Steve Sheffey, counsel for Allstate Insurance Company, informed insurance regulators at an April 24 speech in Scottsdale, Ariz., that they need to keep pace with gains in the technology field by forming regulation that reflects consumers’ ability to make the most of the Internet.
Speaking at the National Association of Independent Insurers’ 2001 Underwriting Seminar, Sheffey noted that, “Consumers are the final arbiters of what rates and products are appropriate. They are bombarded by ads, have access to hundreds of insurers over the Internet, and are in the best position to determine what is best for their unique situations.”
In further remarks to the gathering, the NAII and Sheffey note that the number of options available to the public are endless.
“There are literally hundreds of insurance companies,” Sheffey stated. “Consumers have tremendous freedom to shop, which means that while some companies will win and some will lose, the consumer will always win. Regulation that impedes innovative approaches, such as the use of financial stability or credit scoring, hurts consumers by restricting choices that may be good for some consumers. Continued use of technology to more accurately segment and price risks will, in the absence of unwise regulation, result in more product choices and better prices for the insurance-buying public.”
In his final thoughts, Sheffley stated that underwriting executives need to firmly urge regulators, actuaries, insurers, and consumers to re-think those assumptions which haven’t been thought through, were once workable 40 or 50 years ago, but in this day and age prove worthless.
“Changes in the insurance industry, changes in commerce and changes in consumer habits have outpaced the changes in the regulatory oversight,” Sheffey added.