Category Archives: Industry Awards & Events

MIT Economist Speaks on ACA Impact @WCRI

Workers compensation insurance will have to move quickly to keep from being a net loser from health care reform, said Dr. Jonathan Gruber, one of the architects of what ultimately became the template for the Affordable Care Act (ACA).

Dr. Gruber, an MIT economist who helped construct the Massachusetts health reform that the ACA modeled, spoke to more than 400 attendees at the Workers Compensation Research Institute (WCRI) conference in Boston.

Health care reform should help the workers compensation system, he said. Fewer workers will be uninsured, so fewer people will get injured over the weekend and then claim on Monday they got hurt at work.

But Dr. Gruber, an MIT economist, noted that the comp system is incredibly inefficient. It pays higher rates for services than most health plans. And it changes slowly, which could be a big disadvantage as the ACA forces efficiency on the other parts of the health care system – hospitals, doctors and health insurers. If the comp system can’t keep up, the rest of the system will find ways to dump costs on it.

Dr. Gruber said it will be three years before we can tell whether ACA has been successful. At this point – in ACA’s early days, its proponents and opponents are “saying too much.†

Gruber also gave a nod to researchers like those at WCRI. With ACA’s many moving parts, he said, it will be important to intelligently determine which of those parts are truly working.

Day One of the WCRI conference also featured two examinations of how changes in state comp laws play out.

The first showed how Texas successfully reduced the rate of claims through changes enacted in 2002, 2003 and 2005. The changes brought individual claims under greater scrutiny.

The good news: the rate of claims in Texas lagged those of 15 states studied, said WCRI senior analyst Carol Telles. The rate of claims from chiropractors fell more sharply than other professional services, though Texans continue to use chiropractors more than the other states.

Costs per claim, though, increased, in part because the changes aren’t free. It costs money to review claims. Any changes to a workers comp system must consider whether savings will be able to justify those costs.

The second study showed how Illinois took a more blunt approach in 2006. It cut fee schedules 30 percent across the board. One interesting result, said senior public policy analyst Rebecca Yang: costs per claim fell, as you might expect, but only by 24 percent overall.

Among the reasons: the rate of claims increased, and there were signs that doctors were billing for more complex office visits than before.

Day Two of the conference will take a longer look at the impact of ACA on workers comp. Other sessions will look at how the economy drives workers comp results; accountable care organizations; and medical dispute resolution.

WCRI Conference Preview

With the Affordable Care Act (ACA) at center stage, interest is high in this week’s workers compensation conference in Boston, Massachusetts.

We read a lot about how ACA is changing health insurance and the world of business, but an effect of less renown is how the health law will affect workers compensation insurance.

Check out previous T+C posts on this topic here and here.

The conference, sponsored by the Workers Compensation Research Institute (WCRI), will feature health care experts like economist Jonathan Gruber, an MIT professor and one of the architects of the ACA, teasing out how health care and workers comp will intertwine in the coming years.

More than a dozen media organizations are scheduled to attend, from industry blogs to national media. I.I.I. will be there, too, with chief actuary James Lynch reporting and tossing off the occasional tweet @III_Research under the hashtag #WCRI.

WCRI is an independent, not-for-profit research organization that provides high-quality, objective information about public policy issues involving workers compensation systems. The conference is March 12 and 13, with details here.

A roundup of I.I.I. workers comp  work can be found here.

2014 Joint Industry Forum

A survey conducted by the Insurance Information Institute (I.I.I.) at its 18th annual Property/Casualty Insurance Joint Industry Forum found that property/casualty insurance industry leaders believe Congress will delay implementation of the Biggert-Waters (BW) reforms to the National Flood Insurance Program (NFIP).

Some 75 percent of respondents expect Congress will delay implementation of the Act intended to help reduce the debt of the NFIP, a debt now estimated at more than $25 billion, by bringing rates charged more in line with the risk and losses in flood-prone areas, the I.I.I. survey revealed.

A majority of respondents to the survey—93 percent—also believe the Terrorism Risk Insurance Act, which is set to expire at the end of this year, will be reauthorized by Congress.

