Archive for May, 2011

Sweltering temperatures across much of the eastern part of the United States over the holiday weekend got us thinking about another catastrophic risk: wildfires.

The map below from the U.S. Forest Service Wildland Fire Assessment System indicates that the fire danger is currently high to extremely high in the southwestern U.S.

Wildfires destroyed a total of 12 homes in parts of Amarillo in the Texas Panhandle over the weekend. Meanwhile in Florida state officials say the danger of wildfire is very high throughout the state, due to lack of rain, low humidity and windy conditions.

During the first four months of 2011 there were over 22,000 wildfires in the U.S., affecting 46 states, and burning more than 2 million acres, according to I.I.I. facts and statistics on wildfires.

In 2010 catastrophic wildfires caused $210 million in insured losses and $314 million in total economic losses, according to Munich Re.

Although eight of the 10 costliest U.S. wildfires in history, based on insured losses, occurred in California, Texas has had the greatest number of wildfires in the last three years. However, wildfires are a national problem affecting almost every state.

Check out the National Interagency Fire Center for the latest fire outlook for May through August.

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The 2011 Atlantic hurricane season officially begins Wednesday and so far all signs point to above-average activity.

But as the Palm Beach Post’s Eye On The Storm blog recently pointed out: all hurricane seasons are active, as attested by last year’s 19 named storms, 12 hurricanes and 5 major hurricanes.

That said, in its just-released pre-season forecast, London-based consortium Tropical Storm Risk (TSR) is sticking to its April prediction for 14 named storms, with seven to eight hurricanes and three to four intense hurricanes (Category 3 to 5).

TSR expects the 2011 season will see activity about 25 percent above the long-term (1950-2010) norm.

Just last week the National Oceanic and Atmospheric Administration (NOAA) predicted the 2011 season would see 12 to 18 named storms, of which six to 10 could become hurricanes and three to six major hurricanes.

The last time a major hurricane (Category 3-5) made landfall in the U.S. was in 2005, but it’s been only three years since Hurricane Ike, which ranks as the third most costly hurricane in U.S. history.

If you want to compare the views of the major forecasters, Guy Carpenter’s GCCapitalIdeas blog has a summary of the latest predictions.

Many, including Colorado State University’s Tropical Meteorology Project, will issue updated forecasts next week.

Check out I.I.I. facts and stats on hurricanes.

Oh, and take a minute to check out this recap of the 2010 hurricane season, courtesy of Discovery:

The Joplin, Missouri tornado has been ranked by NOAA’s Storm Prediction Center (SPC) as the eighth deadliest tornado in United States history.

With its estimated death toll of 124 (and rising), right now this makes it the most deadly tornado to hit the U.S. since 1947.

The Joplin event adds to what was already the second deadliest year ever for tornado-related deaths in the U.S., according to the Insurance Information Institute (I.I.I.). Tornadoes killed 747 people in the U.S. in 1925.

Latest data from NOAA’s SPC through May 23, 2011, shows about 483 tornado-related fatalities have occurred so far this year.

Over at Wunderblog Dr. Jeff Masters observes that this year’s high death toll from tornadoes is partly just bad luck.

Violent EF-4 and EF-5 tornadoes usually miss heavily populated areas, and we’ve had the misfortune of having two such tornadoes track over cities with more than 50,000 people (the Joplin tornado, the Tuscaloosa-Birmingham EF-4 tornado in Alabama, which killed 61 people on April 27).”

If you’re wondering whether this has happened before, the answer is yes.

According to Wunderblog, this sort of bad luck occurred in both 1953, when F-5 tornadoes hit Flint, Michigan (116 killed), Worcester, Massachusetts (90 killed), and Waco, Texas (114 killed), and in 1936, when F-5s hit Tupelo, Mississippi (216 killed) and Gainesville, Georgia (203 killed).

Dr. Masters goes on to point out that this year’s death toll is more remarkable than the 1953 or 1936 death tolls, since in 2011 we have Doppler radar and a modern tornado warning system:

The first tornado warning wasn’t issued until 1948, and virtually all tornadoes from the 1950s and earlier hit with no warning. On average, tornado deaths in the United States decreased from 8 per 1 million people in 1925 to 0.12 per 1 million people in 2000.”

He adds:

Had this year’s tornadoes occurred 50 years ago, I expect the death toll would have exceeded three thousand.”

Good point.

For more information on insured losses arising from the Joplin tornado, check out this article from PropertyCasualty360.com.

Check out I.I.I. facts and stats on tornadoes.

The health risks associated with silicosis have been well documented since the early 20th century, so it’s with interest that we read that the Occupational Safety and Health Administration (OSHA) will soon propose a comprehensive silica health standard.

A report in Occupational Health and Safety Magazine cites OSHA Assistant Secretary Dr. David Michaels telling attendees at the recent American Industrial Hygiene conference that the proposal will be issued in the next few months.

