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The Summer of 2017: Driving

Posted By Administration, Tuesday, June 6, 2017

 

The month of June starts one of the more worrisome months for parents of teenagers and for the auto insurers who insure those families. How worrisome? Very. In fact, it’s uppermost on the minds of the Students Against Destructive Decisions (SADD) and Liberty Mutual.

The two organizations combined to sponsor a study of teen driving and found a startling, but not all that surprising, fact. Teenagers drive like their parents. And their parents are often not very good drivers and have bad driving habits like using their smartphone while driving for all kinds of things like talking, texting and checking email.

SADD’s Gene Beresin put it in perspective, “Parents are not great role models. As a matter of fact, they’re pretty poor role models for teenage driving.” And this is especially important when you remember that distracted driving now accounts for 25% of all car crashes. That’s one in four.

The SADD-Liberty Mutual survey checked in with 2,500 teens and 1,000 parents and found:

  55% of parents use applications when driving

  62% admit to using their phone to take calls while behind the wheel

  50% admit to calling their teenagers when they know the teen is driving

  And 33% — if the call is missed — expect a response from the child before they arrive at their destination

And the kids? A whopping 33% say they’ve asked their parents to stop that behavior while driving. Beresin said, “The good news is this sets the stage for a conversation between parents and teenagers.

The report also offers some suggestions to parents to help prevent fatal car crashes:

  Don’t let teenagers drive when they are tired

  Why? 10% of teens admit to falling asleep behind the wheel because they’re tired

  The study asks parents to instruct their kids to call for a ride or take a cab when they’re tired

  Set up a distinctive ring tone or text tone for emergency calls from the parent so they can ignore all other calls.

  Tell teenagers to program the two biggest driving distractors navigation and music before the trip starts

Beresin said, “Program a playlist ahead of time. If the phone is within reach and you hear or see a notification, you’re going to be very tempted to either look down or pick it up. And the bottom line is you don’t need to.”

Another study by the Insurance Institute for Highway Safety (IIHS) looks at the cars that are most likely to be involved in fatal collisions for teens and their parents this summer.

And for winter, spring or fall, too, for that matter.

Minicars and small cars have the most potential for a fatal collision because they don’t have the protective bulk of larger vehicles. Four door minicars are the most dangerous and four-wheel drive large luxury SUVs had the lowest number of fatalities.

The two most dangerous minicars — according to the number of fatalities recorded — are the Hyundai Accent and the Kia Rio. The Accent is first and had 104 deaths per million vehicles registered.

The 11 with zero driver deaths from 2012 to 2015 are:

  Volkswagen Tiguan

  Toyota Tacoma Double Cab

  Mazda CX-9

  Audi A6

  Audi Q7

  Jeep Cherokee

  Mercedes Benz M-Class

  BMW 535 i/is

  BMW 535xi

  Lexus RX350

  Lexus CT 200

David Zuby of IIHS told Forbes magazine, “Vehicles continue to improve, performing better and better in crash tests. The latest driver death rates show there is a limit to how much these changes can accomplish without other kinds of efforts.”

 

Source links: Insurance Business America — link 1, link 2

Tags:  driving insurance  Insurance Content  Insurance Industry  Insurance News  The Summer of 2017: Driving  Weekly Industry News 

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UnitedHealth Group May be in Trouble with Feds

Posted By Administration, Tuesday, June 6, 2017

The Department of Justice has filed charges against UnitedHealth Group for overcharging the federal government more than $1 billion through its Medicare Advantage packages.

The suit — filed in a Los Angeles court — said UnitedHealth made patients appear to be much more infirm than they actually were so they could collect higher Medicare payments.

A report from Salon.com said the federal government’s conservative estimate is that UnitedHealth “knowingly and improperly avoided repaying Medicare” for the more than $1 billion in overcharges during the decade ending in 2016.

