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, please email Mike Barry at michaelb@iii.org.
HURRICANE SEASON BEGINS TODAY
I.I.I. has sent out a media advisory on the resources it has available to the media as well as a release on business insurance. In addition, I.I.I.’s Lynne McChristian sent out a Florida press release on preparedness and did an interview with WTVT (FOX) on what to know about insurance. She also did an interview with FOX on taking a home inventory. She will be doing a live Skype segment with Pinellas County emergency management on insurance and hurricane season preparedness. It will run on the county’s TV channel and will be available afterward on the county’s website.
JOPLIN, MISSOURI TORNADO CONTINUES TO DOMINATE HEADLINES
I.I.I.’s Bill Davis has been on the scene in Joplin, Missouri: His blog has been posted at the Disaster Newsroom, and his photos posted on the I.I.I. Flickr page. Bill had interviews with WKRG-TV, Ch. 5 (Mobile, AL), KSPR-TV (ABC, Springfield, MO), KYTV (NBC, Springfield, MO), KOLR-TV Channel 10 (CBS, Springfield, MO) KSX-TV, Channel 24 (FOX, Springfield, MO). In addition, he did an interview with the News Leader and the Joplin Globe. He and the I.I.I.’s Loretta Worters both did interviews with the Milwaukee Journal-Sentinel. The New York Times’ Christine Hauser (hauser@nytimes.com) spoke with the I.I.I.’s Bob Hartwig on the high catastrophe losses in the U.S. Hartwig and Worters both spoke with Steve Jordan of the Omaha World Herald and Mike Barry taped interviews with National Public Radio, KMOX-AM in St. Louis, a news radio station; and KCBS-AM in San Francisco.
Availability, cost and benefits of life insurance subject of Smart Money story: Julian Mincer, senior investing reporter with SmartMoney.com (212-416-2239; Jilian.Mincer@Dowjones.com) interviewed Steve Weisbart.
Hartford Courant looks at the issue of bicycle theft and insurance: The I.I.I.’s Jeanne Salvatore was on the issue following an I.I.I. press release on the issue.
USA Today piece on homeowners insurance runs: The I.I.I.’s Salvatore was interviewed by personal finance reporter Sandra Block (sblock@usatoday.com) for this story.
The New York Times looks at how insurance boosts local economies: Michael Cooper wrote a piece on May 31 looking at the local economies in the South and the Midwest, which have been disrupted by deadly tornadoes and widespread flooding just as they were starting to recover from the economic downturn. However, the reconstruction beginning in these communities is expected to provide a boost to local economies. Economists who have studied the impact of natural disasters such as floods, tornadoes and hurricanes have found that after the initial emotional devastation and large scale economic disruptions, periods of increased economic activity frequently follow as insurance funds and disaster relief flow in to jump-start rebuilding and construction. As insurance claims payments are made, a further economic boost is provided as people shop to replace lost goods.
Cellphone use may raise cancer risk: On May 31, the International Agency for Research on Cancer, an agency of the World Health Organization said that using a cellphone may increase the risks of glioma, a common form of brain cancer, the Wall Street Journal reported.
Pools urged to close due to mishaps: Federal regulators have requested that swimming pool operators close thousands of public pools and spas using drain covers that may not prevent potentially fatal accidents involving a swimmer becoming entrapped by the powerful suction from a drain, according to this May 28 Wall Street Journal article by Ashby Jones.
Fitch Ratings says first quarter global catastrophes and the spring tornadoes have already exhausted the 2011 catastrophe budgets of many reinsurers: In a report on the 2011 hurricane season, Fitch says insurers and reinsurers could face rating actions in the event of hurricane losses, depending on the size of the loss relative to capital, options pursued to replenish capital and underwriting prospects going forward, according to this Property/Casualty 360 story.
As Alabama Legislature enters finals days, Mobile-area bills hang in the balance: With only weeks left in this year’s regular legislative session, the fate of many bills backed by local lawmakers remains uncertain, according to a May 31 (Mobile) Press-Register story. Bills related to coastal insurance have made little progress. One has passed, and another few may do so, but lawmakers generally agree that most will wait until Gov. Robert Bentley calls a special session on the subject, planned for later this year.
Storm Risk and Insurance an issue in Alabama: An editorial in the May 29 (Mobile) Press-Register points out that recent tornado damage in the northern part of the state will change the conversation about storm risk and homeowners insurance statewide because it makes it clear that the risk of catastrophic weather damage is not limited to coastal areas. The piece calls on state leaders to increase the dialogue about ways to build stronger structures so more people can survive future storms of all types. Coastal leaders and state legislators are already engaged in a push for insurance reform, including a measure to offer an income-tax deduction to property owners who retrofit their homes to better withstand storms, and another to create a state Department of Insurance fraud unit. A statewide building code would go a long way toward easing the state’s coastal area insurance problems, which until now have been seen solely as an issue for that area, the editorial concludes.
GEORGIA HOME PRICES MIRROR NATIONAL DETERIORATION OF HOUSING MARKET
The Atlanta Journal Constitution reported that home prices in metro Atlanta fell in March to the lowest level since late 1999, weighed down by the effect of foreclosures and a backlog of unsold properties, according to a widely watched index released May 31. The region’s decline mirrors a national housing picture that continues to decline, despite the slow economic recovery, the latest Standard & Poor’s/Case-Shiller Index said. “This month’s report is marked by confirmation of a double-dip in home prices across much of the nation,” said David Blitzer, chairman of S&P’s index committee. “Home prices continue on their downward spiral with no relief in sight.”
