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Special Report: The Next 9/11?

Posted By Staff Reporter, Monday, September 17, 2018


It has been 17 years since the 9/11 attacks radically changed this nation and ultimately, the world. Many authorities believe the next 9/11 won’t be a military strike but — instead — could be a massive cyber attack.

Airports and airlines will — however — again be a key to the predicted attacks.

Airlines and airports are still very vulnerable says Tampa International Airport IT head Michael Stephens. He put the danger in perspective for the House Homeland Security Committee’s subcommittee on transportation and protective security. “Cybersecurity risks, without question, represent the most preeminent and existent threat to the continuous safe, secure and efficient operations on U.S. airports and the global aviation system,” he told a congressional hearing on the matter.

There are no regulations governing cyber networks used by airports and airlines. Rep. Bonnie Coleman is a Democrat from New Jersey. She’s working on a bill to require the Transportation Security Administration (TSA) to require airlines and airports to adopt baseline cybersecurity standards.

Her bill — however — is in the earliest stages of development.

Bad guys — she noted — could hack into the computers and servers that run boarding systems, air traffic control systems and any number of systems that control flights. An attack in those areas could cripple the system and dangerously disrupt businesses in the U.S.

A survey from the federal government’s  Airport Cooperative Research Program on cybersecurity best practices at airports says there is a huge problem:

  32 of the 41 airports responding said they have cybersecurity programs in place

  Just 49% of the people who run the programs feel they are adequate to protect from a cyber attack

Officials from the Department of Homeland Security and others working in the cybersecurity area believe it is only a matter of time before a cyber security breach happens at an airline or at many airlines.

Other problems are also present when it comes to airport security. Reports say an investigator from the Department of Homeland Security was recently able to breach a plane on a tarmac. Other security tests — as noted earlier — found huge holes in security inside airports and outside on the tarmac.

And most of us are aware of the employee from Horizon Airlines who hijacked a plane last month at the Seattle-Tacoma International Airport (SeaTac). Richard Russell was fully-credentialed and had a Security Identification Display Area badge. That means he was authorized to work around aircraft.

Russell worked on the airline’s tow team that tows airplanes onto the tarmac for takeoff and also did baggage loading and unloading. So as a ground support employee, he — or others for that matter — have a great deal of access to jets and other aircraft.

No one knows how he learned how to fly an airplane but he grabbed a plane and took a joy-ride around SeaTac doing all kinds of aerial stunts before crashing and dying near Tacoma, Washington.

The air traffic control people he communicated with at SeaTac said Russell told them he learned to fly the plane by playing video games and that it wasn’t that hard to figure out how things worked in the cockpit.

Horizon is owned by the Alaska Air Group and its CEO Brad Tilden said the plane was inside the security fence so no security measures were violated. Russell was fully screened and had a criminal background check.

No red flags were found and an anonymous source at Horizon told CBS News, “We vet against someone who would hijack a plane for terrorism. This is an Horizon Air employee with a clean background, no known criminal activity, no terror relation, and wanted to commit suicide. TSA isn't screening for that because you cannot. We're the processor; the employee (Horizon) is the steward.”

Erroll Southers is a former FBI agent and now works as a transportation security expert. He told CBS the guy likely had some kind of pilot training. If he knew how to do loops in the air then he had the skills to attack people on the ground or fly into buildings.

"The greatest threat we have to aviation is the insider threat. Here we have an employee who was vetted to the level to have access to the aircraft and had a skill set proficient enough to take off with that plane,” Southers said.

Christopher Porter of the cybersecurity company FireEye told the subcommittee meeting the federal government needs to create and lay out a baseline on cybersecurity that clearly defines the roles of airlines, airports and the federal government.

“There may be parts of the aviation sector that have underinvested in cybersecurity because they can't justify it as a business expense, but everyone will be required to do it. I think that would make it a lot easier for them to bring things up to par,” he said.

Commenting on her still-in-development bill, Coleman said, “We must urge security agencies to think creatively about potential new attack actors as terrorists continue to search for new vulnerabilities to target. With that in mind, we must do more when it comes to the cybersecurity of transportation systems. We cannot allow them access to cockpits via cyber means.”

The September 11th attacks in 2001 got airports and airlines — because of new federal involvement in what they do — to tighten security. This has only been moderately successful because tests to the passenger boarding systems and the luggage screens seem to have holes.

