Steinberg talks on insurance industry

Approximately 250 Wharton students took time out yesterday to hear from a man who has his name on more University buildings than probably anyone else, living or dead. Saul Steinberg, a Wharton alumnus and CEO of Reliance Group Holdings, spoke about the insurance industry and his own experiences as a successful entrepreneur. Steinberg peppered his talk with humorous anecdotes, insurance jokes and barbs aimed at lawyers, keeping his rapt audience hanging on his every word. Steinberg began his 35 minute lecture humorously, saying, "It's always a pleasure for me to come back to Wharton, especially when I don't have to race across campus to make an 8:00 class." After the lecture, which was in Steinberg-Deitrich Hall, Steinberg fielded questions from the audience for another 45 minutes. Steinberg concentrated his talk on the insurance industry, staunchly defending it against its detractors. "Insurance is perhaps the most widely misperceived industry in the history of commerce," he said. It is wrongly assumed, he added, that "owning an insurance company is the next best thing to having your own mint." Steinberg addressed the bad reputation of auto insurance companies as an example of the undeserved criticism of insurance companies. In New Jersey, for example, insurance companies such as Allstate came under fire for high premiums and low coverage. The blame for these maladies, claimed Steinberg, lies in fact with the government and its overregulation controlling insurance companies. "The simple fact is that overregulation does not work. It never has," Steinberg said, contrasting the New Jersey average annual premium of $734 per car owner with Illinois' $440, where there is far less regulation. He also characterized New Jersey Gov. James Florio's attack on Allstate as a knee-jerk reaction to public frustration and another case of "insurance bashing gone wild." Allstate recently left the state after losing $8.5 billion there. "Consumers rank insurance salesmen only slightly higher than used car salesmen, and the politicians have been quick to exploit these feelings," Steinberg said. The "yawn myth" -- the idea that insurance is "a lot of boring people doing boring things" -- was another alleged misconception Steinberg sought to dispel. "Insurance today is anything but dull," he said. "It is an industry in violent flux, [which is] going to have an insatiable need for people like yourselves." Most of the questions were about Steinberg's business experience rather than the specifics of his talk. When asked for a hot business tip, Steinberg suggested Eastern Europe. "It's like going to the Wild West," he said. "No rules, no laws -- there's a real opportunity." Students said Steinberg changed their views on insurance. "I always thought insurance was boring as hell," Wharton junior Paul Thurk said. "He has really shown me that it's a lot more exciting and that there's a lot of opportunity." "I now have a much kinder view toward the insurance industry," added Wharton senior Gene Kim.

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