Setting the Record Straight

It’s a cold day in Miami, one of the few we enjoy each season before our neighborhoods warm up. This morning, The Miami Herald’s headline proclaimed “Baby It’s Cold Outside!” Our temperature at 8 a.m. was 53 degrees. OK, stop laughing. With my apology to the meteorologists, cold is relative and looking for the family sweater is one of my favorite winter sports.

When I was a kid growing up in Havana, we had two dogs in our family, Bonky and Hopalong Cassidy. They were both Cocker Spaniels with long shaggy black hair. On the rare winter days that a cold front managed to reach Cuba—less frequently than here in Miami—we would slap doggy sweaters on Bonky and Hoppy the moment the thermometer dipped below 60 degrees. Think about this: those were probably the only days of the year that the poor dogs were comfortable, temperature wise, and on went the sweaters! I have great guilt mixed with trepidation that at the Pearly Gates, to my detriment, St. Peter and a representative from the ASPCA will bring up this painful memory.

So what do all this exaggeration, hyperbole and disproportional response have to do with our business? If you are a frequent observer of the daily national news, it is practically impossible to come to any conclusion other than that some of our industry does a terrible job taking care of its clients when losses occur. Stories purporting to be news from the Gulf region of the United States suggest that a large number of insureds hurt by Hurricane Katrina have not been paid or have been underpaid and are suing their insurance companies. The facts are otherwise. The Insurance Information Institute indicates that fully 95% of Katrina claims have been closed and only 2% are in dispute! Surprising, isn’t it?

One of the greatest tragedies to befall this nation occurred Sept.11, 2001. There are thousands of articles about the events preceding, during and after that fateful day. One story that I have yet to read is how the insurance industry met and fulfilled practically every single obligation it had to its insureds who suffered losses. The insurance industry made a promise and kept it! However, in the din of heroic tales, tragedies and conspiracy theories, this one does not seem to merit any ink.

All of this misinformation and lack of information portends badly for us. Public opinion is galvanizing against a financial mechanism that overwhelmingly works well for America. By logical progression, those who wish us ill, desire radical reform or simply want to punish insurance companies are emboldened to seek measures that under normal circumstances better angels would reject.

I am truly perplexed that our industry and, more precisely, our company partners, do not invest the necessary resources to set the record straight and tell the real insurance stories. The stakes are too high to simply stand idly by and let others broadcast untruths. A lie that is repeated and unchallenged eventually is accepted as having veracity and, thus, can do a lot of harm. We should have a cadre of trained and articulate industry representatives, armed with facts, who continually rebut falsehoods and hyperboles in the press and other public venues.

Like any other industry, we have made our share of mistakes. But, when we do, we take corrective action and try not to repeat them. However, this unrelenting and pernicious attack on the insurance industry is neither bal¬anced nor fair. It lacks perspective and proportionality—and it will not stop until we vigorously defend ourselves. If we don’t, the injuries from recrimination shall be considerably more painful than sweater-ing two Cocker Spaniels in mild weather.

Bonky and Hopalong Cassidy, I truly apologize!

Alex Soto
President