The property/casualty insurance industry faces an urgent challe
nge to rebuild public trust amid growing public skepticism fueled by
false narratives, ac
cording to remarks by Dino Robusto, chair of the American Property Casualty Insurance Association board of directors.
“We must better explain how private-market insurance works and why it is superior to government solut
ions that expand state insurers of last resort with subsidized pricing th
at, over the long term, is completely unsustainable,” said R
obusto, the former chief executive of CNA who is now executive chairman, at APCIA’s annual meeting in Orlando.
Dino Robusto
Growing distrust in the insurance industry is fueled by misrepresentations in the media, echoed by legisl
ators and regulators “misconstruing the basics of economics and profitability, and dangerously misrepresenting
he fundamentals of consumer protection,” Robusto added.
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Additionally, tactics from plaintiffs’ attorneys frame insurers as adversaries rather than partners.
Robusto said the industry has essentially paid 100% of premiums
and loss payments to underwrite and process insurance protection over the last decade.
“This reliable fulfillment of our promise must be made more visible,” as should the industry’s investments i
n mitigation efforts, resiliency, and safety, he said. “We must make it all m
ore visible with facts and examples communicated broadly and constantly.”
Robusto acknowledged the challenge to build trust since its model differs from income statement-driven businesses that the general public is familia
r with. Insurance products are priced before the true cost is known, and it may take years to realize. This can “lea
d to confusion among the public and policymakers who expe
ct rates to be based on recent losses,” while “complicated con
tract language can result in further mistrust and misconceptions,” he said.
He dismissed claims of excessive profits, noting property/casualty insurers’ return on net worth has averaged just
6% over the past decade—less than half the Fortune 500 average.
APCIA, Robusto continued, has embarked on a grassroots education effort with public comment, research, and advoc
acy. He cited APCIA’s response to criticism following hurrican
s Milton and Helene, when data showed fewer than 1% of claims generated regulator complaints.