SYNOPSIS ALL INDUSTRY CONFERENCE CALL August 3, 2011

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, August 10, please email Mike Barry at michaelb@iii.org.

 

The Wallow wildfire that recently burned through approximately 538,000 acres in the Sitgreaves National Forest, the largest in the history of the state of Arizona, was the subject of a CNBC story on August 1.  The I.I.I.’s Bob Hartwig, who was interviewed for the story, said that this type of development is likely to continue due to population growth and associated economic and political factors.

 

This piece by Jean Eaglesha in the July 29 issue of The Wall Street Journal (subscription required) looks at how business groups have lobbied Congress and regulators to influence the financial reforms under the Dodd-Frank law, and some of these groups are now considering filing lawsuits to prevent some measures of the law approved by Congress last July from being implemented. The lawsuits are not expected to be filed unless business groups are unable to convince lawmakers and regulators to accept the changes they seek. The opponents of Dodd-Frank are encouraged by the recent ruling by an appeals court throwing out a Securities and Exchange Commission (SEC) rule that would have made it easier for investors to dismiss corporate directors.

 

Best’s Review reported on its upcoming Webinar, What Carriers Need to Know About Growing the Midsize Insurance Company.  The article noted that in the current economic climate, midsize insurers face ever stiffer competition from larger companies with the resources to deploy new products more effectively and gain market share. It is now possible for carriers with 50 to 1,000 employees to level the playing field by tapping into an increasing array of strategic offerings, like cloud computing, which enforce straight-through processing. A panel of experts will discuss the unique challenges they face and how the ability to better manage information and business processes helps them scale operations with ease and grow both their top and bottom lines. The live Webinar is scheduled for Tuesday, August 30, at 2 p.m. EDT. Register at no charge at http://www.bestreview.com/webinars/midsize11. Webinar panelists will include: Dr. Steven Weisbart, Senior Vice President and Chief Economist, Insurance Information Institute

 

USA Today’s Jonathan Lebowitz and Dan Vergano reported on August 2 that Tropical Storm Emily, the fifth tropical storm of this year’s hurricane season, threatened the Dominican Republic and Haiti with heavy rains and winds of 60 miles per hour. Emily could hit the coast of Florida by August 5. Although the storm is not expected to be the first Atlantic hurricane of the season, forecasters are warning coastal residents to be prepared for storms as the season’s most active period approaches. Dennis Feltgen of the National Hurricane Center in Miami said that Emily will weaken as it moves over the Dominican Republic and Haiti but could regain strength over the Bahamas. Meteorologist Bradley Sutker of Unisys Weather Information Systems in Malvern, Pennsylvania, predicts that the storm will move east of Florida and turn north, possibly reaching the Outer Banks of North Carolina.

The Wall Street Journal’s Andy Pasztor wrote in this August 3 article that airline industry lobbyists convinced the Obama administration to delay the implementation of new regulations intended to reduce pilot fatigue. The Federal Aviation Administration (FAA) and Randy Babbitt, chief administrator, had made strict new rules on pilot work hours, rules that have not been altered for decades, one of their top priorities. Until recently, the FAA had planned to release these new rules by the August 1 deadline required by Congress. On July 29 charter and cargo carriers took their concerns about the new rules directly to the White House Office of Management and Budget, and the timing and details of the proposal are now uncertain while it is under review. The proposal would have forced charter and cargo airlines to comply with the same pilot fatigue rules as passenger carriers. The FAA began working on the proposal in response to the 2009 crash of a Colgan air turboprop near Buffalo, New York. Investigators found a major factor in the crash, which killed 50 people, was the sleep deprivation of two pilots, who had been on long commutes on planes before beginning work.

The New York Times’ Steven David had a piece on August 3 which suggests that the former directors of institutions such as Bear Stearns and Lehman Brothers, which collapsed during the financial crisis, have no reason to be concerned about their careers. After Enron fell into bankruptcy in 2001, the leaders of the corporation were accused of improper activities and fraud. The corporate world was shaken by Enron’s collapse, but the event seems small in comparison to the later financial crisis. While some top corporate officials, including Jeffrey Skilling, a former chief executive of Enron, received prison terms after the company’s collapse, none of Enron’s former directors seem to have suffered career setbacks, and four of Enron’s former directors are now serving on public boards. The only court penalty faced by Enron’s former directors involved the $165 million settlement of shareholder litigation in the wake of Enron’s collapse. The directors had to pay a relatively substantial sum of $13 million, but the remainder was covered by insurance. 

