Mississippi Insurance

Maximum concerned by the sharp rise in costs of hurricanes and other disasters, home insurers are available on the withdrawal of some U.S. markets coasts, warning collection of financial storm clouds of how the USA pays damage caused by the disaster.

The development is another legacy of Hurricane Katrina, whose super assembling the destruction along the Gulf Coast has crystallized a growing industry debate about the combined effect of climate trends and population growth in coastal areas. Some believe that the two are so that the risk of loss as large as the insurer could be pushed to break, so that the government and taxpayers, the tab for the next disaster.

Since August 29 - if the country is where the hurricane along the Gulf Coast - Allstate Corp., the industry of the second company has ceased owner in writing the policy in Louisiana, Florida and the coasts of Texas and parts New York State. The company has ceased underwriting coverage of earthquakes in California and elsewhere. Other companies have again fired on the Gulf coast of Cape Cod, notifying Florida of plans to terminate 500000

Meanwhile, owners of removal from the state-backed insurer plans of last resort, which tend to be borne by taxpayers, and whose costs are also rising.

Given that premiums are increasing, companies, shed customers and owners of hurricane claims combat injured States, a revision of the industry is encouraged by an unusual coalition. It includes Allstate and State Farm Fire and Casualty Co., and a group of bipartie of governmental regulatory authorities, academic experts and former officials of Homeland Security.

They propose the creation of a larger federal role in the new state catastrophe funds or secure private insurance companies, if the loss of a certain limit, lasts from state and local construction and rising risk premiums for exact price. Some also want to potentially pool the high costs for risks such as earthquakes, hurricanes, tornadoes and floods in the national or regional groups to facilitate consumer costs and the use of a certain sum of money to Improved first response to prepare and local communities.

“This is a potential market here, if not already an actual market failure at work”, said Robert E. Litan, senior fellow at the Brookings Institution, the state is working with regulatory authorities in California, Florida, Illinois and New York, on a plan Redevelopment catastrophe insurance. “If we have another hurricane season this year, we had the last time that I would not be surprised if you have a panic Insurers try to. ”

Taxpayers are already feeling the effects. While Katrina caused an estimated $ 38 billion to 50 billion in private insured loss, but also contributed to the Confederation flood Insurance Program $ 23 billion in red blood cells and organizations invited, the costs of the Confederation over $ 100 billion. That is about $ 10 billion for Mississippi and Louisiana homeowners.

“The fundamental dispute about the role of government and that the government should or should not play an important role in the effective contribution to the diversification of catastrophic risks that this country faces,” said Robert P. Hartwig, chief economist for the insurance industry Institute of Information The research arm of the industry.

Businesses will be eliminated Ownership policies and driving residents financed by the taxpayers of public insurance plans. Florida’s citizens Corp. things, for example, acted 815000 and 40000 per month addition, “said Kevin McCarty, Commissioner of the Office of regulating insurance. Last week, Poe Financial Group collapsed, and many of its policyholders 316000 is probably among the citizens, there is already a deficit of $ 1.7 billion.

LA citizens things Corp., the state insurers of last resort that policies reach 200000 this year, it was not in 2004. Texas’s insurance of last resort, “he said down to $ 1.3 billion in order to increase reserves and a price of at least 22 percent.

“Everyone looks at this issue, every insurance company certainly, and other companies, banks, lenders and the authorities,” said Joseph J. Annotti, spokesman for Property Casualty Insurers Association of America , 1000 represents the insurers, including some of the biggest insurers of the Nation owner. “This is a political problem, and it is an economic problem - makes it so difficult.”

Analysts point out that seven of the 12 most expensive disasters insured in the history of USA in the last two years. At $ 57.7 billion, private insured loss in the year 2005 was twice higher than that of 2004, after the Insurance Services Office.

Hurricane diseur to predict five major storms of category 3 or higher in the 2006 Atlantic season, with a chance of Agriculture of the USA to 81 cases per cent, compared with 100 the year an average of 52 per cent. In March catastrophe Modeler Risk Management Solutions Inc. raised their estimate of damage insurance this year by almost 50 percent above the pre-industrial-2004 broad guidelines of the East coast and golf. RMS, whose rates are set by insurers to calculate premiums, debt “Sea surface temperatures higher.

