Satellite, Mobile Technologies Underpin Insurance Payout To Herders In Kenya

A $2 million insurance payout to thousands of livestock owners in Kenya hit by drought is a good example of insurance and technology coming together to deliver financial protection where it is needed most.

The Kenya Livestock Insurance Program (KLIP), a public-private partnership developed by the government of Kenya and reinsured by Swiss Re, just announced the payout which averages around $170 per household and will be made by the end of February.

KLIP uses satellite technology to measure vegetation available to livestock. Payment is triggered for feed, veterinary medicines and water trucks when the satellite data shows drought is so bad that animal lives are at risk.

In this case, the $2 million payout will help save 70,000 tropical livestock – primarily cows, goats and camels – that in turn sustain approximately 100,000 people across six counties.

Even better, a consortium of insurers led by APA Insurance will pay funds directly into the livestock owners’ bank accounts or via mobile phone accounts.

Here’s the infographic:

The 2016/2017 drought in Kenya was one of the worst in 16 years. Between 2008 and 2011, livestock losses in Kenya accounted for 70 percent of the $12.1 billion in damages caused by drought.

More on this story from Thomson Reuters Foundation.

Insurance Information Institute facts and statistics on droughts and heatwaves are available here.

Out of the Mouths of Insurance Families

Trying to decide whether a career in insurance is right for you? A six-year old friend of the family just nailed it.

In a school homework assignment all about “My Dad” the first grader was asked to complete the sentence: My dad is the best dad in the world because…

Here’s his answer:

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So, there you have it, an insurance career in the making. Or, as the six-year old’s Mom quipped: #hiitsjakefromstatefarm.

There’s a new State Farm ad in there somewhere.

Check out the Insurance Information Institute’s new web portal–My Career in Insurance to get a sense of the incredible range of opportunities and occupations waiting for you.

Insurers Active In Auto Crash Prevention Efforts

2016 may have been the deadliest year on the roads since 2007, with an estimated cost to society of $432 billion, according to preliminary data released by the National Safety Council (NSC).

“As many as 40,000 people died in motor vehicle crashes in 2016, a 6 percent increase over 2015 and a 14 percent increase over 2014—the most dramatic two-year escalation in 53 years.”

A recent Insurance Information Institute (I.I.I.) white paper on personal auto insurance offered this prescient warning:

“There has been an alarming increase in crashes and claims reported. This, combined with the cost of the claims themselves, has led to a dramatic rise in the overall loss cost.”

And:

Technology is both improving and complicating matters, making vehicles safer but at the same time amplifying possible driver distractions, as discussed in this New York Times article.

The NSC call for life-saving measures, includes:

Extend laws banning all cell phone use – including hands-free – to all drivers, not just teens; upgrade enforcement from secondary to primary in states with existing bans.

I.I.I. tips on how to keep your auto insurance affordable here.

From China With Love Insurance

Can’t buy me love, or can you? In China, at least, it appears you can.

This Valentine’s Day Chinese insurers have their hearts set on wooing customers with the sale of love insurance.

As Sixth Tone reports, love insurance comes in various packages. One policy offered by Answern Property & Casualty Insurance entitles customers to a congratulatory payment if they and their designated significant other get married any time between three and 13 years after taking out the policy.

Customers choose a one-time premium payment for the policy of 99 yuan ($14), 297 yuan ($43), or 495 yuan ($72) in return for a respective payout of 1,999 yuan ($291), 5,997 yuan ($873), or 9,995 yuan ($1,445), providing a valid marriage certificate is shown to the insurer in the allotted timeframe.

Other insurers will throw in a little extra love. For example, China Life will send 10,000 roses to the wedding ceremony of any customer who marries their partner three years after signing up for the 299 yuan plan, Sixth Tone explains.

Love insurance has been around for a few years now. See this 2012 report by the Financial Times.

More on how to make sure your loved ones and valuables are protected on the Insurance Information Institute’s Valentine’s Pinterest board.

From 1 To 100: Re(insurer) Tech Investments Soar

Who says insurers and reinsurers aren’t tech savvy? CB Insights reports that (re)insurers made 100 strategic investments in private tech companies in 2016, up from a single investment just four years prior.

