STRIVING TO MAKE HOUSING INSURANCE AFFORDABLE

Rough Notes, Dec 2004 by Zinkewicz, Phil

Groups cooperate in effort to provide low- and moderate-income residents with affordable insurance

TYhe NeighborWorks® Insurance Alliance (NIA), a collaboration between the insurance industry and community development corporations, recently marked its 10th anniversary at its annual meeting in Washington, B.C. The NIAs mission was-at the start and is now-to improve insurance availability and affordability in America's lower income and minority communities, something that insurers and agents' associations, individually, have also been addressing for years.

For example, the Independent Insurance Agents & Brokers Association (IIABA) has its own Diversity Task Force, a cooperative industry group comprised of Big "I" agents and brokers, members of groups representing Latin-American, AfricanAmerican and Asian-American agents as well as several leading insurance companies. The mission of the IIABA task force is to foster a profitable independent agency force that reflects, represents and capitalizes on the opportunities of the diverse U.S. population. The U.S. Census Bureau predicts that by 2050, nearly half47.2%-of the country's population will be minorities. It was a natural fit for the IIABA task force to support the NIA. This action represents a concerted effort on the part of insurance company and other corporate members to improve the quality of life in low and moderate-income neighborhoods by showing residents how to obtain affordable insurance by practicing sound risk management techniques.

The real genesis for the NIA goes back a bit further than 10 years. In fact, it goes back a little more than a quarter of a century with the creation of the Neighborhood Reinvestment Corp., a public nonprofit organization chartered by Congress under the Housing and Community Development Amendments of 1978. According to Todd Pittman, NIA director, Neighborhood Reinvestment began modestly. He says that in the late 1960s, Dorothy Richardson became concerned about the degeneration of her neighborhood on the north side of Pittsburgh. She didn't want to see fine old houses torn down and their residents moved into public housing. She organized a resident-led consortium that included citizens determined to save their homes, financial institutions that supplied capital and lending expertise, a local foundation, and the city government. Richardson's Neighborhood Services of Pittsburgh united these groups and ultimately was successful in arresting the degeneration of her neighborhood.

That was just the beginning. There are now more than 220 local NeighborWorks affiliates covering more than 2,500 communities and more than 4 million residents, who have directly benefited from the program's efforts. NeighborWorks' affiliates operate in every state and the District of Columbia and Puerto Rico.

Says Pittman: "They serve every urban area of any size in the country and, in recent years, a number of suburban and rural communities as well. Neighborhood Reinvestment receives a direct federal appropriation that is now about $100 million annually. Through financial leverage, matching grants and the Community Reinvestment Act, the NeighborWorks system converts this financing into $1.9 billion in annual local investment."

Ten years ago, the people at NeighborWorks decided that insurance affordability in low- and moderate-income level areas of the country was a subject that needed to be addressed and formed the National Insurance Task Force. That task force is now called the NeighborWorks Insurance Alliance (NIA).

When the NIA finished its first decade, Edward M. Liddy, chairman, president and chief executive officer of Allstate Insurance, and Edward B. Rust, Jr., chairman and CEO of State Farm were there to offer their congratulations as well as their support.

"This alliance has been instrumental in identifying areas where the insurance industry can lend its talent, its expertise and financial resources at the local level," said Liddy. "Together, we have educated and equipped current and future homeowners with the skills to protect and preserve what they consider to be their most valuable possession-their homes."

Rust affirmed that NIA had made homeownership a "reality" for many thousands of Americans and has done important work in helping build strong, safe and stable neighborhoods, making them good places to live, raise a family and start a business.

At the annual meeting, the group also announced its newly appointed co-chairs-Daryll Fletcher, vice president, risk management at Allstate Insurance Co., and Marianne Garvin, executive vice president and chief operating officer of the Community Development Corporation of Long Island, New York.

"The NIA's effort over the last 10 years illustrates the power people have when they come together for the good of the community," said Fletcher. It's an honor to serve as co-chair, along with Marianne Garvin, to lead the NIA into its second decade."

At the annual meeting, the NIA also formalized its transition from a task force working with 13 nonprofit organizations to a nationwide initiative working with the more than 225 organizations that are members of the national NeighborWorks network.