Huge holes sometimes.

Republican Rep. John Katko of New York — who is also on the subcommittee — said cyber criminals and terrorists may now be able to attack via an airliner without even having to be in the cockpit of the plane. “The specter remains, a plane could technically be weaponized against us and be taken over by bad guys through cybersecurity threats,” he said.

The events of 9/11 on that horrible day 17 years ago radically changed insurance. Losses hit $32.5 billion. In today’s dollars that figure is much, much higher. Only Hurricane Katrina produced a higher insurance payout.

The 9/11 attacks impacted a number of insurance lines:

  Property

  Business interruption

  Aviation

  Workers compensation

  Liability

  Life

Out of the attacks came the federal government’s Terrorism Risk Insurance Act (TRIA) which shares the insurance burden with insurers and caps insurance losses. It has been extended to December 31, 2020 and is now called the Terrorism Risk Insurance Program Reauthorization Act of 2015.

Source links: The Hill, CBS News, Insurance Information Institute

Tags:  911  PIA Western Alliance  Special Report 

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One for the Books — Basic Auto Warning Symbols

Posted By Staff Reporter, Monday, September 17, 2018


 Automobiles are much in the news lately with the soon to be coming onslaught of self-driving vehicles. To say the least they are controversial. For insurance they are a nightmare in the potential for income and claims loss.

 Self-driving vehicles are also dangerous when one of them is operated by someone not paying attention to what the vehicle is telling them. The deaths of several people during experimental driving prove that fact.

 That people may not understand a vehicle that drives itself led the insurance search engine The Zebra to poll 5,000 people and ask them what they know about their ordinary cars and trucks when a warning light pops up.

 The researchers started with these questions:

  As of 2016 there were 222 million licensed drivers in the U.S.

  There were 263.6 million registered vehicles

  What do we know about the three most common and important warning lights?

  Tire pressure warning light

  Coolant temperature warning light

  Oil pressure warning light

Here’s what was found:

  73% of Americans don’t know what their oil pressure warning light means

  40% don’t understand the coolant temperature light

  30% don’t understand the tire pressure warning light

The next step in the questioning is how long does it take us to deal with a warning light when one pops up. The answers are kind of shocking:

  Same day —  19%

  Within a week — 34%

  Within a month — 10%

  Never — 11%

  I’ll fix it myself — 23%

Waiting too long is costly.

Here’s what The Zebra says ignoring these lights can run in terms of dollars:

  Oil pressure problems start at $500 and work their way up

  Waiting longer than a month could end up with the need for a new engine. It can run $2,000 to $4,000

  Coolant temperature warnings — if you wait too long — can again end up in total engine failure and a price tag of $2,000 to $4,000

  Tire pressure problems aren’t quite as expensive but tires aren’t cheap and neither are rims of a rim ends up being damaged

The conclusion? It’s obvious. The faster you respond, the less problems and the lower the cost of repairing the vehicle.

Source link: PropertyCasualty360.com

Tags:  Auto warning symbols  autonomous vehicles  PIA Western Alliance  self driving vehicles 

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Hurricane Florence Brings FEMA & Congress into Focus

Posted By Staff Reporter, Monday, September 17, 2018


Hurricane Florence slammed into North Carolina on Friday and stalled over the weekend. At the time this is written — Monday morning — damage assessments have not been completed.

The storm brought huge amounts of rain and flooding everywhere. From an insured and uninsured perspective, damages will be very, very high.

The question now is how well the Federal Emergency Management Agency (FEMA) will handle the disastrous consequences of the hurricane. It didn’t get very good grades from the Government Accountability Office (GAO) for how it handled last year’s major hurricanes and the wildfires that decimated parts of the nation.

The report said back-to-back hurricanes and catastrophic wildfires in California overwhelmed federal disaster responders last year. It forced FEMA to use — in some cases — uncertified workers in key roles. When Hurricane Harvey hit, FEMA was 30% understaffed and by the time Hurricane Maria hit Puerto Rico, the challenges were overwhelming.

A GAO official noted, “These events came at a time when FEMA was already supporting 692 federally declared disasters and tested the nation’s ability to respond and recover from multiple concurrent disasters.”

