Opinion
The Great Reset doesn’t care if you believe it exists and Canada is on the front line
If you’re among the many people (can is possibly be the majority?) who still believe The Great Reset is an unfounded conspiracy theory, this article is for you.
The Great Reset ‘conspiracy theory’ has been around for years. If you don’t know what it is, here’s a brief explanation. It basically submits that some of the world’s wealthiest and most powerful people are using some of the world’s largest companies (which they own) as well as many of the world’s richest nations (which they run) to execute a plan to completely change the way our society works (which they don’t like very much). The theory is, these people who refer to themselves as “the elite” are planning to cripple the power of nation states and concentrate that power in a world governing body (like the World Economic Forum). This new powerful “elite” would exercise control over everyone, everywhere. They will completely change our supply chains, our economic systems and our energy systems in an effort to unite the world to protect the environment. There’s more to it, but that gets in most of the main points.
So this is the “theory”. But is there a “conspiracy” around this?
According the the Merriam-Webster Dictionary ‘conspiracy’ means simply “The act of conspiring together”. The Oxford dictionary spices that up a little. According to Oxford, ‘conspiracy’ means “A secret plan by a group of people to do something harmful or illegal”. Seems like it’s going to be easier to prove the Merriam-Webster version, but by the end of this article you’ll see how the Oxford definition might just work as well.
When it comes to all of the people who are not actively conspiring to change the world, there are roughly four categories of understanding The Great Reset. Either you:
- Have no idea there is a Great Reset
- Accept there is a Great Reset, but doubt the ability and the organization of the people conspiring.
- Accept there is a Great Reset, accept the ability of the conspirators, but either agree with their intentions, or at least not oppose their intentions due to your concern for a more fair economic system and an impending world devastating environmental disaster.
- Accept there is a Great Reset, and oppose the intentions of the conspirators because you personally value individual freedoms above everything else.
Group 1 is huge. Recent US polling shows half of Americans aren’t even aware of the Great Reset. It’s not like the people behind the reset aren’t writing and talking about it. It’s just that at least half of Americans haven’t seen them do it. That means we need to establish how it is possible in this age of information, that information of this magnitude is not being distributed to everyone. This part of my explanation is critical to understanding how very intelligent people can be completely unaware of information other people take for-granted.
It all comes down to this. We’ve all experienced the vast chasm of division and hatred in society of late. In this atmosphere of doubt and suspicion, there is really only one one thing in the entire world that absolutely everyone can believe in. President Donald Trump is a capital A a-hole. Even the “Don” would likely agree with that, right? But here’s the thing. When the rude TV star began his stunning run through the primaries, the world quickly divided between those who backed Trump and those who absolutely despised the orange tsunami.
How did this happen? Well a very large number of people, many of them living in ‘middle’ America had had it with the quality of the people running, to run America. When a second Clinton announced a Presidential bid they collectively shouted NOOOO. Then they set out in search of the exact opposite of the establishment. They found it in an orange sun rise of vitriol, emerging over the high rises of Manhattan. When Donald Trump threw his hair, ehem.. his hat into the ring, they had their guy. It wasn’t because of his experience, or that they believed he was ultimately qualified for the job. Trump’s crowning quality was the exact thing most people hate about him. You see it was that massive, bulbous, all encompassing ego that was the key. Only someone with an ego this out of control would be capable of resisting and even going on the attack against the oncoming onslaught of opposition from the embedded establishment and the mainstream media who despise him with a passion.
Trump will likely claim differently, but he didn’t invent divisiveness. The world was already moving in this direction. But like every huge event in history, it all starts with one bullet, one border crossing, and sometimes one very unusual Orange head of hair. Camps divided around Trump’s blinding ego. Guess which side the establishment was on? Guess which side the media was on? Guess what this would mean to the distribution of information?
