To recap the issues raised during this week’s conference call, here are the key media stories we discussed, and the messages we’re conveying.
If there is a subject you would like to see addressed on Wednesday, April 1, please email me at michaelb@iii.org.
I.I.I. ISSUES WHITE PAPER ON ALTERNATIVE CAPITAL AND ITS IMPACT ON INSURANCE AND REINSURANCE MARKETS
I.I.I. President and Economist Robert Hartwig and Chief Actuary James Lynch discuss the impact of alternative capital on the reinsurance marketplace in this report. Alternative reinsurance capital has two variations on the traditional reinsurance arrangement. First, it involves a new class of investor, such as hedge funds, sovereign wealth funds and pensions. Second, it invests using methods such as catastrophe bonds, collateralized reinsurance and reinsurance sidecars, methods rarely employed until recent years. Investors focus on the catastrophe reinsurance market, where by some estimates, between 40 percent and 50 percent of all capital comes from alternative arrangements. The paper examines the growth of the phenomenon, the reaction of traditional reinsurers and possibilities for the future of these arrangements. Full report
PART 3 OF PROPUBLICA’S WORKERS COMP SERIES ON THEIR WEBSITE
Entitled 5 Tales of Harm, injured workers share their stories, revealing the real-life impact of rollbacks that have been spreading across the country. No specific insurance companies were mentioned, rather a criticism of the system. Other stories in the series can be found at www.propublica.org/series/workers-compensation. NCCI developed some talking points (they are attached). They also developed the following bullet points:
- There are no perfect measures for calculating WC profitability.
- Using the operating gain as a profitability measure has limitations.
- Using a multi-year operating gain ratio is more meaningful than using a single year approach.
- The combined ratio is the best measure of WC underwriting profitability.
GERMAN JETLINER CRASHES INTO FRENCH ALPS
On Tuesday, March 24, an Airbus A320 en route from Barcelona to Dusseldorf crashed near the village of Seyne in the French Alps, apparently killing all 150 on board. The plane, operated by Germanwings, a budget unit of Deutsche Lufthansa SA, crashed after an unexplained, eight-minute descent, as reported in this Wall Street Journal story (subscription required). The I.I.I. issued a media advisory the same day, alerting reporters that experts were on hand to discuss the insurance ramifications of the accident. The advisory also included facts and statistics about aviation insurance and safety records.
LIGHTINING PROTECTION INSTITUTE CONFERENCE HELD IN NASHVILLE; I.I.I.’s SALVATORE ON SITE FOR INTERVIEWS
Reporters covering the Lightning Protection Institute (LPI) conference in Nashville this week will have an on-site resource for information on lightning and insurance. I.I.I.’s Jeanne Salvatore will be available to conduct media interviews on lightning and insurance, lightning safety and will also be conducting media training for installers of lightning systems. LPI is an I.I.I. subscriber.
DELAWARE, LOUISIANA AND TEXAS REGULATORS FAULTED IN WSJ STORY ON PRIVATE EQUITY FIRM’S PURCHASE OF TWO INSURANCE COMPANIES
Texas gave Southport Lane Management control of Dallas National Insurance, a workers comp insurer now being liquidated in Delaware, while Louisiana approved the same company’s takeover of Imperial Fire & Casualty, which has since been sold, according to The Wall Street Journal (subscription required). Alexander Chatfield Burns, the 28-year-old who recently resigned from Southport, was at the center of these two transactions, according to a front-page WSJ investigative article on Saturday, March 21.
INSURANCE COMPROMISE BILL DEVELOPED BY LEADING INSURERS AND TNCs
Uber says it has struck a deal with several major insurance companies to overhaul how personal insurance policies cover Uber drivers who get in accidents. The deal is supported by State Farm, Farmers and USAA, as well as by the American Insurance Association, according to a post on Uber’s blog and as reported on Tuesday, March 24, on the news site Vox.com. Supporters hope this will become the basis of legislation in a number of states in the coming months. It is designed to prevent drivers from falling into a gap between the insurance coverage offered by ride-sharing companies and a driver’s personal insurance policy.
STORIES IN THE WORKS
Jeanne Salvatore spoke with Philip Marcelo, a reporter with the Associated Press, about insurance claims following New England’s big snow storms.
Michael Barry spoke with Anthony Dormann of Men’s Health for a June 2015 article on peer-to-peer home insurance rentals and Daniel Kelley of Metro Philadelphia about air bag thefts, a topic on which the National Insurance Crime Bureau has a Fact Sheet.
The Palm Beach Post’s Eliot Kleinberg has received an embargoed copy of Steve Weisbart’s Wednesday, April 1, presentation to the National Hurricane Conference (NHC). The NHC is being held in Austin, Texas, March 30 – April 2.
Janet Ruiz spoke with Valli Herman of The Los Angeles Times who is doing a story on identity theft/fraud insurance.
CAPITOL HILL
State Farm won Federal Aviation Administration approval to test drones within 50 miles of its corporate headquarters in Bloomington, Illinois, it was reported in the March 17 issue of the Pantagraph.com.
