When the countdown ends on 2009, it also brings an end to the first decade of the new millennium. It’s hard to believe how much our world has changed in those 10 short years, from global terrorism (still happening) to the financial meltdown to the ascendancy of the Internet. Let’s look at just a few:

Everything tech. Yes, the Internet was around at the turn of the century, but it wasn’t as ubiquitous as it is now. Since then, a whole generation has grown up with this technology, and that generation is our future employees and customers. While all this has made our lives a lot easier, it’s also phased out a lot of what we were confortable with and raised the bar on customer expectations. A mixed blessing, to say the least.

A world of new risks. The world is smaller, and the risks you underwrite are not like anything that’s been insured before. Acts of terrorism, environmental exposures, professional liability related to new technology standards and expectations — they’re all in the mix, with new risks coming at us every day. The challenge for our industry will be to keep one step ahead of anything new that comes along.

A bigger, smaller agency universe. The agency/brokerage M&A boom may have slowed to a trickle, but the activity of the past 10 years has altered the landscape forever. Big brokerages have gotten bigger by increasingly targeting the midmarket customers that have long been the bread and butter of the average agency. Conversely, the latest IIABA Agency Universe numbers suggest that smaller, startup agencies are on the rise, thanks in large part to the availability of sophisticated automation systems that allow them to compete with bigger players.

More eyes on the industry. Public/political scrutiny of the insurance industry is nothing new, but the seismic financial upheavals of the past 10 years — from the Enron fiasco in 2002 to last year’s subprime mortgage meltdown and AIG bailout and current healthcare debate — have put this most risk-averse industry in the spotlight more than ever before.

And while nobody can predict what the next 10 years will bring, it’s a safe bet that the trends we saw begin at the dawn of the century will continue to play a significant role going forward. And while 2009 was a good year in that we dodged a lot of bullets — from natural disasters to truly bad legislation — it’s inevitable that we’ll stand to take a hit from these and other problems in the future.

What were your biggest concerns in 2009, and what do you predict will dominate the headlines in 2010?

Last June, AA&B took an in-depth look at insurers and agents who were specializing in “green” insurance coverage. Our sources spoke glowingly of the potential for growth in green construction, especially in the area of retrofitting existing buildings — a topic covered in a current Web exclusive article on the subject.

Supporters maintain that adopting green building methods and materials will create a “green collar” job transformation in the U.S.  The latest figures from the USGBC in a “Green Jobs Study” conducted by Booz Allen suggests that green building will support or create 7.9 million jobs between now and 2013. And in certain areas of the country, it seems to be working. One independent study shows California green jobs grew 36 percent from 1995 to 2008.

But President Obama’s campaign promises to create 5 million new green jobs and put the U.S. in the forefront of renewable energy production have failed to materialize. Ironically, China, which for years has been reviled for its profligate use of nonrenewable energy, is now the world leader in the production of off-grid wind turbine generators, according to a recent article in EcoWorld.com.

According to a recent article in Fast Company magazine, there is terrific potential for green job growth in these areas:

• Farmers
• Foresters
• Solar power installers
• Energy efficient builders
• Wind turbine fabricators
• Conservation biologists
• Green entrepreneurs
• Recyclers
• Sustainability systems developers
• Urban planners

This list is inclusive enough to accommodate all levels of workers, from MBAs to retrained blue-collar people.

Nobody should be cheering green jobs more than the insurance industry. With the manufacturing and construction industries struggling to find a place in the “new normal” economy, a burst of new activity in the green jobs area could pull these and other industries out of the doldrums.

But as the California example indicates, it takes more than hope to build the new green collar middle class American worker. Green is “gold” in California in large part because of state and municipal rules mandating green compliance. Like any fledgling industry, green jobs need some government incentive to get off the ground. As long as it’s cheaper to keep doing things the old way, the green promise will remain just that. In China, the government subsidizes wind power, knowing the young industry won’t be self-sustaining for years, but willing to make the investment. It seems if we really want to dig ourselves out of our current economic malaise, our country would be better served by a government that’s willing to invest in the future instead of propping up relics from the past.

Last week I had the privilege of seeing independent agents in action at the Big “I” annual legislative conference and convention in Washington, D.C. — an event that, unlike the recent RIMS conference, was well attended in spite of pinched travel budgets and the growing swine flu threat (yes, there were a few travelers in medical masks at O’Hare Airport). 

Despite the pleasant weather, cherry trees in bloom, and the perennial chaperoned groups of middle-schoolers on class field trips, this D.C. meeting is no junket. Agents who take time away from their businesses to come to this event are committed to getting their POVs known and understood by their representatives in Washington.

I was graciously invited to tag along on some of the Hill visits by the boys (mostly) from Illinois, led by IIA of Illinois President-elect Luke Praxmarer of the Corkill Insurance agency in Elk Grove Village (you couldn’t miss his psychedelic tie).

