A reader discusses insurance

NRCA's Executive Vice President William Good blaming 9-11 for the current state of the insurance market in "The insurance market: no easy answers," May issue, page 34, doesn't make sense. It may have been the proverbial straw that broke the camel's back, but the real cause was years of the insurance industry poorly underwriting and pricing its product in the search for more capital to invest in a market that had to burst. That is the reason the insurance industry was headed into a "hardening market cycle"—something that could have been avoided by the consistent application of prudent underwriting and pricing. Such a business practice would eliminate cycles in insurance costs and make predictable costs available to the construction industry as a whole, making our lives easier because we price our product for work that may not take place for months or even years.

Because I live and work in Arizona, where workers' compensation rates are among the lowest in the United States, I can't really comment on those costs except to say that a strong association commitment to worker safety seems to work especially well with the carrier and Occupational Safety and Health Administration.

In response to Good's comments about the stand taken by CNA Insurance Cos., Chicago, regarding torch work, I would like to see statistics that back up the statements it is making regarding fire losses. And not just for 2003. If this has been an ongoing problem, why hasn't CNA Insurance worked with the roofing industry (installers and manufacturers) to develop new or improved applications or equipment? I don't think using the results of one year makes any sense except as a "knee-jerk" reaction or to defend the stance CNA Insurance now is taking, which, to my way of thinking, is again a result of years of poor pricing and underwriting by the insurance industry. Tell me how limiting the percentage of work will improve loss results. Although it may improve the odds by reducing exposure, doesn't it also mean—even assuming the use of best practices—that an applicator who doesn't do this type of work on a consistent basis will not be as proficient as an applicator who does that work every day?