Personally, when the orange glow emerged from Manhattan I tuned out. Not understanding what was happening, I dismissed the orange storm as a weather system that would fizzle out when people got sick of it. I tuned out of mainstream media because I only had so much time for the gong show that was (and remains) the media coverage of the orange blowhard. This is what saved me. I had to go looking elsewhere for information. I would soon find there was more information here, and different takes on the information everyone ‘knows’.
If you still depend on mainstream media you may not know or have time for an entire new world of information that has developed on the internet over the last few years. Comedians who used to turn to late night TV to analyze the daily news through humour (I understand they are still there), have turned to long form and as it turns out, extremely informing conversations in a series of compelling podcasts. They are joined by former media types and some pretty sharp up and coming minds. While their late night and daytime TV competition unite in their humorous hatred of all things Donald, these longer form conversations have tended to go deeper, due simply to the length of the presentation. Conversations often run past two and three hours, and “sound bites” are more like 5 to 15 or even 30 minute explanations of single issues. Yes it is wise to avoid a number of them, just like you would avoid a number of TV programs, but you dismiss many others at your own expense.
You don’t need to agree with them to find them compelling. They are talking about events, people, and issues (including The Great Reset) you will not even find on regular mainstream media. It is not uncommon for these podcaster / interviewers to be covering topics that my friends who rely on mainstream media won’t hear about for months, or even years. A great example of this is the Hunter Biden laptop. If you’ve been paying attention to this new online media, you’d have known about this since the fall of 2020. For those who rely on regular media, they only discovered the exact same information when it was finally confirmed by the New York Times in March of 2022. The fact they call this breaking news is hilarious (and disturbing) for those who read the original articles from the New York Post, about 20 months ago! Here’s a link to a retrospective look at Biden laptop news from The NY Post from December 2020!
Now on to The Great Reset. If you haven’t already clicked on the link in the fist sentence of this article here’s another opportunity.
OK now at least you know The Great Reset is a real thing. So we move on to people who find themselves in group 2 which doubts that the Reset will ever amount to any actual resetting. This group would say these ‘elites’ live really far away, and they’re probably harmless to us because it’s not like they have any control over us. Not in our country. Well. That all depends on how far away you live from people like Canada’s Deputy Prime Minister Chrystia Freeland. Canada’s Deputy PM is also on the Board of Trustees of the WEF. If that’s not a conflict of interest, they probably need to redefine conflict of interest. Don’t take it from me. Take it from the founder of the World Economic Forum Klaus Schwab. (You mean the Klaus Schwab who researched, wrote, and published the book COVID-19: The Great Reset, less than 6 months after Covid-19 was a thing?.. Yes. that’s the guy.) In this short video from way back in 2017 Schwab brags about the success of a WEF program called Young Global Leaders. In Schwab’s own words, the WEF has “penetrated” Canada’s federal cabinet. Sounds kind of conspiratorial.. and a little bit less like a theory when he says it.
If we want to know if this should be disturbing to us we need to know what Earth’s elites are planning for us. Well the WEF was kind enough to tell us exactly what The Great Reset will mean to.. well.. the rest of us. This (in)famous video reveals just how different life will be for the average person by 2030. It doesn’t say how “the elite” will live, though we can expect they’ll have slightly different rules. Alas, I’m getting ahead of myself. Here’s a list of the 8 things the WEF has been kind enough to let us know we need to prepare for by 2030. I understand this video originally came out in 2016. I first saw it in 2020. In five years it’s been circulated widely. Though it’s no longer featured on the WEF website, there are copies all over the internet.
Recap:
1) We’ll own nothing. Ouch. (Obviously the elite will own everything and since they’re smarter than us we’ll be very happy to know they’re taking care of us so well). It’s being said by opponents of this idea that people who own a bit of land are perhaps the greatest risk to this environmental movement. It’s bad for the environment for us to own property or even your own home. Especially because we decide what happens there. Do we keep animals? Do we cut down trees or burn around on recreation vehicles or inefficient farm machinery? All bad for the environment. All that will change.
