Florida insurance regulators took control of the first insurance companies lacking sufficient reinsurance in the face of the coming hurricane season. Florida Select writes about 70,000 homeowners policies and is the 20th largest insurer in the state, according to the Business Journal of Jacksonville. The list is expected to grow as global reinsurers pass through the expected cost of more damaging coastal storms. Once an insurer is declared insolvent and ordered liquidated, the cost of hurricane claims can be passed to the Florida Insurance Guaranty Association (FIGA), which passes them in turn to all other insurers continuing to write in the state. Reinsurance crisis may spark more takeovers - The Business Journal of Jacksonville: (July 17, 2006).
State Farm received approval of an average 52% rate increase for homeowners and 70% for condominium owners, with the biggest increases in coastal areas. According to the South Florida Sun-Sentinel and other media outlets. The cost and availability of reinsurance is driving the increases, which are as much as 94% in parts of Brevard County. Following Katrina, reinsurers are rebuilding capital and surplus and re-assessing risks and the likelihood of increasing damage from coastal storms. State Farm rate hikes hit coast hardest - Orlando Sentinel : State News State Farm rate hikes hit coast hardest - Orlando Sentinel : State News (July 19, 2006)
The second severe storm in a week struck St. Louis this week, leaving 200,000 electric customers without power, days after over 500,000 were blacked out. Ameren, the local power company for over a century, said the earlier storm was "the worst storm in company history," almost half of its 2.4 million customers in two states were out. New storm socks Ameren St. Louis customers - Yahoo! News (July 21, 2006).
Many climatologists associate global warming with increased hurricane activity and more intense thunderstorms and inland flooding, as warmer oceans put more water vapor into the warmer atmosphere. For additional readings on the reaction of the global insurance community to the climate changes brought on by human activities increasing greenhouse gases in the atmosphere, see: Unintended Consequences: Insurers "Feeling the Heat" of Climate Change (July 9, 2006)
Posted by dougsimpson at July 21, 2006 07:01 PM