SYNOPSIS ALL INDUSTRY CONFERENCE CALL July 31, 2013

 

If there is a subject you would like to see addressed on Wednesday, August 7, please email Michael Barry at michaelb@iii.org.

 

Bob Hartwig, Jeanne Salvatore and Elianne González did a satellite media tour on hurricane preparedness on Tuesday, July 23, from 7:00 a.m. to 1:00 p.m. EST. The 35 interviews they conducted ran in 178 local TV stations and four national networks reaching an audience of nearly four million. They also appeared on seven radio programs reaching an audience of nearly 600,000. These numbers are likely to continue to grow as not all of the taped interviews have run yet and the vendor has just started to promote the generic interviews they did in Spanish and English to website and broadcast stations.

 

The Wall Street Journal reported on Wednesday, July 31, (subscription required) that on July 30 BP claimed it had allocated almost all of the $20 billion fund set up to compensate victims of the 2010 oil spill in the Gulf of Mexico, a disclosure that could mean that the large British oil company will have to use a greater than expected portion of its future earnings to cover the growing cost of the disaster. BP established the fund immediately after the spill, before the process of compensating victims was in full operation. Although BP offered reassurance to investors in the wake of the disaster, the company now says that $19.7 billion of the fund has been allocated. A spokesman said that while approximately $7 billion remains in the fund, only $300 million has not been allocated to a variety of injury claims from businesses and governments. BP has taken $42.4 billion in charges related to the disaster, a total that includes the estimated cost of the cleanup, compensation for victims and fines.

 

Residents of the mid-Atlantic and southeast regions of the U.S. are beginning to realize the inevitability of hurricanes and are becoming better prepared for the next big storm, according to an article in today’s Wall Street Journal. Last year two major hurricanes hit the Atlantic region, and the U.S. government forecasts as many as six major hurricanes this year. Although meteorologists say that hurricanes can occur anytime between June 1 and November 30, the record shows that 90 percent of hurricanes appear in August and September. According to insurers, one of the largest problems facing homeowners is not having a list of their possessions.

 

An article in the Saturday, July 20, issue of The Economist discussed the phenomenon of declining crime rates in Europe and America in spite of high unemployment rates and economic problems. Theories discussed that could account for the decline include: demographic trends, such as the decreasing numbers of men in the 16- to 24-year old age group, a group that is responsible for most crimes; more criminals locked up in prison; the end of the crack epidemic; and, particularly, better policing. The latter is discussed in detail, including how policing has affected crime rates in New York City and Los Angeles. The article notes that in New York City, the number of car thefts each year has fallen by 93 percent over the past 20 years.

 

The Wall Street Journal’s Donna Bryson reported on the issue of pedestrian deaths on Tuesday, July 30. Across the U.S. these fatalities have been increasing in recent years after decades of decline. Some experts say that it is too early to identify a trend, but many transportation and urban authorities are citing rising pedestrian deaths as an indication that the nation’s cities need to be made safer for walking. In 1975 the number of pedestrians who died in traffic accidents across the U.S. totaled more than 7,500. The number fell to a low of 4,109 in 2009. In 2011, the number increased again to 4,432, representing 14 percent of the total traffic deaths of 32,367. Distracted driving and walking are factors believed to be contributing to increases in pedestrian deaths, according to Anne McCartt, senior vice president for research at the Insurance Institute for Highway Safety (IIHS). The article includes a graph from the IIHS, showing the annual pedestrian death rates among five age groups from 1975 through 2010. Also included is a bar graph listing 2011 pedestrian deaths by speed limit. The year’s victims included 1,345 women and 3,086 men; 19 percent of the year’s pedestrian deaths occurred in hit and run crashes.

 

Tropical Depression Flossie struck Hawaii on Monday, July 29, causing heavy rain and some power outages across the island chain, according to this CNN online piece. The National Weather Service issued a flash flood warning for Maui and flood watches for the rest of the state. Up to a half foot of rain was expected in some locations, along with dangerously high surf and the possibilities of mudslides. Honolulu Mayor Kirk Caldwell said while the system was dissipating, “we need to take it seriously.”

