October 31, 2007

BOSTON – David A. Sampson, the newly appointed president and CEO of the Property Casualty Insurers Association of America (PCI) outlined his vision for the association at the organization’s Annual Meeting.  More than 1,600 CEOs and senior executives from PCI member companies and global reinsurers participated in the 2007 meeting, setting records for attendance at the event.

Sampson, the former Deputy Secretary of the Commerce Department, said that America’s property/casualty insurers provide consumers with a financial safety net and businesses a way to deal with the risks inherent in commerce that enables them to expand and innovate – key factors in making the U.S. economy the model for the world.  

“We are a foundation industry,” he said.  “Nothing moves in the U.S. economy without insurance.  We are also a misunderstood industry.  That misunderstanding results, in large part, from the very nature of our product.”

Sampson pointed out that average consumers purchase our product because state law or mortgage lenders require them to.  And because the type of products that almost every American purchases – auto and homeowners policies – are heavily regulated in many states, they become more and more like a commodity with very little perceived difference in features from one company to the next.

“The danger of over-regulation is clear: when markets hit bumps in the road it makes it easier for some public policy makers to say that government is better suited to making insurance products available and affordable than private insurers.  The concept of ‘government to the rescue’ can lead to unintended consequences, the most important of which is the undermining of the free market system on which our nation’s economy is built,” he said.

“We have a better chance of solving those problems when government unleashes the innovative powers of the free market rather than unfairly restricting it,” said Sampson.  “Today, our economy – every sector including the property and casualty industry – faces an innovation imperative.  That is the challenge we face as an industry and a trade association in both the public policy and operational arenas.”

Sampson told his audience that our nation, our economy, and our industry are currently facing a period of change and turbulence.  

“Such times are never easy,” he said.  “To safely navigate these stormy waters requires a strong philosophical framework to address new public policy and political realities.  It requires commitment and cohesion to work through the tough issues together. The most important requirement to thrive and prosper while facing strong headwinds in times of change is forward-looking leadership.”

Sampson said that while PCI is composed of over 1,000 very diverse member companies, all members share a common objective: the desire to operate in an environment that allows each insurer to compete on a level playing field and to have the opportunity to grow and prosper based on their individual abilities to develop and distribute products and services that consumers want and need.

“It is that goal that unites us and that has fostered PCI’s reputation as an organization that is willing to address the toughest issues facing the industry in new and innovative ways,” he said. 

Sampson also challenged the industry to join him on an effort to enhance the industry’s perception among consumers, opinion leaders, and public policymakers.  

“The aftermath of Hurricane Katrina is still having a significant impact on how both the public – and public policymakers – view property/casualty insurers,” he said.  “I know that we cannot wave a magic wand and convince the vast majority of the public to love us.  But I do believe that by focusing on the fundamentals of our industry and through more effective communications with consumers and public policymakers we can restore their trust in our industry and their respect for our contributions to personal safety and economic security for their families, their communities, and our nation.  Enhancing our image and reputation will not be easy, nor will it occur overnight.  But it is possible and we must make this a priority for PCI and the industry.”

Finally, Sampson called on members to continue their active involvement in the association’s advocacy efforts as the industry faces a challenging new political environment.

“The industry is at a critical juncture.  If we learned anything last November it is that elections matter.  Today PCI is debating public policy and advocating on behalf of our members in a political environment that is markedly different than it was one year ago.  How we deal with those political realities will define our organization and our industry.  You and PCI will play an increasingly critical role in advancing public policy initiatives that best serve consumers, our industry, the nation’s economy and that meet the test of time.  For the policies we forge today will affect us for years to come.

PCI is composed of more than 1,000 member companies, representing the broadest cross-section of insurers of any national trade association.  PCI members write over $194 billion in annual premium, 40.1 percent of the nation’s property/casualty insurance.  Member companies write 51.3 percent of the U.S. automobile insurance market, 39 percent of the homeowners market, 32.1 percent of the commercial property and liability market, and 38.7 percent of the private workers compensation market.