NAIC Pres. Csiszar Slams Industry Education Efforts

By Mark E. Ruquet

NU Online News Service, Jan. 22, 9:54 a.m.EST?Reacting to a consumer poll that found a lack ofknowledge about insurance, the head of a regulators' group, in aninterview, castigated the industry for failing to better educatethe public.[@@]

Ernst Csiszar, president of the National Association ofInsurance Commissioners, said that populist sentiment easilyattacks the insurance industry, making it "the container of allevil in the world, and that just tells you that the industry, theagents and the regulators have done a lousy job over the years interms of getting the public to understand the value of havinginsurance in the first place."

The insurance industry, he said, needs to overcome consumers'perception that coverage is a necessary evil and do more to educatethe consuming public about the insurance they buy.

"Clearly, I think it is evident that all of us can do a betterjob [educating the public about insurance]," said Mr. Csiszar, whois South Carolina insurance commissioner as well as NAICpresident.

Mr. Csiszar's remarks to the National Underwriter cameas Kansas City-based NAIC's "Get Smart About Insurance Week" wasunder way. The week is dedicated to making consumers aware of thevalue insurance has in their lives.

A telephone survey of 1,009 adults, conducted by OCRInternational, asked a range of questions about the various typesof insurance coverage they may have including home, auto, personalliability, disability, life, health and others.

Of those surveyed, 72 percent said they felt they had the rightamount of coverage, a five percentage point increase over lastyear, but only 33 percent said they understand the details of theircoverage "very well."

Only 20 percent of younger adults, between the ages of 18 to 24,said they understood their insurance "very well," compared to 45percent of older customers, ages 65 and up. The NAIC noted that theoverall percentage of adults who understand insurance "very well'has remained constant over the past two years.

Agents, Mr. Csiszar said, need to continue doing what they havebeen doing, becoming more involved in the customer's financialdecision-making process by offering a broad range of financialanswers as their customer's needs change. They also need to getconsumers to reevaluate their insurance needs, something consumers"are not accustomed to thinking about," Mr. Csiszar added.

"It is not a change that is going to happen overnight," he said,citing banking as an example of an industry that has changed itsperception among the buying public from being despised towelcomed.

"People may not like the one-dollar fee they pay, but theyunderstand the value of getting a loan, he said."

Jeffrey A. Myers, vice president of communications for theIndependent Insurance Agents & Brokers of America based inAlexandria, Va., said agents continue to work to educate consumersabout insurance, but consumers also expect agents to help them makethose decisions.

"What agents can take from this [survey] is that they have arole to play in the continuing education of the consumer," said Mr.Myers. "The bottom line, however, is that the average person justdoesn't understand insurance, and it is going to take a concertedeffort of the entire industry to continue to reach out and educateconsumers."

In the busy world of today, he noted, many people simply don'thave the time to become savvy about their insurance coveragebecause "they are stretched in many different directions."

"Our own studies have shown that consumers want an agent to helpthem with that process," he said. "But they can become more savvyby learning about the business. A smart consumer is the bestconsumer to work with."