Presentation on Public Attitudes and Media Environment Facing Key Issues in the Insurance Industry

Transcription

1 Presentation to PAMIC/VAMIC/WVAIC Combined Convention Presentation on Public Attitudes and Media Environment Facing Key Issues in the Insurance Industry Nemacolin Woodlands Resort, Pennsylvania August 5, 2008 Jeanne M. Salvatore Senior Vice President, Public Affairs Insurance Information Institute

2 Presentation Outline I. I.I.I. s Key Communications Initiatives II. Media Coverage of Key Insurance Issues III. Public Attitudes IV. Resources

3 I. Key Communications Initiatives for the I.I.I. I. Consumer Education II. Key Issues III.Disaster Communications IV. Special Projects

4 I. Key Communications Initiatives for the I.I.I. I. Consumer Education What Individuals and Business Owners Need to Know About Insurance - What it is how? - How it works - What coverage should be purchased?

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6 I. Key Communications Initiatives for the I.I.I. II. Key Issues Attacks on the Integrity of the Claims Process Challenges to Underwriting Criteria and Predictive Modeling Systems Climate Change Florida-Related Issues Impact of Fraud on the Insurance Market Natural Disasters and the Cost and Availability of Coverage Industry Financial Performance and Market Conditions Rapid Response to High Profile Critics Regulatory Modernization Terrorism and Insurance

7 I. Key Communications Initiatives for the I.I.I. III. Disaster Communications Disaster Preparedness Post-Disaster Consumer Communications Litigation Public Relations

8 2008 DISASTER PREPAREDNESS ACTIVITIES KEY DISASTER PREPAREDNESS MESSAGES The importance of purchasing the right type of insurance, including flood insurance and the right amount of insurance coverage to reflect current rebuilding costs. Taking a home inventory, including the use of the I.I.I. s free Know Your Stuff home inventory software. Developing a home evacuation plan. Implementing simple mitigation measures that homeowners and businesses can take to reduce the extent of storm damage. Utilize preparedness findings of Insurance Pulse in media materials.

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10 I. Key Communications Initiatives for the I.I.I. V. Special Initiatives Corporate Social Responsibility Diverse Markets

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13 II. Media Coverage of Key Insurance Issues Media Focused on the Economy Tone of the national insurance scene has changed and shifted over the past year relatively sedate compared with 2007 State of the national economy has been the media focus, with additional focus on the election State of the economy is affecting news coverage of the insurance industry, public attitudes and the industry s financial performance

14 TOP ISSUES, JANUARY JUNE 2007 VS. JANUARY JUNE 2008 Rank Top Issues % increase/decrease 1 Hurricanes 8,329 10,307 24% 2 Bond Insurance 4,473 9, % 3 Market Conditions 7,098 6,391-10% 4Workers Comp 3,850 3,970 3% 5 Asbestos 3,665 3,294-10% 6 Auto 3,035 2,793-8% 7 Silica 1,696 2,287 35% 8 Tornadoes 1,641 2,233 36% 9 Homeowners 3,372 2,116-37% 10 Investigations 3,496 1,981-43% 11Global Warming/Climate Change 2,141 1,395-35% 12 Medical Malpractice 1,156 1,373 19% 13 Terrorism 1,244 1,168-6% 14 Tort % 15 Wildfires % 16 Mold % 17 Credit Scoring % 18 CLUE % TOTAL 46,687 50,259 +8% Source: Lexis/Nexis searches. Coverage of insurance issues would have fallen were it not for bond (monoline) insurer coverage

15 MEDIA INDEX: LIFE INSURANCE ISSUES FIRST HALF 2007 vs. FIRST HALF 2008* (percent increase/decrease) 60% 50% 40% 30% 42% 47% 20% 10% 0% 2% 14% -10% -6% -20% -30% Retirement Life Insurance Annuities Long Term Care Insurance *First Half estimate based on data as of June 15, Source: Lexis/Nexis search. -22% Avian Flu Disability Insurance

16 HURRICANE MEDIA HITS, ,000 33,000 30,000 27,000 24,000 21,000 18,000 15,000 12,000 9,000 6,000 3, ,970 11,006 9,552 3,886 33,005 22,435 14,413 6,640 2, * Katrina litigationrelated stories are falling rapidly 2,453 4,009 1,418 Katrina and insurance Hurricanes and insurance Hurricane Katrina and insurance and lawsuits *Annual estimate based on data as of June 15, Source: Lexis/Nexis search.

