NEW YORK — Just a month after all the ballots were counted,insurance-industry panelists at the 23rd annual ExecutiveConference tried to make sense of this year's election results.

The conference, hosted by Ernst & Young and Summit BusinessMedia, featured a panel consisting of Robert Hartwig, president ofthe Insurance Information Institute; Marc Cadin, executive vicepresident for government affairs at the Association for AdvancedLife Underwriting; and Steven Bensinger, senior managing directorof the Global Insurance Services Group at FTI consulting (andformer CFO of AIG).

The reelection of Jeb Hensarling (R-Tex), the vice chair of theCommittee on Financial Services, was viewed as “a good thing” forthe industry, but the defeat of Judy Biggert (R-Ill.), who servedas chairwoman of the Subcommittee on Insurance, Housing andCommunity Opportunity, was described “as a major setback forinsurance.”

And the fact that Maxine Waters (D-Calif) will be replacing theretiring Barney Frank (D-Mass) as the ranking member of theCommittee on Financial Services was also seen as a negativedevelopment.

On the Federal Insurance Office front, no one could be sure whatsurprises might be embedded in its long-overdue report on themodernization of insurance, but there was a fair amount of hopethat the office's focus will be restricted primarily tointernational issues and that it will not impose significantadditional reporting requirements on the industry.

On ORSA (Own Risk and Solvency Assessment): The panelistsreported that leading insurance organizations are recognizing thebenefits of a sophisticated enterprise-risk management program andthat the resulting benefits offset the costs ofimplementation.

Other points of interest:

• While still too early to tell, there likely will beno insurance-agent exemption for the medical-loss ration componentof PPACA.
• Cat bonds and other alternative vehicles, includinghedge funds, will continue to supplement traditional reinsurance.Of note here: Oak Leaf Re 2012, a cat bond open to all investorsnot just traditional buyers of reinsurance, allowed themiddle-market cedant (a Florida Homeowner specialist) to accesssources of capital that traditionally would not have been availableto it.
• Efforts to create a National Catastrophe Fund willbe forestalled by work on NFIP
• Among its numerous other impacts, the Obama victoryvalidated the role of Big Data and predictive analytics
• The awareness of the need for better data securitywill be an important theme in 2013—expect new federal rules for keycommercial industries, including insurance
• One of our favorite quotes from the conference:“The federal government is essentially an insurance company with anarmy.” (Marc Cadin)
• Since the administration of Harry Truman, underwhich president has the industry had the highest return on equity?Jimmy Carter at 16.43 percent (credit sky-high interest rates). Theworst? Kennedy-Johnson (3.55 percent). But for insurers, it hasn'treally mattered which party is in control. The average ROE underDemocrats: 7.67 percent; under Republicans: 7.97 percent—a“marginal difference” that can be ascribed to the fact that “MotherNature doesn't care who's in the White House,” said Robert Hartwig,who shared the data.
• The renewal of TRIA, seen as “critical” for theindustry, will be complicated by the fact that “there is littleinstitutional memory” on the legislation (originally enacted in2002) in Congress.