Some states make progress in tackling opioid epidemic

Prescription opioid use among injured workers decreased in many states, but not all, according to the Workers Compensation Research Institute (WCRI).

Find out which states saw the largest decreases in this new WCRI study.

The National Safety Council (NSC) has developed a new industry specific online calculator that informs employers how much the opioid epidemic is costing companies each year.

The tool provides business leaders with specific information about the cost of substance use (including prescription drug abuse and misuse, alcohol abuse and misuse, opioid and heroin addiction as well as abuse of other illicit drugs and marijuana) in their workplace based on size of employee base, industry and state.

Posted here, the NSC calculator combines latest government and private sector research to estimate annual costs in three categories: time lost form work, job turnover and retraining, and health care costs.

A new NSC survey found only 39% of employers view prescription drug use as a threat to safety, and only 24% feel it is a problem, despite 71% saying they have experienced an issue.

Too few understand hurricane deductibles

What are hurricane deductibles and how do they work?

Homeowners in New Jersey, North Carolina, South Carolina, Florida and Texas were asked this question in an online survey conducted on behalf of the Insurance Research Council (IRC).

Not only did one-third of respondents say they had never heard of these deductibles or were not sure what they were, one quarter of them lacked an understanding of deductibles in general, the IRC poll found.

From the Insurance Information Institute: “Deductibles have been an essential part of the insurance contract for many years and represent a sharing of the risk between the insurance company and the policyholder. When repairing your home or replacing personal possessions, the amount of the deductible would come out of your own pocket.”

Hurricane deductibles demystified by the InsuringFlorida blog here: “You have two deductibles on your homeowners insurance: one is for hurricanes and the other is for everything else. The “everything else” deductible is for things like a fire, lightning strike or water damage, to name a few. It is usually a flat dollar amount, such as $1,000. The hurricane deductible is, obviously, for hurricanes – and for homes valued over $100,000, it starts at 2 percent of what the home is insured for, which is what it would cost to rebuild it. So, if the house is insured for $250,000, a 2 percent deductible would be $5,000.”

More on hurricane and named storm deductibles from the National Association of Insurance Commissioners (NAIC) website.

How do ransomware attacks impact cyber insurance loss ratios?

Another global ransomware attack, dubbed Petya, has disrupted operations at major firms across Europe and the United States.

More than 100 companies and organizations across various industries were affected, including shipping and transport firm AP Moller-Maersk, advertising firm WPP, law firm DLA Piper, Russian steel and oil firms Evraz and Rosneft, French construction materials company Saint-Gobain, food company Mondelez, drug giant Merck & Co, and Pennsylvania healthcare systems provider Heritage Valley Health System.

Today’s Insurance Information Institute Daily, via The Wall Street Journal, reports that the attack has exposed previously unknown weaknesses in computer systems widely used in the West.

The U.S. cyber insurance market grew by 35 percent from 2015 to 2016, based on recent reports.

From A.M. Best: U.S. property/casualty insurers wrote $1.35 billion in direct written premium for cyber insurance in 2016.

Overall, cyber insurance for the majority of companies was profitable and the direct loss ratio decreased by 4.5 percentage points to 46.9 percent in 2016, from 51.4 percent in 2015.

Ransomware attacks are part of the reason for the decline in the loss ratio, A.M. Best explains:

“The decline in direct loss ratio for 2016 is partially attributed to the majority of reported cyber-attacks being related to ransomware heists. In almost all ransomware cases, the losses were well below the deductible and a simple backup recovery resolved and remedied any negative long-term effect of the attacks.”

Read our earlier post on insurance for ransomware attacks.

Covered perils: advertising injury

Insurance Information Institute research manager Maria Sassian brings us an insurance consideration for our next shop at the mall or online:

Insurers have to worry about everything, it seems. For example, the standard commercial general liability policy covers advertising injury. So what constitutes an advertisement?

How about the modest hang tag, the thing that dangles from a piece of clothing as it sits on display at the store? This from a discussion at Gen Re’s blog:

Some courts have broadly construed the definition of advertisement, and policyholders have successfully argued that product packaging and point of sale retail displays qualify as “advertisements.” In E.S.Y., Inc. v. Scottsdale Ins. Co., 139 F. Supp. 3d 1341, 1355 (S.D. Fla. 2015), a competitor sued the insured, alleging it sold clothes with infringing designs and labels on the clothes and its hang tags. The court held that a “hang tag” constituted an “advertisement” such that the insurer owed a duty to defend. The court reasoned that the “hang tag” was not part of the product itself, and “had the additional function of attracting consumers to the garments themselves and to the brand more generally.”

 

Public release of Tesla Autopilot accident report

Insurance Information Institute (I.I.I.) chief actuary James Lynch and I.I.I. research associate Brent Carris share insight on the Tesla Autopilot accident report:

The National Transportation Safety Board (NTSB) released 500 pages of documents on last year’s fatal Tesla Autopilot accident in Florida. Per the initial press release the report contains only factual information on the investigation including highway design, vehicle performance, human performance, and motor carrier factors.

In an email newsletter he writes, autonomous vehicle expert Alain Kornhauser (Princeton University) raised some questions and concerns regarding the report. Those include:

  1. Since lateral control (swerving) couldn’t have avoided this crash (the truck is almost 70 ft long (6 lanes wide) stretching broadside across the highway) , it doesn’t matter if Josh Brown ever had his hands on the steering wheel. That’s totally irrelevant.
  2. Why didn’t autobrake kick in when the tractor part of the tractor-trailer passed in front of the Tesla?
  3. How fast was the truck going when it cut off the Tesla? I couldn’t find the answer in 500 pages.

The full 500 page report is also available to view at NTSB: Docket Management System.

