To recap the issues raised during Wednesday’s conference call, here are some of the key media stories, and the messages we’re conveying.
If there is a subject you would like to see addressed on Wednesday, April 27, please email Mike Barry at michaelb@iii.org
Year-end 2010 financial results for P/C insurers show cumulative asset values increased while notable underwriting profitability remained elusive:
Private U.S. property/casualty insurers’ net income after taxes rose to $34.7 billion in 2010 from $28.7 billion the year before, with insurers’ rate of return on average policyholders’ surplus—a key measure of overall profitability—increasing to 6.5 percent from 5.9 percent. Positive premium growth for the year—at 0.9 percent—was marginal but 2010 marked the first time it had grown since 2006. The PCI/ISO/I.I.I. joint news release was issued on Wednesday, April 20, and I.I.I. president Robert Hartwig offered this same-day analysis of the numbers.I.I.I. warns about ‘dangers of complacency’ at 2011 Hurricane Conference in Georgia:
The I.I.I.’s Jeanne Salvatore and Lynne McChristian delivered PowerPoint presentations in Atlanta, and the I.I.I.’s Bill Davis moderated one of the panel discussions. The details, and links to the I.I.I.’s slides, are available in this Thursday, April 21, media advisory.FEMA director tells Hurricane Conference that municipalities need to stress importance of natural disaster preparedness:
Craig Fugate’s remarks on Tuesday, April 19, were covered in this same-day story by the Associated Press. FEMA’s director stressed how important it is for newly elected public officials to learn how to respond during hurricanes and other powerful storms and that a bad economy is no excuse not to prepare. Fugate said that governors, mayors and others must participate in hurricane preparedness drills to understand the decisions they could have to make this summer. He also stressed the need for emergency management community to take advantage of social media to engage the public and work more with the private sector to fill in the gaps in support when responding to disasters.I.I.I.’s updated terrorism risk insurance is now available:
This updated paper notes that in the countdown to the 10-year anniversary of September 11 the threat of terrorism continues to evolve. The paper includes sections focusing on how insurers treat terrorism risk today; estimating potential terrorism losses; the nuclear, biological, chemical and radiological (NBCR) threat; aviation insurance for terrorism risks; and liability issues. The report also provides an explanation of the structure of and coverages provided by the Terrorism Risk Insurance Act of 2002 (TRIA), which was extended through December 2014 under the Terrorism Risk Insurance Program Reauthorization Act of 2007 (TRIPRA).North Carolina was the hardest-hit of six states struck by severe tornadoes:
More than 40 fatalities, half of them occurring in North Carolina, were caused by a number of severe tornadoes that swept through the U.S. between Thursday, April 14, and Sunday, April 17. NBC News offered a summary of the natural disasters on Sunday, April 17.
USA Today reports that those who specialize in building storm shelters are in demand:
The phones at Granger Plastics of Middletown, Ohio, which makes in-ground storm shelters, said their phone lines lit up on Monday morning, April 18, and the calls have not stopped. Even at $5,000-$6,000 a pop for a five-person shelter, installation extra, callers are unfazed at the significant expense, a Granger Plastics spokeswoman told USA Today in a Wednesday, April 20, article. And with the National Weather Service forecasting more severe weather from Texas to the Great Lakes through today, the calls aren’t likely to abate.
Tornado outbreaks in the southern U.S. prompt policymakers to renew focus on the structural soundness of mobile homes:
Mobile homes are lighter than typical structures and often are not permanently moored to the ground, according to this Wednesday, April 20, Wall Street Journal article. Moreover, they usually do not have basements or interior rooms where residents can hunker down in a storm. For these reasons, safety officials say mobile home residents should leave their homes and seek shelter in a permanent building, storm shelter or even a ditch when tornadoes threaten. But officials say many residents don’t leave, possibly because they haven’t had sufficient warning, don’t know where to go, or have become complacent in parts of the country where storm alerts are common.Sarasota Herald Tribune reporter wins Pulitzer Prize for her coverage of Florida’s property insurance market:
Paige St. John’s Pulitzer came in the investigative journalism category and was the subject of this Monday, April 18, Herald-Tribune article.
Florida’s state-run property insurer of last resort, Citizens, is financially strong and profitable, Herald-Tribune reports:
This Wednesday, April 13, Sarasota Herald-Tribune article says that recent financial statements show Citizens has a surplus of $5.1 billion, which is more than double the money now set aside by all of the 57 companies that account for most of Florida’s private property insurance market. The surplus puts Citizens, with its 1.3 million policyholders, in a position to avoid a replay of the active 2004 and 2005 hurricane season, Paige St. John writes, without the need for a bailout. But state lawmakers who are seeking to dismantle Citizens and move thousands of policyholders out of the company call Citizens a financial time bomb that needs large premium rate increases.
Florida Legislature is grappling with the issue of limiting lawsuits; doctors, trial lawyers, nursing homes and insurers are vying for influence over the issue:
Among the most contentious legislative measures being considered in Tallahassee is one to cap noneconomic damages in suits when a nursing home patient dies, according to a Sarasota Herald Tribune story from Sunday, April 17. Randolph Gray, who works for the state Department of Financial Services, is lobbying for the removal of the current $250,000 cap from a major Medicaid bill (SB 1927), arguing it is wrong to limit the rights of Floridians to have their voices heard in the courts. But Senator Joe Negron, the chief architect of the Medicaid bill, calls the $250,000 cap a reasonable amount, noting that survivors can still claim unlimited economic and punitive damages if they prove the nursing home was negligent.St. Petersburg Times says the number of sinkhole claims filed with insurers closely tracks the extraordinary growth in the number of sinkholes found:
The number of sinkholes reported to the state’s Department of Environmental Protection increased nearly 420 percent, to 171 in 2010, from 33 in 2006, according to this Sunday, April 17, St. Petersburg Times article. Nearly 150 of the 171 sinkholes reported in 2010 occurred in Hillsborough County, where a drought, followed by a cold winter, prompted farmers to water extensively in order to protect their crops. That series of events created a climate ripe for sinkhole formation, the article states. Hillsborough is on the edge of ‘Sinkhole Alley’, an area that includes Pasco and Hernando counties, where the unique geological makeup of the land is already prone to sinkholes.
