Monte Carlo–Joe Plumeri, chairman and chief executive, Willis Group Holdings Ltd., called today for positive involvement by the insurance industry with Hurricane Katrina relief efforts to generate positive publicity.
Mr. Plumeri, who spoke at the Reinsurance Rendez-vous de Septembre here in Monte Carlo, told National Underwriter, "There hasn't been one positive headline since Katrina. So far it's been whether it's wind or water damage."
He added that he would like to see a headline on the order of, "Insurance Industry Poised To Help Build New Orleans."
Mr. Plumeri continued that the "higher end of whatever the [damage] predictions are, is probably accurate. I think it looks, unfortunately, very bad." He added that, "I don't set rates, so I'm not on that side of the equation," but at the same time, "you've got to ask if [Katrina] will have an impact on whether the rates go up or down–certainly it should stop them from going down. What it does for reinsurance and the retro market remains to be seen."
Mr. Plumeri told a packed room of reinsurance executives that "how the industry behaves collectively will define us." He said the defining moment for Lloyd's was in 1906, when it "seized the moment respective to the San Francisco earthquake." This created a favorable legacy "that still follows Lloyd's," he noted.
The insurance sector is vital to the economy, he explained, "and it will make the restoration of New Orleans possible." But, he wondered, "how much time will be spent in courtrooms" by insurers litigating claims?
On another topic, he commented that disclosure of fee arrangements will "do wonders for brokers."
He said the only reason brokers should fear their clients' knowing how much they make is "if you are not worth it." Brokers should not hesitate to explain the many facets of their work to the insured, he said, adding that for too long, business has been about placement only. "Not enough attention is paid to other things," he said.
Regarding a U.S. government terrorism insurance coverage backstop, Mr. Plumeri said terrorism is "here to stay." It's a "permanent problem," but there is no "permanent solution" which would help create stability and predictability.
Mr. Plumeri said that reinsurance is the only industry he knows of "that can do business with a handshake. I can't think of an industry so complex, where this practice is the norm," he said. He noted, however, that "it takes months to deliver a policy. Getting the policy out is important."
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