PLUS Panelists Offer Perspectives on Industry, Today and Tomorrow

Wrapping up the 17th Annual PLUS International Conference last month in San Diego, senior management personnel discussed a number of issues at the final session, noting that some companies have not been able to meet today’s challenges. While the panelists discussed a number of financial matters, the bottom line is that doing little things for customers and doing them better than the competition is still seen as the answer.

Robert Cox, chief operating officer for Chubb Specialty Insurance, remarked when asked why some companies have not been able to stay in business, that the reasons include poor data pricing decisions, poor management and poor reserve decisions. “Most companies disappear because they involuntarily got things wrong on the liability side of the sheet,” Cox said.

Stephen Stills, founder of Darwin Professional Underwriters, sees challenges ahead. “The industry is not proactive enough over what is coming up over the horizon,” he said.

This year’s presidential election also garnered attention, as John Keogh, president and CEO of National Union Fire Insurance Co., noted that, “President Bush has made tort reform a priority. A lot of judges who were pro plaintiff were voted out of office.”

ACE Diversified Risk President John Lupica was hopeful that the Terrorism Risk Insurance Act (TRIA) will pass, but also agreed with Keogh that tort reform has caught a lot of headlines. Lupica asked those in attendance if “John Edwards would have been elected (vice president), would we have had a prayer of getting tort reform passed?”

When it comes to the competition game in the industry, Stills said that smaller underwriters have to be realistic. “We can’t look at ourselves going toe-to-toe with the giants,” he said. According to Keogh in today’s environment, “The types and costs of claims are incredibly volatile and severe.” Cox added that to be successful, one has to achieve attractive and above-average returns through different mechanisms.

Moderator Jeffrey Lattman of Marsh Inc. asked the panelists what they see as today’s top challenges facing the industry. A number of their responses focused on in-house decisions and concerns.

“I’m not entirely confident that the proper education and training needed for young people is being provided,” Keogh commented. Darwin’s Stills noted that companies must “find niches where speed and service can make a difference. You want to find places where larger companies are not or can’t do things better and faster.” And as Cox pointed out, “We need to be much more pro-active in identifying what is the next anomaly? This is a very difficult business and we need to find easier ways for customers to do business with us.”

The conference included three days of panel discussions and concurrent educational sessions for attendees looking at the current and emerging topics facing those in the professional liability industry.

PLUS also appointed its new officers and trustees at the conference.

Newly elected officers to the PLUS board were: President – Sean Fitzpatrick, senior vice president, Chubb & Son; President-Elect – Jeffrey Klenk, senior vice president, St. Paul Travelers Bond; Vice President – Patrick Kelly, partner in Charge, Wilson Elser Moskowitz Edelman & Dicker; Secretary/Treasurer – Karen Gordon, vice president, ACE INA; Immediate Past President – Kevin LaCroix, president, Genesis Professional Liability Managers.