U.S Attorney Sandra Brown said, “To ensure that the program remains viable for all beneficiaries, the Justice Department remains tireless in its pursuit of Medicare fraud perpetrated by healthcare providers and insurers. The primary goal of publicly funded health care programs like Medicare is to provide high quality services to those in need — not to line the pockets of participants willing to abuse the system,” she said.

This is the second time UnitedHealth has been under Justice Department scrutiny under the False Claims Act. In 2011 a similar complaint was filed by the firm’s former finance director.

UnitedHealth is the nation’s biggest Medicare Advantage participant and in 2016 it covered 3.6 million policyholders. The price tag for that insurance was $56 billion.

The company denies any wrongdoing and spokesman Matt Burns said it will go to battle over the accusations. “We are confident our company and our employees complied with the government’s Medicare Advantage program rules, and we have been transparent with (Centers for Medicare and Medicaid Services) about our approach under its unclear policies.”

CMS declined to comment.

 

Source link: Insurance Business America

Tags:  Healthcare  HealthCare.gov  Insurance Content  Insurance Industry  Insurance News  ObamaCare  The Affordable Care Act  UnitedHealth Group May be in Trouble with Feds  Weekly Industry News 

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Mergers & Acquisitions: High Prices Going Even Higher

Posted By Administration, Tuesday, June 6, 2017

The value of insurance agencies continues to grow. In fact, MarshBerry CEO John Wepler said they’re as high as they’ve ever been and those high prices are not deterring those wanting to purchase them.

At a conference in Las Vegas late last month Wepler told 500 agency execs that the M&A market is “explosive” and “private equity has literally taken over the insurance brokerage business. I will tell you today valuations are at the highest point they’ve ever been.”

Wepler said there is now “no oxygen” left at the top with averages topping 10.12 times the EBITDA. “I don’t think it’s a fad. There’s $114 billion in capital on the sidelines trying to get in,” he said.

On another topic, Wepler also said insurance — and brokerages in particular — need to seriously worry about insuretech. “I’m telling you it’s going to be a massive, massive disruption. The insurance industry is ripe for innovation and disruption. I think you can expect disruption in every single type and size of account in your book of business.”

Estimates say there are likely 1,500 tech entrepreneurs, investors and insurance executives involved in insuretech. Those startups are said to be disrupting — as Wepler said — every line of insurance. They are improving the customer experience via the cost of providing insurance, increasing transparency, simplifying processes and empowering customers and it’s all done by employing big data.

Plus, proponents say it even makes the claims process “enjoyable.”

 

Source links: Insurance Journal — link 1, link 2

Tags:  Insurance Content  Insurance Industry  Insurance News  Mergers  Mergers & Acquisitions: High Prices Going Even Hig  Mergers and Acquisitions: Some E&O Words of Wisdom  Weekly Industry News 

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Who has Cyber Insurance? Not that Many

Posted By Administration, Tuesday, June 6, 2017

 

A new survey by the research firm Ovum says 50% of U.S. businesses don’t have cyber risk insurance. Just 16% of the 100% have full coverage. The survey was done for the analytics company FICO and it also found 27% of that 50% say their companies have no plans to purchase said insurance.

Ironically — and dangerously — 61% say they expect cyber attacks increase in the next year.

The survey found U.S. companies lag in cyber coverage when compared to Canada and the United Kingdom. The report says 40% of firms report no cyber coverage in those countries.

And why? Mistrust of insurance pricing is what most say.

The survey is wide-ranging. It connected with 350 c-suite executives and senior security officers. They come from sectors like:

  Financial services

  Telecommunications

  Healthcare

  Retail

  E-commerce

  Media service providers

Company sizes:

  30% have 500 to 1,000 employees

  28% have 1,001 to 4,999 employees

  17% have 5,000 to 9,999

  25% have more than 10,000

Bob Shiflet of FICO said the Ovum survey finds U.S. healthcare to be father behind than most when it comes to cyber insuring. None of those surveyed in healthcare have insurance that covers all risks and 74% had no insurance at all. Shiflet said this is troubling but some of that must be laid at the feet of the insurance industry.

