Jackson: Tap Minority Markets.

Insurers are urged to bring products to underserved U.S. markets; study finds that Medicare beneficiaries have a wider choice in urban areas.

The Rev. Jesse Jackson called on the property/casualty insurance industry to hire more minorities and write more business in urban and rural areas to help minorities gain access to insurance products.

"I see few black and brown faces here... We did not know how great baseball could be until everybody could play, and we don't know how great the insurance industry can be until everybody can play and everyone's insured," Jackson said Jan. 11 at the Property/Casualty Insurance Joint Industry Forum.

There are no car dealerships in Harlem, where business owners and residents in the primarily black uptown Manhattan neighborhood find it tough to get insurance, Jackson said, speaking in midtown Manhattan at the Waldorf-Astoria Hotel. He credited some insurers with working to grow in urban areas but said the industry needs to better focus on opportunities. "If you as an industry plan to grow-indeed, to survive-you must be more inclusive," he said. "Harlem must not be seen as black or brown but must be seen as money, market, talent and location."

As Citigroup Chairman Sanford Weill introduced Jackson, he commented about another topic--the opportunities brought by the new financial-services modernization act. "This is an interesting time in the history of the financial-services business," Weill said, adding that everyone should benefit from changes in banking and insurance.

Weill also urged the industry's leaders to include a broader range of risks, "We watched the collapse of communism, we watched the Berlin Wall come down, and we watched our country really become a leader around the world," he said. "If our country is going to be a leader in what the world is going to look like 50 years or 100 years from now... we're going to have to have everybody participate in these great benefits."

This period of unparalleled prosperity has benefited insurers and other businesses, which haven't necessarily passed those benefits to businesses in underserved or underdeveloped areas in the nation, Jackson said.

The insurance industry has taken steps to improve its track record in urban areas, particularly through the Urban Insurance Partners Foundation, which has launched insurance education and community renovation projects in several cities, beginning with Indianapolis and expanding elsewhere, including Chicago. The foundation expects to launch a project on the East Coast this year.

Larry Forrester, president of the National Association of Mutual Insurance Companies, said the effort grew out of congressional hearings to study redlining in urban areas. The industry reacted voluntarily, he said. "I think we're just going to see that expand. A lot of people don't understand how proactive the industry has been," Forrester said.

Jackson said business, on average, has generated growth of about 5% over the last 10 years. However, African-American businesses have grown by 100%, Asian-American businesses have grown by 180%, and Hispanic businesses have grown by 200%. "There is a vast and untapped market here, ladies and gentlemen. In these areas there is money to be made," he said.

Jackson suggested that the industry use its billions of dollars of surplus to invest in businesses in urban or rural areas "whether it's Harlem, Appalachia or Mississippi or East L.A."

Banks, at first forced to invest in urban communities through the Community Reinvestment Act, have discovered that their portfolios perform as well or better than others. "At first it was by regulation, now it's by profit motivation," he said.

Jackson urged regulators to make it easier for insurers to do business in tough areas and encourage them to move into urban areas with incentives such as premium tax credits.

Jackson also chided the group for the industry's zeal to expand in emerging markets worldwide, saying that many of those markets are less stable than underserved markets in the United States.