship with China going forward?

Some are describing this as a turning point for the U.S.-China relationship. But Raimondo said on Tuesday that the direction of the relationship will depend on how much China follows through on things like improving its treatment of American companies. “Actions speak louder than words,” she said.

In other China news: The embattled homebuilder Country Garden plans to raise $34 million by selling new shares as it teeters on the brink of default. And rivals of Donald Trump for the Republican presidential nomination are following his lead in taking even tougher stances on trade with China.

“I hope they succeed, but this just seems like a lot of tech guys with a lot of money and a ton of hubris diving into another business that they can’t possibly understand.”

Mark Friedman, a real estate developer in Sacramento, expressing his doubts that a group of Silicon Valley moguls will succeed with their plans to build a dream city in Northern California.

Could Bitcoin go mainstream for investors?

Bitcoin surged as much as 7 percent on Tuesday on hopes that a favorable federal court ruling could usher in the crypto industry’s long-held dream of a new mainstream investment product tied to the cryptocurrency.

Bitcoin was trading just below $27,500 on Wednesday morning, after soaring past $28,000 on Tuesday, its highest level in two weeks. Crypto bulls bought it up after the U.S. Court of Appeals for the District of Columbia ruled that Grayscale Investments, the world’s largest digital asset manager, should be allowed to offer a spot Bitcoin exchange-traded fund that could eventually trade on a traditional stock market.

It’s a blow to the S.E.C., which has taken a hard line on the industry and on applications for crypto investment products, especially since the collapse of the crypto exchange FTX last year.

That said, the agency has approved Bitcoin-focused funds — but only those centered on futures that track price fluctuations in the cryptocurrency, starting in 2021. The agency has denied numerous requests to introduce an E.T.F. holding Bitcoin itself, arguing that the market for Bitcoin is subject to fraud and manipulation, leaving investors vulnerable.

In its ruling, the appeals court found the S.E.C.’s track record on such approvals “arbitrary and capricious.”

The crypto industry has waited a decade for this. Cameron and Tyler Winklevoss, the founders of the crypto exchange Gemini, first proposed such a Bitcoin fund in 2013. Since then, Wall Street stalwarts like BlackRock and Fidelity have made similar unsuccessful applications.

Grayscale’s case against the S.E.C. was closely watched by crypto executives: Approval would mean that investors could buy shares in a Bitcoin fund rather than hold the digital asset itself.

But the dream will be deferred at least a little longer. The agency has 45 days to request a review of the ruling, and an S.E.C. spokesman said it was weighing its next steps.



Microsoft offered to sell cloud streaming rights for Activision Blizzard’s games to Ubisoft as a concession to win British antitrust approval for its $69 billion takeover of Activision. (CNN)

Goldman Sachs has reportedly made several private equity investments financed in part with money from China’s sovereign wealth fund. (FT)

Several Republican state attorneys general asked the S.E.C. to make Shein, the Chinese-owned fast-fashion brand, prove it doesn’t rely on forced labor if it files to go public. (NYT)

“Colm Kelleher was always meant to become Europe’s most powerful banker” (FT)


Mayor Francis Suarez of Miami said he would suspend his presidential campaign, becoming the first Republican candidate to drop out. (CNBC)

Elon Musk’s X will again allow political advertising, after it was suspended in 2019. (CNN)

U.S. regulators unveiled new requirements for regional banks, including additional debt issuance and stronger “living wills,” in an effort to prevent future crises. (CNBC).

Best of the rest

Newly released court documents reveal fresh details about the relationship between the Under Armour founder Kevin Plank and the TV anchor Stephanie Ruhle — including a private phone and secret advice on the company’s financial matters. (WSJ)

Meta said that it removed a vast Chinese influence campaign across its social networks, in its single biggest takedown of such an operation to date. (NYT)

How Yahoo staged a comeback. (Axios)

The newest threat to your personal finances: voice deepfakes. (NYT)

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Andrew Ross Sorkin is a columnist and the founder and editor at large of DealBook. He is a co-anchor of CNBC’s “Squawk Box” and the author of “Too Big to Fail.” He is also a co-creator of the Showtime drama series “Billions.” More about Andrew Ross Sorkin

Bernhard Warner joined the The Times in 2022 as a senior editor for DealBook. Previously he was a senior writer and editor at Fortune focusing on business, the economy and the markets. More about Bernhard Warner

Sarah Kessler is a senior staff editor for DealBook and the author of “Gigged,” a book about workers in the gig economy. More about Sarah Kessler

Michael de la Merced joined The Times as a reporter in 2006, covering Wall Street and finance. Among his main coverage areas are mergers and acquisitions, bankruptcies and the private equity industry. More about Michael J. de la Merced

Lauren Hirsch joined The Times from CNBC in 2020, covering deals and the biggest stories on Wall Street. More about Lauren Hirsch

Ephrat Livni reports from Washington on the intersection of business and policy for DealBook. Previously, she was a senior reporter at Quartz, covering law and politics, and has practiced law in the public and private sectors.   More about Ephrat Livni

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