According to OSHA, crystalline silica exposure remains a serious threat to nearly 2 million U.S. workers, including more than 100,000 workers in high risk jobs such as abrasive blasting, foundry work, stonecutting, rock drilling, quarry work and tunneling.

OSHA states:

Crystalline silica has been classified as a human lung carcinogen. Additionally, breathing crystalline silica dust can cause silicosis, which in severe cases can be disabling, or even fatal.”

In the early years of the 21st century, a sharp increase in silica injury claims led many to question whether silica was the next asbestos.

However, in a 2009 report RAND observed that the litigation collapsed soon after the discovery of numerous abuses in the procedures used to diagnose injuries.

This spurred the introduction of medical criteria to determine the validity of claims as well as legal reforms in a number of states.

Preparing for hurricane season? Or for an invasion of zombies? Either way, the Centers for Disease Control and Prevention (CDC) has you covered.

In a blog post earlier this week, the CDC did what many emergency preparedness messages fail to do – it got our attention:

There are all kinds of emergencies out there that we can prepare for. Take a zombie apocalypse for example. That’s right, I said z-o-m-b-i-e a-p-o-c-a-l-y-p-s-e. You may laugh now, but when it happens you’ll be happy you read this, and hey, maybe you’ll even learn a thing or two about how to prepare for a real emergency.”

The CDC went on to advise us to have an emergency kit on hand at home:

This includes things like water, food, and other supplies to get you through the first couple of days before you can locate a zombie-free refugee camp (or in the event of a natural disaster, it will buy you some time until you are able to make your way to an evacuation shelter or utility lines are restored).”

Once you’ve made your emergency kit, the CDC wisely suggests you sit down with your family and come up with an emergency plan. This includes where you would go and who you would call if zombies started appearing outside your door step. You can also implement this plan if there is a flood, earthquake, or other emergency.

While the Insurance Information Institute (I.I.I.) may not have tips for managing zombie risk, we do recommend you have an up-to-date home inventory to be prepared for any disaster. To help you create this inventory, check out our free online home inventory tool Know Your Stuff.

If you're    ready for a zombie apocalypse, then you're ready for any emergency.    emergency.cdc.gov

Just days after Kansas became the third state this year to ban or place restrictions on local governments charging accident response fees for emergency response services to traffic accidents, a new study reveals the majority of the public opposes such fees.

The Insurance Research Council (IRC) study found that some 68 percent of adults disagree with the idea that local governments should charge accident response fees to individuals involved in traffic accidents.

Requiring insurance companies, rather than the individuals involved in an accident, to pay accident response fees had little impact on the level of support for accident response fees, according to the IRC.

When reminded that requiring insurance companies to pay accident response fees could lead to higher auto insurance costs, 69 percent of survey respondents disagreed with the idea of local governments charging accident response fees.

The study was based on telephone interviews with 1,012 adults countrywide conducted in January 2011 by market research firm Harris Interactive.

Interestingly, only one group, individuals between 18 and 24 years of age, were more likely to agree than disagree with the imposition of accident response fees, the IRC found.

The IRC study is the latest in a growing number of surveys that indicate mounting public opposition to accident response fees.

Insurance Journal reports that some 13 states – Alabama, Arizona, Arkansas, Florida, Georgia, Indiana, Kansas, Louisiana, Missouri, Oklahoma, Pennsylvania, Tennessee and Utah – have now passed laws or resolutions prohibiting or restricting municipalities form charging accident response fees.

New York City recently scrapped a proposal to charge accident response fees under mounting public pressure.

Check out I.I.I. information on accident response fees.

Forecasters are predicting an active Atlantic hurricane season in 2011, an indication that property insurers may not be able to benefit as they did in 2009 and 2010 from another benign hurricane season, according to a new report from A.M. Best.

With the official start to the 2011 Atlantic hurricane season just over two weeks away, A.M. Best’s catastrophe review says that forecasters are predicting three to five intense hurricanes in the Atlantic, above the long-term average of two to three intense storms.

One forecaster notes that the U.S. has not had a three-year stretch without a hurricane landfall since the 1860s.

As U.S. property/casualty insurers get set for another active hurricane season, events in the first four months of 2011 are already influencing their catastrophe management programs and, potentially, their operating results, according to A.M. Best.

The ratings agency believes primary insurers could face higher reinsurance costs at upcoming July 1 renewals, given first-quarter 2011 catastrophe losses sustained by global reinsurers.

While property writers continue to manage their exposure to frequent wind, hail and tornadoes, particularly through pricing, deductibles and exposure-reduction initiatives, A.M. Best also warns that volatility remains a significant challenge for this segment.

It’s worth noting that historically, hurricanes and tropical storms represent the greatest share of U.S. insured catastrophe losses.

Indeed, this I.I.I. chart below shows that during the 20 years from 1990 through 2009, hurricanes and tropical storms accounted for $152.4 billion in U.S. catastrophe losses – or 45.2 percent of the $337.3 billion in total catastrophe losses for the period (in 2009 inflation-adjusted dollars).

