Strong underlying corporate values will differentiate property-casualty insurance companies from their competitors, an industry executive told a gathering yesterday.
Speaking at the XL Congress in Boston, company Chief Executive Officer Brian O'Hara pointed out that while many companies in the insurance industry have taken steps to replenish their capital and to focus on strong underwriting discipline, companies must add value through other means.
“Being in possession of the capital to back a promise to pay will get you into the marketplace. However, it may not adequately differentiate you from your equally well-capitalized competitors,” Mr. O'Hara said. “Though we are proud of our unique track record for responsive claims payment, we are equally proud of the enabling culture behind it.”
Mr. O'Hara also noted that the quantitative risk and capital metrics used by the rating agencies “now play a bigger part in determining our ratings than the quality of the security of our risk transfer promise.”
“However, we think quality is as important and is reflected in both our claims paying track record, particularly in the case of large, complex claims, and in our overall attitude toward the payment of legitimate claims,” he said, adding, “Both of these point to the strength of our underlying culture.”
Mr. O'Hara said the p-c industry had demonstrated a “steely determination to endure in the face of severe adversity,” despite the catastrophic losses of 2005.
“Resilience is not a given,” he said. “It must come from a strong underwriting discipline, sound risk management practices, sensible use of reinsurance claims-paying capacity, the ability to earn investment income, and culture and values.”
Speakers addressing XL Congress delegates included Richard Clarke, former national coordinator for security; Mike Moore, the former director of the World Trade Organization and former prime minister of New Zealand; Steve Forbes, president and CEO Forbes Inc., editor-in-chief Forbes Magazine, and president and CEO of World Learning; and Jack Welch, former General Electric chairman and CEO.
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