The Week in a Minute, 12/15/17

The III’s Michael Barry briefs our membership every week on key insurance related stories. Here are some highlights. 

More than 90,000 people have been evacuated in recent weeks as California’s Thomas Fire—the fourth largest in the state’s history in terms of acreage burned—migrated last weekend (December 9-10) into Santa Barbara County from Ventura County.

The total insured damage caused by 2017’s hurricanes Harvey, Irma, and Maria, coupled with two Mexican earthquakes, could rival 2011’s record catastrophe-related payouts from that year’s major earthquakes in Japan and New Zealand, according an analysis published in The Wall Street Journal’s Wednesday, December 13, print edition.

The I.I.I.’s Market Report webinar, “Protecting Small Business Against #cyberfail,’ was held on Monday, December 11.  It is archived online.

 

I.I.I. Market Report Webinar: Protecting Small Business Against #cyberfail”

“Small businesses are an easy target,” said Steve Clarke, Vice President, Government Relations, ISO. Clarke was one of several experts describing the cyber threat small business owners face in an Insurance Information Institute webinar Dec. 11, “Protect Your Business from #cyberfail.”

Many of these enterprises are data-rich businesses, Clarke continued, pointing to how a recent study estimated 28 percent of cyber thefts occur at health care companies while another 17 percent came at financial services firms.

Other issues which arose—

Cutting down the time between when a cyber breach takes place, and when the victim notices it has happened, also known as the ‘dwell time.’

The importance of educating employees about cyber risks, and how many cyber breaches occur because a company’s employees unknowingly open emails which are part of phishing operations aimed at gaining access to a company’s computer network.

The U.S. Small Business Administration has materials on cybersecurity on its website.

Watch this webinar now.

Presentation Date
Monday, December 11, 2017

Speakers

Introduction: James Lynch, Chief Actuary, Insurance Information Institute

Moderator: Marty Frappolli, Senior Director of Knowledge Resources, The Institutes

Panelists:
• Steve Clarke, Vice President, Government Relations, ISO
• Nick Graf, Ethical Hacker, CNA Insurance
• Donald Smith, Director of the Office of Entrepreneurship Education, Small Business Administration
• Michael Rohrs, Associate Director of Global Cyber Practice, Control Risks

Marijuana in the Workplace: What Happens When Business Managers in Legal-Use States “Just Say ‘No’”?

By James Ballot, I.I.I. senior advisor, special content projects

The conversation about marijuana use has evolved. Once, in the not too distant past, we (meaning our appointed civic leaders, parents and other authority figures) had the luxury of taking an absolutist stance about weed. Fast-forward to today, and the discussion is mostly a constructive exchange between or among parties invested in positive outcomes, and willing to embrace wide-ranging points of view.

Marijuana users—particularly persons permitted lawful therapeutic use of cannabis—are both empowered and motivated to pursue legal protection from discrimination potentially caused by employer “zero tolerance” policies.

So, what’s an employer to do? In “Marijuana, the Workplace and EPLI – Clearing the Haze,” Mindy Pollack, J.D., Product Specialist and Vice President in Gen Re’s Treaty department, lays out a few hypotheticals to clarify the situation (i.e., legal use of cannabis by new hires and employees). She also identifies solutions like EPLI policies that offer coverage against claims, as well as guidance for how employers can tailor conduct bylaws to better fit the new realities as legal marijuana use becomes the norm.

In short, the courts are split on discrimination claims related to marijuana use. That leaves employers with no single answer when the marijuana question comes up. Add to that the variations in state laws and workplace scenarios, and you have even less clarity.

The Week in a Minute, 12/8/17

The I.I.I.’s Michael Barry has been attending the National Association of Insurance Commissioners’ meeting. This week, I.I.I. Daily editor Jennifer Ha picks the week’s most important insurance stories.

  • Record winds are fanning the flames of three major wildfires in Southern California. Already 200 homes and buildings have been destroyed, and tens of thousands of persons face evacuation.
  • Damage claims related to the October wildfires that hit the state’s Wine Country have risen to $9 billion. The state tracks the losses reported to major insurance companies, and the recent losses are far greater than any other wildfire outbreak in state history.
  • The Federal Emergency Management Agency (FEMA) has filed claims with private reinsurers for the full $1.042 billion the agency has in coverage. The claims are being sought to help FEMA recover the losses of the National Flood Insurance Program (NFIP) from Hurricane Harvey. Meanwhile, Congress approved a short-term (December 22) extention for the NFIP.

I.I.I. members receive the I.I.I. Daily for the latest insurance-related news for free. Nonmembers can purchase a subscription. Contact daily@iii.org.

More Wildfires, This Time in Southern California

The worst wildfire season in the history of modern California is taking another bad turn, as three major fires have destroyed more than 200 homes and buildings.

Strong winds will be fanning the flames. The state’s foresters have issued a purple wind alert for Southern California, something they have never done before.

This follows a Department of Insurance report that insurers have incurred more than $9 billion in claims so far from the October fires, being $8.4 billion in residential claims, $790 million in commercial property, $96 million in personal and commercial auto, and $110 million from other commercial lines. County-level details here.

The New York Times has a 2-minute video summarizing why this year’s wildfire season has been so bad.

