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INSURANCE INDUSTRY CAN HANDLE HURRICANE LOSSES; NO DRAMATIC INCREASE IN RATES EXPECTED, SAYS ECONOMIST

 INSURANCE INDUSTRY CAN HANDLE HURRICANE LOSSES;
 NO DRAMATIC INCREASE IN RATES EXPECTED, SAYS ECONOMIST
 NEW YORK, Aug. 28 /PRNewswire/ -- The property/casualty insurance industry has the financial strength to handle losses from Hurricane Andrew and other disasters, according to the Insurance Information Institute (I.I.I.)
 The industry has more than $160 billion in capital available to pay the claims of its policyholders, said Dr. Sean Mooney, senior vice president and economist at the I.I.I. "Paying claims is our business. Our capital base is more than adequate to get the job done," he said.
 Dr. Mooney pointed out that the $4.2 billion in insured losses from Hurricane Hugo in 1989 did not shake the industry's financial solidity. A record number of disaster claims -- $7.6 billion -- were paid in 1989.
 "The industry's solvency remained intact after Hurricane Hugo and it will be strong after Hurricane Andrew," said Mooney. He noted that only two small companies became insolvent as a result of Hurricane Hugo. Policyholders of insolvent companies are protected by industry-funded state guaranty funds.
 No official estimate of insured losses from Hurricane Andrew is now available. Prior to Hurricane Andrew, disaster losses in 1992 totaled $3.9 billion.
 Mooney also said that home owners in Florida and Louisiana would not see a dramatic increase in their premiums from the storm. After Hurricane Hugo, he said, homeowners insurance premiums in South Carolina increased by less than 10 percent. "There will be no impact on rates outside of Florida and Louisiana," said Mooney.
 -0- 8/28/92
 /CONTACT: Jeanne Salvatore of Insurance Information Institute, 800-331-9146/ CO: Insurance Information Institute ST: New York, Florida IN: INS SU:


SH-OS -- NY048 -- 4488 08/28/92 15:15 EDT
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Publication:PR Newswire
Date:Aug 28, 1992
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