• Centuries of discrimination have created a cavernous wealth gap between Black and white Americans. 
  • Today, Black Americans own an estimated one-tenth the wealth of white Americans — $17,150 for Black families compared to $171,000 for white families.
  • This gap is not only bad for Black people, it’s bad for the US economy, too.
  • Researchers estimate that the racial wealth gap has cost the US economy $16 trillion since 2000. If the gap closed today, the GDP would see a $5 trillion boost in the next five years.
  • Read more stories from Business Insider’s “Inside the racial wealth gap” series »

Since the start of slavery, racism has cost Black Americans an estimated $70 trillion. Today, thanks to centuries of discrimination, the racial wealth gap between Black and white Americans is cavernous.

In 2016, the Brookings Institution estimated that Black Americans own about one-tenth the wealth of white Americans — $17,150 for Black families compared to $171,000 for white families. The gap persists at every income level: Among the top 10% of earners, the median net worth of white families is $1,789,300, whereas a Black family earning the same income has a median net worth of $343,160.

It goes without saying that this is bad for Black families and individuals. But this type of racial inequality is bad for the broader US economy, too.

What the racial wealth gap costs the US economy

In a Zoom panel discussion hosted by Business Insider last month, experts from a variety of fields — higher education, business, and financial planning — discussed the costs of the racial wealth gap and how to close it.

Dania Francis, an assistant professor of economics at the University of Massachusetts Boston and co-author of “The Economics of Reparations,” illuminated the cost of racial inequality to the US economy.

Six months into the coronavirus pandemic, many Hollywood companies still can’t head back into production on film and TV projects because of one major roadblock: Insurers have made no moves to incorporate pandemic coverage into policies, leaving big studios to self-insure and smaller production companies to seek pricey alternatives — or gamble on shooting without any coverage at all. Productions that bought policies before March are largely safe, as multiple insiders tell TheWrap that most policies procured before the pandemic shutdown did not have COVID-19 or infectious disease exclusions, and cast insurance and civil authority policies cover expenses incurred due to the coronavirus. However, any policy written since March now has a “platter of exclusions” as insurers seek to mitigate potential losses, according to Brian Kingman, managing director at Gallagher Entertainment, who helps find coverage for Hollywood’s stars. Plus, no major insurance carriers will offer COVID-related coverage moving forward. “In the past, most, if not all, specialty insurance products related to film, TV and live events did not have written COVID-19 exclusions, so many of the productions that are being rebooted should have some level of coverage on a moving forward basis, yet the unfortunate news for new productions or…

Read original story Why Insurance Is Still a Roadblock to Restarting Production (Hint: Premiums Cost 10 Times More) At TheWrap

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As home insurance prices are poised to increase sharply, the South Florida Sun Sentinel asked leading insurance experts to provide their views of the disintegrating state of the market. Here’s what they had to say. Responses have been edited for length and clarity.

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Locke Burt, president and CEO, Security First Insurance Co.

Insurance cost drivers are well known and have been reported before — bad weather, increased reinsurance costs, shady contractors, aggressive plaintiffs bar with a favorable legal environment, water losses, fraud. What’s different is the trends seem to be accelerating and the Legislature has not done anything meaningful to change the trajectory of increased costs which, under Florida law, must be passed on to consumers in the required annual rate filings.

The private sector is shrinking and raising rates as fast as they can because the losses are not sustainable and the providers of additional investment capital simply do not believe that the situation in Florida is going to improve for several years. That’s why the public companies are selling for 50 cents on the dollar.

This situation won’t change until legislators hear from their constituents and decide to do something, the weather improves, or the lawyers disappear.

Travis Miller, insurance regulatory attorney, Radey Law

In Florida, we face unique but foreseeable challenges due to our substantial coastal exposures and the corresponding hurricane risk. Insurers anticipate these challenges and typically are well prepared to meet them. However, these challenges have been compounded in recent years by other issues that are not meteorological but instead are behavioral. Simply put, loss experience in Florida has deteriorated to a point historically unseen in this state and significantly worse than in other states following similar events.

The conditions in the current market just reflect how these concerns manifest over time if

As home insurance prices are poised to increase sharply, the South Florida Sun Sentinel asked leading insurance experts to provide their views of the disintegrating state of the market. Here’s what they had to say. Responses have been edited for length and clarity.

Locke Burt, president and CEO, Security First Insurance Co.

Insurance cost drivers are well known and have been reported before — bad weather, increased reinsurance costs, shady contractors, aggressive plaintiffs bar with a favorable legal environment, water losses, fraud. What’s different is the trends seem to be accelerating and the Legislature has not done anything meaningful to change the trajectory of increased costs which, under Florida law, must be passed on to consumers in the required annual rate filings.

The private sector is shrinking and raising rates as fast as they can because the losses are not sustainable and the providers of additional investment capital simply do not believe that the situation in Florida is going to improve for several years. That’s why the public companies are selling for 50 cents on the dollar.

This situation won’t change until legislators hear from their constituents and decide to do something, the weather improves, or the lawyers disappear.

Travis Miller, insurance regulatory attorney, Radey Law

In Florida, we face unique but foreseeable challenges due to our substantial coastal exposures and the corresponding hurricane risk. Insurers anticipate these challenges and typically are well prepared to meet them. However, these challenges have been compounded in recent years by other issues that are not meteorological but instead are behavioral. Simply put, loss experience in Florida has deteriorated to a point historically unseen in this state and significantly worse than in other states following similar events.

The conditions in the current market just reflect how these concerns manifest over time if not addressed.

Name three things these five companies have in common: AutoZone,

Booking Holdings,

Cable One,

NVR

and

Seaboard.

One: Their shares are among the priciest in the U.S. stock market — all in four figures. Two: They have almost never split their stock. Three: All enjoy among the highest-quality shareholders measured by long-term horizon and portfolio concentration.

These are not coincidences, yet the shared experience seems lost on the increasing number of companies doing stock splits, from

Apple

(ticker: AAPL) to

Tesla

(TSLA). Both of these companies recently split their stock in order to cut share price. They apparently are trying to attract shareholders who will also be customers. But while that might be good product marketing, it is definitely bad investor stewardship: Stock splits degrade a company’s shareholder quality.

Managers and investors alike should care about which shareholders grace a company’s shareholder list. At companies brimming with transient shareholders, managers bend toward a short-term focus, while those dominated by indexers get shareholder proposals and votes aligning with prevailing social and political fashions.

Some companies attract a greater proportion than others of patient and focused shareholders — what Warren Buffett has dubbed “high-quality shareholders” (QSs for short). While all public companies have transients and indexers among their shareholders, those with a higher density of QSs get longer strategic runways that are associated with superior performance.

Companies shape their shareholder base through dozens of corporate practices. Actions that focus on stock price tend to draw transients while those emphasizing business performance attract QSs. Stock splits are riveted on stock price; managers who cultivate quality shareholders shun them.

After all, stock splits are like exchanging a dime for two nickels. They produce no economic effect, but carry subtle psychological ones. Side-effects include increasing a company’s market capitalization, despite no change in