[StBernard] Donelon courting small insurers

[Westley Annis]

Louisiana Insurance Commissioner Jim Donelon says he plans to visit six
small insurance companies by March to make pitches for doing business in
Louisiana, and he says there's reason to be optimistic. 
 
"Our story is a good one. We have much to point to," Donelon said. 
 
At a time when few insurers other than Louisiana Citizens Property Insurance
Corp. are writing homeowners policies in New Orleans and many other parts of
South Louisiana, Donelon wants to increase the number of insurance companies
that are willing to do business here. 
 
While six small companies aren't going to turn around the state's insurance
crisis, Donelon and others say finding more companies to spread the state's
hurricane risk will help make the market more stable than having two
dominant insurers -- State Farm and Allstate -- and few other players. If
the state can find more small companies to take nips of the market,
consumers will have more choices. 
 
Insurance Department staffers are researching prospects now. 
 
Donelon's pitch is that Hurricanes Katrina and Rita have made Louisiana
safer, and despite the challenges brought on by the storms, politicians have
maintained a business-friendly approach. 
 
The insurance reforms with the flex-band rating system and Citizens that
were enacted before the storms were improving the competitiveness of the
state's insurance market before the storms, and Louisiana hasn't wavered
from those reforms, Donelon says. The governor, Legislature, Insurance
Department and Louisiana Insurance Rating Commission remained cool-headed in
dealing with the crisis, he says. 
 
The new building code passed by the Legislature last fall will reduce the
potential for future losses. Existing homes are also in better shape because
so many homes have new roofs, and any weak trees that were in danger of
falling are now mulch, Donelon said. Meanwhile, as the Army Corps of
Engineers attested this week in a special briefing for commercial insurers,
the levee system has benefited from $1 billion of repairs and improvements
and is in better shape than it ever was before. 
 
"Those two storms have strengthened our ability to take storms," Donelon
said.