Nero Businesses Keeping Eye On Insurance Before Relocating Here
Written by Charlotte Libov on August 10, 2006
By Charlotte Libov
As word of the windstorm insurance crisis in South Florida spreads, companies may be taking more time making a decision to come here – possibly even keeping a literal "weather eye" out to see if hurricanes will hit this year.
Eventually, however, their decision to move here will be based on factors other than insurance premiums, the head of the county’s economic development council said. "I think that companies are doing their due diligence, and some people are looking to see if this will be a one-year aberration," said Frank Nero, president and CEO of the Beacon Council.
"Hurricanes are always going to be a part of our life here, but in other ways, our infrastructure is more hardened than it was five years ago. And if you compare to what you pay here for property compared to other places in the country such as Manhattan, we’re still a great bargain," he said.
"Any company is going to do their due diligence. They understand that is part of the cost of doing business, but ultimately, a company makes its decisions on the total cost. They may be paying more for insurance but less for labor. They may have greater access to markets by using (Miami International Airport) as opposed to another hub. Companies factor in all these considerations when they make a decision."
Mr. Nero has helped give visibility to the area’s insurance crisis as he and other officials have called on federal and state officials to come up with ways to solve the problem.
South Florida businesses are grappling with the need to find affordable windstorm insurance – or even find it at all as insurance companies leave the state, refuse to offer windstorm insurance or charge skyrocketing rates for it.
But Mr. Nero makes no apologies for signaling the alarm that the state could find itself facing a devastating loss to the economy if businesses decide to locate elsewhere due to high insurance premiums.
"You recruit companies successfully by being honest and upfront and calling it like it is," Mr. Nero said. "We lose credibility if we try to sugarcoat it."
Not to call attention to the problem would be tantamount to neglecting his responsibility, he said. Just as the Beacon Council put out a publication calling attention to the county’s affordable-housing problems, the insurance situation warrants the council’s attention, he said.
In its quarterly economic report, the Beacon Council warned that the county workforce’s ability to find affordable housing has been threatened and the "current residential development boom is pricing valuable talent out of our market."
"You rarely see economic development organizations raining fire down upon our own heads, but we know there will never be a solution if we don’t do it," Mr. Nero he said. "Our job is not to paint a rosy picture.
"We do this to try and seek solutions with the private and public sectors and to show them what the ramifications are if we don’t find viable solutions," he said. Advertisement