The DOJ has a plan for Google

Summary

Marketplace Podcast Summary

Title: The DOJ has a plan for Google
Host: Kyle Rysdal
Release Date: November 22, 2024

---

1. Economic Outlook and the Leading Economic Index (LEI)

[00:01 – 03:28]

Kyle Rysdal opens the episode by discussing the current state of the economy, emphasizing the importance of both public sentiment and objective data. He introduces the Conference Board's Leading Economic Index (LEI), which aggregates ten forward-looking indicators to forecast short-term economic growth.

Key Points:

• The LEI fell by 4.10% last month, continuing a decline observed since early in the year.
• Despite the downturn, the rate of decline has been slowing, indicating a potential stabilization.
• Real GDP is projected to grow by 2.9% in 2024 and 2.3% in 2025.
• The stock market, particularly the S&P 500, has reached record highs, suggesting confidence in economic growth.

Notable Quotes:

• Kyle Rysdal ([00:01]): “How we feel about this economy matters, of course. What we know matters too.”
• Mitchell Hartman ([01:28]): “The leading economic index is designed to predict future growth.”

Insights: Economists like Stephanie Guichard and Mark Zandi provide nuanced perspectives, indicating that while the LEI points to economic headwinds, other indicators such as low unemployment and robust job creation suggest resilience. Sam Stovall from CFRA Research notes that the LEI is easing its warning signs of a potential recession.

---

2. Department of Justice's Plan to Break Up Google

[04:28 – 07:00]

Kyle Rysdal transitions to a major tech and antitrust story: the Department of Justice's (DOJ) initiative to dismantle Google’s market dominance.

Key Points:

• The DOJ seeks to compel Google to sell its Chrome web browser and impose restrictions on its Android operating system.
• The government's focus extends to Google’s manipulation of artificial intelligence (AI) development, aiming to curb the company's advantage in AI-driven search technologies.

Notable Quotes:

• Kayleigh Wells ([04:53]): “Google enjoys roughly 90% of search engine market share.”
• Adam Epstein ([05:16]): “They can continue to improve their own search AI agent and keep searches away from their competitors.”
• Jatisharepto ([19:26]): “I live in a townhome and I would have to put a cord across the sidewalk, which I don't even know if it's legal or not.”

Insights: Kelly Wells of Marketplace breaks down the DOJ's arguments, highlighting the pervasive influence of Google’s Chrome browser and Android OS in steering search engine traffic towards its proprietary AI systems. Experts like Chirag Shah and Thomas Davenport discuss the potential impacts on competition and innovation, with opinions divided on whether the DOJ's actions will foster a more competitive landscape or inadvertently stifle technological advancements.

---

3. Interview with Jatisharepto, President and CEO of Save the Children US

[07:00 – 15:23]

The episode features an in-depth interview with Jatisharepto, the CEO of Save the Children US, who shares insights into the operational challenges and strategic decisions of running a major nonprofit organization.

Key Points:

• Save the Children operates in over 115 countries with a budget nearing $3 billion, focusing on emergency responses, education, and livelihoods.
• The organization has significantly professionalized its supply chain operations, managing over 300 warehouses and procuring essential goods worth half a billion dollars annually.
• Jatisharepto discusses the ethical dilemmas of resource allocation, emphasizing the need to prioritize impactful interventions over simply increasing output.

Notable Quotes:

• Jatisharepto ([08:10]): “If you are working for large consumer packaged goods companies, you do try to make everyday products for everyday people all the time.”
• Jatisharepto ([12:03]): “You have to make that leap. And sometimes we also have to extract ourselves out of areas because there's not sustainable funding.”

Insights: The conversation delves into the complexities of measuring success in the nonprofit sector, contrasting it with the private sector's straightforward metrics. Jatisharepto highlights the challenges of providing tangible benefits to children in crisis zones while maintaining high standards of safety and efficacy. The discussion also touches on the ever-growing needs in humanitarian efforts, underscoring the increasing demand for Save the Children's services.

---

4. Financial Market Updates

[15:23 – 17:47]

Kyle Rysdal provides a slot of financial news, detailing movements in stock markets, cryptocurrency, and mortgage rates.

Key Points:

• Dow Industrials surged by 461 points (1.1%), leading a robust trading day.
• The NASDAQ saw a modest increase, while the S&P 500 climbed 31 points.
• Major banks like JPMorgan Chase and Citigroup contributed significantly to the market rally.
• Bitcoin reached a new high, trading around $98,000, influenced by a cryptocurrency-friendly administration.
• Mortgage rates saw a slight uptick, with the average 30-year fixed rate rising to 6.84%.