2) The US will no longer be the world’s superpower. (Hmmm… Don’t these things often change after brutal wars?) Regardless instead of one superpower, there will be a few important nations. Wonder if that will make the world more secure, or less secure?
3) They plan to use 3D printers to make human organs (lucky for us).
4) We will not be allowed to eat meat very much anymore (cows and pigs and sheep are bad for the environment). Hey, speaking of conspiracies, I mean series of seemingly related facts that are probably just random.. Did you know Bill Gates is the largest private owner of ‘farmland’ in the United States? Not sure when the software magnate and WEF “Agenda Contributor” took up farming. I’m sure none of this is related to what Mr. Gates is going to allow us to eat in the future (nervous smile). Although Gates also happens to be a big investor in synthetic meat. Did I mention he’s an ‘agenda contributor’ with the WEF?
5) One billion people in the world will have to move due to climate change (Not sure if that applies to the beach homes of the elite). (Also not sure why scientists and engineers will stop doing what they’ve always done and help us cope and adapt if conditions are changing quickly and significantly.)
6) Polluters will have to pay to emit carbon dioxide. We already know how this feels in Canada.
7) We will be prepared to travel in space (I’m ready to go now). The logic here is that the earth will be so ruined by us, that we better be prepared to go destroy an entirely different planet. What could go wrong?
Finally and maybe most disturbing of all..
8) Western Values will have been tested to the breaking point. Some probably like the sound of that. But in the history books I’ve read, when a society’s values are tested “to the breaking point” that tends to look incredibly violent and warlike. (In my opinion number 8 is going to be really challenging to accomplish at the same time as the everybody will be happy part in number 1. Maybe that’s why they put them so far apart in their list.). By the way, you have to wonder what they mean by “western values”? Is this finally being enlightened enough to turf Christianity and those silly laws that western societies adopted from those traditional religious beliefs. Can’t wait to find out what the new traditions will be! This outta go over well (Imagine Jerry Seinfeld saying that.)
OK. If you don’t find this a tad disturbing that might mean you are personally in favour of The Great Reset. It’s still a free country so that’s just fine with the rest of us. However the introduction video above is very much prior to the official launch of The Great Reset. That took place in the opening months of the Covid-19 pandemic. It would be better to judge how this is actually going to work by looking at how this New World Order (that’s what they’re calling it now) is unfolding. Now that the resetters have been resetting for about two years, how’s it going so far? Here’s a report from Glenn Beck. Glenn is a conservative pundit and broadcaster. If you follow the mainstream media you will know him as a radical far right conservative (and maybe a lunatic). If you don’t see Beck through that filter you will acknowledge that he sometimes says very interesting things. Things like this. By the way, pay attention to the background behind the speakers at this “world government” conference. Then ask yourself if this group might be planning a new world order.
It’s puzzling that the Canadian media doesn’t give this any coverage. I guess there are simply more important things to talk about than whether our own federal cabinet is working in our interest or in the interests of really rich people who plan to OWN EVERYTHING in just a few short years. Oh this is probably nothing but you may have heard about the federal NDP party making a deal to secure the federal government right up to 2025. That party is lead by the guy who now is Co-Prime Minister Jagmeet Singh. Guess what?
Speaking of Canada. You may find this conversation between the British podcast sensation Russel Brand and Nick Corbishley interesting. Nick is the author of Scanned: Why Vaccine Passports and Digital IDs Will Mean the End of Privacy and Personal Freedom. As Canadians it is interesting to hear how people in other countries are seeing The Great Reset, and how Canadians are “world leaders”. Yippee?
If you’ve managed to find your way through the longest article ever, you will certainly now be able to acknowledge The Great Reset or New World Order exists. The question now is, do you believe this is a good thing or do you think we should resist it as things were working pretty well before they launched this? We can get into that later. At the very least the massive number of people who dismissed the “conspiracy theorists” as slightly insane will see there is a reason many people are concerned. In the end, as all philosophers know we need to establish the facts, before we can decide whether we agree with them or not.
