Archive for November, 2011

The 2011 Atlantic hurricane season officially comes to a close today and as we reflect on what was another active season, here’s a recap by the numbers, courtesy of NOAA.

Note to readers: NOAA’s totals include a post-storm upgrade of Tropical Storm Nate to hurricane status, and the addition of a short-lived unnamed tropical storm that formed in early September between Bermuda and Nova Scotia:

1: Irene was the only hurricane to make landfall in the United States in 2011 and the first to do so since Ike struck southeast Texas in 2008.

19: The total number of tropical storms this season, representing the third-highest total (tied with 1887, 1995 and 2010) since records began in 1951.

7: The number of tropical storms that became hurricanes in 2011, including three major hurricanes.

2005: The last year a major hurricane (Category 3, 4, or 5 with top winds of 111mph and greater) hit the U.S.

A few additional facts from other sources:

$4.3 billion: Estimated insured damages caused by Hurricane Irene, according to ISO as of November.

$52.1 million: The value of flood losses paid by the National Flood Insurance Program (NFIP) due to Hurricane Irene as of mid-November.

Also check out Dr. Jeff Masters’ Wunderblog for an excellent recap of the season.

And here’s the 2011 Atlantic hurricane season in 4.5 minutes, via YouTube and NOAAVizualizations:

Holiday shopping season is well and truly upon us and if you’re searching for Cyber Monday deals from your mobile device you might want to take note of a survey by Internet security firm Webroot.

Webroot surveyed 1,215 mobile device users in the U.S. and U.K. and found that 50 percent plan to make their holiday purchases using mobile devices this year — more than double the 22 percent that did so in 2010.

But convenience may come at a cost for those who skip certain measures to secure their devices and personal data.

Webroot also found that only 40 percent of respondents have a security app installed to block threats or remotely lock and locate a lost device, and a surprising 53 percent leave their devices unlocked.

In a release, Webroot cautions:

People using mobile devices are exposed to a new set of online risks: cybercriminals seed mobile markets with malicious apps that can steal your personal data or send texts and SMS messages to premium numbers. And because of their size, smartphones and tablets are easier to lose or have stolen than laptops and notebooks, which puts the vast amounts of personal data stored on them at risk.”

Webroot security experts offer the following key tips for safe mobile shopping:

- Know your apps: download apps only from a trusted source

- Lock your device: set up a password or code to protect your device when left unattended.

- Explore mobile security services: mobile security apps provide lost device protection, secure web browsing, and antimalware services.

Before you make another online purchase, be sure to also check out I.I.I. tips for avoiding identity theft.

Are you one of the 42.5 million Americans expected to travel more than 50 miles from home this Thanksgiving? If so, you’ll be in good company.

According to the AAA, the number of Thanksgiving travelers is projected to be up 4 percent from the 40.9 million people who traveled a year ago.

This is the first significant increase in holiday travel this year, as travel was flat over Memorial Day weekend and decreased during both Independence Day and Labor Day.

AAA says the projected increase reflects pent-up demand from Americans who may have foregone holiday travel the last three years due to economic conditions:

As consumers weigh the fear of economic uncertainty and the desire to create lasting family memories this holiday, more Americans are expected to choose family and friends over frugality.”

Given that about 90 percent of those holiday travelers (38.2 million people) are expected to be on the road, the highways will be busy. If you happen to be renting a car for your travels, check out tips from the I.I.I. on how to ensure you are properly covered.

To all our readers we wish you safe travels and a Happy Thanksgiving.

Is it possible that a remote cyber attack from Russia caused a pump to fail at an Illinois water utility? That’s the theory put forward by cyber security experts cited in numerous media reports.

The Federal Bureau of Investigation (FBI) and the U.S. Department of Homeland Security are said to be investigating the matter, but so far have not confirmed the reports.

According to the Washington Post blog Checkpoint Washington, this cyber attack, if confirmed, would be the first to cause physical damage:

Companies and government agencies that rely on the Internet have for years been routine targets of hackers, but most incidents have resulted from attempts to steal information or interrupt the functioning of Web sites. The incident in Springfield, Ill., would mark a departure because it apparently caused physical destruction.”

An article in London’s Daily Telegraph cites cyber security experts saying that the reported attack highlights the risk that hackers can break into what is known as Supervisory Control and Data Acquisition (SCADA) systems.

