Spreading Some Good News

Reviewing recent headlines can be a depressing endeavor lately: The European economy; our northeast weather, the Libyan dictatorship and treatment of its people; the news of the earthquake, tsunami and subsequent nuclear crisis in Japan … I could go on and on, but I just don’t want to. … things seem just horrible in the world.

Risk Management Solutions Inc., a disaster- modeling company, estimated total economic losses of $200 billion to $300 billion. Another forecaster, EQUECAT Inc., estimated total insured losses at $12 billion to $25 billion including property, auto, marine, life and personal accident lines but excluding the nuclear emergency. Property insurance in Japan excludes losses from radiation, as it does in the U.S.

AIG released a statement this week saying losses for earthquake-related claims filed with its Japanese company, Fuji Fire & Marine Insurance, are “likely to have a minimal effect,” and will be covered by the company’s reserves. But, the loss estimate hasn’t been released by the company yet, and AIG puts Fuji Fire & Marine’s exposure at 55 percent of the claims from that disaster. I have to believe that even if the losses can be covered by the company’s reserves, this exposure will affect AIG. I’m wondering how the carriers will react to all this news. The Atlantic has never had a tsunami and experts have said it is unlikely one will ever happen on our coast. But, we all know how carriers think—the worst-case scenario will be at the forefront of their minds and placing homeowners’ coverage on Long Island may become much more difficult this year. Producers on Long Island already have challenges placing homes close to the water with their regular companies.

Underwriters, more and more of whom are not local and who are not familiar with our area, are certain to be affected by the headlines. Maybe the one bright spot in all of this is that it might be an impetus for a tightening market.

Among all of the horrible news in the media though, I’ve seen another positive point: the grace and benevolence of the Japanese people and the rest of the world as we seek to help in whatever ways we can. Out of great tragedy, the human character always seems to sparkle.

An example on the local level: I sit on the Long Island Insurance Division of the UJA-Federation of New York. Over the last few years, this group has undertaken projects to support our community in a meaningful way, and I’ve shared some of them in this column. The project we chose this year is called “Fun on the Run.” The group has obtained a donated school bus and is having it outfitted to help special needs children who would otherwise not have been able to have access to the special help they desperately need. Both agents and carriers are sponsoring the bus, and their names will displayed prominently on it. By the way, sponsorships still are available, and I’d be happy to give anyone interested in participating in this worthy cause more information if they simply contact me.

I know I’ll be proud whenever I see that bus. But equally important, my community will recognize my agency’s name and know that we care; that we independ ent agents give back to the people we call friends neighbors and customers. Earlier this month, the newly inducted president of PIA in Connecticut, Jim Berliner, CPIA, took special time in his inaugural speech at the Annual Convention at Foxwoods MGM Grand to discuss how independent insurance agents can differentiate themselves through community service and investment.

“Volunteerism,” he said, “is the rent you pay for the space you take up on this Earth.” And, he asked: “When was the last time you heard a neighbor say: ‘Boy, that lizard sure does care about our town?’” Berliner went on to note that the behemoth national direct writers just don’t care about the communities from which they are extracting money. They have enormous advertising budgets, but they don’t have the ability to really give back, or to build relationships and trust like we can. He reached out to our carriers, and asked them to use their resources to spread the simple, yet powerful message: “Brought to you by your friendly neighborhood agent.” I couldn’t agree with Jim more. I don’t know a single independent agent who is not active in his or her town. We are pillars of our communities: as civic leaders, in capital donations and as volunteers in every way one can imagine. In times of crisis, we are the people who would that would come to help our fellow human beings in need.

That brings me to a final point: Since we are the front line in the case of a disaster, agents should make sure they are prepared. Sitting on my desk is the PIA disaster manual, which I ordered after the March rain storms we had last year. Our agency is in the process of updating its disaster plan and I have some advice: It would be wise for all agents to review their plans now, so that they are not caught by surprise. As the Boy Scouts saying goes: “Be prepared.” —It could mean everything for your agency and your community. Once you’ve developed a plan for your agency, update it regularly and let everyone know about it—spreading that good news will make a difference.