Insurance industry officials are skeptical about the need for futures contracts on homeowners' policies that will be offered by the Chicago Board of trade.

The board of trade claims the futures contracts will allow insurance companies to hedge against unexpected losses caused by catastrophes. But insurance company officials said Wednesday that they have little interest in pursuing those transactions.The board of trade, the world's largest futures exchange, Tuesday won approval to begin selling insurance contracts for both homeowners' and health insurance policies from the Commodities Futures Trading Commission. The

commission regulates the nation's futures markets.

The board of trade has hired ISO Data Inc., a unit of the Insurance Services Office, to provide data on premiums received and claims paid on the homeowners' policies to develop an index that will be supplied with updated information each quarter.

"They needed some basic statistical information which we are providing as an index number," said June Bruce, a spokeswoman for the industry-sponsored organization that provides loss cost and another data. "It's basically a measure of profitability on the underwriting experience for homeowners' policies."

The futures contract price will be expected to reflect the market's projected quarterly underwriting results for a pool of homeowners' insurance policies, using the information collected by the organization.

Even though the Illinois Insurance Department is developing regulations to cover the futures trading, it said the contracts were not a substitute for insurers to place risk instead of using the reinsurance market.

"I view it as a supplement to the reinsurance market," said Jim Hanson, the department's assistant deputy director.

The impetus for offering futures contracts flows from the board of trade, Mr. Hanson said.

"I'm not aware that there is wide industry support of these transactions," he added.

One major Illinois insurer said it had no plan to participate in the futures markets.

"We're not going to participate," said Patrick Gould, a spokesman for Kemper National Insurance Cos., a property and casualty insurer in Long Grove, Ill. "It's just not something we're interested in."

Other insurance industry officials suggested that few companies would engage in the practice of using futures trading.

"Many people in the insurance industry are puzzled by the market concept here because it's not at all clear who needs these contracts or what purpose they would fulfill that isn't already being met," said Marc Rosenberg, vice president of federal affairs with the Insurance Information Institute.

Since reinsurance for homeowners' policies is readily available, the need to engage in futures transactions is nonexistent, he added.

"We have some people on our research staff looking at the organization of this new venture to become as knowledgeable about it as we can about it prior to the time we'd make any recommendation to our member companies," said Larry Kibbee, a vice president with the Alliance of American Insurers, an trade association of property and casualty companies.