These are highly specialized computer systems that control critical infrastructure – from water treatment facilities to nuclear reactors, to dams and switches on train lines.

A PC World blog post has more on the potential threat to SCADA systems.

As noted in an I.I.I. paper on terrorism risk published earlier this year, U.S. intelligence officials have suspected a major cyber terrorism attack is increasingly possible.

A record 99,947 charges of discrimination were reported to the U.S. Equal Employment Opportunity Commission (EEOC) in fiscal year 2011, which ended September 30.

In addition, more than $364.6 million in monetary benefits was obtained for victims of workplace discrimination – the highest amount in the Commission’s history and $45 million more than was recovered in fiscal year 2010.

Ongoing challenging economic conditions as well as changes in employment policies and practices and employees’ greater awareness of their rights under the law are likely factors in the record numbers.

Despite the record number of charges, the EEOC finished FY 2011 with a 10 percent decrease in its pending charge inventory – the first such reduction since 2002.

No news yet on the most frequently filed discrimination charge in FY 2011. In FY 2010, retaliation under all statutes surpassed race as the most frequently filed charge for the first time in the EEOC’s history. Comprehensive enforcement and litigation statistics will be available in early 2012.

As we’ve reported before, employment practices liability insurance has become a key coverage for businesses, protecting them against claims made by employees, former employees or potential employees.

It covers discrimination (age, sex, race, disability, etc.), wrongful termination of employment, sexual harassment and other employment-related allegations and lawsuits.

Hat tip to Business Insurance for its article on the EEOC figures.

You can read the full EEOC report here.

Insurance companies in the Fortune 500 only slightly increased their use of Twitter in 2011, according to an annual study from the Center for Marketing Research at the University of Massachusetts Dartmouth.

The number of insurance companies in the F500 with active Twitter accounts moved to 21 in 2011 from 20 in 2010, the study found.

Insurance companies continue to rank first among industry sectors with a Facebook account, though the number with corporate Facebook pages dropped to 27 in 2011 from 28 in 2010.

Meanwhile, the number of insurers in the F500 blogging rose to 4 in 2011, up from 3 in 2010.

Overall, the study revealed that 23 percent (114) of the 2011 F500 have corporate public-facing blogs, the same level as in 2010, while 62 percent use Twitter, compared to 60 percent in 2010, and some 58 percent are now on Facebook, an increase of just 2 percent on 2010.

The study notes that the adoption of blogs, Twitter and Facebook in the 2011 F500 appears to have leveled off with no significant change in the past year:

These results may signal a leveling off and possibly retrenchment when it comes to the adoption of social media among the 2011 F500. There is also evidence of change in the adoption of these tools by industry and a clear sign from some companies that these are not part of their communications strategy.

Given that the F500 are the titans of American business, we may be seeing the slowdown in business adoption of social media. At the very least, this group appears to have slowed or stopped its adoption of the three most prominent tools – Blogging, Facebook and Twitter.”

As I was sitting in the doctor’s waiting room the other day leafing through the latest issue of Fortune magazine, I couldn’t help but notice Fortune’s 40 under 40.

This annual ranking highlights the hottest young stars in business across the globe. Think technology – Facebook’s Mark Zuckerberg tops the list, while Twitter’s Jack Dorsey is ranked eighth – movies, music, athletic wear, oh, and finance.

Coming in at number 10 and leaping off the page to this insurance blogger is 34-year-old Sid Sankaran, chief risk officer at AIG.

Here’s what Fortune has to say:

The financial crisis proved that AIG had no clothes – or at least no controls. Now it’s up to Sankaran, a Canadian math hotshot (his degree from the University of Waterloo was in actuarial sciences) and former partner at consultancy Oliver Wyman, to make sure it doesn’t happen again. Sankaran declined AIG at first; today, as chief risk officer, he oversees the billions flowing among disparate insurance operations and reports to CEO Robert Benmosche if something suspicious rears its head.”

Just being mentioned in the same breath as Facebook and Twitter is impressive, and it doesn’t hurt to raise the insurance industry’s coolness factor a notch.

So here’s a shout out and congrats to Fortune’s number 10 under 40.

If like me one of the first news headlines you saw this morning was about the life-threatening storm of epic magnitude bearing down on Alaska, you probably wanted to know more, so here’s the low-down.