Their take:

  • Wet winter followed by hot summer. The moisture encouraged plant growth. The heat turned those plants to tinder.
  • Longer fire season, perhaps linked to climate change.
  • Growing residential areas. Development is encroaching on forests.
  • Santa Ana winds. As noted above, the winds are blowing harder this year.

I.I.I. Facts + Statistics on wildfire can be found here. Here’s a prior Terms + Conditions post on filing claims. (It was written for the October fires, but the message will not have changed much.)

JOIN US FOR THE I.I.I. MARKET REPORT WEBINAR: PROTECTING SMALL BUSINESS AGAINST #CYBERFAIL

On-demand Webinar, December 11

America’s 28 million small businesses have virtually the same exposure to hackers and other cyberthreats as America’s largest companies. While the billion-account hacks get most of the attention, what small businesses might not realize is that they are far more likely to be crippled or put out of business in the wake of a cyberattack.

On Monday, December 11, the Insurance Information Institute (I.I.I.) will host its I.I.I. Market Report Webinar: Protecting Small Business Against #cyberfail. Leading experts from CNA Insurance, Control Risks, The Institutes, the Small Business Administration and Verisk will join the I.I.I. to discuss the current commercial cyberrisk landscape, how small business leaders can use insurance products effectively, and how they may best employ risk management best practices and other tactics to protect their firms.

Webinar Details
Monday, December 11, 2017

2pm – 3 PM EST

Register here


Speakers
Introduction: James Lynch, Chief Actuary, Insurance Information Institute
Moderator: Marty Frappolli, Senior Director of Knowledge Resources, The Institutes

  • Steve Clarke, Vice President, Government Relations, ISO
  • Nick Graf, Certified Ethical Hacker, CNA Insurance
  • Michael Rohrs, Associate Director of Global Cyber Practice, Control Risks
  • Donald Smith, Director of the Office of Entrepreneurship Education, Small Business Administration

 

Workplace Harassment and Retaliation Charges

By Brent Carris

Back in October, in the wake of the sexual harassment allegations levied against Hollywood mogul Harvey Weinstein, I.I.I.’s Claire Wilkinson wrote this post about Employment Practices Liability Insurance (EPLI). It appears that companies are aware of the risk and are increasingly purchasing insurance, including EPLI, to cover costs associated with sexual harassment lawsuits.

In addition to buying insurance, companies have risk mitigation protocols in place to handle sexual harassment in the workplace. But a study of employee lawsuits recently published by Hiscox, illustrates how the aftermath of sexual harassment complaints can turn into charges of retaliation by the time the employee files a complaint with the EEOC.  According to the EEOC, many of those who complain of harassment in the workplace also face retaliation. Retaliation was the most prevalent charge category, named in 46 percent of all charges with the EEOC.

The Hiscox study also found that employers in some states have a much higher chance of being sued than in others. In Washington D.C. employers have an 81 percent higher chance of being sued followed by Delaware, Nevada and California.

 

Actuaries Climate Index™ Value Reached a New High With Winter 2016–17

Organizations representing the actuarial profession in Canada and the United States reported recently that the Actuaries Climate Index™ reached a new record high in winter 2016–17, following the record value measured in fall 2016. The change reflects increasing deviation of weather extremes and sea levels from historically expected patterns for the two countries.

“This hurricane season has brought renewed attention to the question of whether extreme weather is increasing, and for a broad swath of North America, the Actuaries Climate Index data were trending in that direction to February 2017,” said Caterina Lindman, chair of the Climate Change Committee.

The Actuaries Climate Index (ACI) was designed as an objective indicator of the frequency of extreme weather and the extent of sea level change. It is available for the United States and Canada and is updated on both a monthly and a seasonal basis. The data are available here for anyone to explore.

The ACI is sponsored by the American Academy of Actuaries, the Canadian Institute of Actuaries, Casualty Actuarial Society and Society of Actuaries.

 

 

 

International Accounting Rules Explained

These days international insurers are spending a lot of time focusing on a significant accounting change, best known by its abbreviation, IFRS17.

IFRS 17 – International Financial Reporting Standard 17 – is an accounting rule scheduled to take effect in 2021. It is designed to bring more clarity to insurance financial statements. It affects most insurers that operate internationally; US-only insurers conform to generally accepted accounting principles (GAAP) or statutory accounting principles, or both.

Life insurers will be affected much more than property/casualty insurers.

Not all insurers embrace the standard enthusiastically, as noted in this Financial Times article (subscription required)

Here’s a cartoon by I.I.I. member Allianz that explains it in general terms:

For more detail, I.I.I. associate member Deloitte has this page of information.

The Week in a Minute, 11/30/17

The III’s Michael Barry briefs our membership every week on key insurance related stories. Here are some highlights. 

 The I.I.I.’s James Lynch participated in Property Casualty Insurers Association of America’s Thursday, Nov. 30, satellite media tour on the dangers of marijuana-impaired drivers as states liberalize their marijuana laws.

The 2017 Atlantic hurricane season was the first one ever to feature three Category 4 storms making landfall on the U.S. mainland (Harvey in Texas, Irma in Florida) as well as a U.S. territory (Maria in Puerto Rick).

Twelve of 14 post-Hurricane Irma fatalities at The Rehabilitation Center of Hollywood Hills (Broward County) were deemed by the coroner to have been “homicides due to heat exposure.”

 

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