Insurance Technologies

Biloxi , MS. – July 17, 2009 With the approach of the 2009 hurricane season, the Property Casualty Insurers Association of America (PCI) is supporting the nation’s governors in turning to the issue of emergency preparedness and catastrophe insurance. This is occurring at the 101st Annual Meeting of the National Governors Association (NGA) located on the Mississippi Gulf Coast. The president and chief executive officer of PCI, David Sampson, said that the PCI supports Governor Haley Barbour and the NGA for bringing about emergency preparedness by making it a top priority at this year’s annual meeting. He says that a system that creates a balanced insurance public policy relating to both the federal and state level is vital for preparation for natural disaster and recovery. He says that the insurance industry is financially strong and therefore prepared for the hurricane season. But he adds that PCI must, together with the state government, begin preparing and building up market capacity to pay for the nation’s future losses. It is agreed among the experts that America is dealing with the prospect of more frequent and severe natural disasters during the coming decades. The dramatic increase in population growth and real estate prices in the most disaster-prone areas increases exposure to natural disasters Sampson says. Sampson says that during the past few years, as never before, homeowners insurance markets are being tested. During the year of 2005, catastrophic losses reached almost $62 billion. This was nearly double the previous record losses of 2001. In 2008, losses will be an estimated $11 billion. Sampson says that property and casualty insurers are prepared to help shape solutions that deal with the needs of consumers, insurers, as well as the government. He stresses that the insurance industry must work together with the government to strengthen homes and businesses, to keep families safe and to rebuild communities if there is a disaster. He says that PCI urges governors and insurers together to address the following fundamental issues on the eve of the NGA meeting, and to see these as integral components for protecting the nation. The aim is to reduce exposure to catastrophic losses. Sampson says that both state and local governments should bring into force responsible building codes and discourage irresponsible development in areas that are unsafe, through the use of better land use regulation. He says that PCI is a supporter of stronger building codes as being one of the most effective ways to prevent storm damage and that it urges states to develop requirements to replace outmoded and inconsistent requirements for building codes and code enforcement. He sees a need for taking proactive steps to build stronger homes and to reinforce existing homes. He says that toward will not only protect loved ones and valued assets, but also directly help strengthen the property insurance market on both the state and federal level. According to Sampson, although it is impossible to control the frequency or severity of a storm, it is possible to control how homes are built. The most effective way to reduce the costs of homeowners insurance is through the storm-proofing of structures, which will bring long-term stability to the property insurance market.