Are insurers wary of a more tornado-prone Illinois?

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1:01Sparks fly over Amtrak's proposed maintenance facility near Raight Field. This was a pretty raucous scene that basically amounted to eventing fest for residents in public officials in Bridgeport and Chinatown and Pilsen in that area. All this is a nasty real estate deal done in the middle of the night. Illinois sets a new record for tornadoes. What will that mean for insurance rates? I'll talk about it with Crane's Mark Wein Rob. Illinois lawmakers pass bills this year, and it lets regulators reject home and auto insurance rates that are deemed excessive. What that means can be subject to a lot of things, but they certainly now at least have that power in their toolkit, which they didn't have before. I'm Gene Sparrow, and this is Crane's Daily Gist for Friday, September 18th. Looking to expand your business?

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3:03Something amazing is happening and networking. Organizations are scaling with less stress. That's because CDW is designing and implementing intelligent HPE Aruba networking solutions that simplify and secure operations. With automation at the center of your data center, growing pains can be a thing of the past. HPE Aruba Networking and CDW. Make amazing happen. Learn more at cdw.com slash Aruba. Illinois has recorded more than 200 tornadoes in 2025, surpassing the state's previous full year record of 147. That isn't increased in severe weather, but insurers have cited that as a reason for rising premiums, even though tornadoes alone are unlikely to be a major factor. HPE Aruba Networks have been following the story and we talk with him now about why this all is.

4:07Hello Mark, welcome and I'm interested to dive into this because home rate jump of 14.1% in 2025 seems like a lot for something that maybe shouldn't be. It is a lot. I mean, those numbers are shocking when you get at it. To be fair, just like the rest of us insurance companies are facing inflation and a large part of that is just replacement costs for everything are going up. Tornados are a very easy culprit. They are horrible when they happen, you know, as you know, they devastating the awful pictures can cause fatalities. The difference between tornadoes and hurricanes or if you're looking at California wildfires is when they do hit, they cause severe damage, but it's too very small areas. So that is not on its own causing rates across the state to go up because one tornado hit or 10 tornadoes hit or 200 tornadoes hit. I talk to Tatiana Derrugina at the University of Illinois and she studies this and she pointed out that even with the rising occurrence of tornadoes, they are still hitting limited areas when they do hit.

5:18So she looked at the past 25 years and over 25 years combined, even with all these tornadoes, tornadoes damage only 946 square miles in Illinois. So just 1.7% of all landmass in the state. Again, it's absolutely horrific and we don't want to downplay those people who are affected. It is not a broad based damage cause or the things that she says insurance companies are really still what your premiums are going to are things like broken pipes or damage windows or something like that from other causes, not from tornadoes. Right. Because I think if it was really weather related, we would be seeing more things like what California and Florida are having deal with where they're not even able to get insurance. Yeah, that's exactly it. And that's kind of where the proof is in the putting you are seeing insurers really limit coverage you offerings or even leave states like California or certain areas of California and Florida. That's because they can look at the history and run the math and know specifically which areas are going to be hit.

6:24How wide to bread the damage is going to be how often is going to happen be a wildfire or a hurricane. Whereas a tornado, it really seems to be a random occurrence. They don't know G these areas are more tornado prone than other ones. They just know that more happening, but you could still spread it out across the wide base of premium payers. So it's still accounting for a small fraction of what you're paying for insurance. Now the hard part is insurers are not giving the best data. They're giving a lot of apples to oranges comparisons. Absolutely highlighting the rate of tornado occurrences and that's absolutely true. But they're not saying specifically and they give out damage reports from all storms. For example, state farm said it's paid out more than 799 million for storm related losses in Illinois this year through July. But it doesn't say specifically what kinds of storms, you know, was that snow that maybe piled up on a roof and caused roofs to collapse.

7:25Was it some from tornadoes? Sure, but it doesn't tell you exactly which occurrences and how much each tornado might be costing. I have called and asked for that data. They did not share it with me. But again, they are highlighting the number of occurrences and they are giving some overall claims, even without breaking it out all state, which is a publicly traded company. So we have a little more data, but they don't break it down to Illinois. It's a paid out 19.05 billion in property casualty claims during the first half of 2026. So that would certainly include tornado damage. That's down from 21.06 billion a year ago. That income, they're doing very well on a bottom line basis. Their profit was 5.67 billion for the first half of the year, more than double 2.65 billion from a year earlier. A lot of that is due to the 2025 California wildfire, which I'm sure you remember, they certainly had to pay out a lot from that this year. They aren't getting hit with that kind of massive widespread disaster yet. That's certainly boosting their bottom line.