Wow, that’s an increase of 9,900 percent.

Cybersecurity, digital insurance distribution, IoT and property management software are some of the tech areas where insurers and reinsurers are investing, according to CB Insights data.

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U.S.-based tech startups attracted 65 percent of (re)insurer investment between 2015 and 2016, while France, China, the United Kingdom and Germany also saw deals.

Munich Re and HSB, XL Catlin’s XL Innovate, Liberty Mutual, Mass Mutual and Assurant are just some of the reinsurance and insurance companies investing in tech startups either directly or via their corporate venture arms.

This is just one of the ways that insurers are leveraging technology, and more specifically data and analytics, into their business.

At the recent Insurance Information Institute Joint Industry Forum, property/casualty insurance leaders identified technology as one of the most important issues for the industry in 2017.

This post by the I.I.I. Insuring California blog talks about how Silicon Valley’s Plug and Play is connecting insurers with the startup ecosystem.

From Many Models, One Decision

Insurance Information Institute chief actuary James Lynch previews one of the most important conferences in the catastrophe modeling world.

I will be attending Cat Risk Management 2017 in Orlando next week, and the reason is as close as the weather forecast I’m looking at early Wednesday.

By now, the weather models have more or less converged: my own sliver of New Jersey is forecast to get about 6 inches of snow. The key word in that last sentence is models.

The many organizations that forecast the weather – the Weather Channel, Accuweather, Weather Underground, the National Weather Service – even the hearty jokester on your local station – use multiple models to predict sun, rain or snow.

The similarity to actuarial work is striking. Like an actuary, the weatherman hasn’t built the models but has to understand the strengths and weaknesses of each. And she has to make a single, certain prediction, yet couch that certainty within a pocket of doubt. The National Weather Service predicts 6.7 inches for my hometown: as much as 7 but as little as 3 (Editor’s Note: total snowfall 6.3 inches by Thursday evening).

Actuaries do that with your insurance policy – many uncertainties but one price. Of the many risks with which they must contend is how their portfolio of policies will perform under a catastrophe. Years ago this risk was estimated crudely – the old Casualty Actuarial Society exams included a section on the ISO Excess Wind calculation. Now catastrophe models do the job. And insurers need a lot of catastrophe models, which is what will be taking me to Orlando.

Next week’s conference is a cornucopia of cat models – hurricane models and wildfire models, earthquake and flood models. There is even discussion of how to coordinate the many models insurers must juggle. The conference, presented by the Reinsurance Association of America, is sold out; about 500 will attend.

I will be live-tweeting and will post a report. I.I.I. wants to draw attention to the importance of resilience – helping people understand that the best way to rebound from cataclysm is to prepare for it. Explaining how insurers do their part – in this case using models so that a policy’s price reflects its risk – helps everyone understand how much risk they must prepare for.

And I suppose, yes, will be good to visit balmy Florida after digging out from a half-foot of snow.

I.I.I.’s Facts and Statistics on global catastrophes gives a good idea of the scope of disasters that insurers protect against.

Winter Weather Hazards Alert

With winter storm warnings in place for large swathes of the Northeast, including major metro hubs of Philadelphia, New York City and Boston, the onset of heavy snow is all but a certainty.

But as insurers and reinsurers will tell you, the term ‘winter storm’ covers a multitude of hazards, such as high winds, snow, severe cold, and freezing rain, all of which can cause significant property damage and ultimately insured losses.

Insurance Information Institute facts and statistics show that from 1996 to 2015 winter storms resulted in about $30.4 billion in insured catastrophe losses (in 2015 dollars), or about $1.5 billion a year on average, according to Property Claim Services (PCS).

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Given the broad definition and impacts of winter storms, how we prepare for them and prevent loss has to expand too.

Check out this FEMA resource on what actions to take when you receive a winter weather storm alert from the National Weather Service for your local area, and what to do before, during and after a snowstorm and severe cold.

And here’s a handy last minute winter weather checklist from the Insurance Institute for Business & Home Safety to help homeowners and businesses prepare for power outages, prevent frozen pipes and roof collapses due to snow.

