Latest Studies - April 2015

Each month the Insurance Information Institute compiles recent studies from industry, government, academic and other sources. Topics include consumer issues, industry trends, climate and environment, and studies covering individual lines of business like automobile liability and workers compensation.

1. WILDFIRE HAZARD RISK REPORT; RESIDENTIAL WILDFIRE EXPOSURE ESTIMATES FOR THE WESTERN UNITED STATES, 2015
Howard Botts, Thomas Jeffery, Sheila McCabe, Bryan Stueck and Logan Suhr
CoreLogic; 40 Pages
March 1, 2015

The exceptional low number of acres consumed by wildfires in the western region of the U.S. in 2014 was surprising, since the region is facing a prolonged period of intense drought and dry conditions prevailed in many areas with a history of wildfires. The 63,345 wildfires in 2014 ranked second only to 2013 as the lowest the number of wildfires during the last 20 years; 3,587,561 acres burned in 2014. Although none of the wildfires in California in 2014 caused large property losses, fires in other parts of the West were very destructive. For example, the Carlton Complex fire was the largest ever in the history of the state of Washington, burning through 256,000 acres and destroying 322 homes. The decline in fire occurrence and the number of acres consumed in 2014 could reflect more intense responses to ignitions and small fires as firefighters have begun to more quickly deploy equipment and resources formerly reserved for large fires. This change in tactics is costly, with California having spent all of the $209 million annual budget for fighting wildfires during the first three months of fiscal 2014. History shows that wildfire events tend to be cyclical, following patterns of vegetation growth and weather, so lower wildfire activity in 2013 and 2014 should not be thought of as a permanent trend. This 2015 report focuses on the residential properties that could be at risk of wildfires in 13 states. The report includes numerous maps, tables and graphs providing a comprehensive evaluation of the number of properties at various risk levels throughout the western region of the U.S. Full Report


2. CONSUMER SENTINEL NETWORK DATABOOK 2014
Federal Trade Commission; 104 pages
February 1, 2015

The Consumer Sentinel Network (CSN) is a secure online database of millions of consumer complaints available only to law enforcement. In addition to storing complaints received by the Federal Trade Commission, the CSN also includes complaints filed with state law enforcement organizations. The database contains more than 10 million consumer fraud and identity theft complaints that have been filed from 2010 to 2014. In 2014 alone, more than 2.5 million complaints were filed. Of the 2.5 million complaints received in 2014, 60 percent were related to fraud, 13 percent were related to identity theft and 27 percent were for other consumer complaints. The FTC identifies 30 types of complaints. In 2014, for the 15th year in a row, identity theft was the number one type of complaint among the 30 categories, accounting for 332,646 complaints, followed by debt collection, with 280,998 complaints. Internet services, with 46,039 complaints, ranked tenth. Full Report


3. 2015 IDENTITY FRAUD STUDY
Javelin Strategy & Research; Page N/A
March 1, 2015

The annual 2015 Identity Fraud Study is an analysis of identity fraud trends, independently produced by Javelin Strategy & Research and made possible by LifeLock, Inc., a provider of identity theft protection services. The study found that $16 billion was stolen from 12.7 million U.S. consumers in 2014. There was a new identity fraud victim every two seconds in 2014. The number of identity fraud victims decreased by 3 percent from 13.1 million people in 2013 to 12.7 million in 2014. Fraud losses declined faster, falling to $16 billion in 2014, a decrease of 11 percent from 2013 losses of $18 billion. Javelin attributes the decline to the combined efforts of industry, consumers and monitoring and protection systems that detect fraud more quickly. Students indicated the least amount of concern about fraud occurring, with more than 64 percent saying they were not very concerned about fraud. Yet, this group is more likely than other demographic groups to perceive significant effects due to the occurrence of fraud (15 percent experiencing moderate or severe impact). Students are also the least likely to detect identity fraud themselves. In fact, 22 percent of students were notified that they were a victim of identity fraud either by a debt collector or when they were denied credit, three times higher than average fraud victims. New account fraud reached record lows in 2014. However, the study showed that victims of new account fraud are three times more likely to take a year or more to discover that their identities were misused compared to other types of fraud, such as existing non-card accounts. This allows criminals to use the victim’s identity for a long period of time, which can result in greater harm to consumers in the form of financial losses, and problems with their credit history and scores. News Release


4. GLOBAL INSURANCE UNDERWRITING SECTORS MERGERS & ACQUISITIONS: THE MARKET HEATS UP IN 2014
Conning. News release; Page N/A
March 23, 2015

Mergers and acquisitions among insurers accelerated in 2014 and continued to strengthen in the first quarter of 2015, according to a new study by Conning, “Global Insurance Underwriting Sectors Mergers & Acquisitions: The Market Heats Up in 2014.” The study tracks and analyzes both U.S. and non U.S. insurer M&A activity across property casualty, life annuity and health sectors. Specific transactions are detailed, and trends are analyzed across both sectors. It is available for purchase from Conning by calling (888) 707 -1177 or from the company’s website at www.conningresearch.com.


