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PIA Provides Unlimited Opportunities

By Leonard C. BrevikExecutive Vice PresidentNational Association of Professional Insurance Agents The vision statement of the National Association of Professional Insurance Agents is clear...
February 10, 2006

Editor's Note:  This article originally appeared in the January 23, 2006 issue of the National Underwriter.

PIA National Executive Vice President & CEO Leonard C. BrevikBy Leonard C. Brevik
Executive Vice President
National Association of Professional Insurance Agents

The vision statement of the National Association of Professional Insurance Agents is clear and concise: "The Association that creates unlimited opportunities for professional insurance agents." As we begin 2006 - which happens to be PIA's 75th anniversary year - I'd like to draw attention to some areas in which agents and our company partners are able to work together to make the most of our shared opportunities.

The hurricanes of 2005 taught us that there are routine disasters, and then there are extraordinary natural catastrophes. The Insurance Information Institute reports that homeowners claims payments resulting from the 2005 hurricanes in Louisiana are enough to wipe out all homeowners premiums paid in the state during the past 25 years, as well as every dollar of homeowners insurance profits ever earned there.

The challenge for carriers is to have new ways of reserving for such extraordinary events, while continuing to reserve for disasters of lesser scope.  As a society, we can no longer afford to take a parochial view of how to address this problem. The time has come for a public-private natural disaster partnership that is national in scope.

The insurance industry will also benefit by becoming more responsive to changes in the marketplace. For example, next month Travelers will become the first company to offer a 10% discount on auto insurance to drivers of hybrid vehicles nationwide. Hybrids have been sold in the United States since 1999, and their popularity with consumers has been growing exponentially. So what took us so long?

Enhancing the effectiveness of state regulation of insurance benefits agents, carriers and insureds. The National Association of Insurance Commissioners has compiled a solid record of achievement in helping to accelerate regulatory modernization. PIA believes that state-based functional regulation of insurance is in the best interest of the consumer and our overall industry.  We oppose an optional federal charter and support continued improvement to our state-based system of insurance regulation, which has helped make the insurance business one of the most profitable sectors of the American economy throughout our nation's history. In other words, let's improve the system, but don't mess with success.

Technology is at the top of any list when it comes to opportunity. Carriers and agents have benefited greatly by leveraging technology to take expense out of the system while improving competitiveness. At the same time, technology has the potential to create serious federal regulatory burdens for our industry. The PIA Insurance Technology Coalition is working to track the variety of proposals currently in play on Capitol Hill and be the go-to source for accurate information for Members of Congress and their staffs.

For more than ten years we have seen a trend toward consumers favoring the agency system, a trend that is growing. As people become more successful and acquire more assets, their insurance needs become more sophisticated. At the same time, the vibrancy of the marketplace is producing more choices for insurance consumers. Consumers faced with more complex needs and more choices need expert assistance from their Professional Insurance Agents, now more than ever.

PIA Connection

This article appeared in the January 2006 PIA Connection.

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