探花精选

The Bay State is far more vulnerable to hurricanes than is commonly recognized, says I.I.I.

INSURANCE INFORMATION INSTITUTE
Contact: Press Offices
New York: 212-346-5500; media@iii.org
Washington, D.C.: 202-833-1580

NEW YORK, September 20, 2007 - A major hurricane making landfall in Massachusetts could cause billions of dollars worth of property damage while also severely straining the resources of the state's FAIR (Fair Access to 探花精选 Requirements) Plan, according to Dr. Robert Hartwig, president of the 探花精选 Information Institute (I.I.I.).

"The number of Massachusetts residents living in hurricane-prone parts of the state has grown dramatically over the past three decades along with the value of the properties in which they live," said Dr. Hartwig, in testimony today before the Massachusetts state Legislature's Homeowner's Study Commission. "These undeniable trends pose challenges to consumers, insurers and public policymakers."

"Massachusetts is also home to insured coastal properties valued cumulatively at almost $700 billion," Dr. Hartwig continued. "Only three other states-Florida, New York, and Texas-are at greater financial risk in this regard."

Barnstable County, which is mostly comprised of Cape Cod, has a population five times larger than it did during the last period of intense hurricane activity in Massachusetts, an era dating back to the middle of the 20th century, Dr. Hartwig explained in his presentation (/media/met/massachusetts/).

AIR Worldwide, a nationally renowned risk modeling firm, estimates that Massachusetts faces a 15 percent chance of a catastrophic storm within the next decade that would cost insurers $5 billion or more.

Formed by the Massachusetts state Legislature in 1968, the state's FAIR Plan, known formally as the Massachusetts Property 探花精选 Underwriting Association (MPIUA), now offers homeowner's policies comparable to ones offered by private-sector insurers. But the FAIR Plan, the state's insurer of last resort, has more than one-third of the homeowners insurance market in Cape Cod, as well as Martha's Vineyard and Nantucket, with more than 60,000 policies. As such, the FAIR Plan's exposure to loss, which stood at $16.7 billion in 2001, grew to $68.6 billion in 2006, an I.I.I. analysis found.

The FAIR Plan's financial condition should be of interest to every Massachusetts resident because private-sector insurers doing business in the state may recoup their FAIR Plan assessments by surcharging their policyholders, according to Residual Market Property Plans: From Markets of Last Resort to Markets of First Choice, an I.I.I. white paper released in June 2007 ( /media/research/residualmarket/ ).

For more information about insurance, go to the I.I.I. Web site at .

The I.I.I. is a nonprofit, communications organization supported by the insurance industry.