The Atlanta Journal Constitution reported that home prices in metro Atlanta fell in March to the lowest level since late 1999, weighed down by the effect of foreclosures and a backlog of unsold properties, according to a widely watched index released May 31. The region’s decline mirrors a national housing picture that continues to decline, despite the slow economic recovery, the latest Standard & Poor’s/Case-Shiller Index said. “This month’s report is marked by confirmation of a double-dip in home prices across much of the nation,” said David Blitzer, chairman of S&P’s index committee. “Home prices continue on their downward spiral with no relief in sight.”
WORKERS COMP BILL PASSES IN ILLINOIS
Zachary Colman of the Associated Press wrotethat after initially rejecting HB 1698, the Illinois House passed the bill reforming the state’s workers compensation system in a second vote of 62-to-43, sending it to Gov. Pat Quinn. The bill, which was passed just hours before the current legislative session was scheduled to end, could reduce workers comp expenses between $500 million and $700 million. It reduces medical fees by 30 percent, reduces payments for carpal tunnel syndrome to 28.5 weeks from 40 weeks, makes it more difficult for intoxicated workers to win claims and offers new guidelines for injured worker treatments.
Zachary Colman of the Associated Press wrotethat after initially rejecting HB 1698, the Illinois House passed the bill reforming the state’s workers compensation system in a second vote of 62-to-43, sending it to Gov. Pat Quinn. The bill, which was passed just hours before the current legislative session was scheduled to end, could reduce workers comp expenses between $500 million and $700 million. It reduces medical fees by 30 percent, reduces payments for carpal tunnel syndrome to 28.5 weeks from 40 weeks, makes it more difficult for intoxicated workers to win claims and offers new guidelines for injured worker treatments.
NEW ORLEANS AREA DESERVES BETTER INSURANCE OPTIONS, PRICES AS HURRICANE SEASON BEGINS, OFFICIALS SAY
About 20 insurance executives from around the country toured the new state-of-the art concrete flood defenses fortifying the New Orleans area to decide for themselves whether the region is safer—and more insurable—than it was six years ago, reportedRebecca Mowbray, business reporter with the New Orleans Times-Picayune, quoting the I.I.I.’s Hartwig: “The completion of this levee project is an important milestone. But we need to understand that the levees don’t stop wind damage. Because most homes that are insured for flood are insured through the National Flood Insurance Program, there’s not a great deal of impact on the risk profile of New Orleans homes.”
About 20 insurance executives from around the country toured the new state-of-the art concrete flood defenses fortifying the New Orleans area to decide for themselves whether the region is safer—and more insurable—than it was six years ago, reportedRebecca Mowbray, business reporter with the New Orleans Times-Picayune, quoting the I.I.I.’s Hartwig: “The completion of this levee project is an important milestone. But we need to understand that the levees don’t stop wind damage. Because most homes that are insured for flood are insured through the National Flood Insurance Program, there’s not a great deal of impact on the risk profile of New Orleans homes.”
CREDIT SCORING SURVIVES IN TEXAS
Credit scoring using completely race-neutral factors is permitted under Texas law even if it has an unintended impact on minorities, the state’s Supreme Court ruled late last week. The court ruled in an 8-0 decision in the case Ojo v. Farmers Group et al (No. 10-0245) that the state’s law “does not prohibit an insurer from using race-neutral factors in credit-scoring to price insurance, even if doing so creates a racially disparate impact,” reported Property/Casualty 360.
Credit scoring using completely race-neutral factors is permitted under Texas law even if it has an unintended impact on minorities, the state’s Supreme Court ruled late last week. The court ruled in an 8-0 decision in the case Ojo v. Farmers Group et al (No. 10-0245) that the state’s law “does not prohibit an insurer from using race-neutral factors in credit-scoring to price insurance, even if doing so creates a racially disparate impact,” reported Property/Casualty 360.
MEDIA MATTERS
Noah Buhayar (nbuhayar@bloomberg.net) is now the official insurance beat reporter with Bloomberg. Noah has been at Bloomberg for about a year covering other areas. Dan Kraut and Andy Frye will still be on the insurance beat but going forward Noah will mostly be covering property/casualty insurers. He has also reported for the Financial Times, the Wall Street Journal, CBS’s business site BNET.com and MarketWatch.
Alistair Barr (abarr@marketwatch.com), West Coast Financial Services Correspondent for Marketwatch will be leaving the financial information website, which provides business news, analysis and stock market data.
SOCIAL MEDIA REPORT
—Daniel Eckhart of Swiss Re tweeted over the weekend about a quote from Andy Castaldi, head of the catastrophe-perils Americas team at Swiss Re that reads: “These aren’t your grandfather’s hurricanes anymore.” This tweet linked to an article about how potential climate change could lead to more severe weather and thus more costs for insurance companies.
—Daniel Eckhart of Swiss Re tweeted over the weekend about a quote from Andy Castaldi, head of the catastrophe-perils Americas team at Swiss Re that reads: “These aren’t your grandfather’s hurricanes anymore.” This tweet linked to an article about how potential climate change could lead to more severe weather and thus more costs for insurance companies.
–Two topics were trending this week. The first is about uninsured tornado victims and how in areas of the U.S. that are most prone to tornadoes there are many people who lack adequate coverage. The bulk of this trend comes from an Associated Press story that has been reposted numerous times on different blogs and tweeted about consistently, and is promoting better education for people living in areas where severe weather often damages homes. The AP story included a quote by the I.I.I.’s Hartwig and also had information provided by the I.I.I.
–The second trending topic this week is about the start of hurricane season and how homeowners need to be prepared by having homes in good repair and evacuation plans laid out. The start of hurricane season is said to be a great time for an insurance checkup. The I.I.I. press release from this week is already being used as a source to encourage homeowners to be prepared for an expected active season.
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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