Business Leaders Tour Gulf Coast Amid Insurance Concerns

Securing insurance on the storm-battered Gulf Coast is a “tough issue” but should not discourage companies from investing in the region, White House hurricane recovery czar Donald Powell assured a gathering of business leaders meeting in Biloxi, Miss. Friday.

Powell joined U.S. Secretary Carlos Gutierrez in leading a 32-company delegation on a tour of the coast last week to sell them on opening or expanding business in Mississippi and Louisiana.

Powell conceded he doesn’t have a “great answer” to questions about how many insurance companies will cover businesses and homes in areas that were demolished by Hurricane Katrina on Aug. 29.

“I think as time goes by and they see progress here and as investments are made, the marketplace will begin to develop,” he told the delegation when they stopped for lunch at a restaurant in Biloxi.
Mississippi Gov. Haley Barbour said insurers may charge higher premiums and “structure some deals a little differently.”

“But they’re not going to write off from New York to Texas,” Barbour added. “I don’t want to minimize whether that’s an issue or not, but I can tell you: We don’t think that’s going to slow us down and we hope (it) won’t slow you down.”

The delegation, which Gutierrez described as the United States’ first domestic trade mission, met with Louisiana officials and toured New Orleans on Thursday.

On Friday, they visited Stennis Space Center in Bay St. Louis, Miss., a NASA testing facility, and then took a bus tour of Mississippi’s coastline.

Tens of thousands of businesses in Mississippi and Louisiana were demolished or disrupted by Katrina, but Gutierrez said the private sector is helping lead the recovery effort.

“There is no better place to invest than in the United States” Gutierrez said, “and within the United States, there is no better place than Mississippi and Louisiana and the Gulf states that have been so devastated and who need the expertise of the business sector.”

The delegation included representatives of 11 different business sectors, including retail, banking, real estate and construction.

One of the executives on the tour was Home Depot chairman, president and CEO Bob Nardelli, whose company announced Thursday that it will spend $57 million to open new stores and repair old ones on the coast.

Nardelli said Home Depot stores are self-insured, so securing coverage was not a potential roadblock.

“This has been a very good market for us,” he said. “We have an obligation to restore, rebuild.”