Experts will tell you the biggest percentage of damage from any hurricane comes from the storm surge and the flooding caused by torrents of rain. Rob Moore of the Natural Resources Defense Council — an environmental group that wants safer communities — said that leads us to Congress and the failure to reform and renew the National Flood Insurance Program (NFIP).

“They have not dealt with the gorilla in the room which is proactively addressing these types of disasters for the future. Too much of the US’s response to natural disaster is completely reactionary, we throw a bunch of money after it happens,” he said.

Moore and his group think it would cost the U.S. government less to require those whose homes have been damaged, or destroyed and rebuilt multiple times to relocate. It is one of the reforms the group wants Congress to adopt.

The 21st Century Flood Reform Act (H.R. 2874) does some of that. Or at least it is a good start. The bill limits coverage in the future and the discounts for high-risk properties. It modifies premiums and the surcharges paid by policyholders and expands the ability of private insurers to sell flood insurance.

The bill passed the House and is still sitting in the Senate.

 

Source links: Bloomberg, PIA National, The Washington Post, Insurance Business America

Tags:  flooding in North Carolina  Hurricane florence 2018  Insurance content  PIA Western Alliance 

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Moody’s on Commercial Insurance & Current Rates

Posted By Staff Reporter, Monday, September 17, 2018

 

Moody’s thinks the commercial insurance sector is going to be stable for the next year to 18-months. Healthy core earnings and balance sheets that are solid led Moody’s Investors Service to issue the positive rating.

Spokesman Bruce Ballentine said, “Commercial insurers held up well despite the large catastrophes of 2017 and will generate good core earnings in 2018-19. Insurers will benefit from higher rates in property lines and stable-to-rising investment yields, tempered by slightly worse combined ratios in casualty lines.”

In fact, the report says commercial lines pricing is very favorable compared to the last few years. Property rates are higher after last year’s difficult catastrophe season. Casualty rates are also climbing.

Willis Towers Watson’s Commercial Lines Insurance Pricing Survey (CLIPS) is out and it agrees with the Moody’s report. In the second quarter of 2018 commercial prices — on average — jumped 3%. The report noted that price changes of this magnitude have not been seen in four years.

Ben Williams of Willis Towers Watson North America said, “Almost all lines show a more rapid pace of price increases. Notably, mid-market and large accounts prices have recently seen the largest increases. This is fodder for thought, as the history of CLIPS suggests that larger accounts have been leading indicators of market adjustments,” he said.

Source links: Insurance Journal, Business Insurance

Tags:  Commercial Insurance  insurance content  Moody  PIA Western Alliance  Rates 

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The Sharing Economy — A New Insurance Opportunity

Posted By Staff Reporter, Monday, September 17, 2018


The sharing economy is growing. Employed in this economy are people working as contractors for firms like Uber, Airbnb, Task Rabbit and others. Statistics gathered by the data gathering firm Statista says by 2021 some 86.5 million people will be participating in the sharing economy.

That’s a 23% jump from today.

Laird Rixford is the CEO of Insurance Technologies Corporation (ITC). His company provides marketing, ratings and management software services to the industry. Rixford said, “It’s critical that brokers and agents understand how ride-sharing and these gig-type things really impact insurance.”

He makes his point by noting that an Uber driver can drive anywhere and be covered by their personal auto insurance policy. Once they answer the call and go to pick up a fare, that insurance no longer covers them.

This is why agents who understand those nuances will do very well in the gig economy — an economy desperate for proper insurance. “This gig economy has created the ability for more people to pick up ad-hoc, part-time jobs. The amount of people that insurers, agents and brokers can now sell additional coverage to has exploded,” he said. 

Source link: Insurance Business America

Tags:  insurance  PIA Western Alliance  Sharing economy 

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Mergers & Acquisitions — Huge Numbers Again in 2018

Posted By Staff Reporter, Tuesday, September 11, 2018


A prediction from industry analysts at Marsh, Berry & Co. says for the second year in a row mergers and acquisitions will top 500. The prognosis is based on the 289 deals done through the end of July.

Last year’s number ended up at 557 with five of the top 10 brokers completing transactions.

MarshBerry Executive Vice President Phil Trem said his company came to that conclusion after analyzing data from an S&P Global Market Intelligence report and noted it will be the second time 500 has been reached since 2005. That year saw the first time M&A activity hit the 500 figure.

