A View from the Press Box

I led a trio of daily newspaper reporters covering insurance as their fulltime beat into the lion’s den in Boston yesterday, moderating a panel discussion about the industry’s poor reputation during the annual conference of the Property Casualty Insurers Association of America. Read on for the insights and keen advice they and many others at the meeting offered this reputationally challenged industry.

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While Bermuda is destined to be a force in the insurance world for the foreseeable future, I tend to agree with those at the recent ACORD London Conference that it’s more of a complementary player than a pure competitor to its U.K. rivals. In fact, Bermuda is doomed to see some of its competitive advantage erode over time, and the two are bound to become far more integrated.

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David Sampson has been on the job about two months as the new president and CEO of the Property Casualty Insurers Association of America, but he’ll truly take center stage this week in Boston while presiding over PCI’s annual meeting. This Sampson may be tempted to flex his muscles to steer policy or strategy–which in the insurance industry can be as frustrating as herding cats–but he knows his job requires more diplomatic skills to achieve consensus.

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One of the shockers for me in attending last week’s ACORD London Forum was learning about the lack of standardization when it comes to working with catastrophe models. I was also surprised to hear that many companies work with multiple models to hedge their bets. It sounds like the industry is still dealing more with wishful thinking than hard science when it comes to their biggest exposure.

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In his second bold regulatory proposal this month, New York Insurance Superintendent Eric Dinallo has again challenged the inertia paralyzing the nation’s regulatory scene by pitching a plan to jettison the automatic 100 percent collateral requirement slapped on all foreign reinsurers. Instead, he is proposing a far less discriminatory plan based on a carrier’s financial strength, as determined by at least two rating agencies. The knee-jerk reaction by some U.S. parties has been to blast the idea as “radical” and “potentially very risky,” but I think it’s about time somebody acted to crack the ice and speed up the glacial pace on long overdue reform of this archaic restriction set by regulators nationwide.

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Insurers have never been change-friendly, but to still see underwriters, brokers and claims adjusters hauling piles of paper around the market is just ridiculous. Why is this industry so technophobic? What’s the downside of going high-tech? After attending ACORD’s London Conference last week, I have a feeling the only thing the insurance industry has to fear is fear itself. If you’re not afraid of your own electronic shadow, read on!

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Never shy about expressing his views on the harsh realities facing insurers and brokers, Dennis Mahoney, chairman and CEO at Aon Global, based in Bermuda, told traditional players straight out during last week’s appearances at the ACORD London Forum that more efficient capital market players will bury them if they don’t rid themselves of the paper transactions weighing them down, as well as adopt standards for electronic trading. A complete report follows.

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Claims adjusters are stuck between a rock and a hard place. Bosses pressure them to close files—one way or another—as quickly and cheaply as possible. Policyholders—always impatient, rarely up-to-speed about the claims process, and sometimes very angry—want their money now, and the paperwork be damned. But with the proper training, this doesn’t have to be a thankless job. Carl Van–master trainer and claims guru–has been teaching this for years, but I often wonder whether enough people in this cynical, battle-hardened industry are listening.

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I always get choked up when I read the statement of principles published by the founder of National Underwriter, E. Jay Wohlgemuth, who launched the publication as “Ohio Underwriter” back in 1897. The man who stressed ethics and took the side of the customer long before there were risk managers or consumer advocates to protect buyers is being honored today with induction into the Insurance Media Hall Of Fame. Read on for what Mr. Wohlgemuth still means to NU, and to the industry we cover.

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For independent agents, technology has become a critical difference-maker in operating more productively and cost-efficiently. To recognize the efforts of innovative agencies when it comes to technology, National Underwriter–in partnership with ACORD–is launching the inaugural “NU Agency Technology Achievement Award.”

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