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Gen. Colin Powell to Address Big "I" Convention |  What Hurricane Katrina Taught the Industry |  Big "I" Salutes Oxley |  McGavick Makes it Official |  Survey Confirms Americans’ Retirement Worries |  Big "I" National News

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Gen. Colin Powell to Address Big “I” Convention
“True American hero” will discuss leadership and service at April event.

Gen. Colin L. Powell, USA (Ret.), will be the keynote speaker at the 2006 Big "I" National Legislative Conference & Convention. He is scheduled to speak April 28, 2006, at the event’s closing general session. His speech will focus on leadership and service.

"We are very excited and honored that Gen. Colin Powell, one of the most revered military and civic leaders in our nation’s history, has agreed to address our members," says Big "I" CEO Robert A. Rusbuldt. "Gen. Powell is known and admired by Americans from all walks of life. He has made a career of bringing people together in a common cause. Independent insurance agents and brokers are honored to welcome and hear from this true American hero."

After a storied military career, Gen. Powell became the nation’s 65th secretary of state on Jan. 20, 2001. During his four-year tenure as the nation’s top diplomat, he was at the forefront of the Bush administration’s efforts to fight terrorism and advance economic and social development worldwide.

Gen. Powell’s 35-year career in the U.S. Army culminated in his elevation to four-star general and appointment in 1989 as chairman of the Joint Chiefs of Staff. During his leadership of the Joint Chiefs, he oversaw the Panama intervention of 1989 and Operation Desert Storm in the 1991 Persian Gulf War.

As both a civic and military leader, Gen. Powell has earned numerous awards. His military honors include, among others, the Legion of Merit, the Bronze Star and the Purple Heart. Civilian honors include, among others, two Presidential Medals of Freedom and the Congressional Gold Medal. He also has received awards from more than two dozen countries.

"As secretary of state, a soldier and simply as an American interested in helping our nation’s children have better lives, Gen. Powell has demonstrated leadership and service of the highest order," Rusbuldt says. "His long list of honors provides ample testimony to his contributions to America and to humankind. Few individuals living today are as well qualified to speak on the topics of leadership and service as Gen. Powell."

The Big "I" National Legislative Conference & Convention will take place from April 26 through 28, 2006, with the National Legislative Conference taking place April 26 through 27 at the Grand Hyatt Washington, and the Convention taking place April 27 through 28 at the Washington Convention Center.

Highlights of the National Legislative Conference will include an in-depth issues briefing session; the annual Big "I" Congressional reception on Capitol Hill; appearances by numerous high-profile speakers discussing important insurance and national issues; and hundreds of meetings on Capitol Hill between lawmakers and Big "I" agents and brokers. This high-profile event, in past years, featured the past four sitting presidents as speakers —George W. Bush, Bill Clinton, George H.W. Bush and Ronald Reagan.

The Convention will feature an array of thought-provoking and nationally recognized business speakers, industry-leading panelists and innovative insightful workshops, as well as the largest trade show in the insurance industry and numerous networking opportunities for agents and brokers.

To register online and for hotel reservations, click here. You also can obtain downloadable copies of the event registration and hotel reservation forms at this section.

Cliston Brown (cliston.brown@iiaba.net) is Big "I" director of public affairs/media relations.

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H U R R I C A N E   U P D A T E
What Hurricane Katrina Taught the Industry
New RMS report details lessons learned.

The busy hurricane season of 2005 is drawing to a close, but it will leave its legacy on the record books. As the country grapples with how best to pick itself up and recover from the unprecedented number of destructive hurricanes, the insurance industry is taking stock of what happened and what it can do to better brace itself for future hurricane seasons.

Risk Management Solutions (RMS) recently published "Hurricane Katrina: Profile of a Super Cat," a comprehensive look at what made Katrina a "super catastrophe" and the lessons the industry needs to take away from the storms that brought new meaning to the term "destruction."

According to the report, Katrina qualifies for "super cat" categorization because of its far-reaching impact. "Super cats are characterized by damage on a massive scale that gives rise to nonlinear loss amplification, correlation and feedback," RMS President and CEO Hemant Shah writes in the study’s forward. "These effects can increase losses to property and time element coverages, and ‘switch on’ exposure to a wider range of insured lines of business."

