1. Presentation to PAMIC/VAMIC/WVAIC Combined Convention Presentation on “Public Attitudes and Media Environment Facing Key Issues in the Insurance Industry” Nemacolin Woodlands Resort, Pennsylvania August 5, 2008 Jeanne M. Salvatore Senior Vice President, Public Affairs Insurance Information Institute 212-346-5555 Jeannes@iii.org www.iiii.org

2. Presentation Outline I. I.I.I.’s Key Communications Initiatives II. Media Coverage of Key Insurance Issues III. Public Attitudes IV. Resources

3. I.Key Communications Initiatives for the I.I.I. I.Consumer Education II.Key Issues III.Disaster Communications IV.Special Projects

4. I.Key Communications Initiatives for the I.I.I. I.Consumer Education  What Individuals and Business Owners Need to Know About Insurance - What it is how? - How it works - What coverage should be purchased?

6. I.Key Communications Initiatives for the I.I.I. II.Key Issues  Attacks on the Integrity of the Claims Process  Challenges to Underwriting Criteria and Predictive Modeling Systems  Climate Change  Florida-Related Issues  Impact of Fraud on the Insurance Market  Natural Disasters and the Cost and Availability of Coverage  Industry Financial Performance and Market Conditions  Rapid Response to High Profile Critics  Regulatory Modernization  Terrorism and Insurance

7. I. Key Communications Initiatives for the I.I.I. III. Disaster Communications  Disaster Preparedness  Post-Disaster Consumer Communications  Litigation Public Relations

8. 2008 DISASTER PREPAREDNESS ACTIVITIES KEY DISASTER PREPAREDNESS MESSAGES  The importance of purchasing the right type of insurance, including flood insurance and the right amount of insurance coverage to reflect current rebuilding costs.  Taking a home inventory, including the use of the I.I.I.’s free “Know Your Stuff” home inventory software.  Developing a home evacuation plan.  Implementing simple mitigation measures that homeowners and businesses can take to reduce the extent of storm damage.  Utilize preparedness findings of Insurance Pulse in media materials.

10. I. Key Communications Initiatives for the I.I.I. V. Special Initiatives  Corporate Social Responsibility  Diverse Markets

13. II.Media Coverage of Key Insurance Issues Media Focused on the Economy  Tone of the national insurance scene has changed and shifted over the past year— relatively sedate compared with 2007  State of the national economy has been the media focus, with additional focus on the election  State of the economy is affecting news coverage of the insurance industry, public attitudes and the industry’s financial performance

14. TOP ISSUES, JANUARY – JUNE 2007 VS. JANUARY – JUNE 2008 RankTop Issues20072008% increase/decrease 1Hurricanes8,32910,30724% 2Bond Insurance4,4739,392110% 3Market Conditions7,0986,391-10% 4Workers Comp3,8503,9703% 5Asbestos3,6653,294-10% 6Auto3,0352,793-8% 7Silica1,6962,28735% 8Tornadoes1,6412,23336% 9Homeowners3,3722,116-37% 10Investigations3,4961,981-43% 11Global Warming/Climate Change2,1411,395-35% 12Medical Malpractice1,1561,37319% 13Terrorism1,2441,168-6% 14Tort729625-14% 15Wildfires34346034% 16Mold277233-16% 17Credit Scoring12023092% 18CLUE2211-50% TOTAL46,68750,259+8% Source: Lexis/Nexis searches. Coverage of insurance issues would have fallen were it not for bond (monoline) insurer coverage

15. MEDIA INDEX: LIFE INSURANCE ISSUES FIRST HALF 2007 vs. FIRST HALF 2008* (percent increase/decrease) *First Half estimate based on data as of June 15, 2008. Source: Lexis/Nexis search.

16. HURRICANE MEDIA HITS, 2005-2008 Katrina litigation- related stories are falling rapidly

17. MEDIA INDEX TOPIC SHARE BY MEDIASIGNAL (1), YEAR TO DATE (1) MediaSignal is Biz 360's impact metric for measuring reach. It adjusts the impression count for each article by how prominently a subject is featured. Source: Biz360 Media Monitor.

