“Insurers and brokers must remind themselves of the value that insurance provides to clients and to society as a whole,” stated Stephen Catlin, chief executive of Catlin Group Limited*, in a speech delivered on Tuesday after his investiture as president of the Insurance Institute of London for 2010-11.
“We, as insurers and brokers, must constantly remember that we are providing a very important and valuable product, and we should be proud of that,” he continued. “Without insurance, the rebuilding of lower Manhattan would likely not be taking place, nearly a decade after the tragedy of 9/11. The City of New Orleans would not have recovered nearly as quickly from the ill winds of Hurricane Katrina five years ago. And, without insurance, it would take much longer for Chile to rebuild following the devastating earthquake earlier this year.”
He also addressed the paradox that while insurance is “valuable,” it’s unfortunately “a product that no one likes to buy. “Let’s face it,” Catlin explained, “to the rest of the world insurance is not much fun. No one likes or wants to buy it. Cars, computers, clothes: those things can be fun to purchase, but insurance policies are not … not for individuals, and not even for most businesses.”
He called on insurers and brokers to increase the value of the products and services they offer, particularly in the area of claims services. “We as an industry must continue to improve the service we provide to policyholders, especially in the area of claims. It is following a claim when we truly provide value to our clients … because if there were no claims, there would be no insurers.”
There are signs that the industry’s reputation is improving, particularly after the global financial meltdown, precipitated by the banking industry. Catlin noted that the non-life insurance industry has performed well in recent years, especially during the financial crisis. “I am especially proud of our market’s performance over the past several years, which has been a rocky period for the global financial services industry as a whole,” he stated.
“For many years, the insurance industry has been regarded as a poor relation to the banking industry. I listened to many presentations over the years whose themes were something along the lines of … ‘you insurers can learn from the banks’.
“However, during the economic crisis, the banking industry largely failed their clients, and many of the top players would not have survived without government intervention. On the other hand, the non-life insurance industry – with only a few exceptions – continued to provide continued value to its customers without the need of government support.”
He concluded: “Now, I strongly believe that banks can learn much from insurers … rather than the other way around.”
Source: Catlin Group
*Catlin currently manages and fully funds Syndicate 2003, the largest at Lloyd’s, with capacity in excess of $2 billion. See the upcoming article in the October 4 issue of the Insurance Journal.
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