Lessons Learned from Underwriting Cycles Inside the Actuarys Studio

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Lessons Learned from Underwriting CyclesInside
the Actuarys Studio

• All Industry Day
• March 4, 2004

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Panelists

• John Hahn President, Tri-City Brokerage
• (Robert DeNiro)
• Dan McCormick Partner, California Ins Center
• (Tom Hanks)
• Mike Dandini AVP, The Hartford
• (Joe Pesci)
• Michael Marcon President, Equity Risk Partners
• (James Lipton)

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Wholesale Perspective

• Issues Facing Wholesalers
• Demand for Differentiation/Specialized Expertise
• Demand for Quality Service
• The Need for Speed
• The need for Capital Investment

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Wholesale Perspective

• Evolving Distribution System
• The Consolidation Game
• ES versus Standard market
• Role of Bermuda Capacity

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Wholesale Perspective

• What Did We Learn
• Customer Partnerships
• Alliances vs. transactional relationships
• Outsourced Specialists
• Create unique product distribution opportunities
• Creativity Rules!

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Carrier Perspective

• Re-emergence of Underwriting Discipline
• Cornerstone of insurance
• Properly assessing and pricing risk
• Ensuring our financial health/longevity

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Carrier Perspective

• Conducting Business Responsibly
• Integrity of reserves
• Make good on promises
• Agents/Customers succeed

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Carrier Perspective

• Soft Market and Outcomes
• Increase market share
• Strong equities market
• False sense of security
• Coverage sold below ultimate cost
• Deteriorating industry results
• Withdraw from markets / sell off business

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Carrier Perspective

• Renewed Focus on Underwriting Discipline
• Reinsurance impact
• Financial markets tumble
• Tighter government regulation
• Pressure from ratings agencies

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Carrier Perspective

• Why Financial Strength Matters
• Stability and dependability
• Providing best alternatives
• Less volatility for consumers
• Growth opportunities
• Investment in new products/technology
• Attract capital to further strengthen business

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Carrier Perspective

• Summary
• Future cycles will reveal lessons learned
• Discipline will ensure long term viability
• Positioned for long term success

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Retail Perspective

• Customers
• Dealing w/difficult business climate/economy
• Broker relationship tested
• Proper Preparation Prevents Poor Performance
• Under-promise/Over-deliver

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Retail Perspective

• Employees
• Impact of defensive marketing on morale
• Staffing needs
• Managing producer perception

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Retail Perspective

• Underwriters
• Re-vamping submission process
• Re-underwriting for rate AND acceptability
• Investing in carrier/broker partnership

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Retail Perspective

• Our Company
• Understand carrier challenges/economics
• Investing in the future
• Preparing for the turn

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Impact of 9/11

• Short Term
• Long Term

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Predictions

• 2004
• 2005 and Beyond