Sink addresses Institute for Business conference listen11/14/08 Seán Kinane
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The Tampa-based Institute for Business & Home Safety is holding its annual conference at the Convention Center this week. The conference for people in the insurance industries is on property loss reduction. This morning’s keynote speaker was Alex Sink, Florida’s Chief Financial Officer.
In response to the eight hurricanes that hit Florida in 2004 and 2005, state lawmakers set aside $250 million for the My Safe Florida Home program. The funds were generated from windfall sales tax revenues in the wake of those hurricanes. Sink said that program’s mitigation efforts – like helping homeowners get wind inspections and to install storm resistant roofs and windows – are a model for the rest of the country.
Risk modelers predict that mitigation programs like My Safe Florida Home end up saving money, Sink said.
The My Safe Florida Home program has committed all of its allocated funds, and Sink is not optimistic it can obtain more given the state’s current financial situation.
Immediately after the 2004-2005 storm seasons, some insurance companies abandoned Florida, Sink said, but the market is beginning to bounce back after three years with relatively little hurricane activity.
There are two reasons for the stabilization, Sink said. One is the lack of access to credit markets because of the current financial crisis. The other is that the global reinsurance market has gotten more competitive, causing rates to come down up to 50 percent, Sink said.
Many Floridians, including Sink, have pushed for a national catastrophe fund to assist states hit hard by major disasters. Sink said that a catastrophe fund might be more likely now after the election.
“I’m optimistic about the chance of us getting a national catastrophe fund because President-elect Obama did support the concept and his opponent did not. So for me as the state’s risk manager, I’m encouraged that this is something that is on his radar screen.”
The tentative plan for a national cat fund in Congress has the approval of Florida’s insurers, Sink said, and could help the state’s homeowners as well.
“It won’t make our insurance rates cheap here in Florida, we’re still going to have a lot of hurricanes, but what it will do is it eliminates the fear on the part of the insurance companies.”
The St. Petersburg Times reported on Friday that some Floridians who hold insurance policies with Citizens Property Insurance are having a difficult time staying with the state-supported company because they are being aggressively pursued by private insurance companies. Sink told WMNF she is “disturbed” by this practice.
"I think there's some logistic things that Citizens people have to work on. If the homeowner knows they want to stay in Citizens forever and a day, and they don't want to see any alternative proposals, then perhaps they should be on a different list, if you will."
Photo by Seán Kinane/WMNF