From: clarinews@clarinet.com (VIRGINIA MAIDA RANDALL, UPI Business Writer)
Newsgroups: biz.clarinet.sample,clari.biz.finance.services,clari.biz.invest,clari.news.disaster,clari.biz.top
Subject: Hurricane Andrew batters insurers
Keywords: insurance commodities, financial services, investment,
	wall street, corporate news, corporate finance, severe weather,
	trouble
Date: 25 Aug 92 23:12:19 GMT
Followup-To: biz.clarinet.sample
ACategory: financial
Slugword: andrew-insurance
Priority: major
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	NEW YORK (UPI) -- Insurers for businesses and homes battered by
Hurricane Andrew in South Florida sorted through the damage Tuesday and
braced for more havoc as the storm headed for the U.S. Gulf Coast.
	Sam Miller, a spokesman for the Florida Insurance News Bureau in
Tallahassee, Fla., said the earliest estimates of insured losses will
not be ready until Friday or early next week since some areas still are
closed to adjusters and huge traffic jams face anyone entering reopened
areas.
	Miller said Andrew's damage was comparable to Hurricane Hugo's
destruction in 1989, which caused $2.7 billion in property damage and
resulted in total claims of more than $4 billion.
	The Dade County office of Emergency Management issued early damage
estimates that ranged between $15 billion to $20 billion. The storm
killed at least 12 people and left 50,000 homeless.
	Cathy Seifert, who follows the insurance industry for Standard &
Poor's Corp., said the past five years have been hard ones for the
insurance industry.
	``Previously, when something like this happened, insurance stocks
would pick up because the market hoped the claims the companies had to
pay would help propel prices of premiums up,'' Seifert said.
	The stock market, she pointed out, reacted positively after Hugo in
1989 and the California earthquake in 1989 because investors assumed
insurers would raise prices. But now, ``there's so much excess insurance
capacity in the market that competitive pressures have forced companies
to keep prices stable, at least.''
	``After the Los Angeles riots and the flood in Chicago this past
spring, the market no longer believes this hurricane will do anything
but hurt insurers'bottom line results.''
	She said the hardest hit companies would be those already feeling the
pinch from real estate losses, such as Aetna Life and Casualty Co.,
Cigna Corp., and The Travelers Corp.
	At the end of the trading day, insurance-related stocks on the New
York Stock Exchange were mostly lower.
	Among some of the insurance stocks with possible exposure to
Hurricane Andrew, Aetna Life eased 37.5 cents to $38.625 a share, while
International Telephone and Telegraph fell $1.25 a share to $64.75 on
worries over its Hartford Fire Insurance Co.
	The Travelers Cos. gained 25 cents a share to end at $20.75 a share,
while Sears, the parent company of Allstate Insurance Co., ended
unchanged at $41.375 a share.
	Cary Schnieder, a spokeswoman for the Insurance Information
Institute, said State Farm Insurance and Allstate Insurance share 40
percent of the market for business and homeowner policies in Florida.
	Bill Sirola, a spokesman for State Farm, the nation's largest
underwriters of personal, homeowner and automobile insurance, said his
company's adjusters have just been allowed into some of the damage area
so it was too early to estimate the company's exposure. The company paid
out $455 million in claims for Hurricane Hugo in 1989.
	State Farm has about 1 million policies in the six-county area in
South Florida, with 624,000 automobile policies and the rest split
between homeowners and personal insurance. The company has sent more
than 350 adjusters and have 200 on standby.
	Sirola said ``catastrophies have less impact on rates than the
everyday thefts, fires and liabilities, because those are the claims
that come in every day in every given area.''
	``Our rating mechanism has a built-in catastrophic portion in
premiums to begin with,'' Sirola said. ``It will be years before we can
tell the effect of this hurricane in the rate structure.''
	John Gustavsen, spokesman for The Travelers Cos., based in Hartford
and one of the larger insurers in Florida, said it was too early to
estimate his company's total exposure to Andrew. Gustavsen said
Travelers has sent 80 additional adjusters to the damage area, armed
with portable computers so they could issue checks on the spot to
claimants left without homes.
	Gustavsen said the pace of call volume to the company's 800 number
has picked up over the last few days. The volume Monday was between 300
calls and 400 calls a day.
	Bob Lapinsky, spokesman for Allstate Insurance Co., a subsidiary of
Sears, Roebuck and Co. based in Northbrook, Ill., was unable to give an
estimate of his company's exposure. But he said Allstate paid out more
than $100 million in claims for Hurricane Hugo.
	``The first day after the storm, we got over 3,500 calls on our hot
line,'' Lapinsky said. ``We have 20 percent of the Florida market and
expect to pay 20 percent of the claims.''
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