New York Attorney General Eric Schneiderman is preparing to lead the investigations of state officials to determine whether some banks improperly charged state and local pension funds for currency transactions over the last decade, according to an article by Carrick Mollenkamp in the August 3 issue of the The Wall Street Journal. Schneiderman could invoke a far reaching state law known as the Martin Act, which effectively allows him to conduct an interstate inquiry. Inside sources say that Schneiderman’s use of the law could result in the filing of a nationwide lawsuit on behalf of pension funds in New York and across the U.S., or he could seek a settlement on behalf of funds across the nation. Schneiderman is also looking into whether the life insurance industry has made sufficient efforts to ensure payouts on policies of some deceased customers, among other inquiries mentioned in the article.

I.I.I.’s Bob Hartwig is scheduled to do an on camera interview with CNBC producer Sabrina Korber in I.I.I.’s office on August 11 to look at the insurance implications from the 10^th anniversary of 9/11.  In addition to CNBC, Hartwig did several interviews with U.K-based reinsurance trade publications Global Reinsurance and Reactions Magazine. 

 

Bob Hartwig was interviewed by A.M. Best for an article and podcast based on the I.I.I.’s updated residual market study.

 

Jeanne Salvatore was interviewed by New York 1 and Bloomberg Gas TV as part of the I.I.I.’s “Pets and Evacuation” campaign. The goal of the initiative is to use pets as a news hook to get the media interested in the importance of disaster planning. In addition to providing specific disaster planning tips for pet owners, the campaign includes the industry’s key messages on: knowing where to go and what to take when ordered to evacuate; having an up-to-date home inventory; and the importance of having the right type and amount of insurance. The I.I.I. also has a video, Disaster Planning with Pets and encourages members to distribute the press release and video to their own media contacts.

 

WALL STREET JOURNAL PREPPING PIECE ON KIDNAP AND RANSOM INSURANCE
The I.I.I.’s Loretta Worters spoke with Alyssa Abkowitz (alyssa.abkowitz@dowjones.com; 212-416-3141), who is doing a piece for The Wall Street Journal about kidnap and ransom insurance. She is looking to find out how much it costs and how much premiums have increased in recent years, and to get a sense of the scope of K&R coverage within the insurance industry.

WEATHER CHANNEL LOOKS AT PLACES TO LIVE SAFE FROM DISASTERS
Loretta Worters spoke with Kim MacColeman (kmaccoleman@weather.com), a segment producer with the Weather Channel, who is doing a story on the safest places to live in the U.S. from a weather perspective. 

That is what National Underwriter’s Chad Hemingway (chemenway@sbmedia.com) is trying to find out by reaching out to associations, executives, commissioners, experts, etc. for a special feature examining this issue. 

 

CITIZENS PROPOSES RATE INCREASE FOR SINKHOLES, SUBJECT OF NPR INTERVIEW  
A proposed Citizens Property Insurance rate increase for sinkholes was the subject of a taped radio interview, with WUSF (NPR, Public Radio) in Tampa for “Florida Matters,” a 30-minute in-depth news program. The panel included the I.I.I.’s Lynne McChristian, Sen. Mike Fasano, Sean Shaw (a former Florida insurance consumer advocate who now works for The Merlin Law Group), and Sen. Mike Bennett. Citizens’ CFO Sharon Binnun was interviewed separately for the program, which aired Tuesday, August 2, at 6:30 p.m. and will air again on Sunday, August 7 at 7:30 a.m.

Lynne McChristian was interviewed by Julie Patel of the Sun-Sentinel on August 5 about Preferred Service Providers.

Jeff Amy in the (Mobile) Press-Register reported on August 2 that Alabama Governor Robert Bentley told the first meeting of his Affordable Homeowners Insurance Commission that insurance customers in the state need choice and affordability. Bentley told the group that reaching a consensus among consumers, insurers and other participants will be necessary for him to call a special legislative session to enact reforms. The commission will dedicate at least one day to listen to testimony from national representatives of insurers, consumer groups, modeling firms and other experts. One example of possible solutions outlined by the governor is instituting deductibles higher than the 5 percent that have become common in the state’s coastal counties of Mobile and Baldwin. Monique Kabitzke, Alabama state relations director for the Property and Casualty Insurers Association of America, said promoting and protecting a competitive private insurance market is critical to ensuring availability and affordability for Alabama citizens.

