The I.I.I.’s Michael Barry has been attending the National Association of Insurance Commissioners’ meeting. This week, I.I.I. Daily editor Jennifer Ha picks the week’s most important insurance stories.
Record winds are fanning the flames of three major wildfires in Southern California. Already 200 homes and buildings have been destroyed, and tens of thousands of persons face evacuation.
Damage claims related to the October wildfires that hit the state’s Wine Country have risen to $9 billion. The state tracks the losses reported to major insurance companies, and the recent losses are far greater than any other wildfire outbreak in state history.
The Federal Emergency Management Agency (FEMA) has filed claims with private reinsurers for the full $1.042 billion the agency has in coverage. The claims are being sought to help FEMA recover the losses of the National Flood Insurance Program (NFIP) from Hurricane Harvey. Meanwhile, Congress approved a short-term (December 22) extention for the NFIP.
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The worst wildfire season in the history of modern California is taking another bad turn, as three major fires have destroyed more than 200 homes and buildings.
Strong winds will be fanning the flames. The state’s foresters have issued a purple wind alert for Southern California, something they have never done before.
This follows a Department of Insurance report that insurers have incurred more than $9 billion in claims so far from the October fires, being $8.4 billion in residential claims, $790 million in commercial property, $96 million in personal and commercial auto, and $110 million from other commercial lines. County-level details here.
The New York Times has a 2-minute video summarizing why this year’s wildfire season has been so bad.
Wet winter followed by hot summer. The moisture encouraged plant growth. The heat turned those plants to tinder.
Longer fire season, perhaps linked to climate change.
Growing residential areas. Development is encroaching on forests.
Santa Ana winds. As noted above, the winds are blowing harder this year.
I.I.I. Facts + Statistics on wildfire can be found here. Here’s a prior Terms + Conditions post on filing claims. (It was written for the October fires, but the message will not have changed much.)
America’s 28 million small businesses have virtually the same exposure to hackers and other cyberthreats as America’s largest companies. While the billion-account hacks get most of the attention, what small businesses might not realize is that they are far more likely to be crippled or put out of business in the wake of a cyberattack.
On Monday, December 11, the Insurance Information Institute (I.I.I.) will host its I.I.I. Market Report Webinar: Protecting Small Business Against #cyberfail. Leading experts from CNA Insurance, Control Risks, The Institutes, the Small Business Administration and Verisk will join the I.I.I. to discuss the current commercial cyberrisk landscape, how small business leaders can use insurance products effectively, and how they may best employ risk management best practices and other tactics to protect their firms.
Back in October, in the wake of the sexual harassment allegations levied against Hollywood mogul Harvey Weinstein, I.I.I.’s Claire Wilkinson wrote this post about Employment Practices Liability Insurance (EPLI). It appears that companies are aware of the risk and are increasingly purchasing insurance, including EPLI, to cover costs associated with sexual harassment lawsuits.
In addition to buying insurance, companies have risk mitigation protocols in place to handle sexual harassment in the workplace. But a study of employee lawsuits recently published by Hiscox, illustrates how the aftermath of sexual harassment complaints can turn into charges of retaliation by the time the employee files a complaint with the EEOC. According to the EEOC, many of those who complain of harassment in the workplace also face retaliation. Retaliation was the most prevalent charge category, named in 46 percent of all charges with the EEOC.
The Hiscox study also found that employers in some states have a much higher chance of being sued than in others. In Washington D.C. employers have an 81 percent higher chance of being sued followed by Delaware, Nevada and California.
Organizations representing the actuarial profession in Canada and the United States reported recently that the Actuaries Climate Index™ reached a new record high in winter 2016–17, following the record value measured in fall 2016. The change reflects increasing deviation of weather extremes and sea levels from historically expected patterns for the two countries.
“This hurricane season has brought renewed attention to the question of whether extreme weather is increasing, and for a broad swath of North America, the Actuaries Climate Index data were trending in that direction to February 2017,” said Caterina Lindman, chair of the Climate Change Committee.
The Actuaries Climate Index (ACI) was designed as an objective indicator of the frequency of extreme weather and the extent of sea level change. It is available for the United States and Canada and is updated on both a monthly and a seasonal basis. The data are available here for anyone to explore.
The ACI is sponsored by the American Academy of Actuaries, the Canadian Institute of Actuaries, Casualty Actuarial Society and Society of Actuaries.
These days international insurers are spending a lot of time focusing on a significant accounting change, best known by its abbreviation, IFRS17.
IFRS 17 – International Financial Reporting Standard 17 – is an accounting rule scheduled to take effect in 2021. It is designed to bring more clarity to insurance financial statements. It affects most insurers that operate internationally; US-only insurers conform to generally accepted accounting principles (GAAP) or statutory accounting principles, or both.
Life insurers will be affected much more than property/casualty insurers.
Not all insurers embrace the standard enthusiastically, as noted in this Financial Times article (subscription required)
Here’s a cartoon by I.I.I. member Allianz that explains it in general terms: