BestWeek: Regional Homeowners Insurers Particularly Hurt by Katrina's Wallop.

OLDWICK, N.J. -- Hurricane Katrina's aftermath and the threat of future hurricanes in a cycle of increased storm activity are likely going to make life harder for small, regional homeowners insurers, according to an exclusive story in the Nov. 14 issue of BestWeek.

What's not clear is whether the unprecedented catastrophe losses of 2005 will make it so hard for small regionals to operate that they will face their own swan song.

Dr. Robert Klein of Georgia State University, the director of the Center for Risk Management and Insurance Research and a former chief economist for the National Association of Mutual Insurance Companies, said increased market share may contribute to regionals being "severely challenged" in hurricane-prone areas.

"They face a particularly challenging problem, particularly since these carriers picked up a lot of the business the big carriers didn't want," Klein told BestWeek. "An Allstate or State Farm could pull out of Florida and still have the rest of the country. A smaller regional doesn't have that option. It could lead to a situation where there are carriers with no other options and they are just waiting for the other shoe to fall."

Also in BestWeek:

--How reverberations from New York Attorney General Eliot Spitzer's charges against the insurance brokerage industry in the United States and overseas launched an investigation in Canada;

--Why Mississippi Insurance Commissioner George Dale feels somewhat torn between serving insurance companies and policyholders;

--Why Roger Pielke Jr., a scientist at the National Center for Atmospheric Research in Colorado, thinks a lack of a uniform measuring stick for catastrophe models means they can't be effective; and

--How post-Katrina capacity is entering the reinsurance market.

Also featured is Best's Insurance Composite Index, which finished the week Nov. 3, 2005, at 1,122.97, up 21.82% compared with a year ago. The composite index reflects the performance of 138 insurance stocks. The week's top performers include Quanta Capital Holdings Ltd.; XL Capital Ltd.; Axis Capital Holdings Ltd.; Assurant Inc.; and HCC Insurance Holdings Inc.

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

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A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.