Like insurance commissioners in other states, Arkansas Insurance Commissioner Julie Benafield Bowman, is keeping an eye on catastrophe issues and the availability of insurance related to them. Unlike commissioners in Arkansas’ neighboring states of Texas and Louisiana, however, her concern is not hurricanes, but earthquakes.
“We are interested in the earthquake, in particular to catastrophes; we are right on the New Madrid fault line in Arkansas so we are very involved in those issues,” Bowman said in a recent exclusive interview with Insurance Journal’s Andrew Simpson. “Of course we are involved in the federal issues, as well, as they affect the consumers in Arkansas.”
Bowman offers her views on catastrophe insurance and other issues in a video interview, one in a series of 15 interviews with state regulators titled “The Commissioners.” The 15 interviews are now available for viewing in the video feature section on Insurance Journal Web site at https://www.insurancejournal.com/broadcasts/
According to the U.S. Geological Survey, Arkansas is considered a state with a high earthquake risk because of the activity level of the New Madrid Seismic Zone, the southern portion of which is located in northeastern Arkansas. In 1811 and 1812, numerous earthquakes measuring in magnitudes of 8.0 and greater occurred on the southern branch of the fault zone in Arkansas. Some were felt as far away as Washington, D.C.
Due to the unpredictability of earthquakes, the Federal Emergency Management Agency (FEMA) the Arkansas Department of Emergency Management (ADEM) in May reminded Arkansans to take steps to mitigate possible earthquake damage to their property.
Allstate Insurance Company announced in June that it plans to drop earthquake insurance to most of its 400,000-plus earthquake customers across the U.S. as a part of a larger move to reduce exposure to catastrophic losses. In light of that company’s announcement and stated plans by other insurers to pull back from writing policies that include coverage for earthquakes, Bowman expressed concern over whether such coverage would continue to be available to the citizens of her state.
“We have had three companies actually ask to withdraw or tell us that they want to withdraw from writing earthquake insurance in Arkansas,” she said. “And we are concerned about where the consumers are going to get their earthquake coverage. We do have an earthquake authority in Arkansas that writes earthquake insurance. But then there becomes the issue of capacity—is there capacity for enough coverage for the consumers of Arkansas?”
Beyond earthquake coverage, property insurance concerns—such as rising reinsurance costs—that are causing problems in other states have not yet hit Arkansas, Bowman said.
“You know we are really not seeing that yet, we hear rumors about the rising cost reinsurance or the inability to get reinsurance. But we are not seeing that in Arkansas,” she said, adding that the property market is fairly stable in her state right now.
For the complete video interview, visit https://www.insurancejournal.com/broadcasts/
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