If global warming is at work or not, increase costs, because rising property values and development. For example, a full results in Miami by Hurricane Andrew, would have cost $ 60 billion in 1992, would have the effect that 120 billion dollars of damage, because today the market value has doubled, insurance services office estimates.

“In this context, we believe that disasters which cost $ 100 billion of insured damages are not difficult to view” ISO spokesman Christopher Guidette said.

Again, I was a detour, a car red light, and as usual, when I was crying on the driver, as he accelerated away, I could see, increasing its hand in air. And, no, it did not adopt a fuss.

Red fire and stop signs are a thing of the past. Every man, walking in the streets of America knows all too well. I am not quite sure if it lost its authority, but they have.

I travel enough to know that the judgement of characters are now ignored most everywhere. I was almost back to Dallas Hit studded as the other night. Drivers in a race to attend their destination. Drivers for mobile phones. Drivers refuse to be slowed by an octagonal.

More than 165000 people were wounded, the driver turned red over the year 2005, according to the Insurance Institute for Highway Safety. More than 90 pedestrians are killed each year in Washington, DC area alone. Whether with their dirty laundry, I do not know. It plays no role. There are a lot of people.

Where are the bad drivers of all?

I was surprised to read this month’s Men’s Health, they Columbia, SC So much for southern hospitality.

I’ve never there, but I’m not taking every opportunity. I will stay away, Mr. Pratt, my seat driver ed teachers, can speak there and in a sense.

The magazine, which uses the city statistics on the frequency of accidents at Allstate Insurance and statistics from the Governors Highway Safety Association, came with a list of 100 cities the worst of them ranking, the best driver.

St. Louis, followed by Colombia terrorizes the city by bad drivers, followed by Greensboro, NC, Jackson, Miss, Cheyenne, Wyo.

I have never been Greensboro, I’ve never had a Nahtoderfahrung live, and I think people are in Cheyenne, a bit like a cowboy attitude about priority. But I was a little surprised by Jacksons F grade.

A few years ago, I was there to do a story about bad, and how they were disappearing from the American landscape. The assignment my tour around the capital of Mississippi awaits the green light to see how long it will last until someone on his horn blowing around me.

Nobody has ever done. I am always surprised to be.

Obviously, the situation has changed in the Magnolia State. Jackson must inhabitants of places to reach. Too bad.

And where could we go and not killed by the natives, as you cross the street?

Des Moines. He is the No. 1 City with the best riders. An A +. It is followed by Jersey City, New York City. Yes, the New York City. In addition, he received an A +, the third best driver on the list.

I am a bit suspicious of an investigation that Lauds New York City-pilot. Then, I’ve never booked the nearly there. With or without the dirty laundry in my arms.

The truth is known, I am adopting the Massachusetts were the worst drivers. Why was it a Western New York State affected, I have no idea, but cars were Bay State to avoid at all costs.

Even the flooding of the Mississippi, he failed to break the speed climbing stage of the European insurance market stocks. In recent years, they have been hit by such disasters as hurricanes Andrew and Iniki the USA and the City of London, but in 1993, they have a fair wind behind them.

Michael Hauttner European insurance analyst at BZW, said he believed European insurers have hardly the face of numerous requests from the Mississippi floods, because most of the damage should have to pay, giving by the federal government.

“Of course, there are certain claims, because cars are removed and companies must do the job,” he said. “But we are halfway during the year, and we have not had a major disaster, not yet. We’re very pleased, I think.”

The cycle insurance rotation and lower interest rates have a double effect on the sector Whammy, and their actions were among the strongest players on the European Constitution, scholarships and fellowships.

And for those who have a life insurance policy, there is a further fillip arm. How many government public law, the ballooning deficits and the number of retirees relative to workers inflates, it becomes increasingly clear that public pension systems must always be sober. Some analysts argue that people have to defend itself, which should lead to a slow, but the growing flood of pensions business for life insurers.

A sample of stocks indicates the strength of the market. During the first half of the year, AXA in France has more than 35 per cent in local currency, the Alliance Germany 15 percent, Alleanza (ordinary) in Italy, 40 per cent by ING in the Netherlands, 20 per cent of insurance and Zurich (Registered) Switzerland 30 per cent.

But given the strength of the market, but all good news are updated. So, why some commentators are always bulls?

