COMMENT: Reinsurance industry discovers YouTube!

Five years after everyone else did, the reinsurance industry has discovered YouTube. Foreign reinsurers have joined the exulted company of fluffy animals doing cute things, stupid humans doing painful things, Justin Bieber doing whatever he does, and all the other random videos on YouTube.

A video produced by Swiss Re called The New Insurance Tax has been posted on YouTube to help fight a bill working through Congress that would tax the reinsurance of their US affiliates.

For almost three years, a coalition of US insurers led by WR Berkley’s Bill Berkley called the Coalition for a Domestic Insurance Industry has demanded that foreign reinsurers pay tax on ceded reinsurance from their US units. A bill sponsored by representative Richard Neal of Massachusetts would grant the coalition’s wish.

Now the Coalition For Competitive Insurance Rates is hitting back and – in a rare break from the norm for the insurance industry – it is using decidedly 21st century methods to do it. Not only does it have a website at http://www.keepinsurancecompetitive.com, it has now launched a video to help its cause. And it is not only foreign firms that are opposed to the bill. The Risk and Insurance Management Society – which represents North American risk managers – is also vehemently against it, saying it will push up costs for insurance buyers.

The two-minute video provides a simple overview of the reinsurance industry and its importance to the US market, going on to explain that the tax will reduce capacity and increase insurance pricing. It is probably as well it is simple – it is targeted at Congressional staff, not known for their deep understanding of the industry let alone for empathising with its causes.



In keeping with its spirit, here is my summary of the video: Foreign reinsurers good. Tax bad. Yay reinsurers!

To be fair it does back up its argument, stating: “HR 3424 would attack this necessary risk-sharing function by levying a new tax on these global reinsurers. But what the proposal doesn’t mention is that it would also cut insurance availability and raise the cost of your insurance. An independent expert even calculated the cost to consumers – like you and me – would be $10bn to $12bn. No wonder some of the bill’s supporters admit the bill could have unintended consequences.”

Will the video work? Who knows – it is hardly a great time for businesses with tens of billions of surplus capital to be moaning about higher taxes. But at the time of writing, the video had been viewed 11,467 times, a sign of the internet’s power in getting a message out.

One gripe I have is that comments are not allowed on the video, hardly a good way to spark debate. But this innovative approach to getting a message out should be applauded.

It is encouraging that the coalition has decided to use social media as a tool in its fight against the bill. This could be a sign that the insurance and reinsurance industry may be getting with the times.

While, I suspect I may be waiting some time before I see Bill Berkley’s response on his Facebook page, the Swiss Re video is evidence that the industry is slowly coming around to understanding how social media can help it.

Further evidence came back in April. When Willis wanted to fight back against big brokers being allowed to accept contingent commission again, something Willis ois now allowed to do but is choosing not to, it launched a blog at www.clientsbeforecontingents.com to detail its objections and give updates.

These initiatives are a heartening sign that the industry will drag itself into the 21st century and lose the perception that it is stuck using outmoded methods.

But it still has a way to go. Relatively few companies have blogs or are on Twitter – the internet’s present sensation in which updates are given in 140 characters or less.

There are some notable exceptions. For example, Guy Carpenter’s www.gccapitalideas.com, Zurich’s http://www.zurichriskdebate.com, the various Lloyd’s blogs at http://blogs.lloyds.com and Edwards Angell Palmer & Dodge’s www.insurereinsure.com are examples of regularly updated blogs with useful information, while Allianz, Munich Re America and Aon are some examples of firms that use Twitter well to get information out. In addition, industry associations such as the Insurance Information Institute and the Property Casualty Insurers Association of America also use blogs and Twitter well to inform and spark debate.

There are also some good independent industry bloggers such as reinsurance girl at www.rein4ce.co.uk/blog/ and Reinsurance Blogger at www.reinsuranceblogger.blogspot.com.

But the vast majority of the industry is silent. Many may say social media such as YouTube, Linkedin, Facebook, Twitter and blogs are fads and that they do not see any commercial use for them. They may take a glance at the millions of inane updates on Twitter and Facebook and deduce that they are mere forums for egomaniacs, self-publicists and idiots.

It is certainly true that boring people with nothing useful to say are boring in any medium, and that they now have more chance to be heard than ever. But the industry ignores social media at its peril. It is an easy and effective way for firms to get their message out, as the numbers if views of Swiss Re’s video show. While the industry may not believe it has any need for social media, the generation now starting out in their careers is accustomed to receiving and processing multitudes of information from a variety of platforms quickly. They will form the core base of customers as well as employees in the future.

The industry is its own worst enemy sometimes. It has long-bemoaned its terrible image among the public. Yet it shuns the chance to influence this perception by ignoring obvious ways to get its message out.

HYPOCRITE ALERT: It is also true that some of the insurance media have a long way to go in getting up to date with the social media. While many are active on Twitter and there are some pretty decent blogs (including our newly-launched sister site InsuranceCapitalRisk.com’s blog at http://dva.insurancecapitalrisk.com/Blogs.html ) not everyone is quite up to date yet.
This includes Reactions. We have a twitter feed www.twitter.com/reactionsnet but no blog. This is something we are looking to rectify in the next couple of weeks. Watch this space…