Community Partnerships=Good Business

For the past seven years, the “NeighborWorks” National InsuranceTask Force has been working to expand insurance accessibility andaffordability in lower-income and minority communities.

NITF is a partnership among insurance companies, insurance tradeassociations, insurance regulators, educational institutions, theNeighborhood Reinvestment Corp. and community organizations thatare members of the national NeighborWorks network.

While this partnership provides obvious benefits to thecommunity by enhancing the ability of its residents to insure theirhomes, it also benefits insurers by creating better-educatedconsumers and expanded business opportunities.

The NITF is working in many ways to educate consumers, butperhaps the most significant is the Loss Prevention Partnerships–asix-site pilot program funded in part by The Ford Foundation,Nationwide Insurance, State Farm Fire & Casualty InsuranceCompanies, and Travelers Insurance, a member of Citigroup.

The program is addressing the perils of fire in Chicago and St.Louis, wind in Charleston, water in Staten Island, and theft inRichmond and Denver. Each partnership includes severalsectors–insurance companies, city agencies (especially in fire,police and code enforcement), insurance regulators, nonprofitorganization staff and residents of targeted neighborhoods.

All six sites have implemented public education campaigns andhome-safety inspections, which alert homeowners to potentialdangers in their homes and provide information about how to bestremove or reduce theses dangers.

They also include low-interest loan programs that enableresidents to remove or repair hazardous conditions in their homes,especially with respect to heating systems, electrical systems,roofs and pipes. As a result, homeowners not only understand how toreduce risk, they are provided with the means to do so.

The NITF has also developed the Certified Insurance CounselingTraining Program. This two-day course for housing counselorsfocuses on homeowners and life insurance, risk management and lossprevention. The course offers insight into mitigating homeownerrisks.

The NITF also produced the publication, “Insuring Homes: AHousing Professionals Guide to Obtaining Homeowners Insurance.” Theeducation and publication resources developed by the NITF enablecommunity development corporations and insurance companies tobetter market the products and services of both for the benefit ofthe customers and communities they serve.

Clearly, better-educated consumers are better risks. As wecontinue to be successful in this area, we will continue to reducelosses in these communities, enabling us to lower rates, write morepolicies and be more competitive in these communities.

The NeighborWorks NITF brings new customers to participatinginsurers. Because insurers have an increased presence in theneighborhood and established relationships with community-basedorganizations and resident leaders, there are more opportunitiesfor communication.

Insurers develop a deeper understanding of the communitys needs,and the community better understands what is demanded of us to runan insurance business.

Insurers also get a better perspective regarding underwritingdecisions. For instance, the structures in suburban communitiestend to be homogeneous, and that makes it easier to determine thelevel of risk. Homes in urban neighborhoods tend to be moreeclectic–new or old, brick or frame. By engaging in the process andsustaining a relationship with the neighborhood, insurers arebetter equipped to meet that neighborhoods needs.

A secondary, but important, benefit is the ability to enhancethe wealth of the neighborhood. For example, we believe thelocation of some of our offices and those of independent agents hasencouraged other businesses to locate there, thus stimulatingeconomic growth in the community. This increase in commerce, inturn, attracts more customers for the agents located there.

The NITF also provides avenues for marketing and educationthrough activities like neighborhood fairs. Member companies havebeen active in involving independent insurance agents in theseefforts so they can build new business. Mentoring new agents andworking with community organizations can be great sources of leadsfor these agents.

The bottom line is that insurers, like all businesses, have tofocus on making a profit. Through work with the NITF, running abusiness and improving communities are goals that can beaccomplished simultaneously.

The NITF brings tangible benefits to this business. We arecreating a bigger pool of customers. Agents are doing more businessin the community. Policy counts for our companies are up. Consumersare better off economically because their houses are more valuable.Communities are experiencing an increase in business activity.

The fact is, businesses cant afford not to participate inactivities like the National Insurance Task Force.

Clayton Adams, vice president of community development atState Farm Insurance Companies, is incoming chair of theNeighborWorks National Insurance Task Force. Edward Charlebois,vice president, personal lines property for Travelers Insurance, amember of Citigroup, is outgoing NITF chair.

Reproduced from National Underwriter Property &Casualty/Risk & Benefits Management Edition, October 29, 2001.Copyright 2001 by The National Underwriter Company in the serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.

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