Simon Rudolph, Continental Europe insurance analyst at Morgan Stanley, said: “Firstly, it is Hobson’s choice. You have a deteriorating economic situation in continental Europe. You deepening recession. All this is not very favorable for industrial firms. Revanche, the outlook for profits for insurance companies is a positive factor for the year 1993.

He added: “You still have an improvement in the reinsurance and insurance business. Although things as income from life insurance are most affected by the recession, more and more people are aware that they must be for himself. ”

“On the macro, insurance portion are in a period of declining interest rates. A simple explanation is that the interests and obligations fall, prices rise and insurance companies are met for the gills borrowing. ”

Prices are difficulties, because the nonlife insurance cycle turns. In a typical cycle, insurance if they develop and, hence, profits underwriting capacity and shrinking competition and prices are starting to tighten once again. The cycle seems to have the circle.

If lower interest rates are a pleasure, one question remains. The theory is that the obligations of insurers to invest in nonlife-value, because interest rates fall and that insurers are making gains. But the corollary of this is that each new bond investments have a lower yield in terms of income. Still, nonlife insurance traditionally actions have increased if prices fell.

For life insurers pure, or those with a strong life insurance, the benefits of lower interest rates become clearer. The lower rates mean savers take-off cash deposit and invest in economies in the longer term, for example, life insurance.

With all this context, Morgan Stanley recommends: Aegon of the Netherlands, USA for his life insurance, Alleanza for its rapid growth of new models, Generali in Italy for the benefits, it should be higher premiums, ING Because it is a cheap valuation, Münchener Rückversicherungs-France for the rate increases, and Zurich Insurance nonlife specialist for their business.

But not all financial forecasts ok. Some believe that the market may already be expected improvement of nonlife insurance cycle. Mr. Hauttner of BZW, said: “The problem with history nonlife on the prices go up, it is always difficult to say if it is included in the price. Because it could be up to now, but in two years.

It plans to buy nonlife insurers that have burned their fingers, if diverse, but they are now back on their heart business.

“I think the general trend is one of consolidation and, thus, whereas in the past, until the early 90’s, all insurers expanding, and she lost a lot of money, they are now focus on their heart trades, and perhaps also the fields of revenue, until the bottom line, “he said.

Hurricane Katrina (search) will probably reach at least 34.4 billion dollars in private and commercial property loss claims publication of the first survey of the nation’s insurer.

ISO’s (search) Property Claim Services Unit said Tuesday that the provisional estimate of damage to homes and businesses in six countries would make Katrina the most costly natural disaster in the USA forever, and that inflation exceeded 20.8 billion cleans losses from Hurricane Andrew in 1992.

Several companies risk assessment earlier released projections of insured damage Katrina, with a sum of $ 14 billion to 60 billion dollars.

The ISO’s Tally includes expected losses for personal insurance and commercial property, including boats and vehicles, exploitation bursting additional coverage and cost of living. Communicated damaged to insured onshore oil facilities is ISO officials said.

The estimates exclude losses of supply companies, agriculture, aircraft, oil rigs offshore and property insured under the Federal Flood Insurance Program.

Also Tuesday, the Securities and Exchange Commission (search) said that it was the facilitation rules for insurance companies for the acquisition of capital, in response to the concern that the billions of dollars losses from Hurricane Katrina and Rita, it might be difficult for insurers to pay victims claims.

ISO, a risk and insurance companies headquartered in Jersey City, NJ, said that policyholders in the six affected States - Louisiana, Mississippi, Alabama, Florida, Tennessee, Georgia - was expected to file more 1.6 million requests for damage to personal property and commercial vehicles and boats and yachts.

“The loss of personal property are nearly 75000 applications boats and yachts in the States concerned, with an estimated insured value of just under $ 2 billion,” the ISO report said.

The report said that Louisiana, the state worst hit, if Katrina is the case in the country August 29, it was expected to produce about 900000 requests 22.6 billion dollars in losses.

There were these estimates for countries neighbouring Mississippi, 490000 applications for $ 9.8 billion, Alabama, 123000 requests $ 1.3 billion, Florida 110000 requests $ 468 million; Tennessee, 8400 applications from 46.1 $ Million and Georgia, 3300 requests $ 22.2 million.

The report said that insurers were still appraisal losses and notes that access to damage parts of Louisiana has been compounded by floods. He also said the screening of owners, was evacuated as difficult.