Finally my wise friend Garett reminded about the joke that’s been circulating for many months now on social media. Every time it turns out another conspiracy theory was actually a conspiratorial fact, someone passes it around again. If you haven’t seen it yet it might help with your outlook in the future. Goes like this. “What is the difference between a conspiracy theory and the truth? — About 6 months!”
ACIP voted to un-recommend the Hep B birth dose, but here’s the problem: they still can’t weigh the other side of the ledger
Sunday, something happened that has never happened in the history of American public health: ACIP voted 8-3 to un-recommend the universal birth dose of hepatitis B for babies born to mothers who test negative for the virus. After 34 years of jabbing every American newborn within hours of taking their first breath—regardless of whether their mother had hepatitis B—the committee finally acknowledged what 25 European countries figured out decades ago: it doesn’t make sense.
But watching this vote unfold, I couldn’t help but notice the absurdity of the debate itself. Committee members who opposed the change kept saying variations of the same thing: “We’ve heard ‘do no harm’ as a moral imperative. We are doing harm by changing this wording.” Another said “no rational science has been presented” to support the change.
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And therein lies the fundamental problem with ACIP—and with the entire vaccine regulatory apparatus in America. They literally cannot weigh risk versus benefit because they only have data on one side of the scale.
The Missing Side of the Ledger
When ACIP debates adding or removing a vaccine from the schedule, they can produce endless data on disease incidence. They can show you charts demonstrating how hepatitis B cases in infants dropped from thousands to single digits after 1991. They can model projected infections if vaccination rates decline. They have this data at their fingertips because tracking infectious disease is something our public health apparatus actually does.
But ask them to produce equivalent data on vaccine injury, and you’ll get silence. Not “the data shows injuries are rare.” Not “here’s our comprehensive tracking of adverse events.” Just… nothing. A void where information should be.
This is not an accident. This is by design.
The safety trials for Engerix-B and Recombivax HB—the two hepatitis B vaccines given to American newborns—monitored adverse events for four to five days after injection. That’s it. If your baby developed seizures on day six, or regressed into autism over the following months, or developed autoimmune disease in the following year—none of that would appear in the pre-licensure safety data.
And the post-market surveillance? VAERS is a voluntary reporting system that the CDC itself acknowledges captures only a tiny fraction of adverse events. A Harvard-funded study found it captures perhaps 1% of actual vaccine injuries. Vaccine court has paid out over $5 billion in claims while simultaneously being structured to make filing nearly impossible for average families.
So when Dr. Cody Meissner voted against removing the Hep B birth dose and said he saw “clear evidence of the benefits” but “not the harms,” he was accidentally revealing the entire rotten structure. Of course he doesn’t see the harms. Nobody is systematically looking for them.
The Invisibility of Vaccine Injury
Here’s what most people don’t understand about vaccine injury: it’s nothing like a gunshot wound.
If you shoot someone, the cause is obvious. There’s a bullet, a wound, blood, a clear mechanism of action visible to any observer. Even a medical examiner who’s never seen the victim before can determine cause of death.
Vaccine injury doesn’t work that way. When aluminum nanoparticles from a vaccine cross the blood-brain barrier via macrophages, when they lodge in brain tissue and trigger chronic neuroinflammation, when a child slowly regresses over weeks or months—there’s no bullet. There’s no smoking gun. There’s just a before and an after, and a desperate parent trying to explain to doctors that something changed.
This invisibility is the vaccine program’s greatest protection. Because the injury mechanism is complex and delayed, because it doesn’t leave an obvious wound, because it requires actually looking to find—and because no one in authority is looking—the injuries simply don’t exist in the official record.
I watched my own son Jamie regress after his vaccines. A healthy, developing toddler who lost his words, stopped making eye contact, and retreated into a world we couldn’t reach. My wife and I know what happened. Thousands of other parents know the same thing happened to their children. But because this type of injury doesn’t show up on a simple blood test, because there’s no autopsy finding that says “vaccine-induced encephalopathy,” ACIP members can sit in a room and say with straight faces that they don’t see evidence of harm.
They’re not lying. They literally can’t see it. Because no one is measuring it.
The Chicken Pox Conundrum
Here’s an example that illustrates the insanity of our current approach.
The varicella (chicken pox) vaccine was added to the schedule in 1995. It definitely reduces chicken pox cases. The data is clear on that front. Mission accomplished, right?
But what about the other side of the ledger?
Emerging research suggests that wild chicken pox infection provides some protective effect against brain cancers—particularly glioma, the most common type of primary brain tumor. Multiple studies have found that people who had chicken pox as children have significantly lower rates of brain cancer later in life. The hypothesis is that the immune response to wild varicella provides lasting immunological benefits that extend far beyond preventing itchy spots.
Meanwhile, the vaccine itself has been associated with increased rates of autoimmune conditions. Studies have linked varicella vaccination to higher rates of herpes zoster (shingles) outbreaks in younger age groups, to autoimmune disorders, to various adverse events that weren’t captured in the original short-term safety trials.
So what’s the true risk-benefit of the chicken pox vaccine? Does preventing a week of itchy discomfort in childhood justify potentially increased rates of brain cancer and autoimmune disease later in life?
ACIP can’t answer this question. They literally don’t have the data. They can show you chicken pox cases going down. They cannot show you a comprehensive analysis of long-term neurological and immunological outcomes in vaccinated versus unvaccinated populations, because that study has never been done.
And so they keep recommending the vaccine based on the only data they have—the disease prevention data—while remaining willfully blind to consequences they’ve never bothered to measure.
The ACIP Paradox
Sunday’s vote was historic, but it also revealed the fundamental paradox of vaccine regulation in America.
The committee members who voted to remove the universal Hep B birth dose recommendation did so largely based on comparative evidence from Europe, parental concerns, and the basic logic that vaccinating a 12-hour-old baby for a sexually transmitted disease their mother doesn’t have makes no medical sense. They were right to do so.
But the committee members who voted against the change weren’t wrong either, from their perspective. They looked at the only data they have—disease prevention data—and concluded that removing the recommendation could lead to more hepatitis B cases. And within their limited framework, they’re correct.
The problem is the framework itself.
True risk-benefit analysis requires data on both risks AND benefits. ACIP has comprehensive data on benefits (disease prevention) and virtually no data on risks (vaccine injury). So every decision they make is fundamentally flawed from the start.
When Dr. Joseph Hibbeln complained that “no rational science has been presented” to support changing the recommendations, he was inadvertently indicting the entire system. Of course no comprehensive vaccine injury data was presented—such data doesn’t exist because no one has been willing to collect it.
This is like asking someone to make an informed financial decision while only showing them potential profits and hiding all possible losses. Of course the decision will be skewed. Of course you’ll end up with a bloated portfolio of high-risk investments that look great on paper.
The Real Reform
If RFK Jr. and the new HHS leadership want to actually fix the vaccine program, they need to understand that removing individual vaccines or making them “optional” is just rearranging deck chairs on the Titanic.
The real reform is creating the data infrastructure that should have existed from the beginning.
We need a comprehensive, long-term, vaccinated-versus-unvaccinated health outcomes study. Not a five-day safety trial. A multi-decade tracking of neurological, immunological, and developmental outcomes across populations with varying vaccination status. Florida just eliminated all vaccine mandates—that state alone could provide the data we need within ten years if someone had the courage to actually collect it.
We need a vaccine injury surveillance system that actually captures adverse events. Not a voluntary reporting system that misses 99% of injuries. An active surveillance system with trained clinicians looking for the kinds of delayed, complex injuries that vaccines actually cause.
We need accountability for manufacturers. The 1986 National Childhood Vaccine Injury Act removed all liability from vaccine makers—and predictably, the vaccine schedule exploded afterward while safety research stagnated. Why would any company invest in safety when they can’t be sued for injuries?
Without this data, every ACIP meeting will be the same performance we watched this week: members confidently citing disease prevention data while admitting they can’t see evidence of harm—not because harm doesn’t exist, but because no one is looking for it.
What Comes Next
Sunday’s vote was a crack in the wall. For the first time, an American regulatory body acknowledged that perhaps vaccinating every newborn within hours of birth for a disease primarily transmitted through sex and IV drug use doesn’t make sense when the mother has already tested negative.
But the forces of institutional inertia are already mobilizing. The American Academy of Pediatrics is “disappointed.” The American Medical Association is calling for the CDC to reject the recommendation. The pharmaceutical industry—which collects over $225 million annually from Hep B birth doses alone—will fight to restore the universal recommendation.
They will cite the same data they always cite: disease prevention data. Cases prevented. Infections avoided. Lives saved—theoretically.
They will not cite vaccine injury data, because that data doesn’t exist in any comprehensive form. They will not present long-term health outcomes in vaccinated versus unvaccinated children, because those studies have been actively avoided for decades. They will not acknowledge the thousands of families who have watched their children regress after vaccination, because those injuries aren’t captured in any official database.
And this is why ACIP will always be hamstrung. Until we build the data infrastructure to actually measure vaccine injury—to put real numbers on the other side of the ledger—every vaccine decision will be based on incomplete information. Every “risk-benefit analysis” will be a fraud, because we’re only measuring half the equation.
The hepatitis B birth dose vote was a small victory. But the larger battle—for actual science, for complete data, for true informed consent—that battle is just beginning.
And until we win it, ACIP will continue making decisions in the dark, confidently citing evidence of benefits while remaining deliberately blind to the harms they’ve never bothered to measure.
About the author
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J.B. Handley is the proud father of a child with Autism. He spent his career in the private equity industry and received his undergraduate degree with honors from Stanford University. His first book, How to End the Autism Epidemic, was published in September 2018. The book has sold more than 75,000 copies, was an NPD Bookscan and Publisher’s Weekly Bestseller, broke the Top 40 on Amazon, and has more than 1,000 Five-star reviews. Mr. Handley and his nonspeaking son are also the authors of Underestimated: An Autism Miracle and co-produced the film SPELLERS, available now on YouTube.
How to End the Autism Epidemic is a reader-supported publication.
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We’ve all seen the headlines — such as the below — loudly proclaiming that due to climate change the insurance industry is in crisis, and even that total economic collapse may soon follow. For instance, since 2019, the New York Times, one of the primary champions of this narrative, has published more than 1,250 articles on climate change and insurance.
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Climate advocates have embraced the idea of a climate-fueled insurance crisis as it neatly ties together the hyping of extreme weather and alleged financial consequences for ordinary people. The oft-cited remedy to the claimed crisis is, of course, to be found in energy policy: “The only long-term solution to preserve an insurable future is to transition from fossil fuels and other greenhouse-gas-emitting industries.”
However, it is not just climate advocates promoting the notion that climate change is fundamentally threatening the insurance industry. A climate-risk industrial complex has emerged in this space and a lot of money is being made by a lot of people. The virtuous veneer of climate advocacy serves to discourage scrutiny and accountability.
In this series, I take a deep dive into the “crisis,” its origins, its politics, and its tenuous relationship with actual climate science.¹ Today, I kick things off by sharing three fundamental, and perhaps surprising, facts that go a long way to explaining why insurance prices have increased and who benefits:
- Property/casualty insurance is raking in record profits;
- Insurance underwriting returns vary year-to-year but show no trend;
- “Climate” risk assessments are unreliable and a cause of higher insurance prices.
Grab a cup of coffee, settle in, and let’s go . . .
If you value the deep dives such as this one, which you will find no where else,
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Property/casualty insurance is raking in record profits
This year is shaping up to be an extremely profitable year for the property/casualty (P/C) insurance industry. In a report covering the first six months of 2025, the National Association of Insurance Commissioners (NAIC) shares the good news (emphasis added):
Despite heavy catastrophe losses, including the costliest wildfires on record, the U.S. Property & Casualty (P&C) industry recorded its best mid-year underwriting gain in nearly 20 years.
In the second half of 2025, returns got even better for the P/C industry. According to a new report from S&P Global Intelligence, as reported by Carrier Management (emphases added):
For U.S. P/C insurers, it just doesn’t get any better than this. . . With a combined ratio of 89.1 for third-quarter 2025, the U.S. property/casualty insurance industry had its best quarter in at least a quarter of a century—and maybe longer, S&P Market Intelligence said.
Taking a longer view, the extremely profitable 2025 follows significant industry profitability in 2023 and 2024, according to the National Association of Insurance Commissioners (NAIC), as shown in the figure below.
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What accounts for the high profits?
The NAIC explains:
Strong premium growth, driven largely by rate increases, coupled with abating economic inflation . . . Net income nearly doubled compared to last year, attributed to the underwriting profit and healthy investment returns.
Below, I’ll pick up the issue of rate increases and explore one big reason why they have occurred.
If there is a P/C insurance crisis, it may be in figuring out how to explain its impressive returns at the same time that the climate lobby is telling everyone that the industry is collapsing.
Insurance underwriting returns vary year-to-year but show no trend
The P/C industry makes money primarily in two ways — underwriting of insurance policies and investment income. Typically, insurance companies seek to break even, or lose little, on insurance underwriting and earn profits on investment income.
Warren Buffet, in his 2009 letter to Berkshire Hathaway shareholders, explained concisely how the P/C industry works:
Our property-casualty (P/C) insurance business has been the engine behind Berkshire’s growth and will continue to be. It has worked wonders for us. We carry our P/C companies on our books at $15.5 billion more than their net tangible assets, an amount lodged in our “Goodwill” account. These companies, however, are worth far more than their carrying value– and the following look at the economic model of the P/C industry will tell you why.
Insurers receive premiums upfront and pay claims later. In extreme cases, such as those arising from certain workers’ compensation accidents, payments can stretch over decades. This collect-now, pay-later model leaves us holding large sums– money we call “float”– that will eventually go to others. Meanwhile, we get to invest this float for Berkshire’s benefit. Though individual policies and claims come and go, the amount of float we hold remains remarkably stable in relation to premium volume. Consequently, as our business grows, so does our float.
If premiums exceed the total of expenses and eventual losses, we register an underwriting profit that adds to the investment income produced from the float. This combination allows us to enjoy the use of free money– and, better yet, get paid for holding it. Alas, the hope of this happy result attracts intense competition, so vigorous in most years as to cause the P/C industry as a whole to operate at a significant underwriting loss. This loss, in effect, is what the industry pays to hold its float. Usually this cost is fairly low, but in some catastrophe-ridden years the cost from underwriting losses more than eats up the income derived from use of float.
The figure below, using data from the Insurance Information Institute, shows the underwriting performance of the P/C industry from 2004 to 2024.
The time series shows lots of ups and downs, but no trend — by design, as Buffet explained. There are certainly no signs of an underwriting crisis, much less indications of a coming collapse. The P/C industry looks both well-managed and healthy.
“Climate” risk assessments are unreliable and a cause of higher insurance prices
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If profits are high and underwriting is steady, then what then accounts for increasing insurance prices — which, as of the end of 2024, increased 29 consecutive quarters in a row (above)?
A big part of the answer is Climate Change. But not how you might think.
A decade ago, Mark Carney — then Governor of the Bank of England and today Prime Minister of Canada — gave an influential speech titled, Breaking the Tragedy of the Horizon – climate change and financial stability.
Carney argued that the insurance industry was at risk due to changes in the climatology of extreme events that were not properly understood by experts in the industry:
[T]here are some estimates that currently modelled losses could be undervalued by as much as 50% if recent weather trends were to prove representative of the new normal. . . Such developments have the potential to shift the balance between premiums and claims significantly, and render currently lucrative business non-viable.
Coincident with Carney’s 2015 speech, the Bank of England released a report on the impacts of climate change on the insurance industry, and noted that conventional catastrophe modeling did not effectively consider a changing climate. The Bank of England kicked off a longstanding campaign to convince people that extreme weather events were changing dramatically in the near term.
Subsequently, in 2019, the Bank of England required firms to assess their “climate risks.” This guidance was updated last week. In (a coordinated) parallel effort, national and international organizations focused on “climate risk” to the financial sector started multiplying — such as the Climate Financial Risk Forum and the Network for Greening the Financial System.
The climate-risk industry was born circa 2019.
There is an incredible story to be told here (and Jessica Weinkle is the go-to expert), but for today, the key takeaways are that (a) the notion of “climate risk” to finance, including insurance, led to the creation of a “climate risk” industry, and (b) within this industry, a new family of risk assessment vendors emerged, promising to satisfy the new demands for climate risk disclosure and risk modeling.
The Global Association of Risk Professionals (GARP) explains:
As this [“climate risk”] was a new discipline for most financial firms, many turned to third party providers (“vendors”) to help them with different areas of expertise. There are now many physical risk data vendors, which offer a variety of services to financial institutions. While vendor offerings often sound alike — providing projections of how physical risk could evolve for locations across a range of risks and climate scenarios — they can differ significantly in terms of features, approach, or suitability for specific needs, and the underlying models that these providers use differ in methodology and assumptions.
GARP just published an incredibly important study that assessed how 13 different “climate risk” vendors modeled physical risk and risk of loss across 100 individual structures around the world.²
The results are shocking — given how they are used in industry, but should not be surprising — given what we know about modeling.
There is absolutely no consensus across vendors about “climate risk” in terms of either physical risks or risks of loss.
The figure below shows, for 100 different properties around the world, the differences in modeled 200-year flood risk across the 13 vendors, as refelcted in modeled flood heights. The maximum difference among the properties across vendors is about 12 meters and the median difference is about 2.7 meters — These are huge differences.
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In terms of risk of loss, the models have an even greater spread. The figure below shows that for a modeled 200-year flood, 10 properties are modeled by at least one vendor to have total losses (100%) while another vendor models the same properties to have no losses, under the exact same event. The median difference between minimum and maximum modeled loss ratio is 30% — Another huge number.³
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Insurance pricing does not scale linearly with increasing modeled loss ratios. Consider that the difference between a modeled 10% loss ratio and a 40% loss ratio (i.e., the 30% median difference across vendors from above) might result in a 10x increase in insurance rates. Risk adverse insurers have incentives to price at the most extreme modeled loss.
Model inaccuracies, unceratinties, spread, and ambiguity are feature not flaws when it comes to making money. “Climate risk” modeling has resulted in a financial windfall not just for the newly created climate analytics industry, but also for insurers and reinsurers who have seen the envelope of modeled losses expand. The need for new models, of questionabl fidelity, are necessary to satisfy industry guidance and government regulators.
The net result has been a seemingly scientific justification for increasing insurance rates.⁴
There are of course real changes in physical risk, exposure, and vulnerability as well as the regulatory and political contexts within which the P/C industry must operate. The discipline of catastrophe modeling has long integrated these factors to assess risks. As insurance policies and reinsurance contracts are typically implemented on a one-year basis, and this well-positioned to incorporate changng perceptions of risk, this series will explore why a new “climate risk” assessment industry was even needed in the first place.
What about that “climate risk”? THB readers will be very familiar with the science of extreme events and climate change, which, as reported here, happens to be consistent with both the Intergovernmental Panel on Climate Change and those in the legacy catastrophe modeling community.
One of those modeling firms, Verisk, gets the last word for today:
We estimate about 1% of year-on-year increases in AAL [Average Annual Loss] are attributable to climate change. Such small shifts can easily get lost behind other sources of systematic loss increase discussed in this report, such as inflation and exposure growth. The random volatility from internal climate variability also dwarfs the small positive climate change signal.
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