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(1) Catastrophes are all events causing direct insured losses to property of $25 million or more in 2009 dollars. Adjusted for inflation by ISO.
(2) Excludes snow.
(3) Does not include flood damage covered by the federally administered National Flood Insurance Program.
(4) Includes wildland fires.
(5) Includes civil disorders, water damage, utility service disruptions and non-property losses such as those covered by workers compensation.

Source: ISO’s Property Claim Services (PCS) unit.

Check out I.I.I. facts and stats on U.S. catastrophes.

A new emergency alert system that will send text messages to cell phones to warn people of disaster was unveiled in New York City earlier this week.

Known as the Personal Localized Alerting Network (PLAN), this public safety system is expected to be available in New York and Washington D.C. by the end of this year. The ultimate goal is to have the system across the U.S.

The service will allow customers who own an enabled mobile device to receive geographically-targeted, text-like messages alerting them of imminent threats to safety in their area. Think a terrorist attack or a tornado.

NYC Mayor Michael Bloomberg, Federal Communications Commission (FCC) chairman Julius Genachowski and Federal Emergency Management Agency (FEMA) administrator Craig Fugate announced the new service Tuesday overlooking the World Trade Center site.

People will receive three types of alerts from PLAN — alerts issued by the President, alerts involving imminent threats to safety of life and Amber Alerts notifying of missing or abducted children – but can opt to receive only Presidential alerts.

While emergency text message systems are not a new idea, here’s what sets this PLAN apart, according to the FEMA blog:

• First, these alerts will be geographically targeted, so people will receive them based on where they are when an emergency hits, as opposed to where they live. This is a much more practical and useful way of getting emergency information, when it matters most.

• Second, these alerts will be able to get through to phones, no matter how jammed nearby cell towers are.

• And third, they are completely free of charge and require no sign up. Wireless carriers voluntary choose to participate, and in doing so, provide the technology to new and existing customers. Customers whose phones include the new PLAN technology will have the alerts already activated on their phones, but can opt out of receiving them if they choose to do so.

Check out Insurance Information Institute (I.I.I.) info on preparing an effective evacuation plan.

Last week it was a hacker attack at Sony that left the personal data of 100 million customers exposed, today it’s an accidental leak at Facebook that may have given third parties, in particular advertisers, access to user profiles.

IT security firm Symantec discovered that in certain cases, Facebook applications inadvertently leaked so-called “access tokens” to these third parties, potentially enabling them to access user profiles, photographs and chat.

Some 20 million Facebook applications are installed every day, apparently.

According to a post on Symantec’s official blog:

We estimate that as of April 2011, close to 100,000 applications were enabling this leakage. We estimate that over the years, hundreds of thousands of applications may have inadvertently leaked millions of access tokens to third parties.”

Symantec says it has reported the issue to Facebook, who has taken corrective action to help eliminate the issue.

Symantec goes on to advise concerned Facebook users to change their passwords to invalidate leaked access tokens:

Changing the password invalidates these tokens and is equivalent to “changing the lock” on your Facebook profile.”

In a recent post on the Epsilon data breach, we reported that the average organizational cost of a data breach increased to $7.2 million in 2010 and cost companies an average of $214 per compromised record up from $204 in 2009, per a study by Symantec and the Ponemon Institute.

Read more on the Sony data breach in a New York Times article by Ron Lieber.

Check out coverage-related info and I.I.I. tips for avoiding ID theft.

Latest information from the National Weather Service (NWS) in Memphis, Tennessee indicates that the Mississippi River is expected to crest at around 48 feet tomorrow – the second highest level on record at Memphis.

The long-standing Memphis record is 48.7 feet, a level reached during the great flood of 1937.

Heavy, extended rainfall and record snow melt have contributed to what is becoming a major flood event of America’s largest river.

You may remember in March our fellow blogger Jim Lynch reported on the NWS warning of the potential for widespread, record flooding this Spring.

The flood crest along the Mississippi is forecast to move slowly downstream towards New Orleans during the next three weeks.

The U.S. Army Corps of Engineers has already opened one spillway upstream from New Orleans to reduce the volume of water as it surges southward and today is opening a second: the Bonnet Carré Spillway. A third and final spillway could be opened later this week.

Check out Dr. Jeff Masters’ Wunderblog for a timely and fact-filled update on this event.

From the insurance standpoint, while the optional comprehensive portion of an auto insurance policy includes coverage for flood damage, it is excluded under standard homeowners and renters insurance policies.

Flood coverage for homeowners and renters is available in the form of a separate policy from the federal government’s National Flood Insurance Program (NFIP) and from a few private insurers.

Check out this Insurance Information Institute (I.I.I.) backgrounder on flood insurance to find more on how the NFIP works.

As of 9AM here is the NWS graphic of the Mississippi river stages and crests:

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