Luke and his group weren’t there to see the cherry blossoms. Their schedule started at 10 a.m. in the offices of Illinois Congressman Timothy Johnson, and ended well after 6 p.m. with Illinois Sen. Roland Burris (Barack Obama’s replacement, who was appointed by erstwhile Illinois Gov. Rod Blagojevich). I went along for the last two appointments.

At the Hart Building offices of Sen. Dick Durbin, the Illinois contingent of more than 50 agents was so big that the staff couldn’t accommodate them in a conference room, so they met with Durbin’s legislative assistant in the hallway. (As a member of the press, I wasn’t allowed to eavesdrop.)

Later, at Burris’s offices in the venerable Russell Building, where we were told a young Sen. John Kennedy once had his digs, the dapper senator reverted to his political roots and “worked the crowd,” speaking with individual agents about their hometown alliances (I was allowed to sit in on this one).

Ill. Sen. Roland Burris (seated at center) gets a briefing on insurance issues from members of the Illinois Big I.

Over and over, Luke and Illinois agents Mike Wojcik, Tom Mollenhauer and others pounded home the independent agency position on three key issues: federal regulation, agent licensing and healthcare reform. They were both skillful and diplomatic, stressing their knowledge of the subject and how it affects both independent agents and consumers.

Between meetings, and later at the Big I exhibit hall, agents told me that legislator response to these issues could be uneven; some lawmakers were adamant that a form of federal regulation was imminent, while others denied it. Most agreed that Obama’s campaign promise of healthcare reform was a certain deliverable (the latest permutation would expand the federal Medicare program to include the uninsured), and NARAB II, which easily passed through the House last year, seemed to be a shoo-in.

On the whole, the Illinois agents and others at the convention said the politicians they spoke with are playing their cards pretty close to the vest — and it’s understandable why. Their constituents have been burned hard by the Wall Street debacle and are leery about any proposals that might smack of supporting big business. The Illinois agents at our Capitol Hill meetings made it clear that they’re not AIG asking for a bailout: they and their customers are in fact the Main Street America that legislators otherwise know as voters.

The last time I went lobbying with insurance agents was during the palmy days of the early 1990s, back before banks were even allowed to own insurers. Although a lot has changed since then, the need for an informed agency force to communicate their needs to their elected officials is more important than ever. After all, it’s your democratic right — exercise it!

Having lived through and written about the Great Mold Crisis and other scares, I’m watching with interest the development of another potentially hazardous-to-your-health building issue: Chinese drywall.

You’ve probably already seen the reports: Material shortages after Hurricane Katrina caused U.S. builders to start using drywall imported from China, which allegedly emits sulphurous vapors that corrode metal and could adversely affect health. In common use since 2008, it’s estimated that enough of the drywall has been used to construct 60,000 houses of 3,000 square feet each.

At this point, the issue is still just a blip on the radar, with little or no insurer reaction in the form of policy changes or exclusions. Most insurers seem to be taking a wait-and-see attitude to determine the exact trigger of the problem (some say moisture activates the nasty fumes) and whether the threat is real or exaggerated.

Policy maven and all-around cool guy Chris Amrhein reports that at this point the threat may be primarily in the minds of hungry class-action attorneys. “I haven’t heard a word on the insurance side of the room,” Chris says. “All of the smoke and fire seems to be coming from Congress and Florida/Louisiana homeowners, who obviously hate the smell of rotten eggs coming from this allegedly Chinese drywall.” In fact, the Florida Health Department, which is currently studying the drywall, recently observed that there is no “specific” health hazard arising from its use, and that its sometimes rotton-egg odor is caused by strontium sulfide, a material absent from good old American-made drywall (there doesn’t seem to be a consensus about the damage to pipes or property).

If it turns out that the drywall is causing a real problem, resulting in homeowner reimbursement from the manufacturers and distributors–and ultimately their insurance carriers–there appears to be no coverage provided. “From a purely coverage form standpoint, the industry response will no doubt include the total pollution exclusion and any number of variables on the EFIS endorsements,” Chris says.

You’d think that Congress has enough to worry about right now, but some sources I spoke with say they wouldn’t be surprised to see the issue escalate to federal attention. Chris took me down Memory Lane by naming some scares of the past, including overhead electrical wire radiation, silicone implants, Alar-treated apples, and of course, witches–all of which got their share of official political attention.

Good advice in the meantime? Advise your homebuilder customers to review their policies and their liability limits–and maybe consider using greener products in their buildings.

There really isn’t much I can add to the hue and cry following AIG’s announcement Saturday that it would be shelling out $100 billion in bonuses to some of the same clowns who got them into the derivatives mess in the first place. No less than the President himself has vowed to block the move with every legal means at his disposal.

