A View from the Press Box

Would federal regulation better protect big commercial buyers? The Risk and Insurance Management Society’s leadership is excited about the recent endorsement by the Bush administration of an optional federal charter. But all I can say is, be careful what you wish for, because federal oversight certainly has not produced good risk management under this hands-off White House, and I doubt any cost efficiencies will be passed along to consumers.

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The biggest buzz at the RIMS conference here in San Diego this week was about the threats and opportunities prompted by climate change. Zurich, Aon and other major players touted ambitious environmental initiatives. The chairman of Lloyd’s, Lord Peter Levene, even took a side trip to Sacramento to meet with California Gov. Arnold Schwarzenegger to talk about the impact of global warming. Is this all a lot of hot air, or a long overdue response to the most serious threat our planet faces?

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I would be the last person to suggest that the media, of which I am a proud member, can or even should be “managed.” But the fact is that demands for information by journalists at a time of crisis (and even during routine periods) present a reputational exposure that risk managers can (and should) help their organizations more effectively prepare for. That was the central message delivered by a press panel I moderated today at the RIMS conference in San Diego.

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As I arrived today at this year’s RIMS conference in San Diego, my thoughts drifted back to the first time I attended this convention of corporate insurance buyers in the late 1980s, when risk managers had a fairly thankless job. Man, how times have changed, as NU’s exclusive coverage of the annual “Risk Management Compensation Survey” by Logic Associates reveals.

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In her article in the April 20 edition of the New Orleans Times-Picayune, Rebecca Mowbray posed a stark question: “In dealing with all the insurance problems that arose with Hurricane Katrina, would it have made a difference for Louisiana homeowners if a federal insurance regulator in Washington was calling the shots rather than a state insurance commissioner in Louisiana?” What do you think?

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Despite having two strong, intelligent, history-making candidates, are the Democrats on a collision course that will leave the Republicans in control of the White House come November? That worst-case scenario (for Democrats, at least) is far more likely to play out the longer Sens. Hillary Clinton and Barack Obama keep hammering away at one another while Sen. John McCain waits to face the bruised and battered “winner.”

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Back on April 9, I blogged about the controversial suggestion by Greg Squires, a sociology professor at George Washington University, to require insurance carriers to collect and disclose data on the race and income of prospects and clients, to prove once and for all whether there is any prejudice–active or not–when pricing homeowners coverage. I said I didn’t think it was a bad idea, but many in the industry strongly disagree. I promised to give Greg an opportunity to explain his views, so here goes. Click on to read more about his position, and feel free to respond.

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Now that a key member of Congress has introduced a bill creating an interim Office of Insurance Information, does that make an optional federal charter inevitable? Not as long as the industry itself remains so bitterly divided over the issue.

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Have property insurers become too dependent on computerized catastrophe models, and if so, what is the alternative, given the potentially huge exposures they face? Those were some of the provocative questions raised yesterday by one of the pioneers of cat modeling, Karen Clark.

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As a safety net, insurance not only provides coverage when routine losses occur, but for bizarre and pretty funny exposures, too! That fact was vividly confirmed when we asked readers for their strangest claims stories the past two years (click here and here for those stories). We’re doing another roundup for our May 26 edition, and once again I urge you to share tales about your most difficult and unusual claims. Contact Associate Editor Phil Gusman at pgusman@nuco.com before May 1 with your best war stories, and feel free to post them here as well.