Risky Business

Twelve years ago, Hurricane Andrew drove many insurers bankrupt and was the costliest disaster to date. This year seems all set to surpass those losses.. $7.5 Billion for Hurricane Charley and an estimated $35 B for Hurricane Frances (if it continues on its deadly trail). As a point of reference, WTC losses to date have been $30 Billion, while Northridge earthquake have been $15 Billion.

However, Insurers are apparently protected this time, mainly due to the establishement of the Florida Insurance Council. The strategies they have employed have been:

• Raise rates to increase reserves
• Increase deductibles
• Formation of a 14 Billion fund