Aside from the initial reaction of shock and disgust, however, the next thought that came to mind was that AIU Holdings Inc’s recent separation from the insurance industry’s answer to Marie Antoinette was a stroke of timing genius.

We recently interviewed John Q. Doyle, who now heads up AIU’s domestic division (read the article)

Doyle stressed that the formation of AIU is the first step toward separation from AIG, including a whole new branding process. Its property-casualty business is solid, and he proudly pointed out that none of the government TARP money went to this segment of AIG’s business.

We recently asked the survey question on our Web site of whether the AIU move will be enough to put an end to AIG’s problems. So far, the majority of readers seem to think it will. What do you think? Take the survey here.

As if it isn’t easy enough to read the signposts that have been cropping up in the news media, the latest announcement coming out of the NAIC makes things pretty clear: At an industry tele-press conference yesterday, incoming President Terry Vaughan announced that the association was moving its headquarters from Kansas City to Washington, D.C.

The move comes in direct response to demands from Congress during what Vaughan called “a historic time for regulation” of property-casualty insurance and financial services regulation.

The move will essentially create a Center for Insurance Information operating out of the NAIC’s 16-person D.C. office. The association will maintain its staff of 377 in K.C. and 48 in New York.

Although Vaughan declined to comment specifically on the recent findings of the GAO report — which implied that Congressional consideration of an optional federal charter could impact the current state regulatory system — she did say it was a “balanced report that made some good comments and identified issues.”

The NAIC’s strategy reflects the reality that Capitol Hill will continue to scrutinize our industry this year and beyond. Other signs of the times: PCI contracting with D.C. government relations firm Quinn Gillespie to advance its issues in Congress, and Zurich/Farmers beefing up its clout with the addition of former AIG government affairs director Rich Merski to its federal affairs team.
Not a moment too late, evidently. This from NUP:

An influential senator said today that federal lawmakers need to consider U.S. regulation of the insurance industry, which now has only state oversight.

Sen. Richard Shelby, R-Ala., made his comments during a Senate Banking Committee hearing citing the debacle at American International Group, which has required billions in government bailout money as a reason to consider federal regulation of the sector.

It’s happening, folks, whether we want it or not. The smart players are the ones positioning themselves to help craft an agreeable solution instead of those who close their eyes and let themselves be steamrolled by the results.

Want to take a poll about insurance regulation? Visit our Web site.

 The ballots have been counted, they’ve cleaned up Grant Park, and the 2008 presidential election is finally history — literally.

Whether you’re ecstatic or disgruntled about the outcome, you have to agree that what happened is unique, in more ways than the obvious (our first black president). The fact that more than 130 million Americans turned out to vote (the biggest number in 44 years!) flies in the face of conventional wisdom about voter apathy, political burnout, voting along racial/regional lines, and just about everything else we’ve come to expect.

So what was different this time around? Obviously, the economic disaster and two wars dragging on were major factors in turning the tide against the incumbent administration. But there was much more at work here than simple backlash. I think the real story lies at least in part with the number of young voters and how they communicate and relate with each other and the world.

According to CNN’s numbers, 18 percent of the voters were between the ages of 18 and 29, and 66 percent of them voted for Obama. The Gen Y voter trend began in 2004, when 20 million of them cast a ballot, the largest young-voter turnout since 1972 (remember “get clean for Gene”?), according to the Young Democrats of America (www.yda.org).

And as AA&B tech writer Tom Baker so often reminds us, the Millennial Generation is characterized by its technological sophistication and constant connection to each other and the world via social networks, blogs, Twitter, IM and text.

The Obama campaign knew this demographic well, and tapped into the youthful zeitgeist by making it as easy as possible for its supporters to get out the vote. Volunteers could canvass door to door or call registered voters from online lists at the Obama Web site, then click an online checklist to record their responses. The campaign was in constant communication with its supporters; if the sheer volume of e-mail is any indication, I’m now on a first-name basis not only with Barack and Michelle, but with Dave (Plouffe, Obama’s campaign manager) and occasionally Joe (Biden).

What does any of this have to do with insurance agents? Plenty. The Obama campaign used every form of technology and communication at its disposal to reach a new generation of voters, just as our industry must come to terms with this emerging market demographic, both as employees and as customers.

But I’m not paraphrasing good old Marshall McLuhen here; I don’t believe the medium alone is the message. Young people have been marketed to virtually from infancy onward. They’re savvy about being sold a bill of goods. It’s not enough to reach them by Twitter, e-mail or YouTube. Your message has to be authentic and succinct to grab them.

I’ll be ruminating more on this topic over the next month as we gear up for our January issue on talent management. Meanwhile, I’d love to get your thoughts on reaching Gen Y. Can we reach them? Yes, we should!