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

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

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

The industry, however, remains divided, with giant property-casualty insurers such as Liberty Mutual coming out against it with the American Insurance Association. This week, the National Association of Mutual Insurance Companies also voiced opposition.

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

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

The Allstate CEO said the inability of any company to accumulate sufficient profits in the good times due to regulatory constraints in order to pay for the bad times necessitated the government involvement.

State Farm CEO Edward Rust and Nationwide Mutual Insurance Company chief W.G. Jurgensen also expressed general support for the proposal.

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

The panelists also agreed the industry will prevail in the lawsuits by property owners in the Gulf States who contend their hurricane water damage losses must be covered despite flood exclusions in policies.

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

Other storm-related topics included the huge stress the storms placed on claims operations and the need for enlarging current insurance company adjuster staffs so that those sent to stressful catastrophe sites can have their stints shortened.

“We have grossly underestimated the emotional toil these storms have wreaked upon claims adjusters,” Mr. Jurgensen said, noting in some cases they have been threatened with violence from angry claimants.

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