8:29Right. And I think that's a thing that a lot of people think of because when you see the publicly traded companies reporting their earnings, you're like, wait a minute, why is this keep going up if you are still making that much money over what's going on. But without all the numbers, you can't possibly know now one thing is, you know, insurance is highly regulated went how are state lawmakers responding to these rate hikes and when our policy holders going to feel the impact of this. Well, not sure when they're going to feel as you know men know Illinois lawmakers pass bills this year and it lets regulators reject home and auto insurance rates that are deemed excessive. What that means can be subject to a lot of things, but they certainly now at least have that power in their toolkit, which they didn't have before. That law goes into effect July 1st, 2027. So we could still see some premium hikes between now and then that wouldn't face this new law. You know, that law sounds like, oh, they're really going to take a hand, you know, the bull by the horns on this one.

9:36But what it means when you just call it excessive, that can mean a whole lot of things to a whole lot of different people. So we're not exactly sure what that's going to look like if that will ever be used. And exactly how much that will maybe keep insurance companies from really trying to give you some sticker shocking pieces. That's kind of what started this last year state farm and I'll state both filed for double digit increases and that JB Pritzker noticed and that really raised his dander and he called for the legislature to pass a bill, which they did the spring. So we'll see again what effect that has down the line, but it is a new law and we're not sure fully what the effect will be right as it is with most new laws when it comes to what the industry is saying as a counter argument. How are they responding to this kind of oversight, especially one that is as vague as what you just mentioned. Well, they're saying, look, we can do this best. We are the ones with all the numbers. We can run all the actual aerial data and let you know what is required.

10:42Again, they aren't fully forthcoming with all of that. It is a lot of math to be quite frank. So even if they did release all that data, it would be hard to, you know, say exactly, oh, yes, this is right. This isn't right. But they have always said that regulation causes them to provide less than they really could and you look at California, which is one of the most highly regulated areas in the country when it comes to insurance and insurers are leaving the state. So they always have that kind of threat. Hey, if this gets too bad and it's going to cost us money because of these new laws, we're just going to up and leave again. No signs of them doing that in Illinois yet. But I'm sure that's in the back of everybody's mind that if they can't make a profit here, they're just going to leave and they have said that in 13 of the last 15 years state bottom said costs from catastrophe such as tornadoes and flooding in Illinois have exceeded the money. It's set aside to cover them in 13 of the last 15 years. That's what they've said. Again, they haven't given me all the data on what catastrophe such as tornadoes and flooding and how much that was and how much it sets aside and why it sets aside a certain amount, but they have put that out there for us to chew on.

12:00And especially whether or not they're adjusting it based on the trends that, you know, all of the folks who watch this stuff are saying, you know, because of the way that things are changing, whether weather patterns are changing, you know, I remember when I first moved here, you never heard of a tornado hitting the city or close to the city. It was only in that tornado alley, sadly, south of the city, you know, down toward I aid right now, that's a different story, the number of flooding events, the, you know, the deep water project that's underneath the city filling up those kinds of things, I think impact this long term is, is that any part of what you're going to be following next with this story. Absolutely. And as I said, the insurance companies are giving me all the data on the weather that is indisputable. It's just a question of exactly how much the weather is affecting monetarily. That is kind of raising my eyebrows a little bit. Well, if it is this bad, why aren't you throwing at me every instance of every storm and how much it cost you.

13:06Because I'm sure somewhere they've got that data, but the weather is getting worse that absolutely is impacting how much it's costing them. They're just not telling me exactly how much. And meanwhile, we will all keep an eye on our insurance bills when they come in next and look at for what they are. Thank you so much, Mark. We appreciate your reporting. You can of course always find more at Chicago Business dot com. Thank you. Coming up how a Glen co billionaire's daughter became a test case for the new science of making a hit will cover that and more after this. Cranes daily just listeners know their Chicago biz and here's a great way to prove it. Take the cranes weekly news quiz at Chicago Business dot com slash quiz. And of course, Cranes daily just is a great study guide. Follow us wherever you get your podcasts.