“There are steps the insurance industry can take to make guidelines clearer and explain premium adjustments, but companies need to be willing to dedicate the resources required to protect themselves from the breaches they themselves see as likely, if not inevitable,” Shiflet said.

Cost and lack of clarity from the industry is problematic:

  Just 25% of those responding think premiums reflect their risk profile

  Only 23% think the insurance industry is clear and transparent in its approach to pricing

  29% of the executives think insurers need clear guidelines about how premiums are chosen

  28% want clearer communications on why premiums are adjusted when that happens

  23% want insurers to introduce a standard for benchmarking cyber risk

Hiscox did a similar survey that said 55% of U.S. firms have taken out cyber insurance but these businesses are — as with the Ovum survey — confused about what cyber coverage actually entails and what is protected.

For those who don’t have cyber insurance:

  26% do not plan to purchase

  41% said cyber insurance policies are not relevant to their business

  17% say they have no plans to take out insurance — ever — and agreed with this statement: Cyber insurance policies are so complicated — I don’t understand what cyber insurance would cover me for.

Deloitte also did a survey that found buyers just don’t understand cyber risks or options for insurance. And all — the report found — want standardized policies. “Similar cyber insurance products offered by different providers often include alternative features, which makes it difficult for buyers to compare policies by value and price,” the report said.

Deloitte also outlined steps similar to those of Ovum for insurers to take:

  Standardize policy language

  Develop a risk-informed model rather than a definitive predictive model for cyber risks

  employ more targeted underwriting by industry or exposure

  Offer more holistic cyber risk management programs

RAND Corporation did a different report and hit the real nail on the head. Companies — it found — just don’t see cyber insurance as a good investment. The typical cost of a breach according to RAND is $200,000 which means an event will cost a company about 0.4% of annual revenues.

Sasha Romanosky of RAND put it in perspective. “Relative to all the other risks companies face, the cyber risks often aren’t as big a deal as we think. It may be bad for you if you are the victim, but it doesn’t change the behavior or strategy of a company. Like you and me, companies are self-interested and operate in ways that minimize their costs. You can’t begrudge them for working that way,” Romanosky said.

Ponemon seriously disagrees with RAND’s conclusions. It’s report from May of 2014 found the average data breach costs something like $3.5 million for super-sized companies.

 

Source link: Insurance Journal

Tags:  Cyber Breach  Cyber Insurance  Cyber Security  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News  Who has Cyber Insurance? Not that Many 

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Update: WannaCry — Most Would Pay

Posted By Administration, Tuesday, June 6, 2017

Carbon Black surveyed 5,000 U.S. consumers about their trust in corporations for keeping their data safe. Part of the questioning involved the WannaCry ransomware virus. The crisis a few weeks ago in 150 countries is the first most had heard of ransomeware. That’s odd because ransomeware has been a problem for a decade or more.

What is most surprising is the number of people who’d pay the ransom if it happened to them:

  52% said they’d pay the ransom if their computer or data is taken hostage

  Only 12% said they’d pay $500 or more

Experts are advising people to be prepared. Verizon did a report in 2014. Then ransomeware was the 22nd most common form of malware. Today it is number-five. The quick-buck approach to profits means it could even rise above that point in the future.

As for the rest of the world. Financial institutions and healthcare providers are trusted by about 70% of us. But only 52% trust retailers.

Consumers — overall — think the responsibility of keeping their data safe lands at the feet of the individual business. They do not believe it is the responsibility of cybersecurity vendors, software vendors and providers like Microsoft, Apple and Google and government agencies like the FBI, NSA and CIA to keep their data safe.

 

Source link: BizReport

Tags:  Cyber Breach  Cyber Insurance  Cyber Security  Insurance Content  Insurance Industry  Insurance news  Special Report: The WannaCry Virus Aftermath  Update: WannaCry — Most Would Pay  virus  Weekly Industry News 

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ObamaCare Repeal & Replace: The Usual Confusion

Posted By Administration, Tuesday, June 6, 2017

The Senate is back in session. They’ll go to work on the repeal and replacement of the Affordable Care Act. Or we should say, Republicans will go to work. Democrats will sit on the sidelines and complain.

