A View from the Press Box

I moderated a lively panel discussion among my competitor/colleagues in New Orleans today, “Meet The Insurance Press,” during the Risk and Insurance Management Society’s annual conference. Unfortunately, only a handful of risk managers showed up, with the bulk of the audience serving in public relations at some of the leading brokers, insurers and associations. It’s time for risk managers to come out of their shells and engage the press–even if they have to confront their own communication departments and corporate counsels to do so–for their own good, as well as that of their organizations.

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Anyone who expected fireworks yesterday had to be disappointed after J. Robert Hunter, insurance director of the Consumer Federation of America (better known as the man insurers love to hate) walked into the lion’s den for a Town Hall meeting during the annual conference of the Independent Insurance Agents & Brokers of America in Washington. The debate was way too civilized, tame and even polite for a journalist’s tastes, although Mr. Hunter managed to get in a few good shots. Actually, I had a lot more fun sparring with Mr. Hunter over lunch earlier in the day, where we met face to face for the first time.

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Undefined “moral obligations” should never influence the settlement of “wind versus water” hurricane claims, or any other uninsured loss, NU readers agreed in response to our latest column on “A Question Of Ethics.” Read on and feel free to weigh in further on this hot topic.

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Are risk managers better off without the federal government looking over their shoulders? In the long run, I don’t think so, yet the Occupational Safety and Health Administration is supposedly taking a more passive role when it comes to regulating workplace exposures, according to a major piece in today’s “New York Times.”

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Despite falling premiums and expanding coverage in the traditional market, buyers have not turned their backs on alternative risk-transfer options, according to NU’s “State of the Market” survey. Nearly half (49 percent) said they are still considering ART options—including captives, finite reinsurance and catastrophe bonds. Given the uncertainty of pricing in the traditional market over the long term, that doesn’t surprise me. How about you?

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Many risk managers are doing their best Alfred E. Neuman impersonation, seemingly echoing the classic catch phrase of “Mad” magazine’s cartoon icon–”What, Me Worry?”–with their apparent lack of concern over terrorism exposures. Indeed, terrorism does not loom large on the radar screens of many risk managers surveyed by NU. That alarms me, especially with a major TRIA hearing coming up Tuesday before a House Financial Services subcommittee.

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Property-casualty insurers reported an awesome year for 2006, with the industry-wide combined ratio coming in at a stellar 92.4 (the best result since at least 1959), fueling a 44 percent jump in net income to $63.7 billion. Normally, that would be good news, but carriers are doomed to take a hammering from critics for making too much money! Are insurers price-gouging the public? That’s the question industry leaders will face.

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The large majority of corporate insurance buyers don’t believe their firms have benefited from the fact that major brokers stopped accepting contingency fees following probes into bid-rigging and account steering by then New York attorney general (now governor) Eliot Spitzer and others, a National Underwriter survey revealed. With the mega-brokers having sworn off the now disgraced volume-based bonus commissions, where did all those billions go?

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The commercial insurance market in general might be heading south, but the bottom hasn’t fallen out yet, a survey of National Underwriter readers reveals. Indeed, the market might still be a lot more rational than people think.

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Sen. Trent Lott pulled an interesting gambit this week during a hearing of the Senate Commerce Committee, trying to drive a wedge in the insurance industry lobby on his call to revoke McCarran-Ferguson’s limited antitrust exemption by offering small carriers a “safe harbor” to allow them to keep sharing data. Will it work?

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