Meanwhile, a panel of industry chief executives agreed that a repeat performance of the property/casualty industry’s stellar 2013 performance will be hard to repeat.

The CEOs said higher rates, fewer-than-normal catastrophes, and strong stock market returns seem likely to make last year one of the best of the past decade.

But new challenges in growth and price competition make a repeat performance unlikely this year, the CEOs said.

By lines of insurance, only 35 percent of I.I.I. survey respondents believe there will be an improvement in profitability in personal auto in 2014, while 45 percent expect an improvement in homeowners profitability.

Only 40 percent expect an improvement in profitability in commercial lines, while 50 percent expect an improvement in workers compensation.

Looking at economic growth, 40 percent of insurance industry leaders think the U.S. economy will accelerate and 58 percent think it will remain the same, according to the I.I.I. survey.

Dr. Steven Weisbart, senior vice president and chief economist with the I.I.I. said:

Many economic forecasts say that the U.S. and most global economies will grow stronger in 2014, and this means a greater need to protect more assets and income, which leads to greater insurance premium volume.†

Some 30 percent of survey respondents believe that premium growth will be higher in 2014; 42 percent believe it will remain flat; and 28 percent believe it will be lower.

In terms of capacity, as measured by policyholders’ surplus, 73 percent of respondents expect it to increase; 20 percent believe it will remain flat; and 7 percent believe it will decrease.

Some 68 percent believe the combined ratio (the percentage of each premium dollar a property/casualty insurer spends on claims and expenses) will be higher in 2014 compared to last year.

2013 IICF Week of Giving

The Insurance Industry Charitable Foundation’s (IICF) Week of Giving, an eight-day industry-wide volunteer event kicks off Saturday across the U.S.

During the week (October 12 – 19, 2013), teams of insurance industry volunteers will provide three or more hours of volunteer service at neighborhood and community nonprofit organizations.

Since 2001, the insurance industry has generated over 166,000 hours of volunteer service, serving over 150 nonprofits nationwide, and engaging thousands of volunteers in 36 states.

The IICF provides online signup for volunteer teams and coordinates contact with the charities for which volunteers work.

For a glimpse into last year’s IICF Week of Giving check out this video:

P/C Joint Industry Forum

The 17th annual Property/Casualty Insurance Joint Industry Forum will be held tomorrow at the Waldorf-Astoria Hotel in New York City.

The Forum, sponsored by 16 leading property/casualty insurance trade associations, was created to provide p/c insurance and reinsurance company leaders with an opportunity to meet and discuss topics of general interest.

Thomas J. Donohue, president & CEO, U.S. Chamber of Commerce, will be the keynote speaker at the event.

A panel of experts will first discuss the insurance industry from the perspective of those who regulate, analyze and write about the business.

This will be followed by the CEO panel where industry leaders will discuss general trends in industry services.

You can follow the Insurance Information Institute’s live Twitter feed on Tuesday.

Annual Webby Awards Open for Voting

This landed in my inbox a few days ago. If in the course of the past year you’ve built an insurance website, created a mobile app or made an online film or video, you may want to submit your work for consideration for a Webby Award.

The International Academy of Digital Arts and Sciences just opened its call for entries for the 17thAnnual Webby Awards.

Hailed as the “Internet’s highest honor† by The New York Times, The Webby Awards celebrate the year’s best websites, interactive advertising and media, online film and video, mobile and apps, and social experiences.

If your company is interested in submitting for a Webby Award, the category to choose is: Financial Services + Insurance (Interactive Advertising). This is for the sites promoting financial services, information, or insurance on behalf of a brand.

The early entry deadline to submit works for consideration is October 26, 2012, and the nominees will be announced April 2013.

Judges include Tumblr founder and CEO David Karp, Instagram Co-Founder Kevin Systrom, and media mogul Arianna Huffington among others.

Entrants compete not only to win a Webby, but to deliver their 5-Word Speech. Since 2007, Webby Awards 5-Word Speech videos have garnered over seven million views on YouTube.com/webby

Worth checking out.

Back To Basics

After a record year for natural catastrophes, a  tepid economic recovery and ongoing low interest rate environment, insurers are focusing firmly on underwriting discipline.