ISO says it does resurvey insurers in 60 days, as many of us and fees are closed update their findings.

The SEC said in its announcement that it has, among other things, allow insurance companies listed on the stock exchange to introduce reduced administrative burdens for the inclusion of new issues with components of the Agency.

“The SEC is always ready to do everything possible for victims of Hurricane Katrina and Hurricane Rita,” the Agency Christopher Cox, the president said in a statement. … We will ensure that our legislative process not to disrupt market access. SEC will do what it can to ensure that all victims of insurance, the capital, up around him and he is not unnecessary delays payment of fees due to the absence of “money available.

Given that all the effects of WorldCom’s $ 4 billion fraud began versickern humid Mississippi by the evening, the powerbrokers of the country’s capital, Jackson, knew exactly what to do: they have in their truck and led to Tico’s Steak House, a building of low arrivals back from the highway in the middle of a jungle of service stations and strip-mail to the east of the city.

The interior dark, barely illuminated by flashing neon signs of beer and watched the assumption by a huge head of Stag’s, Mississippi’s is the unofficial seat of government. Its walls are made of wood with photographs of its donors signed - judges, lawyers, the master of the country. And it was here that Bernie Ebbers, WorldCom Chief Executive April meetings, which transformed a small phone in a global society Behemoth, and a small coach basketball in a multi-millionaire Tycoon.

In Clinton, in the suburbs of Jackson, where WorldCom established its headquarters, have been rumors flying yesterday that employees were threatened with losing their retirement benefits if she spoke to the press. But Mr. Ebbers’ old friends to drink Tico’s showed no such reluctance.

“It was one of the damnedest is underway, from zero to hero. Well vultures feeding him, and it is not fair,” said Bill Chapman, an insurance executive, in a medium rare steak zurückstreifend. “People in the economy, they are doing what they have to do.”

They did not see Bernie in two months, they said, even more silent, more low-profile Chief Financial Officer Scott Sullivan, was set on fire in this week. And they did not know where he was. “Very far,” guess.

The Mississippi, Attorney General Michael Moore is a press conference today in the expectation that a criminal investigation would be discussed at WorldCom.

But Mississippi is a state of the former loyalty - Konföderierten flag still flies, despite its disturbing harmonics of racism and slavery - and somehow the feeling seemed violent accountable for the confidence that Jackson’s Elite always maintained at WorldCom and its founder.

“I do not think anyone is ready for the knife Bernie Ebbers. He was someone Mississippi was proud,” said Andy Kilpatrick, a lawyer and shareholders of WorldCom. “I have invested three or four years, $ 20 a share, the pension plan in my account. I did not sell when he went, because it is a Mississippi, and I did not sell when it is gone, because it is a Company of Mississippi. And I’ll stay until he is any way to zero. ”

And then, he says half-jokingly: “The inhabitants of the south tend to the adoption, as local people, because you do not trust the damn Yankees.

WorldCom has brought recognition, money and employment of Jackson, said another friend of Mr. Ebbers, so that there is a bundle of rare heruntergekommenen in the poorest countries of the capital in America. Mr. Ebbers the party in possession of local teams ice hockey, the Jackson Bandits, Sunday and taught at the school, a local Baptist church. It was in Jackson, Mississippi’s College, a bastion of Christian education in a city staunchly religious.

He was a celebrity in a city glamouröser before any of them. Apart from the fact that the communication said: “If I am in possession of Jackson and hell, I owned, I rent Jackson and go to live in hell.”

There was no sign of M. Ebbers, is at Brookhaven, south of Jackson - where he saw a large house well protected by the back door and the street.

The 6ft 4in Tycoon were discussed in the past, shearing its neighbours “on a lawn tractor lawn mower, a tower that was repaid with emphatischen silence yesterday. It is also a fixed point in the city’s First Baptist Church, and faithful said one resident, “It was very real for Brookhaven.

“Let everything that happens, I have not seen, but if you can see here a long time, there is only one type Plain Old nice,” said Ronnie Ross, director of the Brookhaven Country Club. “They do not realize it was something different about me.”

He did not know what they are doing these days: “I think it goes back to evaluate, never a book by its cover.”