Notable Quotes:

• Kyle Rysdal ([15:31]): “Bad news becomes good news sometimes.”

Insights: The financial segment illustrates a resilient market buoyed by strong banking sector performance and positive investor sentiment towards cryptocurrency. However, rising mortgage rates indicate tightening conditions for the housing market, reflecting broader economic trends.

---

5. Challenges in the Electric Vehicle (EV) Market

[17:47 – 20:03]

Stephanie Hughes explores the hurdles faced by the EV industry in both Europe and the United States.

Key Points:

• In Europe, the termination of an EV subsidy program by the German government led to a slump in EV sales.
• European automakers struggle with increased competition from cheaper Chinese imports and stringent emissions standards.
• In the U.S., the focus has shifted from high-end EVs to more affordable models to appeal to the average consumer.
• Infrastructure challenges, such as the availability of charging stations, remain a significant barrier to widespread EV adoption.

Notable Quotes:

• Stephanie Hughes ([18:00]): “Since then in Germany, EV sales have been quite sluggish.”
• Stephanie Hughes ([19:03]): “American consumers also don't always know when and where they'll charge an EV.”

Insights: The segment underscores the multifaceted challenges of the EV market, including governmental policy shifts, competitive pressures, consumer preferences, and infrastructural limitations. Experts suggest that achieving broader EV adoption requires concerted efforts in policy support, technological advancement, and public education.

---

6. Insurance Industry’s Response to Recent Hurricanes in Florida

[20:03 – 24:47]

Amy Scott reports on the impact of Hurricanes Helene and Milton on Florida’s insurance market, highlighting the sector's resilience and ongoing challenges.

Key Points:

• Hurricane Helene caused approximately $2 billion in insured losses, while Milton's losses are expected to be lower than initially estimated.
• The Florida insurance market has stabilized, showing its best financial position in nearly a decade due to tort reform and improved financial strategies by insurers.
• Despite stabilization, challenges persist as major insurers like Farmers Insurance and Allstate have reduced their presence in the state.
• Citizens, the state-backed insurer, has taken on more risk, but overall insurer ratings remain low, with over half of the companies rated 6 or lower by Weiss Ratings.
• High denial rates of insurance claims, especially for flood damage, remain a pressing issue for Florida homeowners.

Notable Quotes:

• Mark Friedlander ([20:45]): “The Florida market is in its best financial position in nearly a decade.”
• Chuck Nice ([23:01]): “I don't think people realize how close we were to a collapse of the private market in Florida.”

Insights: The insurance segment reveals a complex landscape where regulatory changes and economic factors have bolstered the financial health of insurers, yet customer satisfaction remains low due to high claim denial rates. The reliance on state-backed insurers and the exodus of major private companies indicate ongoing vulnerabilities in Florida's insurance framework.

---

7. AAA’s Rebranding to Support EV Charging

[24:47 – End]

In the final segment, Kyle Rysdal shares a development in consumer services related to electric vehicles.

Key Points:

• AAA has rebranded its gas price reporting to "fuel prices" to include electric vehicle (EV) charging costs.
• Consumers can now access statewide average per kilowatt-hour (kWh) rates for EV charging through AAA.
• The national average cost for EV charging is reported at 34.7 cents per kWh, compared to the national gas price average of $3.06 per gallon.

Notable Quotes:

• Kyle Rysdal ([24:47]): “As EV penetration keeps gathering steam in this economy, there has been a rebrand.”

Insights: AAA’s initiative reflects the growing normalization of EVs and the necessity for consumers to have accessible information on charging costs. This move aims to facilitate the transition for traditional car owners contemplating the shift to electric vehicles by providing transparent and relevant pricing data.

---

Conclusion

The November 22, 2024 episode of Marketplace delivered a comprehensive overview of pressing economic indicators, significant antitrust actions against Google, humanitarian leadership insights, and evolving trends in financial markets, electric vehicles, and the insurance industry. Through expert interviews and detailed reporting, the episode offered listeners a nuanced understanding of how these diverse topics interconnect and impact both the macroeconomic landscape and individual lives.

