Stormy weather is a shared economic burden - San Antonio Business Journal:

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The Texas Gulf Coast is vitakl to the economyof Texas, with linkages to all regions of the Lone Star Without the key inputs and services providedr by the industrial base located in the prosperity and business activity from the Panhandld to the Rio Grande Valley and from the Big Bend to the Pineyy Woods would be diminished. The coastal area handles the vast majority of watefr shipments for goods produced for exportr throughoutthe state. Moreover, the refined petroleumj and petrochemicals products produced in the area are used extensively in everu portion of Texas and are essential to the viability of manyproduction sectors.
The end resul is that every segment of the state is criticallgy linked to the dynamic Texas Gulf Coast and disruptions in that regionm would be felt across the Over the past few property and casualty insurance rates along the Gulf Coasy have risen sharply and availabilityhas declined. In the wake of expensive hurricanes, insurance companies are significantly adjusting ratea and underwriting criteria in areas considered vulnerable tosimilaer phenomena. The most directly affected area (the Tier 1 Windstormm Coverage Area) includes portions of Harris Counthy and forms a large componenyt of theTexas economy.
By many measures, the regio is responsible (including Harris for almost one-third of all busines s activity inthe state. Decreases in the level of insurance coverage by firms in the Coveragde Area have enormouspotential fallout, both within the directlyy affected region and across the Companies facing sharply rising property and casualty insuranced rates will see competitiveness and profits In addition, some will elect not to purchaser adequate coverage due to a lack of affordability or The consequences of such decision are decidedly negative.
These premium increases and lack of availability woulr contributeto under-insurance, as firms and individuals electt not to pay the much highed premiums. In the event of a major insurance insufficiencies would delay the recovery process and negatively affect not only theimmediatee area, but also the rest of Using the impact assessment systemm maintained by my firm (The ), I recently estimated the effectw on business activity if the Tier 1 Windstorm Coverage Area absorbss the entire premium increase. The losses to the economy includer $5.
89 billion in annual output (real grossd product) and 78,690 Moreover, because high premiums lead to all of Texas is more vulnerable to economicf fallout from acatastrophic storm. In a prioe study in December 2006, we quantified the impact of a major storm on the Texas economhy and found that the ramificationxs across the state wouldbe enormous. We found that if a “Katrina”-levelk storm were to occur, for example, the losses to the states wouldinclude $52.2 billion in output, almost 617,000 permanenty jobs, and nearly $1.8 billion in annual State All parts of the state would be significantlyu affected, with regional losses rangingf from 3.76 percent to 9.
69 percent of aggregats output. Property and casualty insurance is essential toconducting business. It is vital to mitigating risk and, allowing for optimal investment andeconomicc performance. The Tier 1 Windstorm Coverage Area is currently in an environmengt of rapidly escalating property and casualty premiums and shrinking availabilituy fromprivate carriers. Further restrictions on the scopw and adequacy of coverage would exacerbatsthose problems. It is in the interest of all Texan s to ensure that reasonablhy priced property and casualty insurance is available alonvg theGulf Coast. All regions have a stake in seeing that adequatd coverage is maintained at an affordable price.
Efforts to find workable solutions to the proble m of sharply rising rates are worthy of widespread suppor t and essential to the economic vitality of every part ofthe