Katrina will cause the risk assessment segment of the industry to re-evaluate several aspects of its models. Areas to be examined post-Katrina include:

· Flood Claims. Katrina caused major flood damage in two ways: flooding in New Orleans and storm surges along the Gulf Coast. "For many of these properties, it will be important to identify the precise address level location so that the damage can be related to the different contributions of passive flooding and wave action," the report says. "This claims data is also expected to further clarify the degree to which insurers may cover some elements of flood loss when structures have sustained both wind and flood damage."

· Extreme Storm Surges. Katrina’s strong storm surge was uncharacteristically large for the strength of its winds. That leads RMS to conclude that the flood risk along the coastline is underestimated. If this is the case, not only will the National Flood Insurance Program’s zoning maps need to be updated, but the industry will have to rethink how it separated storm surge and flood losses in hurricanes. "The ambiguity of what is intended to be covered relative to what actually gets paid reflects the weaknesses of a system in which coverage is provided for only certain agents of the hurricane peril," the report says.

· Additional Lines of Business. Some lines of business that catastrophes usually do not affect, including cargo, inland marine, floating casinos and more, experienced heavy Katrina-related losses. "Risk managers may need to reexamine their exposure to these classes in more detail, and modeled losses may need to be expanded to incorporate them more explicitly," according to the report.

To access the full study, click here.

Jennifer Sikorski (jennifer.sikorski@iiaba.net) is IA’s associate editor.

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Big “I” Salutes Oxley
Veteran lawmaker will retire when current term ends.

The Big "I" this week is paying tribute to House Financial Services Committee Chairman Michael Oxley (R-Ohio), who announced he will retire from Congress at the end of his term.

Big "I" CEO Robert A. Rusbuldt, who worked with Chairman Oxley on many important pieces of legislation over the years, today hailed him as a "giant" for independent insurance agents and brokers, and the financial services industry, due to his legislative and leadership abilities, among other qualities.

"Mike Oxley is a ‘legislator’s legislator,’ which is the highest compliment you can give to a member of Congress," Rusbuldt says. "He is a leader in Congress because he possesses the rare combination of policy, legislative and political acumen to move legislation."

Charles E. Symington Jr., senior vice president for government affairs and federal relations, worked for Chairman Oxley as a Financial Services Committee staffer, and then worked with him on insurance issues after joining the Big "I."

"Chairman Oxley is a leader in every sense of the word," Symington says. "As a former committee staffer for the chairman, I can say from two distinct perspectives that he is a man of integrity, vision and great leadership qualities. People follow him because they trust him and he’s a man of his word."

Oxley, currently serving his 12th term, has been at the forefront of many important pieces of insurance and financial services legislation, including Sarbanes-Oxley, Gramm-Leach-Bliley and the Terrorism Risk Insurance Act (TRIA), and has actively worked with Subcommittee Chairman Richard Baker (R-La.) to craft the State Modernization and Regulatory Transparency (SMART) Act. His tireless work on vital insurance industry issues earned him the Big "I" Gerald Solomon Legislator of the Year Award in 2001.

Rusbuldt and Symington say Oxley crafted effective legislation because he was able to translate abstract policy ideas into concrete solutions for real people.

"He has been a tremendous leader for policyholders, independent agents and the entire insurance marketplace, from the passage of TRIA and the development of the SMART Act to issues as broad as privacy," Symington says. "Chairman Oxley has always considered the real-world implications and applications of legislation."

"Mike is not just an X-and-O kind of person," Rusbuldt says. "While he is an expert on policy, he understands that policies ultimately are about people. At the end of the day, he will always do what is in the best interest of Americans—average citizens who rely on their leaders to make the right decisions. Mike has always been grounded in reality, and he’s been an ardent advocate for Main Street America’s families and businesses."

Cliston Brown (cliston.brown@iiaba.net) is Big "I" director of public affairs/media relations.

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McGavick Makes it Official
Safeco CEO will Seek Senate Seat in Washington State.

Known to many as "the man who saved Safeco," Mike McGavick is now taking on a new challenge. On Oct. 26, he officially declared his candidacy for the United States Senate seat from Washington state, currently held by freshman Democrat Maria Cantwell.

