St. Paul Travelers to cease renewing some commercial accounts in New Orleans

In a blow to post-Katrina recovery in New Orleans, St. Paul Travelers on Dec. 1st said it will stop renewing many commercial insurance policies in the area in the next year, according to the Associated Press.
The rebuilding of New Orleans is already hindered by a tough commercial property market and St. Paul Traveler’s announcement stoked fears that other property/casualty insurers might do the same.

The state’s largest commercial insurer will stop renewing property business policies for an undisclosed number of small- and mid-sized businesses, mostly in Orleans Parish, starting in March, a spokeswoman for the St. Paul, Minn.-based company told the AP. St. Paul Travelers writes about 14 percent of the state’s policies.

The company is the first insurer to announce it will stop renewing commercial policies in Louisiana in the wake of Katrina, according to the state’s insurance department.

Travelers spokeswoman Jenni-fer Wislocki told the AP that the company is intent on reducing its high concentration of commercial property risks in hurricane-prone areas of the state.

Mark Drennen, president and CEO of the Greater New Orleans Inc. economic development group, estimates the company’s decision will result in $3 billion in lost coverage for businesses in the New Orleans area, the AP reported.

State Farm Insurance Group accounts for 12.6 percent of the state’s commercial policies, followed by Zurich Insurance Group at 10.3 percent and Allstate Insurance Group at 5.9 percent, according to insurance department spokeswoman Amy Whittington.

Insurance Commissioner Jim Donelon was expected to meet with St. Paul Travelers executives on Dec. 5 to discuss the company’s plans. At press time meetings were reportedly scheduled with Gov. Kathleen Blanco, other insurers and business leaders in the New Orleans area.

Topics Commercial Lines