Most Republican leaders are skeptical that anything can get done before the July 4th break or even before August’s month-long recess. The Trump administration — and in particular Vice President Mike Pence — wants it done and done quickly. Several things will make that difficult starting with the enormous unpopularity of the bill Republicans in the House sent over a few weeks ago.

The unpopularity is with many moderate Republicans in the Senate and with many consumers. A tracking poll released by the Kaiser Family Foundation’s Kaiser Health says 55% of Americans have a negative view of the House bill. And equal number want the Senate to dump it or make major changes. Just 8% of those polled want the House version passed.

Breaking it down by political party:

  66% of Republicans want the Senate to pass the House bill

  78% of Democrats view the Affordable Care Act positively

  48% of Independents like the ACA

  30% of Independents like the House bill

Kaiser also looked at the popularity numbers for ObamaCare and found 49% view it positively compared to just 42% with a negative view. Spokesman Drew Altman said, “There is nothing in this poll, that if you were in the Senate, would cause you to rush out and pass the House bill.”

One of the biggest problems facing Republicans in the Senate is the whether to keep the House’s $664 billion in tax cuts that are repealed in the House bill. They stretch from the Cadillac tax to investment income.

Senate Finance Committee Chairman Orrin Hatch of Utah laughed at the reluctance of some of his Republican colleagues. He says those taxes all must go and they have to go soon or the party will be very embarrassed. Why? The party has spent a better part of the last seven years trying to get it repealed.

“We should not be treating the Obamacare taxes as a smorgasbord, picking and choosing which ones to keep and which to discard. I don’t think there is a single tax increase in Obamacare that has enjoyed support on this Republican side,” Hatch said.

Republican Sen. Bill Cassidy of Louisiana — who along with Maine Republican Sen. Susan Collins — has authored the Patient Freedom Act. It’s an alternative that’s more or less in the middle between the Draconian House bill and ObamaCare. He and Collins think President Trump’s pledge to give the American people a healthcare plan to be proud of ought to be honored. 

President Trump’s contract with the voter, when he was running, was that he would continue coverage caring for pre-existing conditions, eliminating mandates but also lowering premiums. If we think that Trump’s contract with the voters is important to us, then the fiscally conservative thing to do is to pay for it,” Cassidy said in a statement.

To keep Collins in the fold and to placate Alaska Republican Sen. Lisa Murkowski, Sen. Mitch McConnell and the other very conservative Republicans are going to have to keep some of those taxes to pay for a better repeal and replacement plan. 

As for the president? These days it’s hard to figure out where Trump stands on the issue.

Stan Collender is the executive vice president Qorvis MSL Group. He is also a former congressional budget aide. He said, “This is undoubtedly one of the things that has to be driving Mitch McConnell crazy. It’s the key difference between the House and Senate Republicans. Tea Party members of the House want to cut taxes all the time, any way they can on any legislation. The Senate is willing to be more moderate and almost has to be, given its constituency.”

As to what direction all this will go? We’ll keep you posted.

 

Source links: The Washington Post, Insurance Business America

Tags:  Healthcare  HealthCare.gov  Insurance Content  Insurance Industry  Insurance news  ObamaCare  ObamaCare Repeal & Replace: The Usual Confusion  The Affordable Care Act  Weekly Industry News 

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Around the PIA Western Alliance States

Posted By Administration, Tuesday, June 6, 2017

California — Commissioner & the FAIR Decision Controversy
Marlene Garnes won a legal victory against California FAIR Plan Association (FAIR) when the California Court of Appeal, First District overturned a decision by a lower court and ordered the insurer to pay the cost to repair Garnes' Richmond-area home, which was damaged in a fire in 2011.

California Insurance Commissioner Dave Jones said, “The Court's decision prevents FAIR from forcing residents in lower income and other economically challenged neighborhoods to move or live in a damaged home instead of repairing it after a fire.”

