Faculty at the Wisconsin School of Business are leading a timely initiative to help inform major public policy issues affecting the insurance industry as a result of the COVID-19 pandemic. It is part of the newly created WSB Insurance Experts Panel.
The panel surveys insurance experts to gauge the extent to which they agree or disagree on public policy issues related to topics such as business interruption insurance, health insurance, and workers’ compensation. The 54-member panel includes economists, risk management and insurance academics, actuaries, and legal scholars. All members are faculty at research universities and are highly qualified to speak on public policy matters affecting the insurance industry.
“This effort stemmed from a need to bridge the gulf between academic research and policy making,” says Ty Leverty, associate professor of risk and insurance and the Gerald D. Stephens CPCU Distinguished Chair in Risk Management and Insurance. “This need came to light during the pandemic when policy makers sought immediate responses to these big questions.”
“Typically academic research is a slow process to ensure robustness of the results,” adds Leverty, who is leading the work on behalf of WSB’s Department of Risk and Insurance. “I had an idea of how we could bridge the divide between when policy makers need this input from experts compared to when we actually provide it in publication form by just asking experts important public policy questions.”
The initiative is performed in partnership with the Center for Insurance Policy and Research (CIPR) at the National Association of Insurance Commissioners (NAIC), the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia, and five U.S. territories.
Leverty says the goal is to issue surveys to the panel every two to four weeks, having just released the first round of survey data in mid-May. The initial survey focused on business interruption coverage, an important topic as businesses across the country have been forced to shut down or decrease operations to contain the spread of COVID-19.
“Currently, the vast majority of insurance policies do not cover pandemics. It’s an excluded risk,” says Leverty. “Some states have drafted legislation that would require insurance companies to pay business interruption losses, even though insurers never charged a premium for it. So a number of the first round of survey questions came from this immediate policy need.”
To share survey findings, Leverty collaborates with Jeffrey Czajkowski, director of CIPR, to write a research brief that summarizes the main findings. NAIC then distributes the report to key audiences such as state insurance regulators and insurance companies by sharing it on its website and in industry publications.
WSB also developed a dedicated website to host and share research findings, including individual responses from each panel member. It illustrates the School’s leadership in advancing expertise to influence contemporary policy issues and industry practices. To Leverty’s knowledge, this is the only insurance-focused survey of its kind.
WSB’s risk and insurance department is particularly well positioned to advance this initiative. Its undergraduate program is ranked first in the country by U.S. News & World Report, and faculty members offer a wide breadth of expertise.
“We have expertise in a lot of different areas,” says Leverty. “And with department chair Joan Schmit serving as editor of the Journal of Risk and Insurance, the top academic journal in the field, we can reach a broad audience. So Wisconsin seemed like a natural home for this work.”
It’s also an example of the Wisconsin Idea in practice.
“When faculty provide assistance and expertise to help the public during a time of need, we really demonstrate the value of this university to the state and nation,” says Leverty.
“Good policy helps consumers. Everyone buys insurance—auto insurance, homeowners insurance, health insurance—and businesses cannot function without it. We all, therefore, benefit from good public policy. This survey work impacts almost everyone who works, owns a small business, drives, owns a home, or has health insurance. It has broad implications.”