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Q&A With David Hollander, Ernst & Young’s Global Insurance Advisory Leader

On the heels of Ernst & Young’s recently released 2012 Global Consumer Insurance Survey, I spoke with David Hollander, Ernst & Young’s global insurance advisory leader, to ask a few questions the report brought up.

The report states that, in regards to younger P/C consumers, the brand can command a higher premium. Do you find this surprising and why?

DH: Initially, yes. We thought many of the millennials would be active in price competitive shopping and that price would be dominant. However, when considering the findings, we realized that this segment is accustomed to massive ad campaigns focusing on the importance of brand across all industries and the finding became less of a surprise.

What do you see for the future of online P/C business? Will it eventually be completely online or will customers always demand face time?

DH: There are many products within the P/C spectrum. Many of those products will fit and move more quickly to a web-based sales mechanism. For some products, we do see a continued shift to more “direct to company” or “aggregator” usage over the next five to 10 years. However, in no way will consumer interaction be completely web based. Companies will counteract by bundling products prompting consumers to seek more info from a live person. Also, in our study, consumers resoundingly stated that when it comes to servicing, especially when making a claim or purchase they want personal interaction.

The report states that a mere 31% of P/C consumers in Brazil are satisfied with their claims experience, as compared to 71% in the U.S. and 68% in Mexico. Why do you think there is such a vast difference?

DH: The difference in Brazil can be attributed to several factors. While in the Americas the top three measures insurers can take to improve the claims experience were: Dealt with my claim more quickly (33%), provided a better level of communication with me during the claims process (32%) and provided a more personal service (23%).

In Brazil, the same top three measures were noted, but all were mentioned by more than 40% of the customers. For instance, more than 50% of the customers expect quicker service.

Additionally, as a response to the low interest rate environment in Brazil, some insurers directed their focus on efficiency gains. One of the steps some Brazilian insurers took was to tighten their negotiations with claims services providers resulting in a reduced quality of claims servicing to customers.

In your opinion, what was the most surprising finding of the Global Consumer Consumer Insurance Survey 2012?

DH: Actually, we found three. The first being the favorable position of the insurance industry overall as a trusted provider of insurance and other investment products. The second being the degree to which consumers desire to purchase multiple products from the same product provider. And the third is the degree to which the insurance industry is behind others in rewarding loyal customers and conducting customer retention programs.

9 Insurance Companies Among the Top 50 Companies for Executive Women

Insurance is always looked at as an old boys’ club. In many regards, it is. Just attend any industry event and you can count a stagger number of balding white men.

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But we all know several, if not many, women who have climbed the industry ladder to put their stamp on the world of insurance.

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Now, the National Association for Female Executives is suggesting that insurance is just the place for women to make their careers.

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The organization included nine insurers among their list of “The Top 50 Companies for Executive Women”: Aetna, Allstate Insurance Company, MetLife, State Farm Insurance, HSBC North America, New York Life, Prudential Financial, The Principal Financial Group, and WellPoint.

These and the other honorees were described as “stellar workplaces [that] assure winning career paths for female talent.”

Business Travelers Refuse Assignments to Dangerous Areas

When bossess tell employees they have to travel to dangerous locations — effectively asking them to put their company’s profits ahead of personal safety — workers are increasingly saying thanks, but no thanks. According to a new report by the insurer Chubb, nearly one-fourth of people surveyed would refuse to go on a business trip to a location they consider dangerous unless their employer provided them with emergency medical and other services. In all, 23% of business travelers said they would refuse to go on the business trip, 21% said they go but would refuse to go on the next trip, and 14% would go but look for a new job after returning.

Workers apparently become more willing if services are provided, however. If their employer provided access to reliable emergency medical services, 42% said they would go on the assignment, and 47% would travel if their employer provided pre-travel information about the country. If their employer provided access to legal assistance abroad, 38% would agree to go.

“Organizations that fail to address the risks may lose employees as the economy improves, and even face reputational damage and legal liability,” said Jim Villa, senior vice president of Chubb’s accident and health business.

Chubb, not so surprisingly, offers some products and services to mitigate travel to high-risk locations. As do others. I spoke with Charlie LeBlanc, an exec at ASI Group, last year following all the turmoil in Egypt. With Cairo in chaos, he helped several Westerners get out safely.

Here’s an excerpt of the piece I wrote at the time.

Having traveled to Egypt many times, he knew there were many foreign nationals living and working there who would need assistance when the riots broke out. He did not know there were close to 80,000 expats, however. And he never imagined there would be an event so widespread that so many would need his company’s advice at once. “It seemed like all 80,000 were calling at the same time,” said LeBlanc. He expects that this will be the largest event of this type that he will ever come across. “We can’t envision a larger-scope scenario,” said LeBlanc. “You know, short of Armageddon.”

LeBlanc’s company is who you want to call if you are trapped in such a situation. Through a 2008 acquisition, his ASI Group, which was founded in 1989 as Air Security International, became part of MEDEX, a travel assistance and international medical insurance provider that works with insurers including Travelers and Chubb.

Immediately following the unrest in Egypt, the ASI team had some 30 corporate clients seeking consultation on how to keep their employees safe. All told, the company directly chartered more than 800 people out of Egypt in short order.

There were many others who wanted advice but wound up on State Department flights. ASI provided them with information on where they needed to go and how to sign up to get evacuated, but they made final arrangements on their own. LeBlanc does not know how many cases of indirect assistance his firm was involved in. “We stopped even counting,” he said.

For most people, all they wanted was a way out of the country. “When you’re talking to these folks,” said LeBlanc, “they’re frustrated, they’re upset, they’re discouraged and some of them…are worried that they’re not going to be able to get off the ground.”

Situations like this help illustrate that travel assistance services can be of value. The Arab Spring scenario was unprecedented in many ways, but it’s likely that companies working in the Middle East or other treacherous locations may find themselves in need of help when their employees get stuck.

And according to this latest Chubb survey, it will be increasingly harder to even get them to go in the first place if you have no plan to help them out when trouble arises.

Property-Casualty Insurance Pricing Up 2.8% in the Last Quarter

More evidence that rates are headed north surfaced yesterday. The latest quarterly property/casualty survey from the Council of Insurance Agents & Brokers came out. And as the chart above illustrates, there’s no surprise here: rates are on the rise in the face of insurer catastrophe losses, falling reserves and rising underwriting discipline.

Commercial property/casualty pricing rebounded in the fourth quarter of 2011, according to The Council of Insurance Agents & Brokers’ quarterly Commercial P/C Market Index Survey. On average, small, medium and large account pricing increased 2.8 percent last quarter, compared with a -5.4 percent decline in the same period last year. The market hit its low point in the third quarter of 2007 with an average -13 percent decrease and has been slowly clawing its way back up ever since.

“It’s clear from the data that the market continued its upward momentum in the fourth quarter,” said Ken A. Crerar, president/CEO of The Council. ““Capacity was still strong, but prices rose in the face of declining underwriting profitability, dwindling reserves and huge catastrophic losses.”

Another key finding was, as anticipated, the effect that RMS 11 is having on property pricing.

Carriers were “reviewing all property based on RMS11 modeling,” said one broker from the Southeast. “The RMS CAT Modeling for property was used widely — more property insurers since the third quarter,” said a broker from the Northeast. “Many clients saw this for the first time.”

Large buyers fared better than their smaller counterparts but there were increases across the board. All told, here are the full results broken down by account size.