In October 2011, Garnes submitted a claim for $320,549 for the cost to repair her damaged home, less depreciation. Her FAIR fire insurance policy had a limit of $425,000, but the insurer denied her claim. In the end, the insurer only paid $75,000 and said that was the fair market value of her property in 2011.

When the parties were unable to agree on the claim payment, FAIR sued Garnes.

Jones filed an amicus brief in support of Marlene Garnes. He pointed out the Insurance Code entitled her to be reimbursed for the cost of repairing her home even if that exceeded the fair market value. The court relied on Commissioner Jones' interpretation of the Insurance Code and ruled in favor of Garnes.

A statement from the FAIR Plan noted that the property was grossly overinsured.

“The property suffered a kitchen fire and, due to the age and condition of the property, the cost to repair the damage far exceeded the actual cash value (fair market value) of the property. The policy made clear that the most the FAIR Plan would pay if there was a partial or total loss was the fair market value of the property. Prior to purchasing the property Ms. Garnes was presented with a disclosure statement in 2006 giving her the various policy options available that the FAIR Plan wrote, including the option to purchase replacement cost coverage. Ms. Garnes chose an ACV policy,” the statement said.

The statement went on to say Garnes knew she was purchasing an ACV policy. It claims her broker decided how much to insure the property for and the FAIR Plan does not conduct property value appraisals when insuring property.

FAIR’s statement also added that the definition of “total loss” in the policy includes the concept of constructive total loss, which utilizes an economic test for the valuation of total loss where the repair costs exceed the property’s fair market value. That’s an approach that’s consistent with automobile and other policies that give insurers the right to pay the fair market value in the event of a total loss and the cost of repairs exceed its value, according to the FAIR Plan.

The statement also took aim at the statement issued by the California Department of Insurance.

“Last year, the Department of Insurance asked the FAIR Plan to change the definition of ‘total loss’ in its insurance policy form, and, working closely and cooperatively with the Department of Insurance, the FAIR Plan made that and other significant changes to its policy form. The new form will be used on all new and renewal policies starting July 1, 2017. The FAIR Plan is outraged that the Department of Insurance would issue a press release suggesting that the FAIR Plan discriminates against its inner-city customers.”

Source link: Insurance Journal, California Department of Insurance

 

California — Google Expands Carpool Service: Google wants more Californians to share rides to work. It is now collecting data to help people set up carpooling groups. This is being done through Google’s navigation and traffic monitoring app Waze.

It will have been testing carpool waters for the last year or so in various areas of the Golden State. The app is now ready to expand into much more heavily congested traffic areas like Los Angeles and other parts of Southern California.

When riders want to carpool, they notify Waze in advance and the app will try to match them with others wanting the same thing. Matches — at least at this point — are not guaranteed. And riders can only request two rides per day.

Drivers can only pick one carpooler a day and do get to profile the user before offering a ride.

Waze’s app will focus on rush hour commutes for now because the odds of successfully matching people is highest at that time.

Source link: Insurance Journal

 

Idaho — Insurance Department Op-Ed
Since the election, much has been said about what the Obamacare repeal and replacement may look like for Idahoans. Unfortunately, some of what has been said is incomplete, misleading, or inaccurate. I want to clarify some of the misconceptions. I and the Department of Insurance also want to be a resource to the questions you may encounter as our health insurance system is debated.

Perhaps the biggest misconception is that Idahoans can afford for Obamacare to remain unchanged. Every Idaho insurance carrier continues to lose millions of dollars in the individual health insurance market. These losses translate into higher premium increases for Idahoans, reduced availability, and narrower provider networks. The individual insurance market is not on a sustainable path.

This dilemma is not unique to Idaho. Across the country, insurance carriers are withdrawing from the individual marketplace. In 2017, 70% of the counties across America have two or fewer carriers and 33% of the counties only have one carrier. Already for 2018, some carriers have announced their withdrawal, potentially leaving citizens with limited choices

I have seen evidence that with the repeal and replacement of Obamacare insurance premiums will be significantly lower in Idaho on very good products and Idahoans will have more choices to buy plans that better fit them.