 

The Tuscaloosa News had a piece on August 1, on the fact that the storm damage may have been preventable. Reporter Jay Reeves wrote that a new study of the April 27 tornado destruction in Tuscaloosa, Alabama, conducted by a research team funded by the National Science Foundation found that relatively small changes in construction could have prevented much of the damage to houses on the edge of the EF4 twister. While houses in the direct path of the tornado were doomed, those along the fringes, where the storm was weaker, experienced less damage. The study found that changes such as using wind-rated shingles; additional anchors at the bottom of porch columns: metal straps to link roofs with walls; and higher-quality vinyl siding could have made major differences in how well some homes withstood the tornado. Researchers did not determine the additional cost to a new home, or the cost of retrofitting existing homes, but hope their findings will lead to stronger construction standards in tornado-prone areas, similar to the way stronger building codes in coastal areas have helped structures withstand hurricanes.

HONDA, TOYOTA, LEAD STOLEN CARS IN CALIFORNIA, U.S., SAYS MODESTO BEE
History has shown that Californians really like the Honda Accord, Honda Civic and Toyota Camry. Those feelings apparently are shared by car thieves—not only in the Golden State but nationwide. The three passenger car models topped both the state and U.S. lists of the most stolen vehicles in 2010, according to data released August 2 by the National Insurance Crime Bureau and reported in the Modesto Bee.  The Fresno area topped the nation with 7,559 thefts in 2010, equating to 8.12 thefts per 1,000 in population. Sacramento was No. 6 nationwide with 11,881 thefts, equating to 5.53 thefts per 1,000.

Temma Ehrenfeld (@temmaehrenfeld) will join Dow Jones Newswireas a news editor overseeing wealth management, effective September 6. Until recently, she was a senior editor at Financial Planning magazine. Ehrenfeld is also a freelance writer specializing in health, psychology and personal finance.

 

Veteran journalist Greg Corcoran has left his post at The Wall Street Journal, where he most recently served as news editor for the Money & Investing section. He was also a contributor to the Deal Journal blog. Corcoran has served in a number of different roles for Dow Jones over the past two decades.

Longtime Associated Press staffer Rachel Beck is leaving the news service next week. She has been with the AP the entirety of her career, since 1993, most recently serving as a business columnist. A replacement has not yet been named.

 

The I.I.I.’s Pets and Disaster video and release were posted to 180 media sites ranging from Yahoo news and Reuters to many local TV news stations. The I.I.I. encourages member companies and others to continue to promote the content. 

 

Julie Patel of The South Florida Sun-Sentinel tweeted about the sinkhole claim issue: “Could Citizens’ massive sinkhole insurance rate hike be phased in? CFO Atwater questions insurance commissioner,” and links to a story about the possibility of phasing in the massive rate hike over the next few years instead of all at once. There are some policyholders who are very upset over the hike and are organizing a protest rally on August 6.

 

Ben Berkowitz of Reuters tweeted that 73 percent of small and midsized companies experienced cyber attacks in the past year, with a link to a Chubb article about cyber security insurance. The topic of cyber security insurance is a growing trend this year after several major hacks on big corporations like Sony.

 

A trending topic in the Twitter insurance sphere this week is tropical storm Emily. Lots of people are watching and waiting as everyone is expecting a big storm to be on the way this season.

 

A blog post about a partnership between Progressive Insurance and Weather Central, a weather alert company, and a program to offer drivers a localized advanced warning system for hail and other storms mentioned surfaced this week with a reference to the I.I.I. and has been getting some attention from people online. Drivers can sign up for alerts online and can personalize locations of interest such as their home, office or their child’s school and receive automatic alerts via text message up to 30 minutes before a storm.

 

An I.I.I. press release about pool safety has been shared on Twitter and Facebook by insurance groups and agents.

 

 

The I.I.I. is cited regularly in the media as an authoritative source of insurance information. To access the current I.I.I. press clips, click here

 

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