| News for property casualty insurers | December 11, 2008 |
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A look forward to 2009
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PCI and the industry face two powerful, countervailing trends in the coming year: declining industry revenue and the most challenging policy and advocacy environment the insurance industry has faced since the end of World War II. Three dominant challenges confront us: a fundamentally changed political environment, a severe economic crisis, and financial services regulatory reform. These are extraordinary times, and we are facing extraordinary challenges. PCI is well positioned to lead the industry in advancing our agenda and defending our interests. We know that additional massive federal intervention in the weakened economy will happen -- and it will happen quickly. The new administration and Republican and Democratic financial services committee leaders in both the House and Senate have signaled that fundamental comprehensive reform is likely to be enacted next year. PCI will be positioned to provide immediate response and feedback to Congress as well as advance policy options to address some of the most critical issues under discussion. PCI staff also will be working to educate Congress and the new administration on numerous insurance-specific proposals to help guide their reform approach and to ensure consideration of impacts to property casualty insurance companies of all sizes and all lines of business. Reauthorization and reform of the National Flood Insurance Program will be a top priority again as the extension that PCI worked to pass this year will expire in March. At the state level, we are focusing on reform of the North Carolina Beach Plan. PCI commissioned an actuarial analysis from Milliman, Inc., so that lawmakers, consumers and insurers would have an objective tool by which to begin discussions on long-term solutions for the state's property insurance system. Another focus area is reform of the Texas Windstorm Insurance Association. In addition, we are closely monitoring the fledgling managed competition system in Massachusetts, as well as fighting auto body shop attempts to drive up repair costs in that and other New England states. We have completed a research initiative with consumer focus groups and telephone surveys in Rhode Island and Connecticut and will use the results to craft messages that will resonate with consumers and drive our initiative. PCI is also prepared to set the record straight on issues like credit scoring, bad faith and workers' compensation, which are sure to be hot issues in 2009. PCI is focused on the horizon and prepared for the tough challenges ahead in 2009. The landscape has fundamentally shifted, and we will effectively deploy our resources to adjust to those new realities. PCI is committed to addressing our members' needs at the state, federal and international levels. PCI is also hosting a wide variety of seminars in 2009 to help senior management stay on top of critical developments and discover new and better ways of doing business in this new landscape. Our Executive Roundtable Seminar in January will address topics such as succession planning, data mining, capital management and insuring "green." In addition, Peter Skarzynski, co-author of the highly touted book Innovation to the Core and CEO and a founding director of Strategos, will speak about the central role of innovation in company success. Other thought-provoking events on the calendar next year include PCI's Joint Marketing & Underwriting Seminar in April, a forum that will address productivity, profitability and customer loyalty in a weak economy; Human Resources Conference in April; Investment Seminar in September; Information Technology Conference in October; and more. Sincerely,
David Sampson
President and Chief Executive Officer 
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| Your Predictions |  | |
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| Poll: What's the best way for the industry to enhance its image? |
| Embark on a national advertising campaign promoting the good things the industry does |
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44.73% |
| Focus on gaining the respect and trust of public policymakers and opinion leaders |
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29.45% |
| Pay claims and keep our heads down |
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25.82% |
| Poll: What change would have the greatest impact on coastal insurance affordability and availability? |
| Enactment and enforcement of stricter building codes |
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56.15% |
| Elimination of price controls |
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27.31% |
| Establishment of a federal reinsurance program |
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9.23% |
| Establishment of more state reinsurance cat funds |
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7.31% |
| Poll: What will be 2009's most contentious insurance issue for states? |
| Federal vs. state regulation |
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59.03% |
| Use of credit scores in underwriting |
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29.51% |
| Efforts to expand bad faith laws |
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8.31% |
| Efforts to limit insurers' ability to refer/recommend auto body repair shops to consumers |
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3.15% |
| The Big Picture | | |
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An interview with David A. Sampson, President and Chief Executive Officer
PCI SmartBrief Editor Devlyn Ray corresponded with PCI's David Sampson to get his thoughts on where the property and casualty insurance industry is headed in 2009. What steps will the industry need to take in order to align itself with the incoming Obama administration? The insurance industry has a long history of working with policymakers from both parties, and we look forward to working with the Obama administration. As President-elect Obama looks to navigate through the complexities of financial services regulatory reform, the industry should be available to provide technical expertise and insight and to offer constructive ideas and suggestions. All segments of our industry must work together in ways we have not done before to educate incoming policymakers and staff on the vital role of our industry, the strength of our products and policies, the strict solvency regulations that are already in place, and the contributions we make to the success of the American economy. How can the insurance industry best change any negative public perception that industry groups and the media have helped create against it? The best thing the industry can do to counter negative characterizations is to do an excellent job of handling interactions with policyholders. The insurance industry can also change misperceptions by providing credible, valuable information on the issues, countering misinformation, promoting the positive image of our industry, and ensuring our messages are being heard. For example, we need to highlight how our industry provides over a half million jobs and almost $35 billion in payroll that property casualty employees then spend on consumer goods and services in their local communities. We also have to seek opportunities to positively advance our agenda and tell the story of how our industry has been helping to protect peoples' property and dreams and to rebuild lives and communities after the unthinkable happens. It will be important to find fresh, clear and compelling ways to communicate that, at the end of the day, insurance companies are there for policyholders in their time of need. What are some predictions for 2009 with regard to the economy? The insurance field? What steps will individual companies need to take? The world's economy has been battered, and the financial world as we knew it one year ago, or even two months ago, no longer exists. The U.S. and most developed economies are plunging into a recession of unknown depth and duration. While insurance has fared better relative to other segments of the financial services sector, the fallout from the financial crisis will not bypass the property casualty insurance industry. The industry is likely to experience a more difficult business environment, an increased regulatory and tax burden, and a period of slow or negative economic growth. Anticipating this fundamentally changed environment where the "default setting" will be for more intrusive regulation and legislation, the industry must collaborate and come to the table with constructive ideas on regulatory reform. Although we will face challenges in the coming year, our industry and our nation are extremely resilient and innovative, and we will come through this crisis.
    
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Product announcements appearing in SmartBrief are paid advertisements and do not
reflect actual PCI endorsements. The news reported in SmartBrief does not necessarily
reflect the official position of PCI.
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- Wednesday, December 10, 2008
- Tuesday, December 09, 2008
- Monday, December 08, 2008
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