"We're concerned about possible legislation restricting or banning its use. That's a big problem to us," he said in the course of stressing the need to communicate why and how a company uses credit scoring as a key initiative for the new year.

He said Progressive has not only found credit rating to be a powerful predictive variable, but also one that allowed the company "to offer better rates to consumers who, for one reason or another, didn't meet traditional underwriting standards."

"That's the thing we're going to spend the most time on early next year," Mr. Williams said. Communicating the message to regulators will be part of the strategy, but "it's got to go beyond that. We've got to proactively advance our practices to meet the objections we hear from agents, consumers and regulators"

"One of the things we need to address is the whole secrecy around this stuff." Noting that every company has its own credit "black box," he said, "that needs to be abandoned. The secrecy creates suspicions that are unnecessary."

William R. Berkley, chairman and chief executive officer of W.R. Berkley Corp. in Greenwich, Conn. also highlighted communications issues for commercial lines insurers.

"We, as an industry, do an exceptionally poor job of conveying the economics of our business," Mr. Berkley said speaking about broader industry issues.

"People need to understand that our industry provides certain kinds of protections--and we do it on an economic basis," he said. "This is an industry that's had sub-par rates-of-return for a long time. Yet the world thinks we're gouging them all the time."

It's not simply an image problem, he said. "We talk our own language and our own terms. We use our own type of financial statements. So it's very hard for people to understand what we're doing. And that includes regulators, legislators and our customers."

National Underwriter interviewed the p-c executives in December about the challenges they would have to address in 2002.

While Mr. Berkley and Mr. Williams highlighted communications issues, the three issues that emerged more regularly during the interviews were the need to push "back-to-basics" underwriting, the need to assess workers' compensation exposures in a post-terror attack environment, and the need to push technology out to agents. (See NU print edition, Jan. 7, page 10.)

For insurers with a personal lines focus, a key challenge is bringing profitability to the homeowners line, executives said.

"In homeowners, our challenge is singular--and that's to get that product profitable," said Michael LaRocco, president and chief operating officer of personal insurance at SAFECO in Seattle. He said the company would do that through product design and appropriate rate levels.

Mr. LaRocco said, in the year ahead, that mold damage claims are also a significant concern.

Progressive's Mr. Williams noted, "Loss experience has been terrible in auto and homeowners is worse." He noted that the personal lines market has been hardening as companies take rate increase to recover profitability and predicting continued hardening in 2002.

Unlike the situation in homeowners, Mr. LaRocco said that in auto insurance, SAFECO does "not only want to get profitable, but to grow significantly." He said the company is working toward offering a SAFECO-branded auto product to agents that will be available for nearly every client that comes through their doors in 2002.

"We're always going to emphasize the preferred auto product, but on a going-forward basis, we're going to give them a product that goes from nonstandard auto to ultra-preferred," he said. "Getting our product segmented better, redesigned and priced appropriately is a major challenge," he said.