Back to the Insurance Future: What Marty McFly Saw in 2015

October 28, 2015 by Christopher J. Boggs / Academy Journal Blog

According to my history book (or “future” book), well, at least the history taught by the movies, Marty McFly landed in Hill Valley today after skipping over the last 30 years. If you see him, compare notes with him regarding the insurance industry and what has changed since 1985.

My bet is Marty will recognize some parts of the industry, but there is probably a lot in the insurance industry he doesn’t recognize. Here are a few things that are different (or even the same) compared to 30 years ago:

• The night he left, Insurance Services Office (ISO) was in the process of releasing its first major forms revision since 1973 (when Marty was just about 5) – the 11/85 edition.
• Although he wasn’t around when the 11/85 edition of the forms was released, he would be AMAZED to discover that contracts are still asking for the 11/85 edition of the CG 20 10 Additional Insured Even he would say, “Come on, Doc.”
• Speaking of ISO, I’m quite sure Marty would be shocked at how different it is compared to 1985. It is no longer the forms, rules and rate bureau it was initially intended to be. Thirty years later it’s a publicly traded data behemoth known as Verisk with its hands in a wide variety of pots.
• The CPCU designation is no longer a 10-part designation, all essay exams, with two exam dates a year (in January and June). Now it’s an eight-part designation with four exam windows a year. Most exams are multiple choice and the student can choose a personal lines or commercial lines track.
• Several national carriers with which Marty was well-acquainted no longer exist: Royal, USF&G, St. Paul, Aetna (P&C), and Kemper (but parts of it have made a comeback).
• The Kemper Open golf tournament (with the Kemper Cavalry) is no longer played.
• The number of banks (regional and national) now in the insurance business. (Marty completely missed the time when CitiGroup owned and used the Traveler’s Umbrella.)
• Lloyd’s of London now allows corporations rather than just individuals to participate.
• Insurance rates based on a person’s credit score.
• Underwriting based on computer models versus underwriter knowledge and training.
• Contracts stating that the lower tier’s insurance is to be primary and the upper tier’s policy will not have to contribute to a loss (“primary and noncontributory” language).
• That drones rather than flying cars would create an insurance coverage issue (and that the FAA would be so stumped by how to manage the issue).
• The increased awareness of and need for EPLI coverage in the wake of the Anita Hill / Clarence Thomas controversy.
• The ability to get an auto quote online – and “save hundreds.”
• The Insurance Journal was just a west coast magazine and National Underwriter was the big dog. And now….
• Mandatory CE killed quality insurance education. And online CE drove the stake through its heart.
• SEMCI (Single Entry Multiple Company Interface) is still being discussed.
• Agents no longer have to complete glass coverage applications (and measure each pane) to garner glass coverage.
• Hank Greenberg is no longer in charge of AIG. (Unfortunately, or fortunately, Marty never saw the rise and eventual self-destruction of Eliot Spitzer.)
• GEICO is no longer only for government employees (and they have a lizard as a spokesmodel).
• Strangers will actually let you ride in their private vehicle – for a fee – without you holding out your thumb. And insurance protection is being debated.
• Underwriters and fraud investigators use Facebook to assess insureds and claimants. Insureds and claimants put stupid stuff on social media.
• Underwriters use insured’s website information to underwrite the risk.
• The NFIP is $24 billion in debt – and rates are still subsidized.
• Agents have to disclose their commission (Spitzer again), explain terrorism coverage (and get the form signed), and name everyone including their third cousin as Additional Insureds on a policy.
• Cyberattacks and the insurance protection necessary is a hot topic that few seem ready to tackle.

Originally Posted at Insurance Journal on October 21, 2015 by Christopher J. Boggs / Academy Journal Blog.