mr. nutter could probably add a lot of value to this conversation as well, is that when we look at the models' performance after a storm there are some excellent track records in terms of, you know, this was anticipated, this amount of economic impact was forecast and that is indeed what occurred. and often they are more conservative than what actually happens because of the duration after the impacts of the storms and costs that are not anticipated. ironically, it seems like we come away -- and i think this is true out weather side, engineering side, economic side -- we get this sense that we learn things after a storm and develop a set of beliefs. for example, in hurricane andrew we learned that hip shape roofs perform better than gables. what happens is we labor under those beliefs and that is good. but we learn something new each time. with respect to you talked earlier about hurricane wilma, the rule of thumb -- and i think we find comfort in society having a set of conclusions. so, what has always been said is the storm makes landfall you can expect to lose a category of, you know, if i

mr. nutter, we haven't forgotten you. i want you to comment on how better construction methods and the stronger building codes that mrs. chapman-henderson mentioned can save lives and property and reduce the economic losses and since you were in the reinsurance business and how does this improved forecasting and modeling also bring down the economic loss? >> there is no question as has been mentioned by several people improved forecasting where people can be out of harm's way is going to save lives that will not necessarily save property damage unless we do something to mitigate these properties. let me cite a statistic. losses from hurricane andrew in '92 as you mentioned cost about $20 billion in today's dollars of insured losses that would have been reduced by 50% for residential property and 40% for commercial property if it destroyed damaged structures had been built in compliance with florida's 2004 building code to ms. chapman-henderson's point that we know how to do this there are ways to do it and it has value we

mr. nutter? then i want mrs. ch mrs.chapman-henderson to comment. >> that is a clear value to immediate response and preparation for that immediate response. the government has not always been fairly prepared or even fairly criticized for its response, but the reality is those who might come in to help mitigate those damages need access to those areas which include debris removal and communications capability. so, economic that would focus on first responders to prioritize them would reduce the insured losses. >> dr. spinrad i'm going to test your forecasting ability here. we have had la nina, the cold pacific waters, and what your bi bulletin dated a week ago says el nino has arrived and that is the warming of the pacific waters which tends to lessen the activity in the atlanta hurricane. now, thus far we haven't had any activity in the atlantic on hurricanes -- i mean of any significance. so, tell us what is going to happen in the atlantic? >> first i would point out out that my meteorologist friends in the weather ser

mr. nutter, we haven't forgetten you. i want you to comment on how better construction methods and the stronger building codes can save lives and property and reduce the economic losses. since you're in the reinsurance business, how does this improve forecasting in modeling also help bring down the economic loss? >> there's no question it's been mentioned by several people that improved forecasting where people can be out of harm's way is going to save lives. that will not necessarily save property damage unless we do something to mitigate these properties from the statistic. losses from hurricane andrew caused about $20 billion in today's dollars of insured losses. that would have been reduced by 50% of residential property, and 40% of commercial property if the destroyed and damage structure had been built with florida's 2004 building code to miss chapman-henderson's point. there are ways to do this. other statistics that homes built experienced the 60% reduction in the frequency, actual losses of property losses and 42

mr. nutter, president of reinsurance association of america. mr. nutter? >> mr.irman, mems of the committee, thank you very much. i am frank better, president of the reinsurance association of america represent reinsurance cubbies doing business in the united states. reinsurance is a risk management tool for insurance companies to improve their capacity and financial performance to enhance financial security and reduce financial volatility. reinsurance is the most efficient capital management tool available to insurers. reinsurance is a global business. in encouraging the participation of reinsurers worldwide in the u.s. market is essential because reinsurance provides that much-needed capacity in the u.s. property for cash and life risks. including their u.s. subsidiaries, foreign-owned reinsurance companies accounted for nearly 84% of property-casualty premiums ceded on u.s. risk by u.s. insurers. because of reinsurance transactions between sophisticated business parties, the regulation of reinsurance focuses almost exclusively on prudential regulation, ensurin