Reducing the risk from hurricane loss through government andprivate building initiatives would be far more effective inmitigating losses than government insurance programs, according toan industry economist.

That assessment came from Robert P. Hartwig, InsuranceInformation Institute president and chief economist.

His comments came during a media telephone briefing on SouthCarolina officials' insurance market plans.

In the course of his discussion Mr. Hartwig mentioned insurancelegislation passed by Florida that he said has been criticized as"fiscally reckless" and has done nothing to reduce the riskpolicyholders face there.

He said instead of following Florida's example and making thestate's insurer of last resort the primary insurer, South CarolinaGov. Mark Sanford has proposed a series of tax incentives to helppeople retrofit their homes to withstand hurricanes and developdisaster savings accounts. He has also introduced proposals toassist low-income families to purchase insurance and give taxcredits to insurers writing policies for coastal risks.

He did not discuss the program Florida has, which providesmatching grants to homeowners who adopt the recommendations ofstate inspectors for changes to strengthen their houses againsthurricanes.

Mr. Hartwig said the key to both reducing losses and aiding inthe recovery afterward is to improve building structures so theycan withstand a hurricane.

"When a state or the federal government provides people withincentives to strengthen their home, to retrofit their home andtake all sorts of mitigation measures to make their home more fitto withstand the risks we know that home is going to encounter,then not only is the owner of that home better off, but thecommunity is better off and the whole economy of the coast, thecounty, and in fact the entire state, is better off," Mr. Hartwigobserved.

He said recovery would be faster because structures would stillbe standing after a hurricane, allowing people to get back tonormal more quickly than in the past. The same goes for businesses,which would not be faced with rebuilding either their structures ortheir client base.

"It is a win, win, win situation for the state if theappropriate incentives are brought into play," said Mr. Hartwig."It's a win for buyers of insurance who will see more availabilityand more affordability of coverage. It's a win for the economy ofthe state. And of course, it's a win for insurers, too, becauseultimately losses should be more moderate if there is seriousattention paid to mitigation in the state."

Like other states, Mr. Hartwig said South Carolina is faced withan expanding population, especially along its coastal shores, whichhas tripled since the 1950s. He noted that in 2004 the state wasnumber eight on the list of total insured coastal exposure at$148.8 billion, and that figure has probably increased today by15-to-20 percent.

There is much to be concerned about concerning the risk of ahurricane hitting the state, Mr. Hartwig noted. There is currentlyan increased cycle of hurricane activity that is expected to lastthe next 15-to-20 years, and predictions for the hurricane seasoncall for an above-average year with a 99 percent chance that ahurricane will strike the U.S. mainland, he said.