Stormy Weather

If the folks who measure TV viewing habits broke down ratings demographically by profession, the No. 1 show for those in the property-casualty insurance industry certainly would not have been the lame-brain “Friends” spin-off “Joey” that won the top spot last week. It would have been “Storm Tracker” on The Weather Channel.

I cannot remember spending so much time in front of my TV, avidly listening to the weather pros track one massive hurricane after another threatening Florida and other U.S. properties.

Still, while carriers marshal an army of adjusters to assess damages and pay claims sure to top $10 billion, its comforting to know that defense mechanisms put in place in the dozen years since the devastation of Hurricane Andrew appear to be limiting the destruction and financial losses caused in this latest multi-storm onslaught.

For one, improved building codes pushed by the industry made a huge difference. It wasnt easy to convince the state to raise the bar on building safety, since it must have added to the cost of construction, but it most assuredly saved lives, property and money in the long run this summer.

In addition, the insurance mechanisms put in place to ease the blow to the industry and encourage more carriers to write business in at-risk statessuch as the expansion in capacity for the Florida Hurricane Catastrophe Fundappear to be paying off. Coverage is more expensive and deductibles are higher, yes, but it beats chasing the entire private sector out of the market.

So far, the industry as a whole appears to be taking the recent heavy losses in stride. Indeed, there is even some doubt about whether the storm claims will slow down the recent softening in p-c rates outside of the property market.

However, since this industry is always one mega-catastrophe away from a complete meltdown, youd better keep your eyes glued to The Weather Channelas well as on our own NU Online News Service at, where you can get the latest breaking news on storm damages and their impact on the market.

Road map To Nowhere?

It was not a good week for road maps. Israeli Prime Minister Ariel Sharon pretty much chucked the road map for peace with the Palestinians set out by the United States, while state legislators, regulators and consumer advocates hammered the federal road map for insurance regulatory reform proposed by leaders in the House of Representatives.

The most significant criticism came from the National Conference of Insurance Legislators, which wrote Congress that it “cannot support” the road map because “it could undermine the role of state legislatures in the development of insurance public policy and undermine the authority of state insurance commissioners.”

NCOIL pretty much told Uncle Sam that he should keep his nose out of insurance regulation, thank you, except for clearly national issues such as terrorism and catastrophe insurance.

Is this merely the latest phase of the endless turf war between state and federal lawmakers? Of course it is, but its also more than that. There are substantial issues to clarify and tricky compromises to be struck before the states are going to be comfortable entering into any regulatory reform “partnership” with the feds, who are notorious for dumping unfunded mandates onto depleted state treasuries.

In the meantime, the debate makes for some lively copy, so keep reading NU and our daily online news service for the blow-by-blow.

Sam Friedman


Reproduced from National Underwriter Edition, September 16, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.