Frank Coyne, president and CEO of New Jersey-based Insurance Services Office (ISO), feels that independent agents’ biggest challenge in 2002 is sending the message to policyholders that the market is stable despite the catastrophic events of 9/11.
“We learned from September 11 that this could all happen at one time,” said Coyne. “All lines were too complacent before September 11.”
Coyne was just one of a number of speakers April 24 at the Applied Insurance Research (AIR) Conference in San Diego. Along with a number of guest speakers, AIR scientists and engineers presented new and recently updated catastrophe models and modeling techniques. From industry and legislative responses to the events of 9/11, to business interruption and workers’ compensation issues, the conference brought pros together to look for solutions to a number of complex issues facing the industry.
Coyne outlined a number of steps insurers need to take to be better prepared for a catastrophe, including: adjusting their underwriting criteria; dispersing geographic concentrations; and re-examining pricing, reinsurance arrangements and investments.
“Do not prepare for past events, prepare for the future,” remarked Coyne.
Robert Humphreys, Lloyds of London’s Manager of Market Risk, pointed out that “there is no room here for complacency.”
And John Kollar, vice president for ISO, pointed out that the biggest wildcard out there now is “will there be another terrorist event?”
Ed Weissner, vice president of Everest Reinsurance Company, discussed the possible consequences of a major catastrophe, be it a California earthquake or another event. AIR has been working on a new model for estimating potential workers’ comp losses resulting from extreme events.
“Before 9/11, you didn’t think a building could collapse like that,” commented Weissner. “Before 9/11, workers’ compensation was cheap. Reinsurers didn’t think the risks of multi-person catastrophes were high.”
For more on the conference, look for the Insurance Journal West issue of
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