The E-axes Forum on Climate Change, Macroeconomics, and Finance

Ana-Maria Tenekedjieva

“Pricing of Climate Risk Insurance: Regulation and Cross-Subsidies”

Event description


This paper studies the consequences of state-level price (rate) regulation for U.S. homeowners’ insurance, a $15 trillion market that provides households protection against climate losses. Using two distinct identification strategies and novel data on regulatory filings and ZIP code level rates, the authors find that insurers in more regulated states adjust rates less frequently and by a lower magnitude after experiencing losses. Importantly, they overcome these rate-setting frictions by adjusting rates in less regulated states, consistent with insurers cross-subsidizing across states. In the long-run, these behaviors lead to a decoupling of rates from risks, implying distortions in risk sharing across states.


Stephen G. Cecchetti (Moderator)
Brandeis International Business School

Ana-Maria Tenekedjieva

Senior Economist
Ana Maria Tenekedjieva is a Senior Economist at the Federal Reserve Board of Governors, specializing in the Flow of Funds section. She holds a Ph.D. in Finance and has a research interest in financial intermediation, climate change, insurance, and political economy. Tenekedjieva has been involved in research examining the impact of corporate money in politics on labor. Her work and expertise revolve around the intersection of finance and various socio-economic factors.

Stefano Giglio

Professor of Finance
Professor Giglio’s research interests span several topics, including asset pricing, macroeconomics, and real estate, with a particular focus on hedging macroeconomic risks using different financial instruments: crash risk, uncertainty risk, and climate risk. Currently he is a professor of finance at Yale School of Management, before this he was an Associate Professor of Finance at the University of Chicago Booth School of Business. He has been awarded several prizes, including the AQR Insight Award, the Fama-DFA Prize for the Best Paper in the Journal of Financial Economics, and the UBS Global Asset Management Award for Research in Investments, and his work has been featured in several news outlets, including the Economist and the New York Times. He currently serves as an editor for the Review of Financial Studies.

Paper and slides

Pricing of Climate Risk Insurance: Regulation and Cross-Subsidies (Paper)



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