Sarasota reporter wins National Journalism Award for biz reporting

TALKING BIZ NEWS EXCLUSIVE

The Sarasota Herald-Tribune received the William Brewster Styles Award for business and economics reporting, which comes with $10,000, on Friday from the Scripps Howard Foundation.

It’s the second consecutive year that the Florida paper has won the award. In 2010, it received the award for a series on real estate flipping. This year, it received the award for exposing the problems with the state’s property & casualty insurance market.

Despite no hurricanes in five years, Florida insurers are demanding yet more money from homeowners. At the same time, the capital that insurers have on hand to pay claims has shrunk. The Herald-Tribune spent more than a year examining the Florida insurance market in an attempt to find out why.

The reporter for the series was Paige St. John, who joined the paper in 2008 and is part of its investigative team.

Before joining the Herald-Tribune, St. John was a statehouse reporter and Tallahassee bureau chief for the Gannett papers in Florida. She has also worked as an environmental reporter for the Detroit News.

St. John spoke by e-mail with Talking Biz News earlier this week, before the awards were announced, about the series. What follows is an edited transcript. (Disclosure: I was the lead judge for the Styles award. The Herald-Tribune entry was a unanimous choice, winning out against more than 70 other entries.)

How did you decide on writing about property insurance in Florida?

This project has its inception the day in 2004 Hurricane Charley ripped through Port Charlotte, followed in less than a year by Frances, Ivan, Jeanne and Dennis, Katrina, Rita and Wilma. I worked for Gannett’s Tallahassee bureau at the time and in between shifts at the emergency ops center, covered the catastrophes first-hand, ‘coptering into disaster zones with our “be-there-before-the-wind-stops” governor.

It wasn’t long before the tales of sorrow gave way to nightmares of unpaid insurance claims, and then failing insurance companies, sky-rocketing rates, and mountains of policy cancellations. I nibbled away at this new economic disaster on the front lines, covering the Legislature and chronicling the death of one carrier after another.

How did you begin?

In 2008, the Herald-Tribune offered me the opportunity to do what Bob Woodward champions – get to the truth. Even as I interviewed for the newspaper’s investigative team I pitched a project that would crack open the property insurance industry in this state. The first discussions were very broad. “Why aren’t rates falling when the Legislature (i.e. citizens) provided $12 billion in nearly free hurricane coverage?” No reform seemed to take hold. Billions of dollars were evaporating, with no storms.

So we started with questions and immediately began a hunt for what could possibly provide answers. There were no road maps.

You collected a ton of data to report this story. How was it decided that the project would be this big?

I struggled to get basic financial reports of every Florida carrier from a hostile state regulatory agency that wanted to charge something like $1 a page for reams of paper. I discovered these same reports were electronically housed as 50-page pdfs for $10 each with a national organization – again a mountain too steep to climb when you need 10 years of data from more than 200 carriers.

I found a source working in a branch state agency willing to provide Excel sheets of numbers pulled from databases I didn’t even know existed, and comforted that I had a backup plan at least, began pressing that national organization to provide me those same reports directly and for free. In two years we went from “that doesn’t exist” conversations to “I’ll have it to you by Friday” with every imaginable stop in between.

That was just the financial statements. It was a similar expedition to get quarterly policy data from Florida, executive pay reports, solvency exams and reinsurance financial filings and transcripts of quarterly earnings calls that provided the core bedrock for the project.

Your editors sent you to Europe and Bermuda to write about the reinsurance market. How did you convince them to do that?

We were hit by layoffs in the newsroom at the time and the bean counters weren’t happy about a foreign travel bill, so I paid my own way, stayed cheap (bathroom down the hall), rode the public bus, and expensed what I could when I got back. Worth every euro! Still, I have to say, covering the Democratic National Convention cost more.

One of the things I was impressed with was the online database that showed consumers whether their insurer was financially solid. How was that developed?

Toward the end we decided to make as much of that data available to readers, and came up with a four-way ranking system that let consumers quickly scope out the financial stability of their own carriers – a tool that turned out to be the most popular aspect of the project. It had a mobile app twin because the outside web programmer — CityMinds.com, great guys, great attitude — who built the tool threw that in for free to show off what he could do.

How did you find the consumers who were used as examples in the stories?

