State insurance commissioners, through the National Association of Insurance Commissioners (NAIC) currently are in the process of examining urban property insurance issues. We appreciate and support this work, and look forward to the findings of the NAIC's new Urban Insurance Issues Subgroup. We know that this subcommittee will carefully review all the evidence presented here today. For further information on urban insurance issues, we can suggest a variety of sources. A good starting point would be with the NAIC and the National Committee on Property Insurance. situations. Urban property presents many unique and interesting coverage For example, in April 1992, the Los Angeles riots caused an estimated $775 million in insured property losses. The 1992 indexed dollar losses for previous civil disorders would be: $195 million for the 1965 Los Angeles riots; $174 million for the 1967 Detroit riot; and, losses of $98 million during the 1968 Washington, D.C., disturbances. It should be noted that the 1992 losses came in a record year of catastrophic property losses for insurers and their reinsurers. Hurricane Andrew will cost the industry nearly $20 billion; Hurricane Iniki, almost $2 billion; and, the 1991 Oakland fire, over $1 billion. Even in the face of such extraordinary losses, the insurance industry has met and will continue to meet, its commitment to urban America in the area of property insurance. Our industry will do all we can to meet the dual challenges of making insurance available and affordable, without sacrificing actuarial standards. This is not to say that there is not a perception within some communities in America today that insurers do not treat everyone fairly. The Alliance and its member companies want to do all that we can to correct this misperception. We appreciate the opportunity to present our views here today. I would be happy to answer any questions you may have. Thank you. 0 **PROPERTY INSURANCE INCLUDES: FIRE, ALLIED LINES, EARTHQUAKE, FARMOWNERS, HOMEOWNERS, AND COMMERCIAL MULTI-PERIL. SOURCES: A. M. BEST'S AGGREGATES AND AVERAGES, 1983-1992 EDITIONS PIPSO REPORTS, 1983-1992 EDITIONS; SOURCES: A. M. BEST'S AGGREGATES AND AVERAGES, 1983-1992 EDITIONS PIPSO REPORTS, 1983-1992 EDITIONS; PROPERTY INSURANCE PLANS SERVICES OFFICE |