Contents

“You have to be involved ... When

you’re at fault, you pay. You don’t make

people sue you. Take away the incentive.

Lawyers make their money from insurers

being bad partners.”

Rick Lindsey

Prime Insurance Co.

learned he can win even in its absence, he said.

In his opinion, insurers started down a slippery

slope when they began outsourcing some claims

years ago to law firms, which then morphed into

third-party administrators.

In this century, outsourcing the work to other

countries sounds good because it’s cheap, he said,

but consumers don’t like it and it’s too easy for

claims handled remotely to go south and enter the

litigation zone.

“If you make a mistake, we should step up and

pay. We have to be involved. If you didn’t, we want

to fight. It’s as simple as that,” said Lindsey.

He likes the word “simple.” But the CEO has

been deposed more than 110 times. He’s not a

lawyer, but jokes he has spent more time in court

than most attorneys.

He shows up at trials when he doesn’t need to, a

move he said reassures nervous policyholders.

Lindsey will spend $300,000 or more to defend

what he considers frivolous litigation. He’ll take a

case to court even when it seems like the plaintiff

will win a sympathy verdict.

Prime and Mega Trucking recently won a suit

filed in Florida in which the plaintiff was thrown

from his vehicle, suffering multiple fractures,

surgeries, an above-the-knee amputation and about

$1.9 million in medical bills.

The man’s attorney sought $15 million in

damages. Lindsey said the man was speeding and

driving recklessly at an intersection while the truck

driver had video and eyewitness testimony on his side.

“First, you can’t sue if you weren’t wearing a seat

belt. But nobody enforces those laws,” said Lindsey.

In this case, he said Prime had offered the injured

man more than $500,000, a “gift they should have

taken” instead of “swinging for the fences.”

A jury agreed the plaintiff was responsible for

the accident. Because the defense won at trial,

Prime will, as usual, seek to recoup the hundreds of

thousands of dollars spent on defense costs.

Plaintiff attorneys and their clients are regularly

surprised when this happens. Lindsey says, “You have

to play the game the way the opponents play it.”

If losing plaintiffs can’t reimburse Prime’s legal

fees, Lindsey said they can head back to court and

declare bankruptcy. It happens infrequently, he said.

Lindsey said he would like the U.S. legal system

to reflect that of the United Kingdom, where the

“loser pays” legal costs for similar lawsuits. He isn’t

hopeful. However, “in any contract you have the

ability to put that wording in ... Most lawyers won’t.

It hurts their industry,” said Lindsey.

A few years ago, Prime and its policyholder, Top

Auto Express, were found liable for an accident

and ordered to pay nearly $412 million. The

policyholder, who had a single-vehicle business, had

apparently fled the country and didn’t appear in

court, said Lindsey.

Prime later satisfied the judgment with $1

million, the policy limit. It also protected Top Auto

from the remainder. “We had offered them the $1

million before the case went to trial, which is what

most truckers carry,” said Lindsey. “That’s all they

could ever get.”

Ever-increasing policy limits contribute to the

frequency of litigated claims, he said. “The first

thing a plaintiff’s lawyer wants to know is what’s the

limit. They’re going to try to create more leverage.

Lawyers aren’t nice. They want to bowl you into

settling,” he said.

“If you’re not liable you have enough coverage at

any limit. When I started, I could only sell a $3,000

limit,” he added.

BEST’S REVIEW

•

MAY 

39

of Business. “Sometimes we would plant ideas with

them. It wasn’t unusual for these reporters—after

they called us about something they wanted to

cover—to say, ‘So is there anything else going on

that would make for an interesting piece?’

“You never hear that anymore because it’s not

their beat.”

The Rolodex may have practically disappeared,

but an insurer’s ability to get its message out has not.

Instead, modes of communication have changed,

evolved and diversified in recent years. Notably, there

are more “thought leaders” in the industry now than

there were decades ago, distributing their ideas through

social media and trade publications. Insurers also no

longer have to rely on traditional media to channel

their concepts; now they’re using blogs, videos and

podcasts to dispense information unfiltered and uncut.

Thought Leadership

In the past, large daily newspapers often had a

beat reporter dedicated to writing about the business

of insurance. Insurance leaders are now putting out

BEST’S REVIEW

•

MAY 

41

Insurance Mediasphere

She said trade publications dive deeper into the

business and risk, and they look at the industry in

ways traditional media doesn’t. They also effectively

use social media, particularly LinkedIn, and other

innovative methods as effective vehicles to get their

message out.

“They’re all innovating with podcasts, video.

They have their own awards. They have events.

They’re really part of the insurance community,”

Jarecki said. “I think the trades do a great job

showcasing the work the industry does, showcasing

the interesting people and how they make a

difference in managing some of the greatest

challenges facing our world.”

Part of the innovation is trade publications being

more open to accepting columns from the industry’s

leaders than before, said Jarecki.

Best’s Review

, published

by AM Best, a global credit rating agency, news

publisher and data analytics provider specializing in the

insurance industry, is one of the industry publications

that accepts columns from industry leaders.

Russ Banham, a former executive editor at

The

Journal of Commerce

who now writes as a freelancer

for a number of trade publications, said he finds the

Although More Faint, the Insurance Beat Goes On

T

here was once a time when the traditional

insurance media would go beyond the breaking

news stories to cover the insurance industry.

Long before the advent of social media, blogs and

podcasts, there were beat reporters at many news

organizations who would regularly provide in-depth

coverage of the industry and get the details behind a

big story.

Those stories weren’t all consumer-focused, either,

as they commonly are now. Nor did insurers have

to compete for coverage against the emerging tech

sector and other industries.