Finding people in the industry to talk — at least on the record — was harder. Reinsurers don’t talk. Particularly not to unfriendly outsiders. The state’s predominant reinsurer literally used a New York public relations agency to tell me it “preferred to stay in the background.” Even getting that brush-off took some two months.

By then we’d booked a plane ticket to Bermuda, and I dropped in on an industry “conference” where executives could be corralled over the coffee urn. Months later, we did it again in Monte Carlo, and by the time that same New York media specialist e-mailed me “no luck,” I already had his CEO on tape, interviewed on the steps outside the Hotel de Paris.

The people on the other end of the premium notice — Florida homeowners – are very easy to find. Ask almost anyone in Florida about their home insurance bill and you’ll get an earful about how the rate doubled and then the company dropped them after 20 years of timely payments and never a claim.

But to broaden our reporting reach and depth, I pulled several years of e-mails sent to the Florida governor’s office – an exercise that not only let us track the angry pulse of consumers, but turned up gems such as Gov. Jeb Bush’s failed effort to recruit other Republican governors to form a multi-state disaster pool. Arnold Schwarzenegger’s Blackberry-touting aide replied promptly that the California governor’s fingers were too fat to reply personally.

Insurance is not the most scintillating topic to write about. How did you make it relevant to the readers?

With outraged consumers, drunken Bermuda reinsurers (I never told that particular story), champagne-swilling millionaires in their Speedos on the French Riviera, screaming bureaucrats and a muscular special interest lobby — what isn’t scintillating?

You spent more than a year on this project. Tell me about how you kept yourself organized in putting the package together?

In a year we had mountains of records and transcribed interviews and tapes – filling two hard drives, my desk, the desk next to mine, and a spare dimly lit and overly air-conditioned room at the paper I dubbed the “cave” – where most of the project was written.

The first outlines looked like anatomical dissections. We knew we’d end up telling readers about the rarified world of foreign reinsurance but had no concept how to make that connect with their daily lives. I went to the artist supply shop and got drafting paper. I made cartoons of project elements, and very bad Power Points, to try to visualize how it would fit. In the end, necessity drove us.

By early 2010, we knew several Florida carriers were on the verge of bankruptcy, yet still allowed by regulators to take on new customers. The specter of heading into another hurricane season with a market that shaky was horrific. In February, months ahead of the rest of the project, we began rolling out stories about the shaky and insolvent insurers in whom millions of Floridians had entrusted their financial security. Regulators hollered. Literally. The deputy commissioner screamed at me in a hallway that I had killed a company — it already was walking dead — while her boss bolted through a side door and into a basement parking garage in an attempt to avoid questions.

Overall, the size and reach of the project was its worst enemy. We only published three out of four planned packages (still working on that last one). In length it rivaled a book. I woke up at night in a cold sweat. I’m sure Chris (ever-so-patient I-Team editor Chris Davis) must have done that once or twice himself. But every time we lifted a rock, we’d find more dirt, and it was impossible to stop. And Mike Connolly, executive editor, kept egging us on to dig more, find more, take whatever time it took.

The writing was exceptionally tough. Chris delayed his honeymoon six months to make sure every piece passed a dual standard for impact and understandability. It was well worth it. Translating insurancese into plain language enabled readers to see past the fiction peddled so many years in Florida and seek change.

The Florida property & casualty market has been written about a lot. How did you work to find something new to say?

Yes, it’s been written about a lot, but little of it was true.

What advice would you give a business reporter looking to see if there are similar issues with the P&C market in their state?

Advice? Look past “explanations” and find the raw supporting (or damning) numbers. Get really inquisitive when the insurance industry employs certain words, like “crisis,” or “loss,” or an “epidemic of fraud.”

Has the series had any effect yet in changing the Florida insurance market?

Legislation in 2010 was introduced to raise solvency requirements for carriers and demand greater transparency. It passed only to be vetoed by the governor (the bill also deregulated rates) and is back again before the 2011 Legislature. The project has sparked public hearings, been read aloud (parts) at committee meetings, and landed me a part-time gig speaking to community groups. Regulators in the interim are using administrative powers to impose increased surplus requirements on the weakest carriers.

Still, reinsurance rates remain unbridled and a new suite of catastrophe models released in December is again setting off another round of double-digit rate hikes and policy cancellations and the industry is making a grab for reduced regulation and limits on policyholder rights.