The first whispers of the company, WorldCom was produced in a bar in Hattiesburg, Mississippi, the second largest city, where a waitress suggested the company name for the first time: Long Distance Discount. But it was too Tico’s, that small businesses has increased at a telecommunications giant with a series of aggressive acquisitions discussion.

Even Tico’s silence clients employ sound when they talk about what is simply a room - the space behind the counter and the kitchen, where a large part of Mississippi, according to reports of government is always and where Mr. Ebbers and its leaders would be used to take regularly to formulate the strategy.

Tico Hoffman, the former professional golf adorable, owns the property, hesitates around the room for visitors, but finally true. Suitable, given the magnitude of WorldCom’s ambitions, it is dominated by a world map, a whole wall.

With four insurance companies bond, whose potential loss of their Triple-A financial strength ratings of credit, the effects are bound not only by the ripple banks, but issuers of bonds.

In the $ 2.6 trillion municipal bond market, only déclassent debt risk of some 563000 votes in each common issues insurance bond, according to Moody’s Investor Service. About half of municipal bonds to insurance, Moody’s said, even if some of the loans underlying conduct their own evaluations and often those who are less single or double-A.

But demotions on the bond markets of insurers, including the two largest, Ambac Financial Group (NYSE: ABK - News - people) and MBIA (NYSE: MBE - News - people), could lead to cuts in municipal bonds, particularly those Underlying without notice. Late Friday dominoes were set in motion after Ambac Fitch downgraded the financial strength for the triple-double AA, demoted and 420 classes of asset-backed securities transactions carried out by insurance by a subsidiary Ambac.

The uncertain fate of compulsory insurance for municipal elections may say issuers to also ensure the availability of their debts, the requirement of double-jumped a few Fund. This does not mean, municipal exhibition is to fall. “Nobody is predicting a sharp decline,” said Gail Sussman, Director of public finances, Moody’s. “But the landscapes are also always on the move for a while.”

A decrease in the number of competitors in the sector, but the cost of insurance, said Tate Reeves, Mississippi State Treasurer, and this could cause problems for small issuers of limited resources. “Without insurance inexpensive, many of these small towns and counties may not be able to finance some projects,” he says. “The cost of capital is higher than the transaction may not be feasible . ”

MBIA and Ambac Financial on the ropes, with which further by Moody’s and Standard & Poor’s. Bond insurers are trying a triple-A financial strength rating, because their activity is that the effective transfer of reducing the assessment rating of issuers of bonds, using future assessments to better on the price of pension.

Seven of the eight bond insurers have triple-A-Ratings, although four are in progress for Moody’s downgrading.

MBIA and Ambac have each announced plans to acquire capital for the preservation of their ratings, if efforts to defend a triple-A-Rating, the equivalent of money to throw in the oven. In fact, Ambac, on Friday casts its plans to increase $ 1 billion in equities and equity-linked sales, storage and after 70% in two days, jumped Friday on trade.

“As a result of market conditions and other factors, including the recent actions by certain rating agencies, the capital increase is not an attractive option at this time, Ambac said in a statement . “The company must ensure the evaluation of alternatives.”

One option for these companies, it is run-off, ie, is not new business models and cash-flow from its existing accounts. Could it be care goals, but it would also prevent the dilutive effect of issuing new shares. Credit default swaps on the debt of MBIA and Ambac a chance to involve 73% of companies is by default in the next five years.

MBIA said Friday he was surprised that Moody’s had verification for other demotions, only a few days after selling $ 1 billion in equity securities for purchase and after an investment of $ 1 billion infusion from Warburg Pincus. Gary Dunton, MBIA’s Chief Executive, said: “We believe that our plan for the capital reaches or exceeds the requirements described above by Moody’s and the two other major rating agencies.

Fitch Ratings, who came with the harshest of evaluating the loan insurers in December, confirmed MBIA’s Triple A Rating stable with a view.

There are many peripheral pointing the finger. Bond insurer began life in the years 1970, Plain Old support of government and corporate bonds. In recent years, she jumped into the world of structured finance and complexity of credit derivatives, they are increasingly troubled.

MBIA, alone, back $ 673 billion debt, even more than its capital. Its market capitalization, after several days of battering deep sell-off, is about $ 1 billion.