This was a key message communicated by insurer and reinsurer CEOs in a panel discussion at the 16th annual Property/Casualty Joint Industry Forum #JIF2012 earlier this week.

Industry CEOs representing small and large, public and private, agreed that with the still-challenging investment environment, underwriting discipline was more important than ever.

Lori Dickerson Fouchà ©, president & CEO, Fireman’s Fund, summed things up:

“Hope is not a strategy, as much as we would like it to be. It comes down to back to basics in terms of the business. We cannot rely on investment results. Underwriting discipline, operational effectiveness, and pricing  ­Ã¢â‚¬“ these are the basics of running an insurance company that we have to strengthen to improve results.†

A survey conducted by the Insurance Information Institute (I.I.I.) of P/C insurance industry leaders at the Forum revealed that most believe the worst of the financial crisis is over and that the industry is now in the early stages of a hard market.

Seventy-five percent expect an improvement in profitability in 2012; and in fact, 72 percent believe the industry is on the road to recovery.

The poll questions and full results are available here.

P/C Joint Industry Forum

The 16th annual Property/Casualty Insurance Joint Industry Forum #JIF2012 will be held today at the Waldorf-Astoria Hotel in New York City.

The Forum, sponsored by 16 leading property/casualty insurance trade associations, was created to provide p/c insurance and reinsurance company leaders with an opportunity to meet and discuss topics of general interest.

Michael McRaith, director of the new Federal Insurance Office, will be the featured speaker at the event.

A panel of experts will first discuss the insurance industry from the perspective of those who regulate, analyze and write about the business.

This will be followed by the CEO panel where industry leaders will discuss general trends in industry services.

Check back later this week for coverage of the event. In the mean time, follow the Insurance Information Institute’s live Twitter feed.

Fortune’s 40 Under 40

As I was sitting in the doctor’s waiting room the other day leafing through the latest issue of Fortune magazine, I couldn’t help but notice Fortune’s 40 under 40.

This annual ranking highlights the hottest young stars in business across the globe. Think technology – Facebook’s Mark Zuckerberg tops the list, while Twitter’s Jack Dorsey is ranked eighth – movies, music, athletic wear, oh, and finance.

Coming in at number 10 and leaping off the page to this insurance blogger is 34-year-old Sid Sankaran, chief risk officer at AIG.

Here’s what Fortune has to say:

The financial crisis proved that AIG had no clothes – or at least no controls. Now it’s up to Sankaran, a Canadian math hotshot (his degree from the University of Waterloo was in actuarial sciences) and former partner at consultancy Oliver Wyman, to make sure it doesn’t happen again. Sankaran declined AIG at first; today, as chief risk officer, he oversees the billions flowing among disparate insurance operations and reports to CEO Robert Benmosche if something suspicious rears its head.†

Just being mentioned in the same breath as Facebook and Twitter is impressive, and it doesn’t hurt to raise the insurance industry’s coolness factor a notch.

So here’s a shout out and congrats to Fortune’s number 10 under 40.

IICF Volunteer Week 2011

Disaster preparedness, education, the environment, housing, senior issues, women’s issues, and youth and children are some of the local community projects that teams of insurance industry volunteers will be donating their time to next week.

Volunteer Week, the Insurance Industry Charitable Foundation’s (IICF) eight-day event, kicks off this Saturday on both the East and West coasts.

During the week, teams of insurance volunteers will donate three or more hours of service at neighborhood and community nonprofit organizations. The IICF provides online signup for volunteer teams and coordinates contact with the charities for which volunteers work.

Betsy Myatt, executive director of IICF’s New York/Northeast division, says:

Volunteer Week feeds insurance industry employees’ strong desire to give back to their local communities, and supports companies that want to be active players in their communities.

In the first year in the New York-New Jersey-Connecticut tri-state area, we expected about 1,000 volunteers – and saw double that.†

Last year, the tri-state area saw more than 2,000 participants give more than 13,000 hours in nearly 200 different projects.

Since it started in 1997, Volunteer Week has contributed more than 140,000 hours of community service.

It’s not too late to be part of Volunteer Week 2011. To register go to: http://Volunteer.IICF.org