I was shocked yesterday to hear Property Casualty Insurers Association of America President Ernie Csiszar abruptly announce his resignation. The move comes shortly after PCI reversed course and pulled out of ProtectingAmerica.org--the Allstate-backed group pushing for a federal mega-catastrophe fund--which PCI joined with much fanfare days before defecting.
While everyone directly involved is making nice and declining to comment on Ernie's motivations, this most probably is a direct result of the tug of war PCI found itself in over its position on catastrophe coverage. As I noted in yesterday's post, "An Industry Divided," PCI was in a tough spot because Liberty Mutual and Allstate--two mega-members--took exactly opposite stances on what role, if any, Uncle Sam should play in disaster insurance.
Ernie and I don't always see eye to eye, but I respect the fact that he's a straight shooter and says what's on his mind. Perhaps in his current situation, caught in the crossfire between two powerful members, it was either 'let me lead, or let me go.' In any case, with all his connections in the business, he should land on his feet pretty quickly. I look forward to dueling with him again wherever he ends up.
As for ProtectingAmerica.org and its Allstate sponsor, this is a terrible blow to their cause--perhaps a deathblow. I cannot imagine Congress acting to create a national cat fund with the industry itself so bitterly at odds over the concept. The opposition is just too fierce, and this was a hard sell for Congress in the first place. Even a united industry might not have been able to slip this one by a very divided and skeptical Congress.
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Comments (3)
This is part of the difference in the view of the industry:
One is a profit-making private business that does not want to share bookkeeping secrets out of government view, that might be needed to be shared if direct government involvement occurs.
The other sees profit protection for the homeowners line endangered by disasters if some government help is not coming soon.
The public would probably be better served by having a true all-risk homeowners policy--not caring who or how the details work. That may be forced on the industry by political will.
Better the industry works with the government to come up with a workable mechanism.
Posted by Joe | September 15, 2006 1:00 PM
Posted on September 15, 2006 13:00
I'm trying to figure out what the real issues are in this spat. Joe tersely laid out his interpretation. A national cat fund sooner or later is going to require a lot more disclosure.
The insurers got off easy with TRIA, where, as the Wharton School pointed out, insurers are entirely free to concentrate all their book within a high-risk market if they so desire--to play in traffic.
I'd like for Joe to expand somewhat, and I want to hear from Sam what he thinks is going on. Some commenter said, if you look at the language of the legislation re: state cat funds, it's hard to see why there is so much storm and thunder.
Posted by Peter Rousmaniere | September 15, 2006 9:45 PM
Posted on September 15, 2006 21:45
Cooler heads usually prevail. Sign of the Times.
Posted by Andy Barile | September 18, 2006 10:48 AM
Posted on September 18, 2006 10:48