First Word: Battling back with good works

The insurance industry continues to battle a war of perception over its performance in response to Hurricane Katrina, and you start to wonder whether the war can ever be brought to a satisfactory conclusion.

Late last month, the industry looked to "dispel misconceptions" raised in a congressional subcommittee hearing.

Among the "misstatements" cited by the Insurance Information Institute and a group of industry trade associations—was a comment Rep. Gene Taylor, D-Miss., made to the House Financial Services Committee's Oversight and Investigations Subcommittee that the industry was "conspiring to defraud" policyholders.

Another came from Mississippi Attorney General Jim Hood, who accused insurers of failing to pay legitimate claims to policyholders whose homes were devastated by the storm.

The industry responded by saying it had not sought to defraud, and noting that insurance companies have paid an estimated $40.6 billion on 1.7 million claims for damage caused by Hurricane Katrina, and citing estimates showing that fewer than 2% of homeowners claims in Mississippi and Louisiana are in dispute.

Mr. Hood, a common denominator in many skirmishes in the current war of perception, also called for a repeal of the industry's McCarran-Ferguson Act anti-trust exemption.

The Mississippi attorney general, of course, has sued a number of insurers for refusing to cover Katrina damage caused by flooding and storm surge, both typically excluded in homeowners insurance contracts. For its part, the industry says the exclusions were "explicit."

Explicit though the exclusions were, and despite a contract being a contract, maybe State Farm Fire & Casualty Co. was right in looking to settle with Mr. Hood earlier this year, and hopefully withdraw from the image fight. Who, though, could blame State Farm for later announcing it would also withdraw from writing new homeowners and small business coverage in Mississippi.

At this point, perhaps the only certainty in this war is that it's not likely to end anytime soon. At the Feb. 28 House hearing, Melvin Watt, D-N.C., the subcommittee's chairman, indicated he expects further sessions devoted to insurers' Katrina claims practices.

As the battle rages, though, I direct your attention to a small item on page 7 of this month's issue. It's about Reinsurance Assn. of America conference attendees volunteering in New Orleans. Their example isn't unique, and it's important to note people in the insurance industry doing good works, even as the institution's image is under attack.

Separately, I need to update some thoughts set out in this space last month. In writing about marketing and brand identity, I wrote about the Travelers umbrella, its likely fate and the impact on those for whom it remained a cherished icon.

Well, in journalism, there are deadlines, and those deadlines can be vexing sometimes. When you're putting news in print, every now and then between the time the story goes to press and the time it lands on people's desks, facts can change.

Such was the case last month when I wrote about Citicorp giving up the umbrella logo it acquired when it purchased Travelers Insurance Co. As my column went to press, the facts were that St. Paul Travelers' said it wasn't interested in reacquiring the umbrella.

Naturally, between the time February's Industry Focus went to press and the time it hit your desk, things changed. The folks in St. Paul decided they would purchase the umbrella from Citicorp, and, recognizing its iconic value and its link to the Travelers brand, announced they were renaming the company The Travelers Cos. Inc.

Hats off to everyone involved in the decision, which I believe is a great marketing move. And congratulations to the people of Hartford, whose cherished umbrella lives on.