D.C. Luminaries Headline Boston Workers Comp Conference

Insurance Information Institute vice president of Media Relations, Michael Barry, previews the upcoming Workers Compensation Research Institute (WCRI) annual conference:

Seldom have the political waters roiled as they have during the first weeks of the Trump presidency. A pair of political veterans will look at what that means for workers compensation insurance at a conference next month in Boston.

Former U.S. Senator Tom Coburn and former U.S. Representative Henry Waxman are appearing jointly in Boston on Thursday, March 2, to kick off the WCRI Annual Issues & Research Conference.

U.S. Senator Coburn, a Republican from Oklahoma, and U.S. Representative Waxman, a Democrat from California, will discuss the ‘Impact of the 2016 Election’ for health care, labor, and workers compensation at the Westin Copley Place Hotel in Boston, MA. Their session begins at 9:15 a.m. and will conclude at 10:30 a.m.

The two distinguished former federal legislators bring impressive credentials to these issues. Before his election to the U.S. Senate (2005-2015), Dr. Coburn, a medical doctor, was a U.S. representative (1995-2000) from Oklahoma.  Former Rep. Waxman served for four decades in the U.S. House of Representatives (1975-2015) and was chairman of the House Energy and Commerce Committee.

The theme of this year’s WCRI conference is Persistent Challenges and New Opportunities: Using Research to Accelerate the Dialogue.” The two-day program highlights WCRI’s latest research while also drawing upon the diverse perspectives of nationally respected workers compensation experts and policymakers.

The Insurance Information Institute will also be represented. Chief Actuary James Lynch will be blogging here at Terms + Conditions from the conference.

The WCRI conference is a leading workers compensation forum for policymakers, employers, labor advocates, insurance executives, health care organizations, claims managers, researchers and other interested parties.

For additional information about the conference, or to register, log onto http://www.wcrinet.org/conference.html

Trumpcare: What’s In A Name?

There are a lot of unknowns right now about what Trumpcare, the replacement for Obamacare aka the Affordable Care Act, may bring.

So the news that South Carolina-based Hibbits Insurance has filed an application to trademark the name Trumpcare is drawing a lot of curiosity.

As the South Carolina Post and Courier reports, Hibbits filed the application with the United States Patent and Trademark Office on January 19, 2017 – one day before the inauguration of President Donald Trump.

The Post and Courier says the filing date was coincidence, but the decision to trademark intentional.

It quotes Jack Hibbits, vice president at Hibbits Insurance, saying:

“It would be a strategic opportunity for us to trademark what could become an equally popular term under this new administration. We would like to be using it from a marketing standpoint on our materials as well.”

Hibbits Insurance is a family-owned insurance brokerage specializing in all lines of insurance, including health.

IP Watchdog adds that in the trademark application Hibbits is seeking to protect the standard character mark Trumpcare for commercial use in offering insurance lead collection and matching services, as well as health insurance underwriting.

Interesting.

Ransomware: Is Cyber Insurance On Your Radar?

Hotel guests locked out of their rooms at a four-star hotel in the Austrian Alps? Washington DC’s CCTV system disrupted days before Donald Trump’s inauguration? Libraries in St Louis brought to a standstill? Eight years of digital evidence lost by a Texas police department?

Ransomware is not just grabbing headlines, it’s now the favorite method of cyberattack used against businesses, particularly in North America and Europe, according to this Malwarebytes report.

In the fourth quarter of 2016 alone, Malawarebytes catalogued nearly 400 variants of ransomware, and 81 percent of ransomware detected in corporate environments occurred in North America.

Lloyd’s insurer Beazley saw ransomware attacks quadruple in 2016 and projects them to double again in 2017.

“Evolving ransomware variants enable hackers to methodically investigate a company’s system, selectively lock the most critical files, and demand higher ransoms to get the most valuable files unencrypted.”

In its white paper Cyberrisk: Threat and Opportunity, the Insurance Information Institute reports that insurers are issuing an increasing number of cyber insurance policies and coverage for cyber extortion, including payment of a ransom following a ransomware attack, is available.

According to the FBI, ransomware attacks are on the up, particularly targeting organizations because the payoffs are higher.

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