14:13If you like YouTube, you'll love YouTube premium. Hi, I'm Sean Evans from Hot Ones and I want to tell you about YouTube premium. It has offline downloads so you can watch without Wi-Fi background play so you can lock your phone and it's still a great way to get your podcasts. Well, please baby, oh, and it is completely ad free. Yes, I said it ad free try YouTube premium for two months free at YouTube dot com slash premium trial eligibility varies terms apply cancel anytime. Something amazing is happening. This agency is experiencing a cyber attack, but no one is panicking. That's because CDW government secured, optimized and future proved their data with the Dell technologies power store solution. It increases cyber resiliency and improves end to end performance for secure scalable solution that doesn't require more physical space. Dell technologies and CDW government make amazing happen find out more at CDWG dot com slash Dell Federal.

15:21An Amtrak town hall turned hostile on the Southside Thursday night as residents and local leaders blasted the proposed $900 million rail maintenance facility near rate field. We're treating us like we're complete idiots. We're not idiots. We're intelligent hardworking people that build our homes there live there and you think you're going to walk in and take it away from us. The crowd of community members repeatedly jeered Amtrak officials and representatives for white socks minority investor Justin Ishbia during a tense 90 minute meeting in Pilsen. As cranes Danny echo reports under the proposal Amtrak would build a new maintenance hub on an existing rail yard between 33rd and 35th streets. Amtrak does not need the city to sign off on this $900 million maintenance facility next to rate field. They have a federal exemption for that. So this public forum and any others they hold are largely a formality they can say they've listened to the community, but they can defy the opposition ultimately.

16:21And that opposition is full of anger lots of nearby residents saying this is going to cause noise and vibration issues and air pollution and oh by the way it's being done to make room for a project that's going to help the white socks eventually move out of rate field. Meaning the community is trading a huge economic engine for an industrial rail facility. It was interesting to see the public officials united against this at the meeting obviously Alderman Nicole Lee in the eleventh ward and Cook County Commissioner John daily who represents the area state rep Theresa Ma was there. But another one was Alderman Pat Dowell of the third ward that includes the neighborhoods adjacent to rate field to the east. She's one of the longest injured city council members and the head of the finance committee, which is a powerful role. Those opinions matter not so much for Amtrak, but certainly for just in ishpia the owner and waiting of the white socks. He's helping Amtrak with this maintenance facility and plans to build a new sock stadium on the existing Amtrak rail yard in the south loop. He has to build a rapport with city hall. He'll need that partnership as he sets out to pursue his mega project and his ties to this Amtrak process creates some bad optics.

17:29While Amtrak's cited federal environmental reviews claiming minimal impact on local air quality and noise residents dismissed rendering showing the multi story structure as misleading elected officials pulled no punches over being left out of the planning process state representative to recent Ma call the lack of consultation a disrespect and disregard for the neighborhood. Amtrak officials maintain the project is essential to modernizing Chicago rail operations. The company launched a website detailing the proposal and promises further public engagement, though no future meetings have been scheduled. Private investors are placing a massive vote of confidence in downtown Chicago's office to residential transformation. Crane's Rachel Herzog reports commonwealth development partners has secured 113 million in private debt and equity to turn the mostly vacant 25 story office tower at 500 North Michigan Avenue into 320 apartments. The financing package includes a 71.5 million dollar construction loan from Santander Bank and nearly 42 million dollars in joint venture equity from Washington capital management.

18:39Real estate services firm JLL arranged the deal. What makes this project stand out is the source of the capital while several major Lissau Street office conversions rely on city subsidies. This mag mile transformation is driving forward using private money proving that high density adaptive reuse can work purely as a commercial investment. Developer Matthew Ferris points to strong demand in the area specifically from the neighboring street or bill medical district and graduate schools along with Chicago's overall surging rent prices. Commonwealth and partner Triangle Capital Group bought the building in 2025 for just five million dollars, a massive discount from its 2017 sale price of 86 million. Washington capital later acquired the base retail space for 41 million. To offset costs, the project will utilize federal historic preservation tax credits and the Illinois affordable housing special assessment program. In compliance with city rules, 20% of the new units totaling 64 apartments will be set aside at affordable rates. Construction is officially underway with full completion targeted for March 20, 20, 28.

