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A roundup of the latest industry news and research from the Insurance Information Institute.
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January 23, 2020

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Natural disasters in past decade broke records for economic, insured losses: Aon

Aon’s recent report, “Weather, Climate & Catastrophe Insight: 2019 Annual Report,” shows that a new record was set over the last decade for economic damage and insured losses. Aon said that between 2010 and 2019, global economies lost $2.98 trillion, $1.19 trillion more than during the previous decade. Payouts in the U.S. represented 55 percent of that total. The private sector and insurance programs sponsored by governments covered $71 billion of the losses for the last decade. Data show that in 2019 the protection gap was 69 percent, the fifth lowest for this century. A total of 41 billion-dollar economic loss events occurred in 2019, while billion-dollar insured loss events totaled 12. The article concludes with a summary of the losses from the seven most significant weather events of 2019. Insurance Journal 01/22/2020
 

Top 10 Costliest World Natural Disasters by Insured Losses, 2018 (1)

(US$ millions)

(1) Natural disasters that cause at least US$25 million in insured losses; or 10 deaths; or 50 people injured; or 2,000 filed claims or homes and structures damaged. Hurricane losses in the United States include National Flood Insurance Program losses. As of September 13, 2019. (2) Date event ended.
Note: Loss data shown here may differ from figures shown elsewhere for the same event due to differences in the date of publication, the geographical area covered and other criteria used by organizations collecting the data.

Source: Aon.
Triple-I Fact Book (Members only)

I.I.I. research


JIF insights: Cowbell CEO on simplifying cyber for smaller firms

Cyber remains a tough sell among smaller companies. Many believe their risk profiles don’t warrant the cost of the coverage, and some complain the policies contain too many exclusions. A 2019 Advisen survey of brokers and underwriters – all involved in cyber insurance – found “not understanding exposures” (73 percent), “not understanding coverage” (63 percent), and “cost” (46 percent) to be the top three obstacles to writing and issuing cyber. This interview with Cowbell CEO Jack Kudale discusses these issues and the company’s A.I.-powered platform that promises to assess customers’ cyber exposures in real time and match them with the most relevant coverage for their business – in about five minutes. Triple-I Blog 01/22/2020

trending

China closes off city at center of virus outbreak

On January 23 Chinese authorities have closed off the city of Wuhan in central China, to curtail the spread of coronavirus. The pneumonia-like virus that has spread halfway around the world is believed to have originated in Wuhan, a city of more than 11 million. The new virus was first identified at the end of December and has killed at least 17 people and has affected more than 570 others. The virus has spread to Taiwan, Japan, Thailand, South Korea and the U.S. and has invoked memories of the SARS epidemic, which originated in China in 2002 and 2003 and quickly spread while officials failed to reveal that the epidemic was serious. More than 800 people around the world died from SARS. The New York Times 01/23/2020
 

Gaps remain in US preparation

U.S. medical experts said the nation is better prepared for a viral outbreak than it was during the West African Ebola epidemic that ended in 2016. Tom Frieden, who oversaw the U.S. Centers for Disease Control and Prevention’s Ebola response, said, “We’re better prepared than we were before, but not nearly as prepared as we need to be.” Thomas Inglesby, director of the Johns Hopkins Center for Health Security, said various federal agencies have spent years training and coordinating with U.S. healthcare facilities to prepare for an outbreak like the coronavirus that has killed at least 17 people in China. Said Inglesby, “It doesn’t mean everyone in the country is properly trained, but the front line is.” The article said the first U.S. coronavirus case offers little evidence of how well the system responded. The Washington Post 01/23/2020
 

Regulators struggle again with issue of infant deaths and crib bumpers

The Consumer Product Safety Commission (CPSC) is weighing the arguments of medical authorities, who seek a ban on padded crib bumpers, with those of the Juvenile Product Manufacturers Association, who call for regulations to make the bumpers safe. A public hearing was held on January 22 by the CPSC, and a final decision, will not be announced for several months. James Dickerson, chief scientific officer for Consumer Reports, said the bumpers should not be sold because they can cause infant asphyxiation fatalities. The Washington Post 01/23/2020
 

Insurers look to curb ransomware exposure as US cyber rates rise

Industry sources say U.S. insurers are considering raising cyber-insurance rates and other steps to try to limit their exposure following a surge in costly ransomware claims. Coveware, which helps negotiate and facilitate ransomware payments, said during the third quarter in 2019, the average ransom demanded by hackers who took down the computer systems of various companies and organizations was $41,198—three times higher than in the first quarter. Robert Parisi, U.S. cyber product leader at Marsh & McLennan Companies Inc., said cyber-insurance premiums started rising 5 percent to 25 percent late in 2019. Parisi characterized the increases as “dramatic” but said insurers have not scaled back coverage. Reuters 01/22/2020
 

Georgians support law requiring everyone to buckle up

Current law does not require adults to buckle up in the back seat in Georgia. However, a state Senate committee has recommended legislation to end that exemption. Even though top lawmakers have been noncommittal, a new survey found that 90 percent of registered voters surveyed support requiring everyone in a vehicle to buckle up. According to the Governors Highway Safety Association, there were 803 deaths of unbelted rear-seat occupants age 8 and older nationwide in 2018, and more than 400 would have survived had they been belted. In 2015 the National Highway Traffic Safety Administration estimated that deaths and injuries resulting from the failure to use seatbelts cost more than $10 billion each year in medical care, lost productivity and other injury-related costs. The article details the evolution of Georgia’s seatbelt law. The Atlanta Journal-Constitution 01/22/2020
 

$119 billion sea wall could save New York or bathe it in sewage

The Army Corps of Engineers is considering approaches to strengthening the protection of the New York metropolitan area from storms that have become more frequent and destructive. One proposal is a six-mile-long barrier that could make it less likely that a severe storm such as superstorm Sandy would flood the city, but critics say that approach is likely inadequate and might cause other problems such as sewage and toxin containment that would reverse the progress being made on the ecological improvement of New York’s waterways. The Corps estimates that construction of the barrier would cost $119 billion and it is unknown whether the city, New York state, New Jersey and Congress would work together to finance the project, which would take a quarter of a century to construct. The New York Times 01/18/2020

members bulletin/of interest

Why tech has been slow to fight wildfires, extreme weather

Orlando bank employees quit in mass exodus — and go work at a competitor the next day. A lawsuit ensues


A month of snow leaves Newfoundland, Canada, in a state of emergency


Complete Members Bulletin

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