In a related matter, the National Association of Mutual Insurance Companies (NAMIC) applauded a Senate Commerce Subcommittee for holding a hearing on the use of unmanned aircraft systems and urged the subcommittee to call for swift action from federal regulators charged with integrating the technology into the National Airspace System. NAMIC submitted as testimony a copy of its recently published white paper, Unmanned Aerial Systems/Drones – Regulation, Liability and Insurance Requirements, which explores the often overlooked and unresolved questions about how users of unmanned aircraft systems would be covered for loss, damage, and liability and how this emerging technology could also impact insurer operations. NAMIC is currently drafting a response outlining the concerns of the property/casualty insurance industry regarding how the proposed rules could inhibit drone use by both insurers and their policyholders.
STATES
California
A UM/UIM hearing is set for Wednesday, March 25, in Sacramento at 1:30 PST. (Backgrounder and agenda are attached).
Washington
Sunday, March 22, was the one-year anniversary of the Oso landslide, which killed 43 people. The I.I.I. posted an article this week on coverage for landslides and mudslides.
Florida
Jeanne Salvatore, Lynne McChristian and Steve Weisbart will participate in the National Hurricane Conference, held this year in Austin, Texas, March 30-April 2, 2015.
Citizens Property Insurance Corporation announced its statewide policy count had dropped this month to less than 600,000, from a high of nearly 1.5 million. A story on the issue appeared in the Palm Beach Post, Wednesday, March 18.
Maryland
A public hearing was held last week on legislation (SB0749) which, if enacted, would prohibit auto insurers from assessing a new policyholder’s marital status, occupation or level of formal education when rating them, according to this Baltimore NBC affiliate story.
New York
The Department of Financial Services has sent a letter to hundreds of auto and other property/casualty insurers, asking for details about the use of mathematical models that predict their customers’ reactions to various price changes, the WSJ reported on Thursday, March 19.
New Jersey
Jeanne Salvatore was interviewed by New York City’s CBS affiliate after The Star Ledger reported New Jersey residents paid more for auto insurance in 2012 than drivers in any of the other 49 states, according to the National Association of Insurance Commissioners.
Connecticut
Katherine Wade has been appointed as the state’s new insurance commissioner, a move that prompted the acting insurance commissioner, Anne Melissa Dowling, to announce she will be leaving the department.
Tennessee
Sponsors of the bill to allow employers to write their own workers compensation policies are preparing to talk to senators about an amendment as they work to get the bill through committee. The bill, SB0721, has evolved since its introduction. Sponsors are looking to add features, including vocational rehabilitation training, temporary partial disability and funeral service benefits. They also plan to address how legal fees will be paid in situations where employees sue an employer over the $5 million cap on benefits distributed to employees per occurrence in litigated claims, according to this Tuesday, March 24, Tennessean story. If the bill, also known as the Tennessee Option, is successful, employers that meet certain financial requirements would be able to craft individual, self-funded injury benefit programs rather than offer insurance coverage under state law.
Louisiana
The Federal Emergency Management Agency is giving the public another month to comment on draft guidelines for implementing the Obama administration’s new rule designed to reduce the risk of serious flooding, according to a Tuesday, March 24, Times-Picayune article.
Oklahoma
A new hazard map for earthquakes from induced seismicity in Oklahoma is expected to be released later this year, researchers at the U.S. Geological Survey said. Data collection and analysis continues after Oklahoma recorded more earthquakes of a magnitude of 3.0 and higher last year than California. Some researchers have linked the increased activity to higher pressure and volumes from wastewater injection wells used in oil and gas activity, according to this Thursday, March 19 article in The Oklahoman.
Oklahomans turned out to a forum on Thursday night, March 19, exploring the state’s rise in earthquakes and the possible links to wastewater injection wells from oil and gas activities. The forum, at Oklahoma City University, was hosted by local television station KOKH Fox 25, according to this Friday, March 20 article in The Oklahoman.
SOCIAL MEDIA REPORT
On March 22, The Delphi driverless car started its cross-country journey from California to New York. Twenty sensors and autonomous technology were placed into an Audi SQ5 for this test. Delphi has been chronicling the drive on their twitter feed using the hashtag #DelphiDrive and posting pictures of amazing scenery as it drives across the country. So far, no problems have been reported with the vehicle.
The search for the second black box of the Germanwings flight that crashed in the French Alps on Tuesday is underway as investigators arrived by helicopter at the site of the crash. Allianz is the lead insurer of the Germanwings plane. Allianz was also the lead insurer for the Malaysian Airlines MH17 that crashed in July over the Ukraine and for Malaysian Airlines MH370 that disappeared over the Indian Ocean one year ago.
Swiss Re released their analysis of 2014’s Global & U.S. Natural Disasters. There were more natural catastrophe events in 2014 but insured losses were below average.
MEDIA MATTERS
Lisa Colagrossi, business reporter for New York’s WABC-TV, has passed away. She had been with the station since 2001. In addition to her reporting duties, she was an occasional anchor.
Assistant Managing Editor Bill Saporito is leaving TIME to join Inc. as an editor-at-large on April 6. Saporito has been on staff with TIME since 1996, and served as the magazine’s first editor-at-large from 2001 to 2007 before assuming his most recent position. In his new role, he will edit two main sections in addition to writing features. Inc. is also starting a new web video series featuring host Marcus Lemonis, the serial entrepreneur who was recently showcased on the cover of Inc. magazine.
Memphis Business Journal announced its editor Terry Hollahan has left the publication. Hollahan was named editor in May 2014, after previously working as managing editor and a sections editor for the publication. A search is currently underway for a replacement.
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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