According to the National Weather Service, a major Bering Sea Storm is bearing down on Western Alaska with a mix of strong winds, high seas, blizzard conditions, major coastal flooding, and the potential to cause widespread damage.

This is expected to be one of the most severe Bering Sea storms on record, forecast to have sustained winds of 80 mph over an area the size of Colorado and produce storm surge effects on the Alaskan coast 8 to 10 feet above normal water levels. The Alaskan city of Nome is in its path.

In a special weather statement issued yesterday the NWS Fairbanks office says:

A powerful and extremely dangerous storm of near record or record magnitude is bearing down on the west coast of Alaska. At 9 AM this morning the storm center was located about 600 miles southwest of St Lawrence Island. The storm is forecast to move rapidly northeast today and tonight with the center moving across the Chukotsk Peninsula tonight.”

The Weather Matrix blog at Accuweather.com cites NWS saying that this storm is comparable to the November 11-12, 1974, Bering Sea storm that remains the most severe in Nome in 113 years of record keeping.

Major differences between the 1974 storm and this storm include the fact that tides were much greater in the 1974 storm. However, sea ice extent is currently much lower than it was in 1974, thus providing no protection along the coast and greater fetch, the NWS says.

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

A series of earthquakes in Oklahoma over the weekend demonstrates that even if you don’t live in earthquake-prone California, earthquake insurance may be worth checking out.

The New York Times reports that a quake late Saturday night centered near Sparks, about 44 miles northeast of Oklahoma City, had a preliminary magnitude of 5.6, and is the strongest earthquake ever recorded in the state.

No serious injuries were reported, but it appears there was some minor damage to roads and buildings.

The quake was preceded by smaller tremors earlier in the day, including one with a preliminary magnitude of 4.7, centered in Prague, about 50 miles east of Oklahoma City, according to USGS.

Oklahoma’s earth-moving activity has scientists puzzled, according to the NYT. It cites a research seismologist with the Oklahoma Geological Survey who notes that since mid-2009 the state has had 10 times more earthquakes than normal:

Unlike earthquake-prone California and Japan, Oklahoma does not rest atop the fractious areas where two tectonic plates rub against each other. But the state’s geophysical activity has only been surveyed in earnest for about 50 years, Mr. Holland said, making it difficult to draw conclusions or put the recent activity into context.

But the state does have faults that are buried deep, like the Wizetta Fault, also known as the Seminole Uplift, east of Oklahoma City, where pressure can build.”

Coming in the wake of a 5.8 magnitude earthquake in Virginia that shook the East Coast in August, the latest seismic activity in Oklahoma is a reminder that many parts of the U.S. face risks from earthquakes and that home- and business owners should reassess their need for earthquake insurance.

Earthquakes are not covered under standard U.S. homeowners or business insurance policies, but coverage is available for earthquake damage in the form of a supplemental policy.

Earthquake insurance provides protection from the shaking and cracking that can destroy buildings and personal possessions.

I.I.I. facts and statistics show that California had the highest amount of earthquake premiums in 2009, at $1.6 billion. Virginia, at 23 on the list had $10 million in earthquake premiums, while Oklahoma ranked even lower at 34 with just $4.8 million in earthquake insurance.

As clean-up continues from last weekend’s early snowstorm in the Northeast, insured losses already have exceeded $25 million, making this event a catastrophe.

PC360 reports that Verisk Analytics’ Property Claims Service has declared the storm as a catastrophe with insured losses exceeding $25 million in six states: Pennsylvania, New York, New Jersey, Connecticut, Massachusetts, and New Hampshire. Other areas are to be determined.

PC360 notes that claims from winter storms typically come in slowly since damage is normally seen after snow and ice melts, and after the lights come back on.

At one point about 4 million homes and businesses were without power as a result of the storm and electricity at some affected homes and businesses may be out until the end of the week. For this reason, PCS says it does not have a loss estimate available.”

Winter storms are historically very expensive and are the third-largest cause of catastrophe losses, behind only hurricanes and tornadoes. From 1991 to 2010, winter storms resulted in about $26 billion in insured losses, or more than $1 billion a year on average, according to ISO.

Insured U.S. winter storm losses in 2010 totaled $2.6 billion, the highest losses from this peril since 2003, according to a January 2011 analysis by Munich Re.