17 MEDIA INDEX TOPIC SHARE BY MEDIASIGNAL (1), YEAR TO DATE Media Index: Bond/Mortgage Insurance Media Index: Homeowners Media Index: Auto Media Index: Investigations Media Index: Small Business Media Index: Hurricanes Media Index: Market Conditions Media Index: Workers Comp Media Index: Global Warming/Climate Change Media Index: Medical Malpractice Media Index: Terrorism Media Index: Wildfires Catastrophe: Tornadoes Media Index: Mold 0% 5% 10% 15% 20% 25% 30% 35% (1) MediaSignal is Biz 360's impact metric for measuring reach. It adjusts the impression count for each article by how prominently a subject is featured. Source: Biz360 Media Monitor.

18 MEDIA PENETRATION 10 YEAR HISTORY 2,500 2,250 2,000 1,750 1,500 1,250 1, Top All Traditional media is in a freefall 178 1, , I.I.I. Print media hits are up 73% since 2000, representing average annual growth of 9% 2, , ,075 2,224 Top 100 hits are up 96% since 2000, a 8% avg. annual increase , , * 348 * Annual estimate, based on data as of June 20, Source: Factiva search.

19 Media Coverage of Insurers Reasons for Decline in Coverage Main First Quarter Issue Affected Bond Insurers Referrals made to their association Decline of Traditional Media Few print pages in newspapers and magazines Fewer Insurance Beat Reporters Example: Joe Treaster at the New York Times has not been replaced Less Pure Factual Reporting Several long-time wire service reporters were let go Stories weren t critical enough of the industry (along the lines of the Insurance Hoax in Bloomberg). Another was told their stories need to be market moving

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23 I.I.I. PUBLIC ATTITUDES KEY FINDINGS 2008: INSURANCE PULSE Four out of seven industries, including auto and home insurers, recorded double-digit declines in favorability. Auto and home insurance industry favorability fell 12 points from 57 percent in 2007 to 45 percent in Despite stable auto insurance rates, the percentage of those surveyed who said that auto insurance is a financial burden rose four points to 60 percent. Surveyed separately, 41 percent viewed auto insurers favorably and 37 percent viewed home insurers favorably. Seven out of ten people think the economic downturn will have an impact on the ability of insurance companies to pay claims and sell insurance.

24 INSURANCE PULSE HAS THE INSURANCE INDUSTRY BEEN AFFECTED BY THE DOWNTURN IN THE ECONOMY? Nearly 3 in 4 Americans believe that the economic downturn has adversely affected the insurance industry Source: Insurance Information Institute, 2008 Pulse Survey, May 2008.

25 INSURANCE PULSE HOW WILL US ECONOMIC/FINANCIAL PROBLEMS AFFECT INSURERS? 78% of those polled believe that the recent national economic and financial conditions harm insurers ability to pay claims Source: Insurance Information Institute, 2008 Pulse Survey, May 2008.

26 INSURANCE PULSE HOW IMPORTANT IS THE FINANCIAL STRENGTH OF YOUR INSURANCE COMPANY? 78% of those polled believe that an insurer s financial strength is Extremely or Very important Source: Insurance Information Institute, 2008 Pulse Survey, May 2008.

27 INSURANCE PULSE WHAT IS THE MOST IMPORTANT QUALITY TO YOU WHEN YOU CHOOSE AND INSURER? Americans are nearly equally divided between price, service and financial strength when it comes to the most important quality of their insurer Source: Insurance Information Institute, 2008 Pulse Survey, May 2008.

28 INSURANCE PULSE KEY FINDINGS 2008: DISASTER PREPAREDNESS Only one-half of Americans think their homeowners coverage is sufficient to rebuild their homes. About seven out of ten homeowners who made improvements to their homes told their insurance company about them. The majority of Americans (74 percent) think that they are primarily responsible for making sure that their home is adequately insured.

29 INSURANCE PULSE DISASTER PREPAREDNESS: KEY FINDINGS 2008 Only 24 percent of Americans have taken steps to protect their home from a natural disaster. Sixty percent of Americans would pay more for a home built to withstand a natural disaster, compared with 46 percent a year ago. Only 17 percent of Americans have a flood insurance policy. Twenty-seven percent of the public believe their homeowners policy covers damage from flooding during a hurricane, down from 35 percent a year ago.

30 I.I.I. Resources White papers Extensive database Brochures Software Support to the State Insurance Trades Members-only Website

31 Version 3.0 just released Handles larger files and images Third-party secure online storage Streamlined set-up process

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33 Disaster Insurance Information Evacuation video Preparedness information covering hurricanes, tornadoes, earthquakes, floods, wildfires and terrorism

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35 Insurance Information Institute On-Line If you would like a copy of this presentation, please give me your business card with address