“I might talk about this and discuss how

modeling might help insurers better understand

risk and produce rates that are more accurate, and

maybe help reduce the number of insolvencies in the

industry,” said Robert Hartwig, who currently serves

as director of the Risk and Uncertainty Management

Center at the University of South Carolina’s Darla

Moore School of Business.

Hartwig recalled how, when he was in a leadership

position at the Insurance Information Institute, he

would rely on the media’s help when he found himself

locked in a battle with trial lawyers who claimed

insurers were using loopholes to avoid paying a large

number of claims after major disasters.

“What I was able to do was a survey of all of

our member companies to get a sense of how many

claims had been filed, how many had been closed,

how many were in the process of being paid and how

many were in dispute,” said Hartwig. “I was then able

to provide that to the insurance beat reporters, all of

whom knew me and knew I was credible. It was solid

information coming from a solid source. They were

willing to sit and talk with me about that, and then

they would go ahead and publish it, and it would

become part of the narrative.”

For his part, Hartwig said he would routinely

speak with the

New York Times

,

Wall Street Journal

,

Los Angeles Times

,

Chicago Tribune

,

Hartford

Courant

,

Miami Herald

,

New Orleans

Times-

Picayune

and many others. Many of those daily

newspapers had beat reporters dedicated to covering

insurance.

“Someone who might have been a coveted interview

back in those days would’ve been [Maurice R. ‘Hank’]

Greenberg in his glory days at AIG. He was selective

in granting interviews and access to his inner chamber.

That would’ve been considered an incredible get, even

if you were the

Wall Street Journal

or the

New York

Times

or

Forbes

or

Fortune

,” Hartwig said.

There are some exceptions to the rule. For its

part, the

Wall Street Journal

remains dedicated to

the insurance beat. Leslie Scism retired last summer

after covering the industry for 30 years, but Jean

Eaglesham has since picked up insurance coverage

for the paper.

Chris Sharkey, associate director of public

relations for AM Best, said he’s seen some

publications bring back insurance-focused reporters

as some news events that heavily impact insurance,

such as climate change, grab headlines.

“That said, we still work with some folks who are

new to insurance—perhaps a general reporter and their

editor put an assignment in their lap that morning—

and so in speaking to the specific issues that they are

covering, we also try to educate them,” he said.

BEST’S REVIEW

•

MAY 

43

Insurance-Focused Podcasts

A growing number of podcasts have popped up in recent

years to offer insights into the insurance industry.

Age of IndiependenceThe Enlightened AgentThe Insurance Podcast

Agency FreedomFix My Insurance AgencyInsurance Pro Blog Podcast

Agency IntelligenceFNO: InsureTech PodcastInsurance Refocused

Agency Nation RadioiCANVoiceInsurance Uncut

Agent Survival Guide PodcastInsTech - Insurance & Innovation With Matthew GrantIt’s Not Just Insurance

Alliant Specialty PodcastsThe Insurance Broker PodcastLife Insurance Academy Podcast

AM Best Audio PodcastThe Insurance BuzzMcKinsey on Insurance

Awkward InsuranceInsurance Coee House PodcastNAMIC Insurance Uncovered Podcast

Behind the Headlines (with Sam Casey)Insurance CoveredProfiles in Risk

Best’s Insurance Law PodcastThe Insurance Dudes PodcastReinventing Insurance

Blog - Insurance Exam Audio LessonsThe Insurance Guys PodcastVertafore Insurance Podcast

Connected Insurance PodcastInsurance Journal PodcastThe Voice of Insurance

Digital Insurance PintInsurance MattersZalma on Insurance

Doing Insurance Right!Insurance for the New PossibleZurich Insurance Podcast

The newest emerging media comes in the form of

podcasts, he said.

“The popularity of podcasts speaks to the

preferences in the way people want to consume

media these days,” Sharkey said. “A podcast is

something you can dip in and out of. People

seem to be more in tune with audio and visual

than they are with print these days. It’s a little

more informal. You get more plain English,

real-speak out of people, and I like that about

podcasts.”

“Podcasts can be particularly useful for business

leaders because they offer the opportunity

to communicate directly with stakeholders,”

according to the

Opportunity in Complexity in a

Post AI World

report. “While cuts may be made for

length, leaders can speak in their own words rather

than be paraphrased or edited into a narrative not

of their own making.”

Sharkey said AM Best is looking to add more

podcasts as part of its media program, which

provides participating publishers and podcasters

access to the company’s industry-standard news,

research, credit reports, ratings and data. It

makes the job of writing about insurance easier

for members of the media, including those who

sometimes may be assigned the story as one of a

number of items to do that day.

“It’s easy things they can put into their story to

amplify, to add some meat,” Sharkey said. “We’re a

valuable source for media covering insurance and

with the media program, we have more people able

to get to our data and information.”

The Future

Ironically, Sharkey said the mainstream media has

dipped its toes back into consumer-focused coverage

of the insurance industry, but it’s largely done so in

reaction to global news events and trends.

One reason is the impact of climate risks on

insurance. Those in the industry note the traditional

media’s interest in insurance spikes when there is

big news, such as 9/11 and the debate about the

Affordable Care Act. Climate change and its impact

on property/casualty insurance could be one of

those moments, as stories have begun to appear in

newspapers and on TV and radio.

This is happening in Florida, home to many

climate catastrophes, where Mark Friedlander,

director of corporate communications for the

Insurance Information Institute, said the NBC

affiliate in West Palm Beach has a reporter who

covers insurance virtually every day of the week.

Additionally, the

Sun Sentinel

in southern Florida

has a business reporter focusing on property and

health insurance, among other topics. Friedlander

BEST’S REVIEW

•

MAY 

45