 

According to a new paper published on Monday, July 29, in the Proceedings of the National Academy of Sciences, a rise in sea levels could eventually put parts of more than 1,400 American cities and towns under water if no action is taken to produce deep cuts in greenhouse gas emissions. This was reported by Wendy Koch in the Monday, July 29 issue of USA Today. The article notes that emissions already in the atmosphere will cause a four-foot sea-level rise, swamping parts of 316 municipalities, although it could take hundreds of years for that to happen. If global warming continues at its current rate until the end of the century, another 1,100 cities and towns will be mostly submerged at some point in the distant future. The article explains how Benjamin Strauss, the author of the report and a scientist at Climate Central, a nonprofit, non-advocacy research group, reached his conclusions and discusses some criticism of his findings. 

ABC’s The Lookout with Bill Weir is going to air on Wednesday, July 31, and will feature a segment on a Point Pleasant, New Jersey, policyholder whose flooded vehicle was declared a total loss after Sandy, yet allegedly turned up, for sale, on a car lot in another part of New Jersey months later….Bob Hartwig spoke with Dan McSwain of The San Diego Union Tribune (619-293-1280; dan.mcswain@utsandiego.com) who is doing a piece on trends in insurance pricing both in the personal and commercial lines…..The CFA’s Monday, July 22, reportcontinues to have legs:Charles Passy, a staff writer with the Wall Street Journal Digital (212-416-2003; charles.passy@dowjones.com), spoke with the I.I.I.’s Hartwig and the American Insurance Association about the report; and WYPR-FM, a public radio station in Baltimore, Maryland, will be speaking to Bob on Monday, August 5 from noon to 1:00 p.m. about the report….Jeanne Salvatore did an interview with Andrea Browne (abrowne@kiplinger.com), Channel Editor, Living & Family Finance Kiplinger’s Personal Finance on disaster preparedness.  She also did an interview with CNBC.com’s Anna Andrianova (201-735-4872; Anna.Andrianova@nbcuni.com) on pet health insurance….Loretta Worters spoke with John O’Dell Senior Editor, Edmunds.com, who was updating a story he did in 2009 on the costs of owning hybrid cars and wanted to know if auto insurers still offered discounts (310-309-4976;  jodell@edmunds.com); She also did an interview with Alex Dobuzinskis from Reuters about car sharing services. (alex.dobuzinskis@reuters.com)…..Staci Giordullo (317-803-9252; stacig@angieslist.com), a staff writer with Angie’s List magazine spoke to Steve Weisbart about homeowners insurance rates in New Jersey after Sandy…..Mike Barry spoke with Andrea Fuller (703-854-5269; afuller@gannett.com), a senior producer with Gannett Digital who is looking to develop a map of the most significant U.S. earthquakes in terms of insured losses. He also spoke with Sarah Tressler (210-250-3000; STressler@express-news.net), a reporter for the San Antonio Express-News, about the potential risks involved with wearing inappropriate footwear when driving.

Nothing to report.  Heading into August recess at week’s end.

Flood maps are not due out for Alabama until next December, but the specter of rising flood insurance premiums is undeniable. Congress, seeking to undo the damage done to the National Flood Insurance Program after 2005, changed the policy to impose more stringent regulation on subsidies and second homes. And those changes have painted a bull’s eye on the state’s two coastal counties, according to this Sunday, July 28 article in the Mobile Press Register. 

Update: Consumer Watchdog has now filed for a ballot initiative in 2014 that would overhaul the Medical Injury Compensation Reform Act (MICRA) of 1975 to raise the $250,000 cap on non-economic damages for medical malpractice lawsuits reported in The Los Angeles Times article, Wednesday, July 24; Sacramento Bee article, Thursday, July 25 and Insurance Journal piece, Friday, July 26.

An op-ed written by State Rep. John Wood (R-Winter Haven) on Monday, July 29 in The Ledger looks at the need for property insurance reform, stating that Florida is only one costly storm away from financial catastrophe caused by Florida’s state-run insurance market. He writes that reform is necessary because Florida relies on the trinity of insurance market “stabilizers” known as the Citizens Property Insurance Corp., Florida Hurricane Catastrophe Fund and Florida Guaranty Insurance Association. Each of these entities was created by the Florida Legislature. Together they focus an unacceptable financial risk on the citizens of Florida. This government solution must be reformed because, instead of spreading the catastrophe risk of hurricanes across the global capital markets, Floridians are basically self-insuring by allowing future hurricane catastrophe claims to be paid by assessments against Florida policyholders. Unfortunately, reforming the property insurance market is extremely difficult because of the political resistance caused by the subsidized rates created by the system of state government intervention.

