Uncertainties Worry Conventioneers

Clear skies prevailed over Florida during October’s ASCnet and Big “I” conferences in Orlando, but an underlying feeling of anticipation prevailed because the hurricane season lasts until the end of November. As if fulfilling a premonition, Tropical Storm Matthew blew across the Gulf of Mexico toward Florida in the middle of the Big “I” event, then veered north to Louisiana.

A cloud of uncertainty permeated both conferences, the big question, “After four hurricanes and $22 billion in claim estimates, how will the insurance industry react?

The consensus of opinion was that, although a lot of money is being spent to pay claimants for losses, overall, the insurance industry has had a run of profitable years—one or two bad quarters shouldn’t rock the industry’s boat.

Five well-known participants in a Big “I” panel predicted that the industry will overcome its hurricane losses and in fact, suggested that the hurricanes might teach the a valuable lesson—not to put all its eggs (profits) in one basket. They pointed out that European insurance companies place a percentage of their annual profits into a special fund to pay for catastrophes.

Panelists voiced most concern about terrorism, asbestos and tort reform; few would predict who would win the November presidential election, but whoever won, there were worries about the effect on the insurance industry.

Both conferences emphasized education, with seminars and sessions aimed at providing independent agents with the latest information to help their businesses grow and prosper. One worry voiced by many participants was where will the new crop of insurance agents come from. Insurance, several people pointed out, is not emphasized as an up-and-coming profession as students graduate from college and enter the job market. Communications was mentioned as essential, so graduates will know how beneficial the insurance industry is and what a good profession it is to enter.

In the furor over hurricane claims and the presidential election, state issues took a back seat. One example of this is Florida’s Ammendment 3, The Medical Liability Claimant’s Compensation Amendment. This legislation proposes changes in the Florida Constitution to control the amount of money attorneys can charge injured claimants by regulating the contingency fee agreement between the injured party and the attorney. It puts a cap on the percentage of a judgement an attorney can collect, exclusive of reasonable and customary costs and regardless of the number of defendants.

While attending three industry conventions in two weeks, I asked Florida agents if they knew about Amendment 3, and no one even knew it was on the ballot, despite often-heard accusations that the amendment is being spearheaded by insurance and medical lobbies.

Topics Catastrophe Florida Hurricane Market