Declarations

Not Cutting Corners

“To date we have not seen a single instance where a human being made a conscious decision to favor dollars over safety.”

—The White House oil spill commission’s Chief Counsel Fred Bartlit said at a meeting exploring the causes of the Gulf of Mexico spill. The commission said it found no evidence to support accusations that the largest offshore oil spill in U.S. history happened because workers for BP Plc and its partners cut corners to save money, mostly blaming the accident on a series of on-site misjudgments. (Reuters)

Eyes on Insurers

“One of the key drivers for insurance companies is interest rates and the interest rate environment we’re in now is obviously detrimental to their investment returns. I think it’s about how you manage the premium growth side of the equation.”

—Craig Fehr, a financial services analyst at Edward Jones, who covers Allstate. Analysts told Reuters they will be watching closely to see how the industry’s top insurers handle both problems, either of which could be enough to constrain earnings in coming quarters.

Support for COGA

“While catastrophe obligation guarantees could substantially reduce earthquake insurance costs in California, they would ultimately have a modest effect on decreasing uninsured losses and reducing the amount of disaster assistance spending.”

—Tom LaTourrette, a senior physical scientist with RAND, a nonprofit research organization, and lead author of a study on the effect the Catastrophe Obligation Guarantee Act would have on losses following an earthquake. COGA supporters say that by lowering insurance costs, the act would spur more households to buy catastrophe coverage, decrease uninsured losses following disasters and decrease demand for federal disaster assistance. The California Earthquake Authority, which supports COGA, asked RAND to conduct the study. The study predicts that lower premiums will produce a 13.2 percent increase in the purchase of earthquake insurance from the CEA.