Louisiana’s two U.S. senators urged President Barack Obama to delay promoting FEMA Administrator Craig Fugate to secretary of the Department of Homeland Security until his agency helps address big increases in flood insurance premiums based on the agency’s new flood maps. This was reported in the July 29 issue of The Times Picayune. Fugate is rumored as a possible successor to Homeland Security Secretary Janet Napolitano, who is moving to the top job at California’s state university system. Another official mentioned as a possible successor to Napolitano is Thad Allen, the former Coast Guard commandant. The letter was originated by Sen. David Vitter (R-LA), and Sen. Mary Landrieu (D-LA)., who signed on to it Monday, July 29.

 

While Louisiana’s congressional delegation sought to remain largely neutral on the suit filed Wednesday, July 24, by the East Bank levee authority against a slew of oil, gas and pipeline companies, state lawmakers were more eager to take sides on the issue. From cautiously supportive to deeply critical, current and former lawmakers agreed the legal challenge would bring with it reactive legislation and tough choices for Gov. Bobby Jindal, according to this Thursday, July 25 article in the Times-Picayune.

The Mississippi Supreme Court has ordered a judge to take another look at a lawsuit over whether a company is liable for damage caused when the surge from Hurricane Katrina tore the President Casino from its moorings and smacked it into the Biloxi Beachfront Hotel, about one mile to the west on U.S. 90, according to this Friday, July 26, article in the Mississippi Sun-Herald.

 

Four Ways to Prepare for a Disaster, an I.I.I. video featuring Jeanne Salvatore, is getting shared extensively on Twitter and Facebook by insurance agents and disaster preparedness groups this week. Hurricane prep is also becoming popular topic on blogs as we move into the more active part of the season. Comments about these topics generally reference Sandy and the need for homeowners to have flood insurance. 

 

The Baton Rouge Advocate announced on Monday, July 29, that it hopes to reduce full-time employment by 5 percent through a buyout offer to employees who have 15 or more years with the newspaper. This was reported on July 29 by the Associated Press and picked up by The Times Picayune. General Manager Dan Shea said the reduction will not affect the Baton Rouge-based newspaper’s aggressive move into New Orleans, where it has added staff and is producing a daily home-delivered edition. That change began last year under the previous owners, the Manship family, as The Times-Picayune in New Orleans reduced its home-delivered print edition to three days a week. New Orleans businessman John Georges continued the push when he purchased The Advocate earlier this year.

 

Ken Stickney has been named metro editor for The Daily Advertiser in Lafayette, LA. He will also continue to serve as business editor of the paper, a position he has held since April of this year.

 

Al Jazeera America will be hosting a Google Hangout on Monday, August 5, at 5:00 p.m. ET to introduce their flagship show, “America Tonight.”  Special correspondent Soledad O’Brien and host Joie Chen will join digital producer Azmat Khan and the “America Tonight” team to discuss how they’re doing news differently. According to Al Jazeera America, the Hangout is also an opportunity for participants to help them find stories. They want to hear from people by tweeting @AJAM with #AHAMLive or leaving a comment on their Facebook or Google+ pages with thoughts on the following topics: 

1.        How should a nightly news program serve you?

2.       #AllAmericans: Share first-person stories from Americans who usually go unheard.

3.       #WhatWorks: Successful solutions to problems, with concrete demonstrable results. These can include anything from a scientific breakthrough, to a medical cure, to a program that remedies social problems, to an individual who changes lives for the better.

 

“America Tonight” producers will look through the pitches and select a handful to be featured in the Hangout when the channel launches Tuesday, Aug. 20. You can RSVP on Google if you want to pitch something to the show. 

 

It’s worth noting that Al Jazeera will open 12 bureaus across the U.S.

 

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