The president of the Independent Insurance Agents and Brokers ofAmerica called on carriers to give his members more authority inthe aftermath of a disaster, while withholding support for anational catastrophe plan until the industry finds commonground.

Addressing the closing session of the IIABA's NationalLegislative Conference and Convention here, William G. Stiglitz IIIlaid out the failures of the insurance industry in the aftermath ofHurricane Katrina and the lessons learned from the calamity.

He said that unlike some instances where direct-writing agentsfailed to perform in addressing clients' claims, independent agentswere often called upon to act as mediators, friends andpsychologists to their devastated neighbors and customers.

Noting the inability of many insurers to come through quickly insettling claims, and the failure of some companies to communicateclaims activity with agents, he said one lesson from Katrina wasthat agents need to be permitted to do more for their clients. “Wesimply must give agents more authority to issue drafts foradditional living expenses and emergency repairs,” Mr. Stiglitztold the audience.

He said the claims fiasco following last year's monsterhurricane season demonstrated a lack of preparation on the part ofcarriers to deal with “a disaster of the magnitude of Katrina.”

Mr. Stiglitz said he was appointing a task force of eightindividuals to work with various company and trade groups to bringthe concerns of independent agents to carriers and work to bebetter prepared for the future.

“We agents sell one thing, and that is the promise to perform inthe event of a claim,” said Mr. Stiglitz. “We cannot fulfill thispromise with our company partners when our system is introuble.”

Another concern coming out of Katrina is the viability of theNational Flood Insurance program. Mr. Stiglitz said it wasimportant that NFIP be actuarially sound, more responsive to theinsured and not a burden to taxpayers.

To this end, the association is supporting hiking homeownerscoverage to a maximum of $335,000 and commercial insureds to$670,000. The current limits are $200,000 and $500,000,respectively.

Earlier in the day, Mr. Stiglitz, speaking during a paneldiscussion with company executives, said the association wouldwithhold its support for any national catastrophe plan until theindustry coalesces around the issue. Allstate has been pitching aplan to create state disaster funds with a federal catastrophebackstop, but many in the industry are skeptical or opposed.

“If we are not united [in our message], then it is an exercisein futility,” said Mr. Stiglitz. Until the carriers' position onthis issue is unified, he added, the association is not going tooffer support for any one plan.

“We would be glad to support a good unified position,” said Mr.Stiglitz, noting that without such unity federal legislators willnot listen to the industry. He also said that given the industry'sburgeoning surplus and higher profits last year despite recordcatastrophe losses, “it will be a hard sell to legislators if thereis not one position to make the case with.”

Another issue of concern to agents is the current softeningmarket conditions, and the ability of producers to provide the bestprice and product for their clients.

Despite advances in technology, Mr. Stiglitz said the industryis making a 360 degree turn back to the 1970s, before agents couldperform comparative rating. Carrier construction of proprietarytechnology systems is reversing advances agents have made, hesaid.

“We have taken a giant step backward,” he said. “Let's all cometogether to find a solution to this problem.”

He also urged companies to write to an underwriting profit,warning that the softening commercial market threatens industryprofitability and makes companies ill-prepared for a cycle ofcatastrophes that loom on the horizon.

He said independent agents continue to gain market share, butneed to remain dedicated to improving themselves through advancesin technology and bringing young people into the business toperpetuate agencies.

Building on that theme, Mr. Stiglitz pointed out the growth ofthe IIABA's independent agent branding program–Trusted Choice. Bythe end of the trade show, which featured the “Trusted ChoiceExperience,” the number of agent participants reached 6,027–eightmonths ahead of the 6,000 agent goal he proposed at the beginningof his one-year term.

In promoting the Trusted Choice brand, Mr. Stiglitz said IIABAwould continue an ad campaign in both print and television.