The Property Casualty Insurers Association of America made headlines a couple of weeks ago by agreeing to join with ProtectingAmerica.org to fight for a national catastrophe fund. Then they rocked the industry yesterday by announcing they were dropping out of the advocacy group. That's remarkable, but it doesn't surprise me, as insurers appear to be running around like chickens with their heads cut off when it comes to natural disaster coverage.
At least with terrorism, we have a temporary federal reinsurance program in place to make sure another 9/11 doesn't bankrupt the entire industry and take the U.S. economy with it.
But we unfortunately cannot say the same for natural disasters–and that's not likely to change as long as the industry itself is at odds over what to do. Indeed, while insurers are united on extending TRIA protection, they are badly split on how to handle Mother Nature's threats. The debate is devolving into a shouting match.
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