A Stronger Market

Despite the devastation from Hurricane Katrina in 2005, Louisiana Insurance Commissioner Jim Donelon said the state’s insurance market is stronger now and that the “outlook for continued market recovery is positive.” Donelon credited several key factors for the recovery, beginning with the efforts of the Coalition to Insure Louisiana (CIL), a group of 40 professional and business organizations dedicated to maintaining the availability and affordability of private insurance markets.

The state adopted the first-ever statewide building code during a special session held two months after the storms. Houses being built and/or repaired following Katrina and Rita must meet strict building code standards. Buildings that meet code specifications are not only more attractive to carriers, they are also eligible for tax credits and insurance premium discounts.

Under the Insure Louisiana Incentive Program, new or existing private insurance companies were encouraged to assume policies covered by Louisiana Citizens Property Insurance Corp. (Citizens). Up to $100 million in incentive money was made available to companies who met certain writing requirements and enhanced solvency standards if they agreed to take policies out of Citizens. Ultimately, $29 million was accessed by five new-to-the-state companies.

Citizens’ policy numbers rose from 110,000 prior to Hurricane Katrina to a little more than 170,000. In 2009, that number fell to 129,000 policies and 6.4 percent of the total Louisiana homeowners market, an amount lower on the day prior to Hurricane Katrina. Since 2005, 12 new-to-the-market companies have begun writing property insurance in south Louisiana.

Topics Louisiana