Disaster backstop talk

June 19, 2006

At the Big “I” National Legislative Conference and Convention, panelists differed over a federal natural disaster backstop:

“Allstate supports state pools that aren’t taxpayer funded but are put together by organizations whose welfare depends on good real estate markets,” said Edward M. Liddy, CEO, Allstate Corp. “It wouldn’t be an industry bailout; it would be good for America, and good for Americans to know they are protected. Americans have an important emotional and physical connection to their houses and they need to know that they are protected.”

“As an industry we should think long and hard before inviting the federal government into our businesses,” countered Gary R. Gregg, CEO, Liberty Mutual Agency Markets. “We’ve been able to deal with catastrophe as an industry for a long time. I’m very concerned about federalizing something that is regulated at the state level.”

The CEOs agreed that the catastrophe risk is not tapering anytime soon. “The baby boomers are about to retire. Seventy-eight million Americans will retire soon,” said Ramani Ayer, chairman and CEO, Hartford Financial Services Group, Inc. “Guess where they’re going? Not Chicago—but the coastal areas.”

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