Has the insurance industry finally gotten over its Spitzer hangover? Late last month, of 260 senior executives surveyed while attending KPMG’s 18th annual Insurance Industry Conference in New York, only 16 percent said regulatory and market conduct risk posed the greatest threat to the insurance industry, down dramatically from 46 percent the year before.
This year, with the market softening faster, wider and deeper, 49 percent of the executives queried ranked pricing risk as their biggest concern--up from 30 percent the year before.
Record catastrophes and terrorism exposures also prompted concern over concentration of risk to tick upward--from 3 percent to 15 percent, the survey found. (For the full story, click here.)
It’s certainly understandable for insurers to be losing sleep over falling premiums, but I can’t help but wonder whether it's a little premature for these top dogs to put regulatory concerns completely behind them.
I realize Eliot Spitzer is in his final quarter as New York’s crusading attorney general, but as the odds-on favorite to become governor, he will pick the Empire State’s next insurance superintendent--someone who won't go nearly as easy on the industry as his predecessor, Howard Mills.
Indeed, Mr. Spitzer could very well fall back on familiar territory, pushing his new insurance watchdog to bite, not just bark at an industry of which he is already suspicious--having caught various evildoers red-handed rigging bids, fixing prices and steering business in a conspiracy with their brokers.
Do you believe it’s time to relax? That the regulatory crackdown of the past two years is finally over? Or could we be in for even bigger headlines should Gov. Spitzer expand his net beyond the mega-brokers to probe contingency fee deals between insurers and independent agencies?
Comments (2)
Are regulatory issues over? Not totally, but the focus and intensity will change.
Mr. Spitzer picked the low-hanging fruit, and acted aggressively to achieve highly-publicized results.
As govenor, Mr. Spitzer's priorities will move toward overall economic improvement. Accordingly, for the insurance industry, regulators will focus on fundamentals--such as integrated risk management and transparency, which will include catastrophe and terrorism funding and pricing issues.
Posted by Edward Kalbaugh | October 6, 2006 12:18 PM
Posted on October 6, 2006 12:18
If I were a betting man, the life and heath companies should be careful, as some of the things done in the past to sell products can still come back to bite!
Posted by joe | October 6, 2006 12:23 PM
Posted on October 6, 2006 12:23