Wednesday, December 14, 2011

New Study on Catastrophic Losses in Alabama

The linked presentation by Robert Hartwig, President of the Insurance Information Institute, focuses on the effects of catastrophic losses on homeowners' insurance in the State of Alabama.  This study, of course, has parallels with other similarly situated States.  According to the study, between 1998 and 2011, insured catastrophe losses across the state totaled $8.4 billion, with homeowners and renters insurance accounting for about 67 percent of the losses. 2011 was the worst year in Alabama history for catastrophe losses, with homeowners losses representing 66 percent of the $3.2 billion in cat losses. This record of catastrophes has taken a toll on the state’s insurers. The return on net worth (RNW) for the Alabama homeowners insurance market from 2000-2009 averaged negative 7.9 percent, ranking the state 43rd out the 50 states. Inclusion of the 2011 storms could make Alabama close to the least profitable state.

The study offers some interesting information that makes for a good segue with the American Bar Association's Tort, Trial & Insurance Practice Section's Disaster Initiative program for the TIPS Spring Meeting in Charleston, SC on May 17, 2012.  The Charleston Disaster Initiative program includes Mayor Joseph Riley of Charleston, who masterminded the response to Category 4 Hurricane Hugo in 1989 and won international accolades for his vision will host the panel.  Other panelists include Governor Bev Perdue (invited), who received tremendous media attention for her thorough and thoughtful preparation in the path of Hurricane Irene.  The Mayor of Birmingham William Bell, who weathered and learned from the tornados that sliced across Alabama this year, has also been invited and should be familiar with the effects of the III study.  Their experiences and what they learned will be front and center.  A second panel, including Judge Bernice Donald of the Sixth U.S. Circuit Court of Appeals, Ed Collins, from Protecting America, and Dr. Robert Bailey from Exponent, will assess national preparedness, the likely hot spots geographically and what can and must be done now to avert even worsened consequences.
The Charleston meeting will also feature a second CLE grouping of four panels on:  1)  “Advising Businesses on Natural Disaster Preparedness and Business Interruption Insurance”;  2)  “ Second Responders:  Experts Responding to a Natural Disaster Loss from Start (investigation) to Finish (Daubert Challenges)”; 3) “Handling a Catastrophic Claim from Beginning to End, including Pre-Storm Preparedness and Post-Storm Evaluation”; and 4) “5-Minute Drills-Foreseeable Ethical Problems and Solutions After a Natural Disaster.”  For more information about TIPS Disaster Initiative and the Charleston program click here.  Coincidentally, Bob Hartwig will be speaking at the TIPS Disaster Initiative program in Chicago on August 3, 2012 on Disasters Caused by Acts of Terrorism.

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