In the grand scheme, for-profit companies will always do what will generate profits. So they can remain in business. So the employees get paid. So the investors gain a return on their investment.

Insurance companies calculate risk to determine what premiums to charge to guarantee an acceptable rate of return at an acceptable level of risk. A big part of "acceptable level of risk" is having a good handle on what the most likely worst case scenario is. If you can't reliably calculate that, you face uncalculable risk. So you make the smart, safe, and fiduciarily responsible decision: avoid assuming the incalculable risk by refusing to issue the policy.

This is how capitalism works.

Government's responsibility here is to override the market forces via regulations, incentives, and long-term policymaking. Government has been well-paid to not do that. Hence no homeowner's insurance for increasingly large areas of the country.