Another misconception is that pre-existing conditions will not be covered under the proposed Obamacare replacement. Recent media hype portrays newborns with health conditions as being uninsurable. This is blatantly misleading and ignores federal law, the proposed law, and Idaho state law.

Let me be clear: a newborn baby cannot be denied coverage under Idaho law as long as the child is enrolled on their parents’ plan within 60 days.  Under current and proposed federal law a newborn child would be entitled to a special enrollment period. The proposed bill does not change the opportunity for the child to obtain health insurance, and a carrier could not deny or restrict that coverage, as long as the child is enrolled within 60 days from birth.

Further, even under proposed changes all plans would continue to be GUARANTEED ISSUE and GUARANTEED RENEWABLE, which means no one can be denied coverage.

The proposed modification to pre-existing conditions applies to consumers who have deliberately chosen to go without coverage until after they have a costly health condition. Like Obamacare, those individuals would be able to obtain coverage at the next open enrollment or special enrollment period; however, under the proposal would pay a higher premium for a limited time period based on their prior decision to forgo coverage.

No other type of insurance allows a consumer to go without coverage and then to enroll only after a costly event has occurred. You cannot buy homeowners insurance after your home is on fire.

If you are concerned about a pre-existing condition, the answer is to obtain and maintain continuous coverage. Continuous coverage guarantees no pre-existing condition exclusions apply under current federal and state law.

The Idaho Department of Insurance is happy to respond to your questions or concerns. We are anxious to dispel misconceptions, alleviate fears and help stabilize the marketplace. Please visit our website to fact check a rumor, ask a question, and read the answers to previously asked questions.

Although I know the road ahead may be bumpy, I am confident we will get through it. This is a critical decision and deserves to have accurate and complete information.

Washington — Department of Insurance
The Department of Insurance has added a Fixed-payment benefits plans annual report 2017 (PDF, 633.55 kB) to its website. You can find it by clicking here.

You can find all legislative and commissioner reports here.

Tags:  Around the PIA Western Alliance States  Insurance Content  Insurance Industry  Insurance news  Weekly Industry News 

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EXPO: PIA Oregon’s Revolutionary EXPO

Posted By Administration, Tuesday, May 30, 2017

PIA Oregon’s EXPO is coming. It’s the largest event of its kind in the Northwest and features a trade show that combines the latest industry products, services and innovation with personal contact.

The focus of PIA’s one of a kind event is:

Wednesday, June 21
Sheraton Portland Airport

But there is more to EXPO than just a one day trade show. Also happening at the Sheraton Portland Airport on June 20th is not-to-be-missed continuing education and all but the Oregon law class gives CE credits to agents in Oregon, Washington and Idaho.

If you’re a Washington or Idaho agent, why not combine a wonderful trip to beautiful Portland, Oregon with some education, a look at the latest in insurance and some quality networking?

Plus, the day of education includes a not-to-be missed Cyber Boot Camp. After the WannaCry cyber-attack that hit 150 countries, the Cyber Boot Camp is just in time.

At the Cyber Boot Camp Session, you’ll receive 3 CE to Oregon, Washington and Idaho agents and the course reveals comprehensive insight into the emerging and critical subject to Network Security and Privacy “Cyber” insurance. The agents and brokers attending this class will leave with a basic understanding of:

  Cyber exposures and threats

  Key elements of protection and prevention

  Cyber underwriting and evaluation criteria

  Unique claims challenges and how these are handled

  Detailed analysis of Cyber forms

  Current state of the cyber market

  Future trends

EXPO’s Education Classes and CE credits:

  Oregon Law & Administrative Rules — 3 CE Oregon agents only

  Cyber Boot Camp — 3 CE Oregon, Washington & Idaho

  Ethical Issues for Insurance Professionals — 3 CE Oregon, Washington & Idaho

  Business Income Insurance — 3 CE Oregon, Washington & Idaho

While there are fees for non-members in the CE classes on Tuesday, June 20th, the trade show and the keynote presentation on the 21st is free to anyone actively working for a licensed agency.