The effect significant leverage with which insurers bonds has been a great source of controversy, when rating agencies have not taken any decision until recently. “The storm has the perfect time to brew, but it will be difficult taken, and quickly, when it was - much harder and faster than we expected,” said Banc of America Securities Analyst Tamara Kravec, cut, the group to “neutral” from “overweight”, Friday.

Rob Haines of CreditSights had a dimmer view of the situation in mid-December, when the rating agencies known as the first verification monolines. “It has long been clear that the industry as a whole is not easy to maintain sufficient capital to absorb a fat tail structured default event,” writes Haines. “Although markets arrived at this consensus a few months ago, the agencies decided to wait until the week before Christmas until finally capitulate.

On the issue of HMO reform, both Democrats and Republicans have competing “patients” Bill of Rights “proposals which at the outset for the debate this week.

Both sides agree that the HMOs should be required to pay for emergency care and patients should be able to rendezvous with specialists such as children or doctors gynecologists, without time ‘ Waiting for references.

But Democrats want the bill is intended to cover someone in a Managed-Care plan, while Republicans argue that it is only to cover needs in plans to encourage those who by their employer, which does are not subject to further measures to reform the state HMO.

And the dispute about a great determination in the Democratic plan, so that patients to sue their HMOs. Republicans propose a mechanism that would be outside comments to challenge decisions, coverage, without courts.

The insurance and business groups have a campaign to convince consumers that the Democratic bill, under the auspices of Senator Edward Kennedy of Massachusetts, supplement premiums and grow the ranks of 43 million had no insurance in America.

Republicans, contrary to what their tax cuts is not a threat to Social Security and Medicare and that they are determined as the Democrats on board these programs. And they argue that if the federal government is to collect more money from taxpayers, when they need the generosity of a few should go back to man, insofar as it applies to first place .

“If we’re in this kind of surplus, we should allow people to keep more of their money,” said Senator Don Nickles (R-Oklahoma) on “Fox News Sunday.” “Some people pay too many taxes.

Saying that Republicans and Clinton to agree on the need to make savings and Social Security and Medicare to pay state debt, Lott called the president to negotiate seriously, rather than the problem of partisan purposes .

“I constantly receive mixed signals of the president. I do not know if he wants, for a number of things done with the collaboration or if it is partisan on the road, the political path,” Lott said on NBC’s Meet the Press “.

“We should lock up social security, we should about the Medicare reform, among others (as regards the costs of) prescription drugs, and we must pay back in the form of tax relief for American families work, “he said.

The Labour Congress this week in its fourth of July Recess, HMO reform and tax cuts on top of the agenda - and probably appear to trigger partisan struggle between Republicans and the White House.

Officials of the Clinton administration made it clear that Sunday against the two republics reduction of tax measures in a house and another in the Senate, which call for about $ 800 billion in tax relief over 10 years.

In the meantime, some Republicans are clearly they are not participating in a “democratic” patients “Bill of Rights” proposal with patients complain about their HMOs, in some cases, if the coverage of medical procedures denied, limited or delayed .

Republicans say it will push the cost of health insurance premiums and thus an increase in the number of Americans without coverage.

“Actions must always be the last result is not the first action,” said Senator majority leader Trent Lott (R-Mississippi). “This is what Republicans believe in”

Dear summit Monday

As Bill Clinton agrees with the heads of both parties Monday for a budget summit, the GOP has two competing plans for tax reduction on the table.

House Republicans have proposed a plan of $ 850 billion, the rate of taxation of income in the Board of Directors of 10 per cent in the next ten years, gains surrender to cut taxes and allow parents to deferred taxes accounts to pay for educating their children in private schools.

Having a Republican Senate $ 792 billion, 10-year plan, low tax rate of 15 percent to 14 percent and elimination of the so-called “marriage of imprisonment” paid by many two-income families. Not included gains from sale or reduction of expenditure on education, which are both against the Democrats in Congress and the White House.

The plans of tax cut GOP, the chief of General Staff of the White House John Podesta, on Sunday as “dangerous binge, are more than three times larger than the $ 250 billion withdraws from the White House.

“The president has very clearly that there is no sign the budget for each action, which did not Social Security and Medicare, firstly, not to step forward (and) stipulates that all measures constitute a risk to the progress we ve made in pay debt, “said Treasury Secretary Lawrence Summers.

Clinton himself, in an interview to The New York Times published Sunday, said GOP plans tax cut with the deficit would be back.