---

Notable Contributors:

• Kyle Rysdal: Host of Marketplace
• Mitchell Hartman: Reporter on economic indicators
• Stephanie Guichard: Economist at the Conference Board
• Sam Stovall: Analyst at CFRA Research
• Mark Zandi: Economist at Moody's Analytics
• Kayleigh Wells: Marketplace correspondent on DOJ and Google
• Jatisharepto: President and CEO of Save the Children US
• Stephanie Hughes: Reporter on the EV market
• Amy Scott: Reporter on insurance and hurricanes

Credits: John Buckley, John Gordon, Noya Carr, Diantha Parker, Amanda Pietra, and Stephanie Seek were part of the Marketplace editing staff, with Amir Bibawe serving as the managing editor.

---

For more insights and updates, visit Marketplace and consider supporting their fact-based journalism through donations at marketplace.org/donate.

Transcript

[Kyle Rysdal]

How we feel about this economy matters, of course. What we know matters too. From American Public Media, this is Marketplace in Los Angeles. I'm Kyle Rysdal. It is Thursday today. This one is the 21st of November. Good as always to have you along, everybody. Let us stipulate here right at the outset that the vibes of this economy are real. Because as we know, how people feel about their economic lives does matter. That said, a good dose of data every now and then can be really useful. Something a little more objective that might tell us where the economy is at present and sometimes a bit about where it's going. It's convenient then that we got just such a dose of data today. The Conference Board's leading economic index, sometimes called in the vernacular the Index of Leading Economic Indicators. It crunches together 10 different forward looking indicators to suss out what economic growth is going to look like in the short term future. Last month it turns out the LEI was down by 4.10percent after being down in September and August and all the way back to earlier this year. What might that portend, do you suppose? Marketplace's Mitchell Hartman is is on the economic crystal ball gazing desk for us today?

[Mitchell Hartman]

The leading economic index is designed to predict future growth. It uses data on manufacturing, home building, unemployment, interest rates, stock prices and consumer sentiment. Economist Stephanie Guichard at the Conference board says LEI was down last month and.

[Kyle Rysdal]

It has also been declining for almost three years now.

[Mitchell Hartman]

So it's bad, but the declines are also slowing down.

[Kyle Rysdal]

So this is a positive development.

[Mitchell Hartman]

It means that there are still headwinds.

[Kyle Rysdal]

To economic growth, but less than a.

[Mitchell Hartman]

Few months ago and the LEI is no longer flashing warning signs of recession to come. Which makes sense, says analyst Sam Stovall at CFRA Research.

[Kyle Rysdal]

Looking at real gross domestic product expected to be up 2.9% in 2024, 2.3% in 2025.

[Mitchell Hartman]

Stovall says you can also look at the stock market, which I know isn't the economy but is often a harbinger.

[Kyle Rysdal]

The stock market is a good predictor of economic growth trends. Historically, the market has anticipated the economy by six to seven months and the.

[Mitchell Hartman]

S&P 500 has been hitting record highs.

[Kyle Rysdal]

Objectively speaking, the economy is doing very well, exceptionally well.

[Mitchell Hartman]

Economist Mark Zandi at Moody's analytics says the Conference Board's leading economic index may still be in the doldrums, but most everything else looks good, starting with the job market, creating a lot of jobs.

[Kyle Rysdal]

Across lots of industries. Unemployment's very low. Economists not long ago were thinking recession Right. I mean, not this go around for.

[Mitchell Hartman]

Any warning signs of recession. Zandi looks to unemployment claims.

[Kyle Rysdal]

As long as they remain low, layoffs are low, consumers are going to continue to do their thing. So you look at the Lei, you think the world's going to fall into pieces. You look at the UI claims, you go, ah, no, that's not happening.

[Mitchell Hartman]

Last week, jobless claims fell again to the lowest level in more than six months. I'm Mitchell Hartman for Marketplace.

[Kyle Rysdal]

Gotta love an economist that says Wall Street. As the week heads into the home stretch, traders do seem to have gotten their mojo back just a bit. We'll have the details when we do the numbers. It's been brewing for days, but now it's official. The Department of Justice has given a federal judge its plan for breaking up Google. The DOJ wants to force the company to sell off its Chrome web browser. It wants limits on the Android mobile operating system. And the government's got thoughts on Google and artificial intelligence too. Quoting here. Justice wants the court to stop Google from manipulating the development and deployment of AI solutions and other technologies that provide the most likely long term path for a new generation of search competitors. That is a mouthful. I know, which is why we asked Marketplace's Kelly Wells to unpack it for us.

[Kayleigh Wells]

The DOJ's complaint about Google and AI is kind of all about the Chrome web browser too. It is the most popular and it directs every search through Google's search engine. So does the second most popular web browser, Apple's Safari.

[Kyle Rysdal]

That's a pretty tried and true monopoly strategy.

[Kayleigh Wells]

Adam Epstein is CEO of the search advertising firm Ad Marketplace. He says Google enjoys roughly 90% of search engine market share. The reason it's an AI problem is every time you look up the name of that one actor in that TV show or how to tie a double Windsor, you're making Google's AI program Gemini smarter.

[Kyle Rysdal]

They can continue to improve their own search AI agent and keep searches away from their competitors.

[Kayleigh Wells]

That's why the doj wants to limit Google's ability to manipulate AI development. Chirag Shah is a professor at University of Washington's Information School.

[Kyle Rysdal]

Getting that kind of diffuse a little bit will at least give some competitors fighting chance.

[Kayleigh Wells]

Google called the DOJ's proposal a quote, radical interventionist agenda. In a statement, the company says it would chill its investment in AI and endanger user privacy. Shah is not convinced.

[Kyle Rysdal]

In fact, there are a number of reasons to believe that it would be actually better for customers if Chrome were to be divested.

[Kayleigh Wells]

Google has promised an alternative solution and information management professor Thomas Davenport of Babson College thinks the company might have a point.

[Kyle Rysdal]

And so it's unfair to Google, really impossible to expect them to do search without being able to use AI freely.

[Kayleigh Wells]

And he says Google controls so much market share, in part because people like it.

[Kyle Rysdal]

There are a variety of other search engines, but people just don't really want to use them.

[Kayleigh Wells]

Adam Epstein of Ad Marketplace says he expects the DOJ effort will change the search market, and today's single search engine reality will feel quaint in a few years. I'm Kayleigh Wells for Marketplace.

[Kyle Rysdal]

There's been no small number of crises across the world these past few years. There are, of course, the wars in Gaza and Ukraine, and there are things like hurricanes and earthquakes and wildfires. All of them disrupt the global economy to one degree or another. Supply chains are what I'm thinking of in particular here. First and foremost, though, of course, they are humanitarian crises. Organizations like Save the Children are on the front lines of those crises. And at the end of the day, running that kind of nonprofit is also kind of like running a business. Jatisharepto is the president and CEO of Save the Children US thank you so much for coming into the studio.

[Jatisharepto]

Thank you for having me.

[Kyle Rysdal]

I want to start with you, actually. You come from corporate America, decades in corporate America. You're an econ finance person by education. How did you wind up in this field?

[Jatisharepto]

Yes, I get asked that a lot. When I came out of grad school in Europe, actually, I joined Unilever, a large multinational company, because I was very keen to actually get working abroad. And I figured if I join a large multinational, that will get me abroad. And indeed it did. Within five years, I was in Asia. But I did think, is there another way to use some of my skills to actually do have more direct impact on people? If you are working for large consumer packaged goods companies, you do try to make everyday products for everyday people all the time. And get.

[Kyle Rysdal]

You sound just like a corporate person.

[Jatisharepto]

I'm just gonna say you do. But that also makes you very aware of there are scores of people who actually could not afford our products. So I'm like, okay, how do I make that my impact more direct? And then I got sort of lucky. I bumped in to Save the Children. They said, oh, here's this. This is 12 years ago. We have this role. Would you like to join? And I went, well, let's give it.

[Kyle Rysdal]

A try to give people a sense of scale. So you've been involved with Save the Children International for a long time? It's now you're running Save the Children. US Give us a sense of what it is that you do. What does your organization do?

[Jatisharepto]

So Save the Children was founded over 100 years ago by this amazing woman, Eglantine Jebb in the United Kingdom. And she was particularly aggravated about the fact that children in Germany and Austria were dying of starvation after World War I. We're talking 19, 19. We are now an organization that has over 25,000 colleagues across 115 countries. We have an annual spend budget of almost $3 billion. And it's, you know, we do emergency responses, whether they are earthquakes or conflict affected settings, but we also do long term education or livelihoods work across all kinds of countries, including here in the United States.

[Kyle Rysdal]

The other thing that struck me as I was thinking about this interview, there's this great video of something it was that you all did. And I apologize for not remembering the specifics, but the number of times supply chain imagery came up in that video. Big cargo airplanes, trucks passing goods hand to hand. The idea that so much of what you do depends on logistics and supply chains actually just sort of surprised me in a way that really shouldn't have been surprising, I suppose.

[Jatisharepto]

Yeah. People always say to me, oh, is it very different from what you did before in the private sector? And I'm like, well, more things are the same. Getting stuff from A to B on time, in full, with good quality, at optimal cost is exactly what is required in this sector. So I think over the years we've really professionalized that area of our work. Right. When I joined now over 12 years ago, I would say we were definitely less organized and less structured and we had fewer systems than a large multinational consumer packaged goods company would have. And it's hard, right? An ngo, you always have to make trade offs. Where do we spend our money? Does it go to children now? Oh, no. We do need a supply chain system. But now I'm very proud, I think, of our supply chain infrastructure. We have over 300 warehouses. We procure half a billion dollars every year from blankets and backpacks and food to medicine and whatever else is needed to help children in emergencies.

[Kyle Rysdal]

And it occurs to me you're doing it under the most horrible of conditions. Not just hurricanes here in the United States, but Gaza, Ukraine. Right?

[Jatisharepto]

Yeah, Yeah. I have to, I always say to my, you know, old private sector people, to do the supply chain, you ain't.

[Kyle Rysdal]

Seen nothing yet, right?

[Jatisharepto]

You ain't seen nothing yet. Exactly. That takes a level of determination and creativity. That is quite something else.

[Kyle Rysdal]

I think you said somewhere, or it was said, about the work that your organization does, there are more children now in need who are in war zones or disaster areas than there have been in generations. Yeah.

[Jatisharepto]

Then probably, certainly since World War II. Yeah, absolutely. Yeah.

[Kyle Rysdal]

What do you do with that? This is your job. What do you do with that?

[Jatisharepto]

You, first of all, you accept that you cannot help every child everywhere, all the time. You have to accept it.

[Kyle Rysdal]

Otherwise that's quite the leap to have to make.

[Jatisharepto]

You have to make that leap. And sometimes we also have to extract ourselves out of areas because there's not sustainable funding, for instance. And if you can't do it well, it's better not to do it. Right. Which is hard to do.

[Kyle Rysdal]

That's rough. Right.

[Jatisharepto]

In this sector because people think, well, do something, and we're like, yeah, but something. If you can't sustain it, you're sometimes.

[Kyle Rysdal]

Doing more work, worse. To go in and give false hope.

[Jatisharepto]

Yes, false hope. And also do it badly. Because if you do it and you start to make shortcuts on the safety with which you do it, the safety and security for your staff and colleagues, but also for the children that you serve, then you're better off not doing it. But still, it's sometimes hard to say, we would like to do this, but we can only do half of it.

[Kyle Rysdal]

How do you know that what you do is working? This is the metrics problem. Right. How do you measure your success?

[Jatisharepto]

And again, there it is sometimes different from the private sector, where I knew every day what we sold, what consumers thought, if they don't like your product, they walk away. And sadly, sometimes I wish the people that we help could walk away if we weren't good enough. But they sadly don't have that choice. Right. So we have to internally be much better at wanting to do, to deliver the best possible product or service at the best possible cost.

[Kyle Rysdal]

But it does kind of ring hollow to have the metric be. We delivered, you know, 14,000 meals today to Rafa. Right. I mean, yes, it's important.

[Jatisharepto]

Yeah, you can count it, but it's not necessarily what counts. No, no, exactly. And we have to live with that. So sometimes we say, what can we count? That does matter. And there are always things that you can do to understand it. How many kids benefited from this education program? And in certain cases, you can absolutely test them. Right. We test baselines. What do they like going in, what do they like going out? And is there significant difference? But sometimes it's harder if you stop early. Child marriage in a country which impacts 12 million girls every year they get married off before the age of, well, often the age of 15 because their parents see no other option because of poverty, because of safety, because of cultural norms, et cetera. If you find a way to stop it that we can measure, then how many girls are not married off early. It does have a huge knock on effect, but you have to sort of use some proxies in order to get there.

[Kyle Rysdal]

You are sadly in a business the need for which will never go away.

[Jatisharepto]

No. And sadly it's actually a growth market as we speak, which I wish I wouldn't have to say, but that is.

[Kyle Rysdal]

Certainly the case at Save the children in the U.S. thank you for coming in.

[Jatisharepto]

Thank you for having me.

[Stephanie Hughes]

Coming up, you had new properties, you had a lot of new roofs which withstand wins a lot better than older roofs.

[Kyle Rysdal]

Bad news becomes good news sometimes. First though, let's do the numbers. Dow industrials up 461 points today. One and a tenth percent on the blue chips closed at 43,870. They did. The NASDAQ gained six points, less than a tenth percent. 18,972. The S&P 500 jumped 31 points, about a half percent. 59 and 48 big banks were a big part of the rally today. JPMorgan Chase ascended 1.6%. U.S. bancorp grew 1 and 3, 10%. Citigroup added 1%. Wells Fargo increased about 1.7% today. Bitcoin BTC traded around $98,000 per today. That is nonetheless or nevertheless rather another record high. The value of Bitcoin has been on the rise since election day. As you might have seen on hopes for a cryptocurrency friendly approach from the incoming administration. Mortgage levels have climbed back to levels seen last in July. The average rate for a 30 year fixed is now 6.84%. That's up from 6.78% last week. Seems like a lot of decimal points, but every decimal point counts in a mortgage. Bonds down Yield on the 10 year T note rose 4.42%. You're listening to Marketplace. You turn to Marketplace for up to the minute news for stories that show you the connections between global events and your personal economy. And you're not alone. Marketplace is the most widely consumed business and economic news program in the country. We're proud to make fact based journalism freely accessible and Marketplace investors make it all possible. Your year end donation today will make a real difference in our nonprofit newsroom and in the lives of millions of Marketplace listeners every single day so please contribute what you can [e-mail] donate this is Marketplace. I'm Kyle Rysdal. Ford said this week it's going to cut 4,000 jobs from its European workforce, most of them in Germany and the uk. In Europe, the company said it's been losing money on passenger cars. Increased competition as well as the shift to electric vehicles, which Ford called highly disruptive, are the proximate cause. Marketplace's Stephanie Hughes has more on the growing pains in the EV market.

[Stephanie Hughes]

One big problem for EV makers who sell cars in Europe started about a year ago when the German government, in a surprise move, ended an electric vehicle subsidy program, says Tom Narayan, an auto analyst at RBC Capital Markets.

[Mitchell Hartman]

Since then in Germany, EV sales have been quite sluggish.

[Stephanie Hughes]

There's since been a big push by automakers, including Ford, to bring an incentive back. Meanwhile, automakers in Europe are motivated to sell EVs to meet a new Continental emissions standard or else they could face big fines. Also, says Talas Blalak, an Electrified Roadways consultant, carmakers have more competition with the.

[Kyle Rysdal]

Much cheaper Chinese imports. Especially in the United Kingdom, where they don't have large automakers themselves, they don't have any tariffs.

[Stephanie Hughes]

Here in the US the challenges are a bit different, blalak says. There's been a lot of focus on the high end electric car market, but now pretty much everyone who wants a fancy EV has one.

[Kyle Rysdal]

So we need to have lower cost vehicles so that the average person that wants a new car looks at an EV and says it makes economic sense for me to buy that vehicle.

[Stephanie Hughes]

Another challenge stateside, says RBC's Tom Narayan. We like big cars like SUVs and.

[Kyle Rysdal]

Pickups, very expensive because you need an enormous battery. These are heavier cars.

[Stephanie Hughes]

American consumers also don't always know when and where they'll charge an ev. Alicia Freeman lives in a suburb of Baltimore. She affectionately calls her current car a spunky old Hyundai hatchback. It's been loved and she's thinking about moving on to an evidence, but she doesn't know exactly where she'd plug it in.

[Jatisharepto]

I live in a townhome and I would have to put a cord across.

[Amy Scott]

The sidewalk, which I don't even know.

[Stephanie Hughes]

If it's legal or not.

[Amy Scott]

So I'm looking into that.

[Stephanie Hughes]

Freeman says she's also just used to gas powered cars. She's been driving them for 30 years. She knows how much the repairs will cost, and an EV is a whole spunky new beast to learn all about. I'm Stephanie Hughes for Marketplace.

[Kyle Rysdal]

Hurricane Helene made landfall On Florida's Gulf coast just shy of two months ago. Milton followed not even two weeks later. The storm killed nearly 250 people across six states. Damage runs into the very high tens of billions of dollars, if not more. Some as yet undetermined purpose, percentage of which was insured, some not. In Florida, where the insurance market is already kind of fragile, those storms are going to pose a real test. As Marketplace's Amy Scott reports back in.

[Amy Scott]

The summer of 2022. Here's how insurance Industries spokesman Mark Friedlander described the Florida market for our podcast How We Survive.

[Kyle Rysdal]

It's hanging on a shoestring right now.

[Amy Scott]

Friedlander is with the Insurance Information Institute, an industry funded research. That year several Florida insurers had gone bust. Others were pulling out of the state. And that was before Hurricane ian caused about $60 billion in insured losses. So it was a little surprising when I checked in with Friedlander again recently after back to back hurricanes Helene and Milton hit the state.

[Kyle Rysdal]

According to our analysis here at the institute, the Florida market is in its best financial position in nearly a decade.

[Amy Scott]

What now?

[Kyle Rysdal]

It is incredible, absolutely incredible what's happened.

[Amy Scott]

So what did happen? Friedlander credits tort reform, new state laws that made it harder to sue insurance companies for denied claims. Insurers have blamed excessive litigation for driving up costs. Meanwhile, the inflation that added to rebuilding costs has cooled. And after years of raising premiums, Friedlander says insurance companies are in better financial shape to absorb claims. This year. He says companies have filed for an average rate increase of less than 1%.

[Kyle Rysdal]

That is a clear stying of a market that is stabilizing. And then on top of all this, we have nine new companies that have come to Florida this year.

[Amy Scott]

As devastating as Hurricane Helene was elsewhere, catastrophe modeler Karen Clark estimates insured losses were around $2 billion in florid Florida. And she now expects claims from Milton will be lower than her company's initial estimate of $36 billion, partly because Milton hit areas that had recently rebuilt after Hurricane Ian.

[Stephanie Hughes]

You had new properties, you had a lot of new roofs which withstand wins.

[Amy Scott]

A lot better than older roofs, she says. Homeowners weary from rising insurance costs may also be hesitant to file small claims.

[Stephanie Hughes]

Because they don't want their premiums to go up. So the insured loss is going to be well manageable for Florida insurers.

[Amy Scott]

But better shape doesn't mean good shape. Chuck Nice is a professor of risk management and insurance at Florida State University. I don't think people realize how close we were to a collapse of the.

[Kyle Rysdal]

Private market in Florida, we are a much stronger footing today.

[Amy Scott]

However, it's still not where I believe it needs to be, as large private companies like Farmers Insurance and Allstate have either left Florida or reduced their coverage. Nice says Citizens. The state backed insurer of last resort has taken on more risk. Martin Weiss grades the financial health of insurance companies at Weiss Ratings. Of the hundred or so companies operating in Florida, more than half have ratings of 6 or lower. And Weiss is concerned about how often insurers are rejecting insurance claims. Last year, Citizens denied just over half of claims. State Farm denied 47%.

[Kyle Rysdal]

Insurance companies have been denying homeowners claims.

[Jatisharepto]

With no payment whatsoever.

[Kyle Rysdal]

At very high levels.

[Amy Scott]

Insurers say they're often turning down flood damage, which isn't covered by traditional homeowners policies. But Weiss says those tort reforms the industry pushed for have made it harder for homeowners to dispute those denials. I'm Amy Scott for Marketplace.

[Kyle Rysdal]

This final note on the way out today in which AAA joins the EV bandwagon. You know how every now and then I do gas prices in this spot on the program. Useful anecdata I think just to give you a sense that all comes from aaa, their website, which until today was labeled gas prices. Well, as EV penetration keeps gathering steam in this economy, there has been a rebrand. AAA now calls it fuel prices and you will be able to find statewide average per kilowatt hour costs to charge your EV 34.7 cents is a nationwide average. Should you be curious per kilowatt hour gas because I know more of you are curious about gas than EV charging $3.06 a gallon, the national average. John Buckley, John Gordon, Noya Carr, Diantha Parker, Amanda Pietra and Stephanie Seek are the Marketplace editing staff. Amir Bibawe is the managing editor and I'm Kai Rysdal. We will see you tomorrow. Everybody. This is apm. You turn to Marketplace for up to the minute news for stories that show you the connections between global events and your personal economy. And you're not alone. Marketplace is the most widely consumed business and economic news program in the country. We're proud to make fact based journalism freely accessible and Marketplace investors make it all possible. Your year end donation today will make a real difference in our nonprofit newsroom and in the lives of millions of Marketplace listeners every single day. So please contribute what you can [e-mail] donate.