Insurance Industry Critic and ‘Conscience’ Hunter Retires From Consumer Federation

The man who served as the director of insurance for the Consumer Federation of America for nearly three decades is retiring.

The official statement from the CFA describes J. Robert “Bob” Hunter as the “father of insurance consumer advocacy” in announcing Hunter’s retirement after 27 years in the position.

While Hunter will continue to serve in an advisory role as insurance director emeritus, CFA’s insurance advocate, Doug Heller, moves into Hunter’s former role. “For the past 40 years, the insurance industry has always had to ask themselves ‘what’s Bob going to say?’ whenever a consumer issue was on the table,” Heller said in a statement. “It is impossible to quantify fully the impact Bob Hunter has had on the insurance market, its regulation, and its public policy.”

Hunter is an actuary who “used the principles of actuarial science to ground every one of his analyses — analyses that he pulls together regularly to do good for society and to make industry participants think,” according to a fellow actuary, Suzanne Sclafane, executive editor of Carrier Management.

Hunter was hired by the U.S. Department of Housing and Urban Development in 1971 as chief actuary of the Federal Insurance Administration, an agency he would lead under Presidents Gerald Ford and Jimmy Carter.

CFA said Hunter, over the course of his career led efforts to eliminate unfair and discriminatory pricing in the insurance. It listed some of what it said were Hunter’s many roles and accomplishments:

• Was instrumental in achieving the flood insurance program’s early goals; creating the Liability Risk Retention Act and making insurance available in the inner cities through the implementation of the Riot Reinsurance Program and the Federal Crime Insurance Program.
• Served as Texas Insurance Commissioner.
• In 1980, founded and led the National Insurance Consumer Organization for 13 years.
• In the 1980s, pushed for a significant change to insurance ratemaking — getting insurers to include their projected investment income in ratemaking.
• In 1986, under contract with the California Legislature, wrote a seminal paper on California’s insurance market, which served as the basis for 1988’s “Voter Revolt” that enacted Proposition 103.
• In 1992, when Hurricane Andrew devastated Florida, proposed the moratorium on cancellations and rate hikes.
• In the early 2010s, uncovered the practice of price optimization, which bases premiums on the maximum amount that a consumer is expected to be willing to pay rather than calculating premiums based on projected costs, such as claims, overhead and profit.
• During the pandemic, called for insurance refunds to auto insurance customers who weren’t driving during COVID lockdowns.

In 2002, at another publication, Sclafane asked Hunter to write an article on his view that an explosion in lawsuits was not to blame for spikes in medical malpractice premiums at the time. He complied, providing multiple charts explaining that an insurance cycle, and in particular, “an explosion in premiums charged by mismanaged insurers,” was at the root of the problem. Hunter then responded with an analysis of alternative data provided by the critic.

Hunter’s work on price optimization in the 2010s prompted another article in which he dove into what he views as the actuarial root of the problem with price optimization.

Sclafane notes that representatives of industry trade groups have often responded to Hunter’s data dives into industry practices with remarks like, “Bob Hunter is at it again,” accusing him of “trying to make the data fit what he believes.” That was, she writes, the opening sentence of a letter to the editor she received in response to Hunter’s medical liability article.

An article published in the Auto Insurance Report referred to Hunter as the “world’s most obstreperous actuary”– a description that Sclafane says Hunter really liked. Sclafane has her own description on Hunter and his career: “Conscience of the industry.”

Topics Market