BestWeek: Katrina Will Force Gulf's Commercial Underwriters Back to Drawing Board.

OLDWICK, N.J. -- Gulf Coast states have traditionally been attractive areas to write commercial insurance. The oil and gas industry, booming export and import trade enhanced by seaports and agribusinesses are just a few factors that make it so.

The legal climate is a bit friendlier, and there's a perception it's hospitable to businesses, Tom Curtin, the chief executive officer of Birmingham-AL-based commercial insurance broker CRC Insurance Inc., said in an exclusive article in the Sept. 12 BestWeek.

There's only so much business you can write in Middle America, he said, noting the "market has an appetite for more, therefore they go in the areas that are more risk-prone in the hopes of getting somewhat lucky."

Now fast-forward. Two weeks ago, Hurricane Katrina pummeled the Gulf shores and destroyed hundreds of businesses in Florida, Alabama, Louisiana and Mississippi, and forced thousands to shut down. Among businesses hit the hardest are off-and-onshore oil and gas infrastructures, shipping ports and warehouses, casinos along the Mississippi River, hotels, restaurants, resorts, antique shops and shopping malls. In addition to the physical damage, these operations have lost billions of dollars due to business interruption.

Experts say the huge insurance loss would force insurers to rethink the viability of commercial lines underwriting in the Gulf coast. In commercial lines, however, there haven't been any drastic changes, said Cory Walker, chief financial officer of Florida-based Brown & Brown Inc., the eighth largest insurance broker in the United States.

Other exclusive Katrina coverage in the Sept. 12 issue of BestWeek includes:

--How claims adjusters are dealing with a lack of lodging, a shortage of gasoline and inaccessible areas in the Gulf.

--Whether Katrina will in the long run be a boost or a drag for insurers.

--How the casino industry in the Gulf region is looking to business-interruption coverage.

--How the potential for serious health issues following Katrina is only beginning.

BestWeek is published by A.M. Best Co. for insurance professionals, including home office executives, agents and brokers.

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