An explosive end: the days when commercial insurance could operate out of public view are over.

From time to time, the relative obscurity of a little known sector of the world's business comes to an explosive end. The phenomenon is typically accompanied by intense, and generally negative, media attention. Workers in such sectors are often unprepared, anxious and resentful as they suddenly confront the almost blinding light flooding the most opaque aspects of their industry.

We don't know how long the current investigations will drag on or what the results will be, but we know one thing for certain: The days when "commercial insurance" could operate out of public view are over. Unfortunately, when the public learns about an industry from news stories about investigations, it gets vivid shards of information in negative colors.

While the auto and homeowners sectors have grown accustomed to constant public scrutiny, and overall have learned to work with it pretty well, the commercial world has never faced so many spotlights on so large a stage. There is no choice but to define and clarify what this vital industry is about--not only for its own future but for the customers, the public and all stakeholders.

This will not be easy. Worldwide, the commercial lines business is huge, diverse and complex. In the United States, it accounts for more than half of all property/casualty insurance premiums. Without commercial insurance, the international economy simply could not function. By making it possible for firms to transfer risk, insurers free all types of businesses from the paralyzing fear that an accident or error could involve huge losses or even lead to bankruptcy. Since the first fire insurance policies were written in the 1700s, the relentless expansion of commerce has created new opportunities and new risks of all types everywhere in the world. In response, insurers have developed some 20 major coverages and dozens of specialty products, such as trademark and copyright infringement coverage, that transfer these risks to an industry uniquely able to understand, price and spread them.

Commercial insurance entails immense responsibility, and requires deep knowledge of the entire range of human economic activity, its past, and how new forces, such as technology, affect the future. The North American Industrial Classification System identifies about 1,170 different business types, according to the processes they use for the production of goods or services. Some 7 million business establishments, from corporations and partnerships to sole proprietorships, provide at least one of these products or services and buy some kind of commercial insurance. It is no wonder that people say, when introducing the topic of insurance, that everything affects it and it affects everything.

It's difficult to convey to the average person an excitement about the world of commercial insurance and its indispensable role in the economy and modern society before the basic building blocks of understanding are in place. People need a frame of reference. They have to see it in the context of the wider industry, the amazing range of insurance products and services that facilitate the smooth functioning of businesses of all types and sizes, from Main Street establishments to multinational conglomerates, and the complex system through which these products are distributed.

They need to know how the underwriting process, the core of our business, works; where capital comes from; how it is allocated; and how firms and individuals are compensated. Other candidates for clarification are investments, accounting, reserving, pricing, reinsurance, and the ups and downs of the commercial insurance cycle, not to mention the role of offshore entities, which are subject to increasing scrutiny by regulators and U.S. Congress. A basic grounding in such topics would help the media, as well as customers, better understand our business and its contribution to the global business community.

In an industry as diverse as ours, we all will have to lead in this unprecedented effort to explain what our business does and how we do it. The days of obscurity are over. If we don't set out for all to see how this complex, heterogeneous, and essential industry functions, others will. We need to seize this trying and dramatic historic moment to define, clarify, explain, and where necessary, reform ourselves.

It may not be a popular perspective right now, but the possibility exists that when the intensity and excesses that come with such a sudden, forced public exposure of an important industry recede, what will be seen standing is a renewed structure, stronger and better able to fill its vital role in the well being of the world.

Gordon Stewart, a Best's Review columnist, is president of the Insurance Information Institute, New York. He can be reached at [e-mail].