New York–Three leading insurance company chief executives voicedsome support yesterday for a state and federal backstop program fornatural catastrophe insurance.

Speaking at the Joint Industry Forum in New York City, heads ofAllstate, State Farm and Nationwide came out in varying degrees infavor of the proposal to provide federal and state backing fornatural risk similar to what is provided for terrorism risk.

Allstate CEO Edward Liddy, whose company has been busilylobbying for such a program for the past several months, proved themost enthusiastic advocate for the proposal.

The industry, however, remains divided, with giantproperty-casualty insurers such as Liberty Mutual coming outagainst it with the American Insurance Association. This week, theNational Association of Mutual Insurance Companies also voicedopposition.

The Property Casualty Insurers Association of America has yet totake a stand.

Mr. Liddy's colleagues are not optimistic that the effort willsucceed. A poll of the executives at the meeting found only 3percent believe it has a chance of being passed this year. “I votedthree times,” joked Mr. Liddy.

The Allstate CEO said the inability of any company to accumulatesufficient profits in the good times due to regulatory constraintsin order to pay for the bad times necessitated the governmentinvolvement.

State Farm CEO Edward Rust and Nationwide Mutual InsuranceCompany chief W.G. Jurgensen also expressed general support for theproposal.

But not one executive backed the all-perils policy, includingflood loss that is a part of the current National Association ofInsurance Commissioners proposal under consideration.

The panelists also agreed the industry will prevail in thelawsuits by property owners in the Gulf States who contend theirhurricane water damage losses must be covered despite floodexclusions in policies.

Mr. Jurgensen said as an experiment he took the front page of astandard insurance contract to sixth and seventh graders who allunderstood the difference between wind and flood damage. “So now mygeneral counsel and I are trying to figure out how we can paradethem through a Mississippi courtroom,” he said.

Other storm-related topics included the huge stress the stormsplaced on claims operations and the need for enlarging currentinsurance company adjuster staffs so that those sent to stressfulcatastrophe sites can have their stints shortened.

“We have grossly underestimated the emotional toil these stormshave wreaked upon claims adjusters,” Mr. Jurgensen said, noting insome cases they have been threatened with violence from angryclaimants.