5. SAFETY AND SHIPPING REVIEW 2015
Allianz Global Corporate and Specialty; 36 Pages
March 1, 2015

According to this annual review of shipping losses and safety 75 large ships were lost worldwide in 2014, a 32 percent decline from the prior year and a record low in 10 years. South China and South East Asian waters top loss hotspots. East Mediterranean and British Isles top locations for incidents. Cargo and fishing vessels account for more than 50 percent of all losses. Ship size growth is raising risk management concerns. The industry should prepare for a $1 billion or more loss featuring a container vessel or even a specialized floating offshore facility. Maximum exposure will not necessarily be limited to vessel and cargo value but could also include environmental, social or business interruption backlash. Full Report


6. NATURAL CATASTROPHES AND MAN-MADE DISASTERS IN 2014: CONVECTIVE AND WINTER STORMS GENERATE MOST LOSSES
Swiss Re sigma 02/2015; 52 Pages
March 31, 2015

According to the latest sigma study, global insured losses from natural catastrophes and man-made disasters were $35 billion in 2014, down from $44 billion in 2013 and well below the $64 billion average of the previous 10 years. There were 189 natural catastrophe events in 2014, the highest ever on sigma records, causing global economic losses of $110 billion. Of these total economic losses, $101 billion were due to natural catastrophes, with cyclones in Asia Pacific causing the most damage. Of the $35 billion in global insured losses last year, $28 billion were attributed to natural catastrophe events. Around 12,700 people lost their lives in all disaster events, down from as many as 27,000 in 2013, making it one of the lowest numbers ever recorded in a single year. The study notes that weather events in the U.S., Europe and Japan cause most insured losses and that severe thunderstorms are generating mounting losses. The report also focuses on the lack of insurance cover, which remains an issue in many countries. Full Report

 


7. CHANGING GLOBAL PATTERNS OF URBAN EXPOSURE TO FLOOD AND DROUGHT HAZARDS
Burak Guneralp et al.
Global Environmental Change; 9 Pages
March 1, 2015

The authors of this study predict how expanding urban areas will be affected by floods and droughts in the near future. In 2000 about 30 percent of the global urban land (over 75,000 square miles) was located in the high-frequency flood zones; by 2030 this will reach nearly 40 percent (280,000 square miles) as the global urban land grows from 250,000 square miles to 720,000 square miles. The researchers also predict that by 2030 the urban extent in drylands will nearly double, reaching over 190,000 square miles, and that even without climate change, extent of urban areas exposed to both floods and droughts would more than triple by 2030. Full Article


8. AON POLITICAL RISK MAP 2015
Aon Risk Solutions; Page N/A
March 1, 2015

The interactive map ranks regions according to various risks including: political interference, supply chain disruption, exchange transfer, legal and regulatory risk and political violence. http://www.riskmap.aon.co.uk/political_riskmap.aspx


9. EYES ON THE ROAD HANDS ON THE WHEEL
Erie Insurance; Page N/A
March 1, 2015

This infographic illustrates the findings of an Erie Insurance survey of U.S. drivers on distracted behaviors they have either witnessed or engaged in. The survey found drivers are engaging in a wide range of distracting and potentially dangerous behaviors. Besides the obvious phone distractions of texting and talking, other distractions people admitted to ranged from public displays of affection to personal grooming to taking selfies.


10. PEDESTRIAN TRAFFIC FATALITIES BY STATE. 2014 PRELIMINARY DATA
Dr. Allan Williams
Governors Highway Safety Association; 21 Pages
March 31, 2015

This annual report, based on preliminary data from all states and the District of Columbia for the first 6 months of 2014, found a decrease of 2.8 percent in fatalities compared to 2013. Pedestrian fatalities decreased from 2006 to 2009 and then increased 15 percent from 2010 to 2012, a period in which other motor vehicle deaths decreased. Four states – California, Florida, Texas and New York – accounted for 43 percent of all pedestrian deaths. Seventy percent of pedestrian deaths take place between 6 PM and 6 AM. Worldwide, pedestrian deaths comprise 22 percent of all motor vehicle related deaths. Full Report

 


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