Monday, June 19th, EXPO includes the annual golf tournament. It’s at Creekside Golf Club in Salem, Oregon. A beautiful private that we have all to ourselves. The shotgun start is at 12:00 p.m.  followed by dinner and awards.

The $75 fee includes the golf, a golf cart, range balls and a drink ticket.

EXPO is all this and more!
Learn More: Click
Here

Tags:  EXPO  EXPO: PIA Oregon’s Revolutionary EXPO  Insurance Content  Insurance Industry  Insurance news  PIA EXPO  PIA Oregon/Idaho’s EXPO!  Weekly Industry News 

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Carrier Ratings: Do You Have the Necessary Process in Place?

Posted By Administration, Tuesday, May 30, 2017

by Curtis M. Pearsall, CPCU, AIAF, CPIA, President. Pearsall Associates Inc. and Special Consultant to the Utica National E&O Program

Over the next few months, rating agencies such as A.M. Best, Demotech, S&P, etc., will be carefully dissecting the financials for nearly every insurance carrier in the marketplace. Based on these reviews, there is the potential that some carriers’ ratings could change. Does your agency have a process in place to manage this key issue?

Managing Carrier Ratings
Every agency should have an established minimum financial rating for the carriers they do business with. While a minimum rating of “A-,” using the A.M Best rating approach, is common among agencies, how your E&O carrier addresses insolvency in the policy form should be a consideration.

As rating agencies begin to publish their findings, it is vital for your agency to have a process to secure the most up-to-date information. There are many approaches. Based on the number of carriers your agency does business with, including carriers used by the wholesalers you do business with, identifying carriers’ ratings can be a time-consuming process. It is suggested that agencies look for an automated approach to secure this key information.

A.M. Best has a tool that is part of its Key Rating Guide that provides email alerts on important information pertaining to various carriers. There is a fee for this service, but the information is timely. Visit www.ambest.com/sales/krg to learn more. The website includes a video demonstrating the guide’s capabilities and functionality to help determine if this approach is right for your agency.

Get It in Writing
Not many carriers are downgraded each year. For example, an agency could have a carrier going from “A+” to “A.” While agency management may want to examine the situation more closely, there will probably not be any further action needed. But what would your agency process be if one of your carriers was downgraded from “A-” to “B”?

If this happens, identify the clients with those carriers. If the carrier is used by a wholesaler, the wholesaler should be able to provide this information unless that information was captured in your agency system.

It is then suggested to give those clients a written notice. The document should explain the situation advising the client that the coverage was placed with an insurance carrier that was recently downgraded. The explanation of the rating as provided by the rating agency should be included. For example, in the A.M. Best methodology, a “B” rating is defined as “Fair,” a “B+” is “Good,” etc.

Inform your client that you are not in a position to attest to the carrier’s future status and that there is the potential for the carrier to be unable to satisfy its obligation to pay claims. A primary goal of this written document is to educate the client to enable

them to make an informed decision on whether they want to continue or discontinue coverage with the current carrier. Include language advising the client that the agency would be willing to remarket the account to a carrier with a higher rating. In addition, tell the client that there is no guarantee that the premium will be equal to or less than what the client is currently paying or that the coverage will be identical.

The client must make a decision and communicate that decision in writing to the agency. In essence, what direction does the client want the agency to take? Some agencies have the choices noted on a document and require the client to check the box that indicates their decision.

Be Ready
There may not be many carriers whose rating changes in 2017, but what if one of those carriers is one you do business with? Make sure you have the necessary process in place.

Tags:  Carrier Ratings: Do You Have the Necessary Process  Curtis M Pearsall  E&O  Errors and Ommissions  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News 

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Update: WannaCry Virus and More

Posted By Administration, Tuesday, May 30, 2017

Experts are still trying to find out who launched the WannaCry ransomware attack a couple of weeks ago. Researchers at cyber security firms Symantec and FireEye say evidence they’ve uncovered says the attack came from North Korea’s hacking group Lazarus.

