public attitudes and media environment facing key issues ...“public attitudes and media...

Presentation to PAMIC/VAMIC/WVAIC Combined Convention

Presentation on“Public Attitudes and Media Environment Facing

Key Issues in the Insurance Industry”

Nemacolin Woodlands Resort, PennsylvaniaAugust 5, 2008

Jeanne M. SalvatoreSenior Vice President, Public AffairsInsurance Information [email protected]

Presentation Outline

I. I.I.I.’s Key Communications Initiatives

II. Media Coverage of Key Insurance Issues

III. Public Attitudes

IV. Resources

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

I. Consumer EducationII. Key IssuesIII.Disaster CommunicationsIV. Special Projects


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?


II. Key IssuesAttacks on the Integrity of the Claims Process Challenges to Underwriting Criteria and Predictive Modeling SystemsClimate Change Florida-Related IssuesImpact of Fraud on the Insurance MarketNatural Disasters and the Cost and Availability of CoverageIndustry Financial Performance and Market ConditionsRapid Response to High Profile Critics Regulatory ModernizationTerrorism and Insurance


III. Disaster CommunicationsDisaster Preparedness Post-Disaster Consumer CommunicationsLitigation Public Relations

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.


V. Special InitiativesCorporate Social Responsibility Diverse Markets

II. Media Coverage of Key Insurance Issues

Media Focused on the EconomyTone of the national insurance scene has

changed and shifted over the past year—relatively sedate compared with 2007State of the national economy has been the media focus, with additional focus on the electionState of the economy is affecting news coverage of the insurance industry, public attitudes and the industry’s financial performance

TOP ISSUES, JANUARY – JUNE 2007 VS. JANUARY – JUNE 2008

Rank Top Issues 2007 2008 % increase/decrease1Hurricanes 8,329 10,307 24%2Bond Insurance 4,473 9,392 110%3Market Conditions 7,098 6,391 -10%4Workers Comp 3,850 3,970 3%5Asbestos 3,665 3,294 -10%6Auto 3,035 2,793 -8%7Silica 1,696 2,287 35%8Tornadoes 1,641 2,233 36%9Homeowners 3,372 2,116 -37%

10Investigations 3,496 1,981 -43%11Global Warming/Climate Change 2,141 1,395 -35%12Medical Malpractice 1,156 1,373 19%13Terrorism 1,244 1,168 -6%14Tort 729 625 -14%15Wildfires 343 460 34%16Mold 277 233 -16%17Credit Scoring 120 230 92%18CLUE 22 11 -50%

TOTAL 46,687 50,259 +8%

Source: Lexis/Nexis searches.

Coverage of insurance issues would have fallen were it not for

bond (monoline) insurer coverage

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.

2%

-6%

14%

42%

-22%

47%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

Retirement Life Insurance Annuities Long Term Care Insurance

Avian Flu Disability Insurance

HURRICANE MEDIA HITS, 2005-2008

18,970

33,005

2,296

11,006

22,435

2,453

9,552

14,413

4,0093,8866,640

1,418

03,0006,0009,000

12,00015,00018,00021,00024,00027,00030,00033,00036,000

Katrina and insurance Hurricanes and insurance Hurricane Katrina and insuranceand lawsuits

2005200620072008*

*Annual estimate based on data as of June 15, 2008.

Source: Lexis/Nexis search.

Katrina litigation-related stories are

falling rapidly

MEDIA INDEX TOPIC SHARE BY MEDIASIGNAL (1), YEAR TO DATE

0% 5% 10% 15% 20% 25% 30% 35%

Media Index: MoldCatastrophe: Tornadoes

Media Index: WildfiresMedia Index: Terrorism

Media Index: Medical MalpracticeMedia Index: Global Warming/Climate Change

Media Index: Workers CompMedia Index: Market Conditions

Media Index: HurricanesMedia Index: Small Business

Media Index: InvestigationsMedia Index: Auto

Media Index: HomeownersMedia Index: Bond/Mortgage Insurance

(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.

MEDIA PENETRATION

10 YEAR HISTORY

289 285178

316 395506

685560 595

474348

832 818 857

1,368

1,743

2,057

2,429

2,0752,224

2,016

1,484

0250500750

1,0001,2501,5001,7502,0002,2502,500

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008*

Top 100 All

I.I.I. Print media hits are up 73% since 2000, representing average

annual growth of 9%

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.

Traditional media is in a freefall

Media Coverage of InsurersReasons for Decline in Coverage

Main First Quarter Issue Affected Bond InsurersReferrals made to their association

Decline of Traditional MediaFew print pages in newspapers and magazines

Fewer Insurance “Beat” ReportersExample: Joe Treaster at the New York Times has not been replaced

Less Pure Factual ReportingSeveral long-time wire service reporters were let go

Stories weren’t critical enough of the industry (along the lines of the Insurance Hoax in Bloomberg). Another was told their stories need to be “market moving”

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.

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.

HAS THE INSURANCE INDUSTRY BEEN AFFECTED BY THE DOWNTURN IN THE ECONOMY?

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

INSURANCE PULSE


HOW IMPORTANT IS THE FINANCIAL STRENGTH OF YOUR INSURANCE COMPANY?

78% of those polled believe

that an insurer’s financial

strength is “Extremely” or

“Very” important

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

INSURANCE PULSE

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.

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.

INSURANCE PULSE

I.I.I. Resources

White papersExtensive database

BrochuresSoftwareSupport to the State Insurance TradesMembers-only Website

Version 3.0 just released

Handles larger files and images

Third-party secure online storage

Streamlined set-up process

Disaster Insurance Information

Preparedness information covering hurricanes, tornadoes, earthquakes, floods, wildfires and terrorism

Evacuation video

http://www.iii.org/static/video/mediaplayer/evacuation.wmv

Insurance Information Institute On-Line

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