18. MEDIA PENETRATION 10 YEAR HISTORY I.I.I. Print media hits are up 73% since 2000, representing average annual growth of 9% Top 100 hits are up 96% since 2000, a 8% avg. annual increase * Annual estimate, based on data as of June 20, 2008. Source: Factiva search. Traditional media is in a freefall

19. Media Coverage of Insurers Reasons for Decline in Coverage  Main First Quarter Issue Affected Bond Insurers  Referrals made to their association  Decline of Traditional Media  Few print pages in newspapers and magazines  Fewer Insurance “Beat” Reporters  Example: Joe Treaster at the New York Times has not been replaced  Less Pure Factual Reporting  Several long-time wire service reporters were let go  Stories weren’t critical enough of the industry (along the lines of the Insurance Hoax in Bloomberg). Another was told their stories need to be “market moving”

23. I.I.I. PUBLIC ATTITUDES KEY FINDINGS 2008: INSURANCE PULSE  Four out of seven industries, including auto and home insurers, recorded double-digit declines in favorability.  Auto and home insurance industry favorability fell 12 points from 57 percent in 2007 to 45 percent in 2008.  Despite stable auto insurance rates, the percentage of those surveyed who said that auto insurance is a financial burden rose four points to 60 percent.  Surveyed separately, 41 percent viewed auto insurers favorably and 37 percent viewed home insurers favorably.  Seven out of ten people think the economic downturn will have an impact on the ability of insurance companies to pay claims and sell insurance.

24. Nearly 3 in 4 Americans believe that the economic downturn has adversely affected the insurance industry Source: Insurance Information Institute, 2008 Pulse Survey, May 2008. HAS THE INSURANCE INDUSTRY BEEN AFFECTED BY THE DOWNTURN IN THE ECONOMY? INSURANCE PULSE

25. Source: Insurance Information Institute, 2008 Pulse Survey, May 2008. HOW WILL US ECONOMIC/FINANCIAL PROBLEMS AFFECT INSURERS? 78% of those polled believe that the recent national economic and financial conditions harm insurers’ ability to pay claims INSURANCE PULSE

26. Source: Insurance Information Institute, 2008 Pulse Survey, May 2008. HOW IMPORTANT IS THE FINANCIAL STRENGTH OF YOUR INSURANCE COMPANY? 78% of those polled believe that an insurer’s financial strength is “Extremely” or “Very” important INSURANCE PULSE

27. Source: Insurance Information Institute, 2008 Pulse Survey, May 2008. WHAT IS THE MOST IMPORTANT QUALITY TO YOU WHEN YOU CHOOSE AND INSURER? Americans are nearly equally divided between price, service and financial strength when it comes to the most important quality of their insurer INSURANCE PULSE

28. KEY FINDINGS 2008: DISASTER PREPAREDNESS  Only one-half of Americans think their homeowners coverage is sufficient to rebuild their homes.  About seven out of ten homeowners who made improvements to their homes told their insurance company about them.  The majority of Americans (74 percent) think that they are primarily responsible for making sure that their home is adequately insured.

29. DISASTER PREPAREDNESS: KEY FINDINGS 2008  Only 24 percent of Americans have taken steps to protect their home from a natural disaster.  Sixty percent of Americans would pay more for a home built to withstand a natural disaster, compared with 46 percent a year ago.  Only 17 percent of Americans have a flood insurance policy.  Twenty-seven percent of the public believe their homeowners policy covers damage from flooding during a hurricane, down from 35 percent a year ago. INSURANCE PULSE

30. I.I.I. Resources  White papers  Extensive database  Brochures  Software  Support to the State Insurance Trades  Members-only Website

31. Version 3.0 just released  Handles larger files and images  Third-party secure online storage  Streamlined set-up process

33. Disaster Insurance Information  Preparedness information covering hurricanes, tornadoes, earthquakes, floods, wildfires and terrorism Evacuation video http://www.iii.org/static/video/mediaplayer/evacuation.wmv

35. Insurance Information Institute On-Line If you would like a copy of this presentation, please give me your business card with e-mail address