Much has been reported about the vulnerability of the Gulf coast states to hurricane risk, but with the start of the 2007 hurricane season just 62 days away, a new presentation from I.I.I. president and chief economist Dr. Robert Hartwig takes us to the Eastern seaboard, specifically South Carolina. The biggest hurricane to hit the state was Hurricane Hugo back in 1989. Since then, South Carolina has experienced enormous growth in coastal population and property. Latest available figures show the state has some $150 billion in insured coastal exposure, of whichÂ about 56 percent is commercial and 44 percent residential. As Dr. Hartwig notes, a major storm could result in far higher commercial than residential losses,Â particularly if business interruption as well as property damage coverage is triggered.Â
Archive for March, 2007
Today another company, this time in the retail sector, revealed details of a breach in data security that saw hackers access information from at least 45.7 million customer credit and debit cards. A further 455,000 customers who returned merchandise without receipts also had their personal data stolen, according to news reports. Indeed, a recent risk survey conducted by the Economist Intelligence Unit (EIU) and sponsored by ACE European Group (ACE) found that one in three global businesses see loss of data as a significant threat and the key issue to address in operational risk management planning. Some 43 percent of survey respondents identified reputational damage as the main threat arising from data loss. Yet only 19 percent of respondents saw loss of revenue as a concern. These latest developments are a reminder of the potentially enormous liability facing corporations, if and when a breach in data security occurs, and the apparentÂ growth opportunity for insurers.
Friday, March 16, 2007
Whoever says insurance is a dull business that has trouble attracting talented human capital to its ranks may want to turn to the Forbes 2007 World Billionaires Survey as part of its marketing and recruitment campaign. By our count, this yearâ€™s list includes seven insurance industry billionaires with a combined net worth of $18.2 billion. The â€œmagnificent sevenâ€ include such well-known names as Maurice Greenberg and Rolf Gerling. Oh, and not included in the seven is Berkshire Hathaway chairman Warren Buffett, who again claims the number two spot with an impressive net worth of $52 billion. For more on employment in the industry, check out the Insurance Information Instituteâ€™s online publication â€œA Firm Foundationâ€.Â
Over the years catastrophe models have been constantly updated and fine-tuned to incorporate the latest technologies, data, and research findings. Following the unprecedented frequency and severity of storms during the 2004 and 2005 hurricane seasons, the output of such models came under close scrutiny. In a recent innovation we can report that underwriters in the Lloydâ€™s market are now using Google Earth to plot their exposure to hurricanes, earthquakes, terrorist attacks and other catastrophes on a 3D map. This is just the latest evidence that catastrophe models and theirÂ application will continue to evolve amid the ever-changing risk landscape.Â Â
Today is International Womenâ€™s Day (IWD), a day aimed at connecting women around the world and inspiring them to achieve their full potential. AÂ review of the IWD siteÂ reveals that among the top companies supporting women and IWD is insurer Aviva. Apparently, more than 50 percent of Aviva staff worldwide and approximately 17 percent of its senior management are women. This is encouraging news, particularly in light of a recent study by research and advisory group Catalyst that reveals a persistent shortage of women in corporate leadership positions. According to its findings, women held just 15.6 percent of Fortune 500 corporate officer positions in 2006, down from 16.4 percent in 2005. At the current rate of change, Catalyst estimates it could take women 47 years to reach parity with men as corporate officers of Fortune 500 companies. Food for thought.Â