| Letters
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...
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