In Search of Clarity

It would be impossible to estimate the total number of words, both spoken and written, that have been used to try to express the cultural maelstrom that has resulted from the terrorist attacks on America of Sept. 11.

Yet many of us still have a deep need to come to some sort of understanding of what that event has wrought upon our nation and its economic health. So we turn to the veritable army of journalists, analysts in the area of economics and other industries, snd political talking heads who dominate the airwavesÑall espousing myriad opinions to fill that knowledge vacuum.

Although we are still in the early stages of learning about the full impact of 9/11, one can sometimes distinguish certain voices out there that seem particularly in tune with the current pulse of events. This is especially important for the insurance industry, which, as has often been noted during the past few weeks, has been getting increased recognition by federal and state governments as well as average citizens.

I recently had the pleasure of going into a recording studio to conduct a transcontinental interview with an individual who impressed me as one of the more compelling and refreshingly frank of the emerging prognosticators for the insurance industry: Alice D. Schroeder, a managing director at Morgan Stanley in New York City.

Among her many achievements, Schroeder heads a team responsible for identifying and regarding investment opportunities among U.S. property/casualty stocks for Morgan Stanley’s international and retail clients, and is a member of the firm’s global insurance research team.

While time only permitted me to ask a few key questions regarding the impact of 9/11 on the insurance industry, during the resulting the 20-minute, streaming audio interview, a wealth of subjects were covered, including updated estimates of insured losses; which property/casualty lines have been most affected; and suggestions for how the industry can best comport itself during these uncertain times.

Having closely followed the recent attempts to pass federal terrorism reinsurance legislation, some of Schroeder’s comments on that subject particularly impressed me.

“The terrorism bill that is currently bring considered by Congress although not passed in 2001, is likely to be considered in 2002,” she said. “And of necessity, if passed on the federal level, it does set up a regulatory structure to deal with terrorism exposures. This, in effect, creates a structure through which Congress may begin in a marginal way to regulate the insurance industry.

“While this is only partial, and the bill as drafted shows great deference to the National Association of Insurance Commissioners, there clearly is the mechanism in place through which the insurance industry could be regulated in the future under certain circumstances. So we think this needs to be monitored.”

Regardless of the degree to which one agrees or disagrees with Schroeder’s views, her insights most certainly provide much food for thought. This IJ exclusive interview can be accessed by visiting our website at www.insurancejournal.com.

Topics Market