I attended the Property/Casualty Insurance Joint Industry Forum Tuesday in New York. Much of the conversation revolved around explaining the tepid growth opportunities in the industry.
VJ Dowling, managing partner of Dowling & Partners, noted that there is low demand for P&C products, as the greater economy remains soft. He also pointed to low interest rates impacting portfolios.
About 70% of P&C carriers' invested assets are in bonds, the III reported in a press release following up on the event. Though this might drive investment in equities (which 88% of respondents to an informal survey said they expect to go up, the III press release added), Superintendent James Wrynn of the New York State Insurance Department said that regulators are concerned about companies "chasing interest rates and relaxing underwriting standards."
So how will carriers look to grow their business? On the CEO panel, agent-based distribution was a big non-financial topic.
Jack Salzwedel, president and COO of American Family Insurance, said that agents "see customers going through tough times, and have an opportunity to show the value we bring."
Liam McGee, chairman, president and CEO of The Hartford, added that agents "need to become a solutions-based intermediary." To that end, he said that agents are showing more desire for "simpler sales and service platforms."
I'm not surprised to see carriers make investments in their agent force. I've recently purchased both renters and auto insurance, and when I got my renters policy, I used an agent, who helped me find a discount that I wouldn't have been able to enter if I simply used the direct-buy option.
For auto, though I mostly completed the purchase online, I did have to call a couple times to clarify some things — and the next time I'm looking to evaluate my auto insurance needs, I will be going to an agent so that the discussion can be done face-to-face and without the time restrictions of an off-the-cuff phone call. The carriers with the most-responsive, best-equipped agents will definitely see business from consumers like me.
Insurance & Technology will be looking at some of these issues in a few weeks in a digital issue dealing with optimized distribution in the agent/producer channel.
A couple other notes:
—Citing the complexities of dealing with different regulations at the state level and among other countries, Munich Re president and CEO Anthony Kuczinski said that a US-level regulator could be positive for global firms as long as the regulation itself isn't "too crazy." The uncertainty around insurance regulation from the Dodd-Frank act was a familiar theme throughout the afternoon.
—Chartis president and CEO Kristian Moor said that workers' compensation insurance was "underpriced" in the U.S. I wonder if they were using payroll-based billing, as the many job cuts that defined the American economy over the past few years certainly must have skewed premiums.
You can see these and other thoughts from events that I&T staff members attend by following us on Twitter. Here's a link to my stream.