COMMERCIAL INSURERS FACE CLAIMS FROM CLOSURE OF NEW ORLEANS

Commercial p/c insurers, which already face billions of dollars in flood and business interruption claims from Katrina, will see outlays rise even further following yesterday’s declaration by New Orleans mayor Ray Nagin that the flooded city would undergo a total evacuation for a period of months. Several insurance analysts have said that commercial carriers are likely to see more flood-related business interruption claims than normally associated with a hurricane. In a city of 450,000 residents, the evacuation will mean the closure of thousands of banks, restaurants, stores, shops and other businesses. The Louisiana department of insurance said insured losses in that state alone will be $19bn. Carriers with the greatest commercial exposure include Ace, AIG, Chubb and St Paul Travelers. Federal Emergency Management Agency statistics show some parishes in Louisiana with as many as 57.7% of homes with federal flood cover. In some affected counties of Mississippi and Alabama, fewer than 4% of homes have flood insurance. Meanwhile Katrina continued to cause damage as it weakened. Storms and tornadoes were reported across Georgia, destroying a number of buildings, A tornado reportedly damaged 13 homes in Marshall, Virginia.