As insurers, legislators and regulators grapple with how to maintain viable insurance markets in the post-Katrina and Rita era; we tip our hat to Illinois Sen. and presidential hopeful Barack Obama who addressed a Senate committee hearing on Gulf Coast rebuilding held in New Orleans Monday. Obama told the committee: Ã¢â‚¬Å“Rebuilding New Orleans is not just good for the Gulf or the state of Louisiana, itÃ¢â‚¬â„¢s good for our nation.Ã¢â‚¬ Good point. Some 18 months since the most costly disaster in U.S. history and of the billions of dollars of government aid promised for Hurricane Katrina reconstruction, only a fraction has reached the hands of those affected. For our industryÃ¢â‚¬â„¢s part, some 95 percent of the 1.2 million homeowners insurance claims in Louisiana and Mississippi had been settled by the stormÃ¢â‚¬â„¢s one-year anniversary on August 2006. With an above-average hurricane season forecast for 2007, and landfall probabilities and intensities up across all regions, the importance of the rebuilding effort in the Gulf cannot be underestimated. Indeed,Ã‚ insurers areÃ‚ not alone in pushing for stronger building codes across the country. Check out I.I.I.’s Louisiana insurance market overview. for the latest catastrophe info.
The potential link between global climate change and extreme weather continues to elicit a wide range of views.Ã‚ But whatever your perspective, it is clear that our industry is becoming involved in green issues in an ever-growing number of ways.Ã‚ From hybrid cars to green building technologies to how to manage corporate exposures to climate change, insurers are increasingly participating in the green debate.Ã‚ For example, Travelers recently said it will offer owners of hybrid cars in California a 10 percent discount on their auto insurance, bringing to 42 the total number of states in which it offers such a discount.Ã‚ Several other companies have introduced similar incentives to hybrid drivers.Ã‚ Meanwhile, FiremanÃ¢â‚¬â„¢s Fund has introduced a new coverage for green-certified buildings that will offer a discount to building owners due to the lower risk factors.Ã‚ Another education-related green initiative will see broker Marsh offer a program with Yale University from January to teach corporate board members about their fiduciary responsibility to manage exposure to climate change.Ã‚ Released earlier this year, IIIÃ¢â‚¬â„¢s report Ã¢â‚¬Å“Global Climate Change and Extreme Weather: An Exploration of Scientific Uncertainty and the Economics of InsuranceÃ¢â‚¬ by III economists L. James Valverde Jr. and Marcellus M. Andrews examines a range of issues related to global climate change and extreme weather and explores the potential implications for insurers and reinsurers going forward.Ã‚ Expect more III research on green-related industry issues in future.