Sunday, August 06, 2006

Allstate gambled on Louisiana. . . and lost. NewsFlash - Not buying reinsurance for Louisiana cost Allstate $2 billion:
"BATON ROUGE, La. (AP) — Allstate Insurance Co. bought reinsurance to cover some of the cost of policies all along the East Coast last year, but not for Louisiana — a gamble that cost it $2 billion in claims.

The company's models did not predict a hurricane hitting Louisiana, attorney Edward Collins told a joint legislative insurance committee last week. It did buy reinsurance in Texas and Florida, as well as New York and other Eastern states, he said.

'You didn't take care of your business, so the citizens of Louisiana have to pay for your mistake?' asked Sen. Don Cravins, D-Opelousas. 'Now that you've had a loss, you put the burden on the backs of Louisiana citizens to pay for your shortcomings.'"
Cravins tells it like it is. They gambled, lost, and now want someone else to cover their markers.

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