This year private equity-backed broker consolidations are at the top of the list. Others making an impact on the list are public and independent insurance brokers as well as banks and thrifts.

Leading the pack:

  Assured Partners — 19 deals

  BroadStreet Partners — 19 deals

  Alera Group — 18 deals

  Acisure — 17 deals

  Hub International — 16 deals

The amount of money involved in these deals is rising significantly.

Trem went on to say, “The average base purchase price, as of the 12 months ending June 30, 2018, has exceed (eight times) earnings before interest, tax, depreciation, and amortization (‘EBITDA’) for the first time in our records. Demand for quality firms is helping drive the activity and values.”

He does — however — predict a slowdown because of rising interest rates and the recent tax reforms. What Trem wouldn’t predict is when.

 

Source link: Business Insurance

Tags:  Berry & Co  Insurance Industry News  Marsh  Mergers and Acquisitions  Phil Trem  PIA Western Alliance 

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Cyber Security: Alexa & Google Home

Posted By Staff Reporter, Tuesday, September 11, 2018


Smart home technology is worrisome to cyber security experts. It’s pretty easy for bad guy players to attack your now web-connected refrigerator, microwave oven or any number of other items in your well-connected home.

Two forms of technology aren’t a worry to former NSA hacker Jake Williams. The one-time hacker has since left government and founded the info security firm Rendition Infosec. Williams said the fastest growing areas of smart home technology is Amazon’s Alexa and Google’s Home. More and more they’re being tasked with running household items.

You’d think that makes them a major-league target for hackers. Williams says yes they are but no they aren’t. And the reason they aren’t is because both companies work hard at making the products secure.

“Would-be attackers don’t care what you’re talking about at home. They’re looking to monetize data,” he said and added there is more data to be had getting to your bank account than these two products.

In fact, getting to that bank account or to those important passwords and account information is much easier via your laptop or smartphone. There’s a lot of software installed on them that is used on a daily basis. Most of us don’t do the regularly recommended software security checks.

Nor do we often make sure software we download is from a trustworthy site.

Smart speakers — as he calls Alexa and Google Home — do not work the same way. The first way they work is impossible to hack because it’s your voice giving a command. The second is the servers at Google or Amazon.

They’re very secure.

Williams said Alexa Skills is one possible target area and is one that the user needs be careful with. The skills you download to Alexa need to be from — much emphasis here — a trusted source.

The security system you need to use — Williams adds — is one that enables a multi-factor authentication and sets up sets up full encryption. This is especially important for phones and laptops.

Source link: Digital Trends

Tags:  cyber security experts  PIA Western Alliance  Smart home  technology 

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California — Earthquake Insurance

Posted By Staff Reporter, Tuesday, September 11, 2018


There is a lot of focus these days on California and the wildfires that have devastated the state. Of equal concern is the potential for even more disaster due to drought. From an insurance perspective, most homeowners in the state’s driest and most fire dangerous areas have homeowners insurance.

What they don’t have is insurance for earthquakes.

A report in The New York Times notes just 13% of Californians have earthquake insurance. This is in spite of an aggressive marketing plan engineered by the California Department of Insurance.

Businesses do even worse. Just one in 10 commercial entities — high-rise towers to low-rise office buildings — are insured against earthquake. Some are self-insured but most say the high price of the insurance keeps them from making the purchase.

Just as puzzling is banks issuing loans that don’t require homeowners and businesses to purchase earthquake insurance.

Scientists say since California lies on a huge number of geological faults it is just a matter of time before the “big one” hits. University of California, Berkeley earthquake expert Mary Comerio says, “What are we going to do when no-one has insurance and everyone has damage? I’m terrified of what’s going to happen.”

Swiss Re’s disaster specialist Alex Kaplan notes that earthquakes are potentially the largest “uninsured exposure from a natural disaster in the U.S.”

Add to that the average cost of a California home. It tops $500,000. So a major earthquake could end up costing the uninsured — and the taxpayer as well — billions and billions of dollars.

Source link: Insurance Business America

Tags:  California Earthquake Insurance  Industry News  Insurance News  PIA Western Alliance  Weekly insurance news 

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Welcome to Marketing Mondays!