“If you pay taxes to reduce their defence and their proposal, the deficit would again,” he said. “It would, I believe, very stupid for the deficit, if it can be avoided.

It is conventional wisdom that America’s coastal regions of Galveston, Tex., to Cape Cod, Massachusetts, are on the increasing risk of megastorms in 2005, Hurricane Katrina. Global warming, the theory will lead to that hurricanes such as ocean temperatures increase nastier. On 3 April, meteorologists at Colorado State University predicted five intense hurricanes in the Atlantic storm season starts on 1 June, two times higher than the average long-term.

They believe that the cost for insurance of households and businesses would be sky-high. But this is not the case. In most parts of the country, prices of things for homeowners and businesses are still weak, as they were before Katrina. And, surprisingly, the insurance rates, were recently in many parts of Florida and the Gulf coast, are incurring heavy losses hurricanes, promotion to continue construction in areas at the bottom .

What Does a force, time is still overwhelmed by two powerful forces: finance and politics. In a world of abundant liquidity, insurance companies traditional and new investors also try a suspension of risks, and competition grows sentences. And in the Super-risk places that do not attract much private capital, particularly Florida, regulators face a cry of pain of policyholders by limiting or reducing the price by the edict .

At the national level, according to the Bureau of Labor Statistics, prices for tenants and owners of insurance have been 1% in March to two years earlier, before Katrina. And after an investigation by the Council of Insurance Agents & Brokers, the rate of claims paid by large companies fell by 11% over the same period. “We are in a softening overall market,” says Chris Boone, Chief Marketing Officer of BancorpSouth Insurance (BXS), an insurance broker in Tupelo, Miss

Can it last? The regulatory authorities and the insurance sector are only the beginning, with the pricing problems of coverage at a time of great potential storms. Thanks to some calculations, the premium payments would be more correct than the freeze on economic development in cities such as Miami and New Orleans.

In Louisiana, insurance, Commissioner James J. Donelon placed on ice increases for companies that their sentences with the help of a scientific model, the risk focuses on forecasts of the storm damage over the next five years. Donelon said that by the results of a study of Florida, insurance is also to take into account the possibility that the cyclone activity in a cyclical peak and could be lower, in the medium-term future . Do expect more such battles. More precisely that the models, the lower the general public, the results are such that they give, “said Andrew Castaldi, Senior Vice-President of Swiss Reinsurance Co.” The prices are even worse than anything else. ”

Wind case INDUSTRY
It is true that in the wake of Katrina, insurers have also significantly increased prices or even coverage in the most vulnerable coastal areas. This year, Allstate Floridian Insurance Co. (ALL) notifying FL 120000 people own their own home “policy will not be renewed.

But even in these areas, many people are better to see and a wider choice of the business aviation insurance, as a year ago. One reason is that the wealth of insurance capital. No hurricane has met with the USA last year, so that the nation damages and reinsurance industrial accidents posted a net profit of $ 31 billion purchase in 2006, a strong momentum of 6 billion net loss in 2005. Add the income from capital and insurance, net profit after tax to the tune of nearly $ 64 billion, so that industry performance highest in 20 years. All the money in the sector expanded underwriting the necessary currency, the price reduction.

In addition to internal resources profits of the industry has received a flood of outside investment, much of the arrival on the heels of Hurricane in 2005. In the years 2005 und’06, $ 44 billion in capital has been damage and accident insurance according to figures from Morgan Stanley (MS). Approximately one third was deprived starter for insurers and so-called sidecar, which are likely temporary pools of capital back cover of insurance policies.

Hungry performance of hedge funds and private equity have pumped money from investors in catastrophe bonds, which have little or no return to the bulk of investors, if a hurricane in a specific location, causes losses above d ‘ a threshold. In return for the risk, says Cat Bonds pay 5 to 10 points from the banks on interest rates. “This class is the payment of a fairly broad dissemination compared to a similar assessment of investment,” says Gary Martucci, Standard & Poor’s analyst.

But financial forces also important as they are, not for all the rate cuts. Politics plays an important role. State regulatory authorities are not content to behave on the market in places like Florida, where insurance companies have provided the most prices. You are invited increased by cutting insurers, and in some cases, an extension of the availability of government subsidies for insurance highly exposed owner, can not cover the private market.