APCIA role in policy advocacy, regulatory change key to industry health

The American Property Casualty Insurance Association (APCIA), representing carriers writing threequarters of the nation’s insurance, has been led by some of the industry’s heavyweight east coast luminaries. The baton of chair of the board of directors was passed to the chief executive officer of Travelers in 2022, who hands it now to the CEO of CNA who will hand it off again, in January 2027, to the CEO of Alps Property & Casualty Insurance Company, a $60 million monoline specialist carrier of legal professional liability insurance based in Missoula, Montana, population 77,000 with 360-degree views of the Rocky Mountains. 

While Alps might be small in comparison to such international carriers, David Bell, its chief, is no stranger to operating on bigger platforms. He started his career with Chubb and was previously the global chief operating officer of Allied World. He has been involved in APCIA for a number of years and has chaired its finance and investments committee. He sits on the boards of the Bank of Montana, the Missoula Montana Airport Authority and the Mansfield Center. He has served as president of the Professional Liability Underwriting Society.

Bell acknowledges the size differential but emphasises that should mean little when it comes to influencing policy and being an advocate for the industry.

“I hope to show small and mid-size insurance companies that you don’t need to be the 800-pound gorilla; you don’t have to lead the biggest insurers to lead policy,” he told APCIA Today as he transitions into the role of APCIA chair-elect at this meeting. He will become chair in January 2027. 

“Personal lines are much more susceptible to populism and politics.”

On the board to date, his voice has always weighed equal to the heavyweights, he insists. He stresses that his nomination does not mean a focus on issues specific to smaller carriers. They are already the dominant force in the organisation by number, and APCIA’s high member satisfaction readings are testament to the fact it is fulfilling their needs. They are key members for APCIA and its work could not happen without them, he said.

If Bell will admit any such bias in what he would like APCIA to focus on, it may lean against his own small-carrier niche commercial interests. Personal lines are the subject of Bell’s greatest care and concern. He said these lines end up in the spotlight more than commercial lines and have suffered more from populist and/or political-driven regulatory initiatives, which generally go against the interests of insurers.

“Personal lines are much more susceptible to populism and politics because we are all buyers,” Bell said. “Nothing creates bad regulatory policy faster than an overreaction to populist complaints about the experiences consumers are having.” 

Personal automotive has become a victim of these forces. Consumers feeling the pinch of high premiums due to claims inflation are “understandably vocal and unhappy”, quick to assume profiteering, and not easily convinced by something as hazy as a combined ratio well north of 100 percent, Bell noted. Politicians listen.

What news for tort reform?

In some other instances, Bell might appear to lean against his own interests even more directly: his clients are law firms. APCIA is a long-standing advocate for tort reform and curbs on litigation finance.

He is optimistic that further progress can be made on this front. He believes tort reform legislation is now capable of gaining bipartisan support at state and even federal levels, very often along lines set out by the APCIA. The bigger challenge is seeing proposals gradually eroded through the political process. 

“The old days of pro-business Republicans for tort reform and Democrats more influenced by the trial bar are clearly no longer the case,” Bell said. “In my observation, you cannot divide tort advocates and opponents by party any longer.”

He credits APCIA for this, at least in part. A number of tort reforms have a strong APCIA ring to them. “The professionalism of APCIA staff: I’ve never seen anything like it,” Bell said. 

He highlights the importance and impact of specific initiatives such as APCIA’s Federal Legislative Action Day, which took place this year in May. Held in Washington, DC, the day brings together P&C insurance executives—primarily CEOs and government affairs professionals—to meet with bipartisan members of the House and Senate from across the country. 

“You cannot divide tort advocates and opponents by party any longer.”

They discuss and debate the issues impacting the P&C insurance industry especially how public policy impacts insurers, policyholders, employees, and wider communities.

Bell describes the action days in Congress as “a reputation of trust” between the organisation and lawmakers. He notes that is often only where the fight begins; the road to securing real change often takes on a whack-a-mole quality. Insurers may have a winning record on crisis-driven big battles, but that is typically just the start.

“Tort reform is put in place and a crisis is addressed,” Bell said, explaining the standard routine as he sees it. “Then immediately the plaintiff bar goes to work to water it down. Eventually we get to crisis point again.”

The task ahead

As he looks forward at the coming term, followed by his own, Bell considers what his focus will be. The first two items on his list are perhaps no surprise: warding off populism-driven bad regulation and enacting curbs on third party litigation finance.

Next on his list is what he describes as “a careful defence of state-based regulatory regimes”. He stresses that the danger comes not so much from any federal attempt to take control, but more from a wider encroachment from across the policy spectrum.

“There are numerous and growing examples of policy decisions made at the federal level that encroach on territory that is and has always been under the purview of state-based regulators,” he said.

The final goal he discusses is an exploration of a national cyber insurance backstop. APCIA has been drafting what Bell believes will be a “sensible, thoughtful position” about what such a backstop would look like. It is likely to borrow from the principles of the Terrorism Risk Insurance Act (TRIA), the federal backstop for terrorism risk formed in the aftermath of  September 11, 2001. 

The concept has been discussed for a couple of years, and broadly has support from risk management and insurance industry organisations. While TRIA could serve as a basic model for a cyber backstop, many other factors such as funding and the structure of coverage still need a great deal of work.

If Bell is correct, it seems at least a chunk of the work will fall to APCIA. The noise about this will only grow louder, he said. “In six months, you will have heard a lot about it.”

For more news from the American Property Casualty Insurance Association (APCIA) click here.

Did you get value from this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.