19:51Public anxiety over artificial intelligence is spilling over from screens into local neighborhoods according to a nationwide survey from the Associated Press, the Norck Center for Public Affairs and the University of Chicago's Energy Policy Institute. The poll reveals that a growing majority of Americans now view massive AI infrastructure specifically the energy hungry data centers that power it as a direct threat to their local environment and wallet. Over half of all adult surveyed say they are extremely or very concerned about the environmental footprint of AI, a steep increase from a year ago. Nearly half believe AI will ultimately cause more harm than good to the planet. That environmental skepticism is sharpest among younger adults and Democrats with nearly six and 10 young people aged 18 to 29 expressing fear over AI's ecological impact. At the heart of the backlash are the massive physical facilities housing these systems built by tech giants like Amazon, Meta and Google data centers require vast amounts of electricity and water to run and cool their servers.

20:58As electricity bills surge across the country, particularly in the Midwest, these facilities have ignited fierce political battles. Local governments are increasingly enacting moratoriums on new builds while state leaders, including Illinois Governor J.B. Pritzker, have begun rolling back lucrative tax breaks for the industry. The public opposition is clear, roughly eight in 10 Americans report being concerned about how data centers affect local power grids, regional water supplies and electricity rate hikes. When it comes to solutions, respondents overwhelmingly favored strict accountability, seven in 10 back policies that forced tech companies to pay for their own power grid upgrades and transition to clean energy sources. Furthermore, six in 10 support hard caps on the total number of new data centers allowed in their communities. From Neutrier High School to the top of the Billboard charts, 24-year-old Glenko Native Stella Lefty returns to Chicago this weekend as one of the fastest rising names in music.

22:04Performing at the Salt Shed, the artist formerly known as Stella Lefkowski, has built a world-wend career. A top 10 hit with her breakout song Boston, millions of streams and appearances at La La Paloza and the Grand Old Opera. But behind her rapid ascent lies a modern music story that combines heavy digital marketing, internet algorithm science and significant family wealth. Stella is the daughter of billionaire investor Eric Lefkowski, co-founder of Groupon and CEO of Tempest AI. While nepotism debates are nothing new in entertainment, industry experts point out that family resources offer a distinct edge in today's music business. Rather than relying on traditional radio play or years of relentless touring, Stella's team at Disruptor Records, a Sony imprint, capitalized heavily on TikTok's algorithm. She regularly posts varied singing clips to gauge audience engagement in real time using data metrics to find out which hooks to turn into full songs.

23:04Industry insiders note that modern platforms like TikTok function primarily as massive advertising engines. Wealthier artists can afford continuous paid promotions, influence or push, and digital narrative management to keep their music in front of scrollers until a snippet goes viral. However, Stella's quick rise hasn't been without friction. Her team recently had to add pop star Noah Khan as a co-writer on Boston over similarities to his hit Stick Season and her team faced further copyright questions over recent releases. Now, as Stella prepares for a headlining show at Lincoln Hall this November, the ultimate question remains whether algorithmic viral success can translate into a long-term artistic career. Read Mark Garino's story on the new science of hit making at Chicago Business dot com. That's Crane's daily gist for now. Check in on our continuous news feed at Chicago Business dot com.

24:07Thanks so much to today's guest, Crane's reporter Mark Weinrob. You can hear all our conversations on Apple Podcasts, Spotify, or wherever you get audio on demand. Remember to follow our show that way every new episode will be dropped right in your feed. Our show is produced by Todd Manley at Ear site studios. Thanks so much for listening. I'm Gene Sparrow and I'll meet you right back here next time. This is a new era of wealth. A UBS financial advisor can help you with personalized advice and long-term planning to move forward with confidence. Find out what's possible. At UBS dot com slash new era UBS financial services in member finra s IPC. You know it's not a great use of time. Getting data ready for AI. That's why IT leaders turn to CDW. We help unify data and govern it building the foundation for your AI and agents to deliver results. Because when your data is ready, AI stops being an experiment and becomes an advantage. We configure, optimize, and deliver the tech that runs business. CDW make amazing happen.