Time to check your vehicle for recalls at NHTSA site

Airbags help save thousands of lives every year, but in the case of Takata Corp, the company’s exploding inflators have been linked to at least 16 deaths worldwide and more than 180 injuries.

Takata’s filing for bankruptcy protection in the U.S. and Japan and $1.6 billion sale of its assets to Key Safety Systems is the latest twist in what has been described as the largest and most complex automotive recall in history.

From Bloomberg:

“The Chapter 11 bankruptcy in Delaware listed more than $10 billion in liabilities, including those from automakers like Honda Motor Co., Toyota Motor Corp. and Tesla Inc., which have claims over the airbags, and people who have brought class action lawsuits.”

Also:

“In the U.S. alone, about 43 million air bag inflators are currently subject to recall, and only about 38 percent have been repaired as of May 26, according to data on the U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) website.”

This is a reminder of how important it is to check your vehicle for airbag­–and indeed any other recalls–at the NHTSA website.

The NHTSA Vehicle Identification Number (VIN) search tool allows you to access recall information provided by the manufacturer conducting the recall which may not yet be posted on the website.

Finding out fast about safety problems with your vehicles, tires or car seat allows you to get your car repaired (manufacturers are responsible for costs) and to protect you and your passengers.

The National Safety Council and Fiat Chrysler just launched an awareness campaign “Check to Protect” to encourage vehicle owners to make recall checks.

Check out Insurance Information Institute facts and statistics on product recall insurance.

Record number of insurers support LGBT equality

If you’re among the millions of people attending a Pride parade in your home city this weekend, look out for participating insurers.

Many companies support LGBT (lesbian, gay, bisexual and transgender) events throughout the month of June and indeed year-round as part of their continuing commitment to diversity and inclusion.

Some 36 insurers were recently recognized as one of the “best places to work for LGBT equality” by the Human Rights Campaign (HRC) Foundation, earning a perfect score of 100 percent on their 2017 Corporate Equality Index.

The number of insurers achieving the top ranking has seen a steady increase over the last decade. Read more on LGBT insurance news and developments in some of our earlier posts through the years (here, here and here),

Here’s an overview of diversity and inclusion in the insurance industry from the Insurance Information Institute.

Private Market Flood Insurance Is Budding

Private carriers are dipping their toes in the turbulent waters of flood insurance, writes Insurance Information Institute (I.I.I.) research manager Maria Sassian.

This year, for the first time, insurers were required to report in their annual statements data on private flood insurance.

I.I.I. has compiled a list of top insurers in the market by 2016 direct premiums written, based on data from S&P Global Market Intelligence:

As you can see, the top three companies hold almost 81 percent of the market share, and at number one FM Global has a 54 percent market share. Direct premiums written for all companies total $376 million.

Private flood includes both commercial and private residential coverage, primarily first-dollar standalone policies that cover the flood peril and excess flood. It excludes sewer/water backup and the crop flood peril.

Some of the reasons private insurers are becoming more comfortable covering flood risk include: improved flood mapping technology; improved flood modeling; the construction of flood resistant buildings; and encouragement from Congress.

The Federal Emergency Management Agency’s National Flood Insurance Program (NFIP) is billions of dollars in debt due to large losses from Hurricanes Katrina, Rita and Superstorm Sandy. Opening the market to private insurers is one of several measures enacted by lawmakers to get the program out of debt.

Another step in shoring up the NFIP took place with the January 2017 transfer of over $1 billion in financial risk to private reinsurers. FEMA gained the authority to secure reinsurance from the private reinsurance and capital markets through the Biggert-Waters Flood Insurance Reform Act of 2012 and the Homeowners Flood Insurance Affordability Act of 2014 (HFIAA).

NHC warns on rainfall and flooding from Tropical Storm Cindy

Heavy rainfall due to Tropical Storm Cindy is expected to produce flash flooding across parts of southern Louisiana, Mississippi, Alabama, and the Florida Panhandle, according to the National Hurricane Center (NHC).

Total rain accumulations of 6 to 9 inches with isolated maximum amounts of 12 inches are expected in those areas, the NHC says.

On Tuesday, Alabama Governor Kay Ivey declared a statewide state of emergency in preparation for severe weather and warned residents to be prepared for potential flood conditions.

FEMA flood safety and preparation tips are here.

Flood damage is excluded under standard homeowners and renters insurance policies. However, flood coverage is available in the form of a separate policy both from the National Flood Insurance Program (NFIP) and from a few private insurers.

Insurance Information Institute flood insurance facts and statistics show that the number of flood insurance policies increased in Alabama, Louisiana and Mississippi after 2005’s Hurricane Katrina.

Here are the numbers:

Lightning claims topped $800 million last year

Every year the Insurance Information Institute (I.I.I.) and State Farm recognize Lightning Safety Awareness Week (June 18-24) by estimating the toll of lightning claims in the United States, writes the I.I.I. research team. Last year insurers paid out nearly $862 million in lighting claims to more than 100,000 policyholders, a 4.5% increase from 2015.

Damage caused by lightning, such as a fire, is covered by most homeowners insurance policies.

Florida—the state with the most thunderstorms—remained the top state for lighting claims in 2016, with 10,385, followed by Texas (9,098), Georgia (8,037) and Louisiana (5,956).

Homeowners Insurance Claims and Payouts for Lightning Losses, 2007 – 2016

The Lightning Protection Institute (LPI) encourages homeowners to install a lightning protection system in their homes. Per Kimberly Loehr, communications director for LPI: “Lightning protection systems that follow the guidelines of NFPA are designed to protect your home by providing a specified path to harness and safely ground the super-charged current of the lightning bolt.”

To learn more about an LPI-certified lighting protection system, click here or visit lightning.org/find-an-installer.