Ben Read of FireEye said, “The shared code likely means that, at a minimum, WannaCry operators share software development resources with North Korean espionage operators.”

North Korea denies involvement.

The WannaCry virus and other recent ransomware attacks has impacted insurance. And that impact is both negative and positive.

Aon Benfield and Beazley did a study of ransomware attacks. It is titled Aon Benfield’s Cyber Update: 2016 Cyber Insurance Profits and Performance and the study found the number of ransomware attacks quadrupled from 2015 to 2016. In their report, Aon researchers Jon Laux and Craig Kerman said this has led cyber insurers to see a jump in the loss ratio to 57.7. That’s a 16% rise from 2015.

On the other side of the coin, the study found cyber insurance premiums grew roughly 30% to $1.34 billion between 2015 and 2016

“For insurers providing cyber insurance, these results illustrate the potential for both extremely good and extremely bad underwriting outcomes, and underscore the importance of managing limits,” they wrote.

Aon Risk Solutions Senior Vice President Jim Trainor also commented on the study. He said it includes data from 138 insurers in the U.S. “One of the challenges of cyber is that it is a very complex environment. Bad actors use and exploit infrastructure both in and out of the United States. A lot of groups who conduct such criminal activity don’t reside in the U.S. This makes it increasingly challenging for both government and companies to protect themselves because those attacking them don’t actually reside in the locations in which they operate,” he said.

Ken Crerar of the Council of Insurance Agents and Brokers said the CIAB has released its current cyber study. The Council of Insurance Agents & Brokers’ Cyber Insurance Market Watch Survey said clients are now more up to speed on the type — and how much — insurance they need. The conclusion is insurers selling cyber insurance can, and should, anticipate growth in policy purchases.

Other survey conclusions:

  32% have purchased at least some form of cyber coverage

  In the last six-months 27% purchased that insurance for the first time

  44% increased coverage in the last six-months

  76% with cyber insurance have stand alone policies

“As brokers become more experienced with cyber exposures, they are growing their knowledge of this new breed of risk. This is a good sign, as brokers play an increasingly crucial role in both cyber risk mitigation and post-event response. The globally-launched WannaCry/WannaCrypt ransomware file encryption exploit is a prime example. Brokers are actively advising clients on the preventative steps to take now to increase the chance of escaping the virus, which has infected hundreds of thousands of systems,” Crerar said.

And on those preventative steps, James Gow — the senior vice president of the Property & Casualty Practice at Corporate Synergies — said a big part of the problem business has with ransomware attacks is uneducated employees and suggests employers set up an education program. It should contain:

  Instructions for employees to regularly change their passwords for software, email and other programs.

  A standard framework on how information is shared within the company.

  A policy for how sensitive information is asked for and given. Not everyone in the company needs to have sensitive information.

  An employee identification policy.

  A safe document management system and disposal services.

  Regular employee testing on security policies to make sure they understand social engineering and hacking scams so confidential and sensitive information is not handed out.

Two last items. The electronic signature service DocuSign has admitted that hackers gained temporary access to its database. It contained the email addresses of customers which is why there was a surge in phishing emails sent to DocuSign users. Those emails encouraged recipients to open a Microsoft Word doc that contained malicious software.

If you are a user, updates on the hack are available by clicking here.

And last. Target has settled its multistate hack from Christmas of 2013 for $18.5 million. In December of that year and January of 2014, over 40 million credit and debit card users had their information stolen. 

 

Source links: PropertyCasualty360.com — link 1, link 2, Insurance Business America — link 1, link 2, Insurance Journal

Tags:  Cyber Breach  Cyber Insurance  Insurance Content  Insurance Industry  Insurance News  Special Report: The WannaCry Virus Aftermath  Update: WannaCry Virus and More  virusCyber Security  Weekly Industry News 

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