Texas wildfires remain difficult to contain amid one of the state’s worst droughts in recent memory:
CNN reported on Wednesday, April 20, that Texas was burning from “border to border.”U.S. motorcycle crash fatalities dropped 2 percent in 2010 as compared to 2009:
USA Today offered an analysis of the data in a Tuesday, April 19, article. Motorcyclist deaths fell last year for the second straight year, the story reports. The 2010 decline, however, is much smaller than 2009’s 16 percent year-to-year drop from 2008.One-year anniversary of Deepwater Horizon disaster generates national media coverage:
CNN interviewed three survivors of the Deepwater Horizon fire for this Thursday, April 21 segment; all of them are suing their former employer, Transocean, for lost wages, pain and suffering, the cable network reports.AARP Magazine preparing piece on car sharing and insurance:
The I.I.I.’s Loretta Worters has been working with reporter John Burgess on this topic.
New York man deemed a Good Samaritan after a truck crash in 2010 stands accused of insurance fraud as a result of the same incident:
The Bronx, New York, resident who rushed from his vehicle to help others after a September 2010 crash, an act captured by a municipal video surveillance camera, was arrested for insurance fraud after he filed more than $21,000 in medical insurance claims despite receiving no apparent injuries as a result of the accident, which involved other motorists. The I.I.I.’s Mike Barry spoke about the issue of no-fault fraud with two New York City television stations, and appeared on both WCBS-TV and WPIX-TV on Thursday, April 14.The New York Times readying story on the demise of New York City’s ‘crash tax’ proposal:
The I.I.I.’s Barry spoke to NYT reporter Al Baker about why the Bloomberg administration’s decision is good news for drivers and auto insurers.
Senior Obama administration official makes the case for swift implementation of Dodd-Frank:
U.S. Deputy Treasury Secretary Neal Wolin, who used to be a senior executive with The Hartford, delivered the White House’s position on financial regulatory reform on Tuesday, April 19, in remarks covered by Reuters. Wolin touched briefly on the Financial Stability Oversight Council (FSOC).
Michigan’s governor appoints Kevin Clinton as the state’s top insurance regulator:
Clinton previously served as President and CEO of East Lansing, Michigan-based American Physicians (AP) Capital, according to this Friday, April 15, news release on his appointment, issued by Governor Rick Snyder’s office.Kansas governor signs workers compensation reform bill into law:
The Wichita Eagle offered details on the first changes to the state’s workers comp system since 1993 in a Tuesday, April 19 article. Governor Sam Brownback’s bill-signing ceremony took place in Wichita, Kansas, on Monday, April 18.Illinois Senate votes down a Republican-backed proposal to reform workers compensation laws in the state:
Illinois State Senator Gary Forby (D-Benton) issued a statement on Thursday, April 14, on why he believed Senate Bill 1349 had little support among his colleagues. “The proposal [SB 1349] would be devastating for workers’ well-being because it gives employers an unreasonable amount of ammo to deny benefits for on-the-job injuries,” Senator Forby stated. “It also gives employers the authority to hand-pick a doctor, instead of choosing one you’ve gone to for years and are comfortable with. These are radical solutions that I do not agree with.”USA Today announces its average daily circulation rose for the first time in more than two years:
The gain during the six months through March 2011 was just a tenth of 1 percent—a rise of 2,477 copies from a year ago, to 1.83 million daily. The Gannett-owned daily released the news in advance of the Audit Bureau of Circulations’ official statement on the newspaper industry’s numbers in this regard, which are set for release on Tuesday, May 3.
SOCIAL MEDIA REPORT
–Ben Berkowitz of Reuters tweeted on April 20 about how Munich Re said first quarter, 2011 catastrophe losses worldwide are about 14 times greater than normal, largely because of the March 2011 Japanese earthquake and tsunami.
— Berkowitz also tweeted about how Standard and Poor’s has revised its outlook to negative from stable on the AAA long-term sovereign credit rating on the United States. S&P’s move could adversely impact five insurers, Reuters reports: USAA, TIAA-CREF, the Knights of Columbus, New York Life, and Northwestern Mutual.
–Julie Patel of the South Florida Sun Sentinel tweeted yesterday about how Florida chief financial officer (CFO) Jeff Atwater is being pressed to take a stand on pending bills which could raise insurance rates. While Atwater has been vocal about his support for insurer-backed legislation this year aimed to fight fraud and inflated auto insurance claims, the CFO has not been very clear on his public position regarding several measures that would allow for premium rate hikes, Patel writes.
–The headline, ‘Property/casualty market to firm’, has been popping up all over Twitter and features the I.I.I.’s Dr. Hartwig saying that he foresees a firming of the P/C market in 2012-2014 and that it would occur gradually, most likely on a line-by-line basis. The quote came during an insurance industry CEO panel discussion at the Independent Insurance Agents & Brokers of America’s annual legislative conference in Washington, D.C.
–The I.I.I. video, ‘Spring cleaning for the exterior of your home’ is still being shared widely throughout the social media sphere.
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