A plan aimed at improving New York CityÃ¢â‚¬â„¢s environment has been unveiled by Mayor Michael Bloomberg. Among the proposals, the idea to charge an $8 congestion fee to drivers entering Manhattan at peak hours during the week. A series of cameras would capture license plates, either charging the carÃ¢â‚¬â„¢s commuter account or generating a bill. Modeled after a similar congestion charge introduced across the pond in London in 2003, the plan may have significant implications for auto insurers and their policyholders. ItÃ¢â‚¬â„¢s easy to identify a few potential benefits right away. As the risk of auto accidents increases in areas of high traffic density, a reduction in the number of vehicles on the road could have a positive effect on auto claims. For drivers who decide to leave their car at home and take the train instead, the lower average miles per year driven could reduce the price they pay for auto insurance. What is not so certain and perhaps up for debate is how the new technology under such a scheme might intersect with the auto insurance underwriting process. What are your thoughts?Ã‚
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 apparentÃ‚ growth opportunity for insurers.
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 LloydÃ¢â‚¬â„¢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 theirÃ‚ application will continue to evolve amid the ever-changing risk landscape.Ã‚ Ã‚
We all know cars and deer can be a lethal combination, particularly during deer season which generally runs from October through December. But moose, weighing up to 1,000 lbs, can present even greater risks for drivers and their insurers. For example, reports out of Anchorage warn that moose collisions could be double or even triple the average this winter as heavy snow has led more moose than ever to wander into city limits. The Alaska Moose Federation notes that in 2006 some 236 moose were killed on Alaskan highways, with an average cost per accident of $8,356. Vigilant driving is part of the answer, but new high-tech solutions may also help to better manage this risk. Take Connecticut, where state wildlife officials have just announced they will use GPS collars to track and collect data on the stateÃ¢â‚¬â„¢s moose population. Now just imagine that regulators allowed auto insurers to use a similar system to monitor the habits of their policyholdersÃ¢â‚¬ ¦Ã‚ Ã‚