> do you think their above-grade returns can persist into the future for decades
In aggregate, yes, given equities have done just fine persisting over the last century and a half. (Also, the 7% figure appears to be nominal.)
> you cannot really have identified, "the same" companies continue to return 2-3x market average over 50 years without some concern remains
No, I don't believe we have precedent for this.
> When the west coast disappears in a tsunami, it won't be as bountiful, right?
Flooding isn't typically privately insured. As far as reinsurance is concerned, a tsunami taking out a bunch of California would be financially uneventful; on one hand, you're losing a premium stream, on the other hand, you've freed up reserves.
(Not an economist nor an actuary, but have training in both and some licensing in the latter.)
In aggregate, yes, given equities have done just fine persisting over the last century and a half. (Also, the 7% figure appears to be nominal.)
> you cannot really have identified, "the same" companies continue to return 2-3x market average over 50 years without some concern remains
No, I don't believe we have precedent for this.
> When the west coast disappears in a tsunami, it won't be as bountiful, right?
Flooding isn't typically privately insured. As far as reinsurance is concerned, a tsunami taking out a bunch of California would be financially uneventful; on one hand, you're losing a premium stream, on the other hand, you've freed up reserves.
(Not an economist nor an actuary, but have training in both and some licensing in the latter.)