SETTING THE COURSE

New PLUS president outlines priorities

The theme of this year’s 17th Annual Professional Liability Underwriting Society International Conference to be held next month in San Diego is: And Now for Something Completely Different...? As conference themes go, this one is unusual to say the least. Sean Fitzpatrick, incoming president of PLUS and this year’s conference chair, refers to the theme as “a bit of ironic license that we hope will spur critical thinking about the state of the professional liability insurance industry as we embark on a new market cycle.” Asks Fitzpatrick: “Have we learned from the lessons of the past? Or, are we destined to repeat the more unfortunate aspects of the last soft market?”

“We have to work collectively to educate the investment community so that they will understand that growth at the expense of sound underwriting is self-defeating.” —Sean Fitzpatrick Incoming PLUS President

Fitzpatrick is a senior vice president and special counsel for Chubb & Son and manages Chubb’s Simsbury, Connecticut, office. Prior to assuming his current responsibilities in 2003, Fitzpatrick was chief underwriting officer of Chubb Executive Risk, the company’s executive and professional liability division, which was formed through the merger of Executive Risk Inc., acquired by Chubb in 1999, with Chubb’s Executive Protection practice. Fitzpatrick also serves as a lecturer at the University of Connecticut School of Law, where he teaches courses in professional liability law and insurance.

“I am pleased to report that PLUS is doing wonderfully,” says Fitzpatrick. “Attendance at our annual is expected to be at an all-time high, as has attendance at our seminars this year. PLUS is financially strong and the ongoing support we receive from our members is tremendous. Our strategic planning approach allows us to maintain initiatives through successive presidential administrations.”

He continues, “We don’t anticipate any major changes, but we do plan to improve on some of our existing programs.” For example, PLUS is planning to take a more comprehensive approach to its RPLU program. “We want the RPLU to become a complete learning approach, providing value to entry level industry people right on up to those at the expert level. We have not yet done the job we want to do with entry level people. We want the RPLU program to be one that members, at any point in their careers, will find useful. Then, we want to take a look at new technologies, to take the RPLU program to our members where and when they want it. There are many who are attracted to the economic efficiencies of online RPLU classes. Still others prefer the classroom approach. We want to be able to accommodate all our members.”

Fitzpatrick says that one of his priorities in the coming year will be to “build bridges” to other organizations—other associations where there is a commonality of interest—and other industries. Most particularly, he says, PLUS must communicate with the investment community. “When you consider developments such as Enron and other corporate scandals, it is reasonable to assume that those in the investment community want to know more about the insurance component in these problems,” says Fitzpatrick.

Another priority for the incoming PLUS president is the continuing development of local chapters, which he says are the primary point of contact with many PLUS members. “We want to empower our chapters with the task of raising PLUS’s profile in local communities through educational programs, seminars and just plain networking,” he says. “I predict our chapters will loom large over the next couple of years.”

Moreover, Fitzpatrick says that the PLUS concept has spread outside the United States. “Of course, we have already had dealings with insurance people both in London and Canada in the last few years,” says Fitzpatrick. “But, there’s more to come. The concept of professional liability is spreading throughout the world. Bermuda recently had its first professional liability symposium, which was a huge success. I think that a formal PLUS chapter in Bermuda is not far off. Bermuda is no longer merely a captive insurance market. Since 9/11, there has been a considerable amount of traditional insurance capacity that has found a home there.”

Commenting on what many perceive as a softening of the property and casualty insurance marketplace, Fitzpatrick says that he is not surprised that the last hard market didn’t last as long as the one in the 1980s. “Capital is more mobile now than it was in the 1980s. In the hard market of the 1980s, there was a strong movement towards captives. We have not seen that wholesale move towards captives during the last hard market. In fact, immediately following 9/11, we immediately began to see the eventuality of the new soft market even before it began. Moreover, the new capacity that has come into the Bermuda market is a good deal more experienced than in years past.”

Nevertheless, there is always a danger that a new soft market will cause underwriters to compete more aggressively than is prudent, especially if there is pressure from the investment community, according to Fitzpatrick. “Of course, when the investment community looks at the insurance industry, they usually think in terms of growth. But we have to work collectively to educate the investment community so that they will understand that growth at the expense of sound underwriting is self-defeating. We have to look towards long-term profitability. Sound underwriting sometimes consists of being able and willing to say no.”

Fitzpatrick says that he is extremely excited about next month’s annual PLUS conference. “We want to challenge our membership to think—think about all the variables that affect our industry and about possible solutions. Also, we want to have the eyes to see ourselves as others see us. In the past, we have opened our conference with a panel of insurance industry CEOs who would give an overview of how our industry had progressed during the previous year. But this year, we’re doing something different. We are opening the conference with a panel of well-known professionals who are not in the insurance business but who routinely deal with the insurance industry. Panelists will include John Garamendi, insurance commissioner of California, and Leandro S. Galban, Jr., a well-known analyst. The panel will be headed by Tom Baker of the University of Connecticut School of Law. This panel will enable PLUS membership to get a feel for how others perceive us.”

In addition, Fitzpatrick says that the PLUS agenda covers many current and emerging topics in professional liability, and the sessions will be aligned into topical “tracks” to allow membership to attend all related panels without experiencing session time conflicts. Among the tracks included in this year’s program are the E&O Track, the D&O track, and the Something Completely Different Track. And, “For Something Completely Different...?”, the conference keynote address will feature actor/comedian John Cleese.

As in the past, PLUS has arranged for the availability of insurance and legal continuing education credits for three segments of the conference. Information on these segments will be contained in the PLUS program to be handed out at the meeting. *