A construction firm executive told New York insurance executives they should not be hesitant to cover risks in New Orleans because significant flood protection work has been done in the city.

Warren Perkins, vice president of Boh Bros. Construction Company, made his remarks at a seminar held in New York by the Inland Marine Underwriters Association's (IMUA) Construction Committee.

Mr. Perkins and other professionals presented arguments designed to convince insurance company representatives in the audience that they should not shy away from underwriting New Orleans construction. They said the city is on a strong road to recovery since the destruction wrought by Hurricane Katrina in 2005.

He said many building projects have been on the drawing board since Katrina, but that securing insurance has been difficult. He said insurers have even balked at covering projects in "white zones" that did not flood during the hurricane.

Mr. Perkins stated that he hoped the seminar would present a clearer picture of the situation in New Orleans and that insurers would begin to invest in the area again.

Lewis E. Link, director of the Interagency Performance Evaluation Task Force (IPET), Department of Civil and Environmental Engineering, University of Maryland, described the steps that New Orleans has taken to correct infrastructure design flaws that existed before Katrina, and he also outlined plans that are scheduled to be completed by 2011 that will protect against a major hurricane, or hundred-year storm.

To help protect against flooding in the future, IPET modeled 152 different types of hurricanes striking the area. The storms took different paths to the city and varied in size and intensity. Mr. Link noted that Katrina, a Category 3 storm, created a much larger surge than Camille, a Category 5 storm, because Katrina's size was massive in comparison.

The Saffir-Simpson scale, Mr. Link said, takes only intensity, not size, into account. The models used by IPET included both factors to determine how the city of New Orleans would hold up against different types of storms.

Hurricanes that were modeled bombarded three different versions of New Orleans: the city and its defenses as they existed before Katrina; the city as it exists today with improvements that have been put in place; and the city as it will exist in 2011 when the hundred-year storm defenses are fully completed.

Mr. Link showed diagrams that displayed flooding has a 1 percent chance of occurring every year for all three scenarios. The current improvements held up better than the pre-Katrina conditions, although the east side of the city, which is considered most vulnerable to major storms, still showed significant flooding.

Major improvements that have already been implemented since Katrina, he said, are the installation of gates and pump stations at the ends of canals, and higher and stronger levees, particularly along Lake Pontchartrain. The threat of a Katrina-like breach, he said, is lower now.

With the hundred-year system in place, the city held up even better to the 1 percent scenario, with the only flooding coming from rainfall rather than storm surge. Improvements that will be in place by 2011, Mr. Link said, include improved gates that will keep high levels of water out of the city, and further strengthening and heightening of levees.

"My feeling," he added, "is that Katrina now would have very little to no flooding."

Michael Tubbs, vice president of Willis of Louisiana, spoke to the economic recovery occurring in New Orleans. He noted that construction efforts are providing a safer infrastructure and that new jobs across all sectors are being created. He also said that, by 2009, tourism will be at pre-Katrina levels.

Speaking to the inland marine market, Mr. Tubbs expressed concern that rates in 2007 were still 50-to-100 percent higher than they were before Katrina. He added that Louisiana catastrophe rates for Tier 1 Wind appear to be higher than coastal exposures anywhere else in the country, including Florida.

Without adequate insurance, he said, recovery in the city will slow or stop, as banks may begin to take their money elsewhere.

"Louisiana is trying," Mr. Tubbs said, explaining that the government there is improving building codes, looking to share in the risks and improving the regulatory environment overall for insurers.

Special Reports /

New Orleans Is A Good Risk, N.Y. Insurers Told

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