NU Online News Service, Feb. 29, 3:54 p.m. EST
The criticism of a consumer watchdog by an industry analyst heated up when Bob Hunter, the director of insurance for the Consumer Federation of America, refuted the analysis of his work by industry consultant Charles Ruoff.
In a four-point letter, Hunter says Ruoff's analysis did not respond to the main premise of the CFA's analysis: “that insurers have significantly and methodically decreased their financial responsibility for weather catastrophes…” and shifted the costs and risk onto consumers and taxpayers.
Hunter backs up his claim that surplus is excessive by noting an Aug. 10, 2011 presentation given by Robert Hartwig, president of the Insurance Information Institute, in which he says the property and casualty insurance industry is holding significant, excess capital. He also cites a report from Keefe, Bruyette & Woods that with the “excess capital” insures need to pursue organic growth, make acquisitions, invest in technology or return capital to shareholders.
Hunter says that while it is true, as Ruoff noted, that surplus, in theory, backs up many individual risks, insurers' entire surplus is available to backup any risk, from a chemical spill or a destructive hurricane.
Ruoff says CFA used limited data in the report when discussing market cycles. However, Hunter says homeowners insurance market data was used in other portions of the report to back-up the assertion that the industry was not significantly affected by losses from Hurricane Katrina in 1995.
Hunter says that he, the author of the report, has extensive experience with the industry, taking issue with the contention that CFA was not familiar with the industry.
Hunter listed among his achievements that he is a fellow of the Casualty Actuarial Society, a member of theAmericanAcademyof Actuaries; served as Texas Insurance Commissioner and as Federal Insurance Administrator; and administered the National Flood Insurance Program.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
