Presentation to PAMICVAMICWVAIC Combined Convention

1
Presentation to PAMIC/VAMIC/WVAIC Combined
Convention

• Presentation on
• Public Attitudes and Media Environment Facing
  Key Issues in the Insurance Industry
• Nemacolin Woodlands Resort, Pennsylvania
• August 5, 2008
• Jeanne M. Salvatore
• Senior Vice President, Public Affairs
• Insurance Information Institute
• 212-346-5555
• Jeannes_at_iii.org
• www.iiii.org

2
Presentation Outline

• I.I.I.s Key Communications Initiatives
• Media Coverage of Key Insurance Issues
• Public Attitudes
• Resources

3
Key Communications Initiatives for the I.I.I.

• Consumer Education
• Key Issues
• Disaster Communications
• Special Projects

4
Key Communications Initiatives for the I.I.I.

• Consumer Education
• What Individuals and Business Owners Need to Know
  About Insurance
• - What it is how?
• - How it works
• - What coverage should be purchased?

5
(No Transcript)
6
Key Communications Initiatives for the I.I.I.

• Key Issues
• Attacks on the Integrity of the Claims Process
• Challenges to Underwriting Criteria and
  Predictive Modeling Systems
• Climate Change
• Florida-Related Issues
• Impact of Fraud on the Insurance Market
• Natural Disasters and the Cost and Availability
  of Coverage
• Industry Financial Performance and Market
  Conditions
• Rapid Response to High Profile Critics
• Regulatory Modernization
• Terrorism and Insurance

7
I. Key Communications Initiatives for the I.I.I.

• Disaster Communications
• Disaster Preparedness
• Post-Disaster Consumer Communications
• Litigation Public Relations

8
2008 DISASTER PREPAREDNESS ACTIVITIES
KEY DISASTER PREPAREDNESS MESSAGES

• The importance of purchasing the right type of
  insurance, including flood insurance and the
  right amount of insurance coverage to reflect
  current rebuilding costs.
• Taking a home inventory, including the use of the
  I.I.I.s free Know Your Stuff home inventory
  software.
• Developing a home evacuation plan.
• Implementing simple mitigation measures that
  homeowners and businesses can take to reduce the
  extent of storm damage.
• Utilize preparedness findings of Insurance Pulse
  in media materials.

9

10
I. Key Communications Initiatives for the I.I.I.

• V. Special Initiatives
• Corporate Social Responsibility
• Diverse Markets

11
(No Transcript)
12
(No Transcript)
13
Media Coverage of Key Insurance Issues

• Media Focused on the Economy
• Tone of the national insurance scene has changed
  and shifted over the past yearrelatively sedate
  compared with 2007
• State of the national economy has been the media
  focus, with additional focus on the election
• State of the economy is affecting news coverage
  of the insurance industry, public attitudes and
  the industrys financial performance

14
TOP ISSUES, JANUARY JUNE 2007 VS. JANUARY
JUNE 2008
Coverage of insurance issues would have fallen
were it not for bond (monoline) insurer coverage
Source Lexis/Nexis searches.
15
MEDIA INDEX LIFE INSURANCE ISSUES
FIRST HALF 2007 vs. FIRST HALF 2008(percent
increase/decrease)

First Half estimate based on data as of June
15, 2008. Source Lexis/Nexis search.
16
HURRICANE MEDIA HITS, 2005-2008
Katrina litigation-related stories are falling
rapidly
17
MEDIA INDEX TOPIC SHARE BY MEDIASIGNAL (1), YEAR
TO DATE
(1) MediaSignal  is Biz 360's impact metric for
measuring reach. It adjusts the impression count
for each article by how prominently a subject is
featured. Source Biz360 Media Monitor.
18
MEDIA PENETRATION
10 YEAR HISTORY

I.I.I. Print media hits are up 73 since 2000,
representing average annual growth of 9
Traditional media is in a freefall
Top 100 hits are up 96 since 2000, a 8 avg.
annual increase
Annual estimate, based on data as of June 20,
2008. Source Factiva search.
19
Media Coverage of Insurers

