Allstate CEO Edward Liddy says insurance rates will be rising.

NEW YORK (CNN/Money) - Allstate will take its battle for higher rate increases in Florida to arbitration after regulators denied the company's request for an 18 percent hike, the company's top executive said Wednesday.

Speaking at the Credit Suisse First Boston Insurance Conference in New York, Allstate (Research) chief executive Edward Liddy said the company is also targeting double-digit rate increases in other areas with exposure to hurricane activity, such as Louisiana, Alabama, Virginia and Texas. and will limit writing new policies in coastal areas across the country.

Liddy said he expects reinsurance rates to climb significantly in the wake of the 2005 hurricane season but added that its still too early to determine what kind of rate increases the industry faces from reinsurers.

Allstate won approval for a 9 percent rate increase in Florida earlier this year and sharply curbed its exposure to the Florida market following last year's barrage of hurricanes.

"We like most of the property-casualty insurers are going after the models, trying to get more specific than we were in the past and look at what the cycle of severe storms will mean for pricing," he said.

He said the new hurricane cycle of stronger and more frequent storms will last for next 20 years and as a result of Hurricane Katrina, federal regulators have woken up to the fact that the insurance industry has to match its pricing to the higher risk environment.

He said states need to do more to improve building codes, mitigate risks and put limits on where builders can build, in order to minimize damage.

He added that the industry is hoping to work with regulators to create statewide insurance catastrophe funds -- similar to the Florida Catastrophe Fund -- which would serve to provide coverage for insurers.

In addition to state funds, the industry is working to create a federal pool that could be funded by a portion of premiums and remain tax-free, in order to support insures in case of devastating catastrophes going forward.

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How did the hurricanes impact policy? Click here for that story.