Head's up, insurers! You're going to have a ton of explaining to do if another monster hurricane or terrorist attack doesn't come along to wipe out tens of billions of your premium dollars. The stage was already set this weekend, when The New York Times ran a story, headlined “Earnings For Insurers Soaring,” which reports to the general public what the industry itself has known for quite awhile now–that “insurance companies are expecting record profits in 2006 after predictions of another year of devastating hurricanes have so far come to naught.”

Do insurers need to apologize for making money, especially since profits were sky-high for 2005 even after last year's record hurricane losses? Certainly not. It's the job of underwriters, after all, to write at a profit.

However, to avoid having regulators and lawmakers at the state and federal level coming down on them like a ton of bricks, they need to show that they are underwriting rationally–that prices are dropping for most commercial insurance lines, while rising fairly for coastal properties, residential or business, and for a good reason, since that is where the biggest exposures lie.