Reasons for Decline in Coverage

• Main First Quarter Issue Affected Bond Insurers
• Referrals made to their association
• Decline of Traditional Media
• Few print pages in newspapers and magazines
• Fewer Insurance Beat Reporters
• Example Joe Treaster at the New York Times has
  not been replaced
• Less Pure Factual Reporting
• Several long-time wire service reporters were let
  go
• Stories werent critical enough of the industry
  (along the lines of the Insurance Hoax in
  Bloomberg). Another was told their stories need
  to be market moving

20
(No Transcript)
21
(No Transcript)
22
(No Transcript)
23
I.I.I. PUBLIC ATTITUDES

KEY FINDINGS 2008 INSURANCE PULSE

• Four out of seven industries, including auto and
  home insurers, recorded double-digit declines in
  favorability.
• Auto and home insurance industry favorability
  fell 12 points from 57 percent in 2007 to 45
  percent in 2008.
• Despite stable auto insurance rates, the
  percentage of those surveyed who said that auto
  insurance is a financial burden rose four points
  to 60 percent.
• Surveyed separately, 41 percent viewed auto
  insurers favorably and 37 percent viewed home
  insurers favorably.
• Seven out of ten people think the economic
  downturn will have an impact on the ability of
  insurance companies to pay claims and sell
  insurance.

24
INSURANCE PULSE

HAS THE INSURANCE INDUSTRY BEEN AFFECTED BY THE
DOWNTURN IN THE ECONOMY?
Nearly 3 in 4 Americans believe that the economic
downturn has adversely affected the insurance
industry
Source Insurance Information Institute, 2008
Pulse Survey, May 2008.
25
INSURANCE PULSE

HOW WILL US ECONOMIC/FINANCIAL PROBLEMS AFFECT
INSURERS?
78 of those polled believe that the recent
national economic and financial conditions harm
insurers ability to pay claims
Source Insurance Information Institute, 2008
Pulse Survey, May 2008.
26
INSURANCE PULSE

HOW IMPORTANT IS THE FINANCIAL STRENGTH OF YOUR
INSURANCE COMPANY?
78 of those polled believe that an insurers
financial strength is Extremely or Very
important
Source Insurance Information Institute, 2008
Pulse Survey, May 2008.
27
INSURANCE PULSE

WHAT IS THE MOST IMPORTANT QUALITY TO YOU WHEN
YOU CHOOSE AND INSURER?
Americans are nearly equally divided between
price, service and financial strength when it
comes to the most important quality of their
insurer
Source Insurance Information Institute, 2008
Pulse Survey, May 2008.
28
INSURANCE PULSE

KEY FINDINGS 2008 DISASTER PREPAREDNESS

• Only one-half of Americans think their homeowners
  coverage is sufficient to rebuild their homes.
• About seven out of ten homeowners who made
  improvements to their homes told their insurance
  company about them.
• The majority of Americans (74 percent) think that
  they are primarily responsible for making sure
  that their home is adequately insured.

29
INSURANCE PULSE
DISASTER PREPAREDNESS KEY FINDINGS 2008

• Only 24 percent of Americans have taken steps to
  protect their home from a natural disaster.
• Sixty percent of Americans would pay more for a
  home built to withstand a natural disaster,
  compared with 46 percent a year ago.
• Only 17 percent of Americans have a flood
  insurance policy.
• Twenty-seven percent of the public believe their
  homeowners policy covers damage from flooding
  during a hurricane, down from 35 percent a year
  ago.

30
I.I.I. Resources

• White papers
• Extensive database
• Brochures
• Software
• Support to the State Insurance Trades
• Members-only Website

31

• Version 3.0 just released
• Handles larger files and images
• Third-party secure online storage
• Streamlined set-up process

32
(No Transcript)
33

• Disaster Insurance Information
• Preparedness information covering hurricanes,
  tornadoes, earthquakes, floods, wildfires and
  terrorism

Evacuation video http//www.iii.org/static/video/
mediaplayer/evacuation.wmv
34
(No Transcript)
35
Insurance Information Institute On-Line

• WWW.III.ORG

If you would like a copy of this presentation,
please give me your business card with e-mail
address