DANA POINT, Calif. Jonathan Michael, the incoming chairman of the Property Casualty Insurers Association of America, has a clear goal for the insurer group.
Mr. Michael, chairman and CEO of Peoria, Ill.-based RLI Corp., said he wants “PCI to continue to be the thought leader when it comes to regulatory issues facing our industry.” That means supporting responsible regulations at the state and federal levels, he said.
Mr. Michael added that corporate tax reform is likely to occur during the next couple of years, and “PCI will have to provide thoughtful leadership along those lines.”
He said PCI also will push for extension of the federal government's terrorism insurance backstop, which is slated to expire at the end of 2014.
“We will advocate in general for underwriting freedoms and innovation and really a robust market free of unnecessary regulations,” he said. “Our customers and consumers benefit greatly from underwriting and rate freedom and competition.”
Mr. Michael said he's concerned about how international accounting standards and the European Union's Solvency II regulatory regime will affect U.S. insurers' ability to provide fair returns to their shareholders. He also is concerned about the “continued threat of more state and federal regulations that are not thought out and are a burden to small insurers,” adding that “smaller insurers are important to a healthy market for the consumers.”
“When it comes down to our insurance industry, we really need a robust economy for things to improve,” he said. “There's too much capital pursuing too little business, and a better economy would lift the whole industry.”
Five years from now, Mr. Michael said he expects the insurance industry to have new leaders, in terms of people and companies, just as the industry had different leaders five years ago, he said.
Some techniques may change, with smaller homogeneous risks possibly being underwritten automatically, he said.
But some things won't change.
“The industry will still be a people business,'' he said. “There will continue to be winners and losers like any other time. Those that continue to focus on underwriting will prevail.”