New Orleans Mayor Ray Nagin today raised the possibility that Hurricane Katrina could lead to a number of life insurance claims as well as property-casualty insurance claims.[@@]
Nagin said during a press conference that Katrina "most likely" has killed thousands of New Orleans residents. Worried evacuees who have talked to relatives still in the New Orleans area are speculating on Web-based message boards that the number of dead could be even higher.
Millions of U.S. residents and about 80,000 residents of Louisiana and Mississippi die every year. That means that even a disaster that kills thousands of people may have only a modest effect on the 2005 mortality rate for the Gulf Coast and a negligible effect on mortality for the country as a whole. But, if Nagin's estimate of loss of life proves to be accurate, Katrina could lead to a temporary increase in claims for insurers that have sold large numbers of policies to Gulf Coast residents.
In related news, life and health insurers are starting to organize to relief efforts.
Thrivent Financial for Lutherans, Minneapolis, a fraternal life insurer, says it expects to start with a commitment of about $3 million for Katrina relief efforts.
Humana Inc., Louisville, Ky., a managed care company with large operations in New Orleans, says it will be donating $1 million to relief efforts and matching employee contributions made before Nov. 1 dollar for dollar.
Humana itself has about 225 employees in the New Orleans area and is just starting to hear from them, company spokeswoman Mary Sellers says.
"We're obviously very concerned about everybody's welfare," Sellers says.
Other companies and industry groups are just starting to hear the accounts of members who have survived Katrina.
"One of our board members [in New Orleans] had to drive 11 hours to find a place to stay," says Jim Edwards, a spokesman for the National Association of Insurance and Financial Advisors, Falls Church, Va.