The outgoing Safeco CEO has raised more than $800,000 to date and has toured the state to drum up support. In his press release declaring his candidacy, he pledged to hit the ground running once his work with Safeco is complete in January.

Prior to his announcement, McGavick lined up an impressive group of supporters for his exploratory committee, including former Senator Slade Gorton, whom McGavick served as chief of staff, as well as Congresswoman Cathy McMorris, former Congresswoman Jennifer Dunn and others. Big "I" CEO Robert Rusbuldt is an informal advisor to McGavick and his campaign and is part of his "Principals’ Group," which represents a cross section of people with interests in Washington state.

McGavick joined Safeco in 2001. At the time, the Seattle-based company was in need of financial stability and change. McGavick and his management team had to make tough decisions, cutting spending and focusing on the company’s core business, which ultimately saved thousands of Washington state jobs.

"Mike McGavick has demonstrated the finest kind of leadership—the ability to lead when the chips are down," Rusbuldt says. "I have no doubt that he will bring the same drive, courage and resourcefulness to the United States Senate that he brought to Safeco. Mike is a thinker and a problem solver. He will be a great senator for Washington state, and a great leader in Washington, D.C."

The politics of this Senate race are intriguing. A growing number of political observers expect it to become one of the most competitive federal races in the 2006 election cycle. Cantwell prevailed over Gorton in 2000, winning a tight election that was not officially decided until weeks after the polls closed. Although Washington state has voted Democratic in the last five presidential elections, Republicans have been very competitive in statewide races, as in the 2004 governor’s race that was not definitively settled for several months, and in the state legislature, where it has not been uncommon in recent years for one party or the other to control one or both chambers by one to three seats.

Cliston Brown (cliston.brown@iiaba.net) is Big "I" director of public affairs/media relations.

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L & H   T R E N D S
Survey Confirms Americans’ Retirement Worries

It’s not a newsflash that Americans worry about having adequate financial resources for retirement. What is surprising is just how much. According to Allstate’s recently released "Retirement Reality Check" survey, retirement concerns are second only to terrorism on the minds of Americans.

Many respondents (65%) worry about their ability to afford health care after retirement. And 58% of respondents worry about not being able to care for themselves. In a related issue, 57% were concerned about Social Security benefit reductions.

These concerns are very real. Given the cost of providing Social Security and Medicare benefits, it’s doubtful that the programs will be further expanded to meet the vast number of baby boomers heading into retirement. This means that Americans will have to look to the private sector to fill in the gaps. Independent agents are well positioned to assist their customers with developing a game plan.

Insurance companies are providing innovative products and riders that address multiple needs. For example, annuities allow retirement savings to accumulate. There are product features that allow for accelerated rate of withdrawals at certain intervals as well as nursing home riders that allow for accelerated payouts that waive surrender penalties. Another example of hybrid products are life insurance policies with a long-term care component that permits an individual to use a portion of the face value and/or cash values for eligible long-term care expenses. Of course, it’s important that agents understand the criteria that trigger payouts under hybrid policies as they can vary and customers need to be aware of the difference.

Many young heads of family focus on having adequate life insurance benefits in the event of their deaths. However, they are not ready to purchase long-term care while in their 40s. One major insurance carrier has a level term life policy that allows individuals to purchase a long-term care policy at five-year intervals with no evidence of insurability required. This approach is a good way to address this future need without a significant current expense. This product also is a win-win for agents as it gives them a reason to stay in touch with customers and a future stream of guaranteed revenue as people get older an realize the value of long-term care benefits.

Albert Einstein once said, "The most powerful force in the universe is compound interest." Keep this in mind as you help customers address their goals (and fears) early on, develop a game plan and execute it by saving for retirement and using efficient vehicles to accomplish goals. By the way, Einstein also said the hardest thing in the world to understand is the income tax. Since many investment vehicles—401(k) plans, IRAs, tax-favored life insurance—involve tax breaks, clearly explain the advantages to your customers.

Dave Evans (dave.evans@iiaba.net) is a certified financial planner and   IA l-h contributing editor.

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