Posted By Staff Reporter, Monday, September 10, 2018

Why your insurance agency should be bloggin.  10 Reasons

10 Reasons Blogging Should be Part of Your Content Strategy

 

Are you blogging? Your strategy to educate and inform your clients should involve blogging. Because blogging is, and will remain, an essential game plan to reach your audience.

 

One only has to look at a couple of sobering statistics to realize this:
  • You have a 434% higher chance of being ranked highly on search engines if you feature a blog as part of your website (Tech Client).
  • Businesses using blogs as part of their content marketing mix get 67% more leads than those who don’t (Hubspot).
10 REASONS WHY BUSINESS BLOGGING IS CRITICAL

 

1) Respondents on a recent content marketing survey agreed that blogging is their most critical content marketing tactic.
 
Blogging was followed by email newsletters (40%), social media content (40%), then ebooks, in-person events, and webinars. And video? Only 30% of respondents consider video to be vital.

 

2) Blogging is still top of mind for in-depth material.
This especially holds true when, according to Google, up to 10% of users’ daily information needs involve learning about a broad topic.

 

3) People trust blogs.
Which is why it’s no surprise to learn that blogs are the 5th most trusted source for accurate online information.

 

4) Blogging drives traffic to your website.
Your blog is an evolving collection of articles, keywords, and expertise that any reliable search engine optimization (SEO) campaign demands.

 

5) Blogging encourages inbound links.
Inbound links (hyperlinks that go back to your site) are the lifeblood of any website. They’re the currency of the internet because high quality back links, from a variety of sites, give your website a higher rank in search engine results.

 

6) Blogging gets results.
Just under 55% of bloggers report that they get positive results from blogging. 30% of them go as far as to say they get strong marketing results.

 

7) Blogging is better with social media.
Interacting with your customers doesn't have to be done exclusively on social media. Your blog offers a great opportunity for you to start discussions with your readers.

 

8) Blogging positively augments your social media posts.
Now your blog informs your social media posts. You promote your blog there, enriching your followers' experience with articles and other content.

 

9) Blogging beats advertising.
Your blog functions as your advertising, only better. Most people use a company blog to find out more about that company.

 

10) Blogging forces you outside your comfort zone.
Blogs have evolved into far more than a company mouthpiece for marketing agenda. Readers now expect candid, transparent storytelling on your blog.

 

 

Blog idea generator courtesy of HubSpot

Tags:  blog idea generator  Marketing Monday  PIA Western Alliance  Why blogging is so important 

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A Pretty Good Year for Insurance — So Far!

Posted By Administration, Tuesday, August 28, 2018

 

A.M. Best is pretty happy with 2018. Results have improved thanks to lower catastrophe losses and growth in premiums.

Or so says Best’s First Look: First Half 2018 Property Casualty Financial Results.

Here’s what the report found about the first half of the year:

  Net written premiums jumped by 13.3% to $306.7 billion

  The increase offsets a 3.8% increase in losses and loss adjustment expenses

  It also offsets a rise in underwriting expenses of 12.9%

  It also offsets a 10.1% in policyholder dividends

  The combined ratio has improved by 4.5% to 96.4%

  That’s the lowest combined ratio for six-months in the last five years

  Catastrophe losses have returned to something considered more normal

  Net investment income rose $3.7 billion

  There has been a $2 billion increase in realized capital gains

All of the above along with very strong underwriting improvement pushed net income to $33.6 billion. That’s a 125.4% increase over the 2017 results for the first six-months of the year.

As for rates, according to the Council of Insurance Agents & Brokers’ (CIAB) Commercial Property/Casualty Market Index Survey commercial premiums rose an average of 1.5% in the second quarter.

  Commercial auto rose the most at 8.2%

  Commercial property increased 2.2%

  Workers’ compensation fell 2.9%

CIAB President and CEO Ken Crerar said, “Although commercial auto continues to be a concern for brokers and carriers alike, other lines appear to stabilize across the board, following several quarters of soft market conditions. As we enter the 2018 hurricane season, the Council will continue to monitor the impact of natural catastrophes on commercial lines.”

He said 77% of the firms the CIAB connects with say the demand for cyber insurance is high.

Source links: Business Insurance, Insurance Journal

Tags:  2018 insurance results  2018 property casualty financial results  Insurance  PIA Western Alliance 

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