Man-made and Natural Hazards Both Demand
a Resilience Mindset

This weekend’s ransomware attack that forced the closure of the largest U.S. fuel pipeline provides another powerful illustration of the need for a resilience mindset that applies to more than just natural catastrophes.

Colonial Pipeline Co. operates a 5,500-mile system that transports fuel from refineries in the Gulf of Mexico to the New York metropolitan area. It said it learned Friday that it was the victim of the attack and “took certain systems offline to contain the threat, which has temporarily halted all pipeline operations.”

Individually, the event demonstrates the threat cybercriminals pose to the aging energy infrastructure that keeps the nation moving. More frighteningly, though, it is yet another example of how vulnerable the complex, interconnected global supply chain is to disruptions of all kinds – a message that isn’t lost on risk managers and insurers.

Last year, a ransomware attack moved from a natural-gas company’s networks into the control systems at a compression facility, halting operations for two days, according to a Department of Homeland Security (DHS) alert

The DHS described the attack on an unnamed pipeline operator that halted operations for two days.  Although staff didn’t lose control of operations, the alert said the company didn’t have a plan in place for responding to a cyberattack.

“This incident is just the latest example of the risk ransomware and other cyber threats can pose to industrial control systems, and of the importance of implementing cybersecurity measures to guard against this risk,” a CISA spokesperson said at the time.

Not just energy companies

It isn’t only energy and industrial companies that need to be paying attention. According to cyber security firm VMware, attacks against the global financial sector increased 238 percent from the beginning of February 2020 to the end of April, with some 80 percent of institutions reporting an increase in attacks.

“Cyber is an existential issue for financial institutions, which is why they invest heavily in cyber security,” says Thomas Kang, Head of Cyber, Tech and Media, North America at Allianz Global Corporate & Specialty (AGCS). “However, with such potentially high rewards, cybercriminals will also invest time and money into attacking them.”

He pointed to two malware campaigns – known as Carbanak and Cobalt – that targeted over 100 financial institutions in more than 40 countries over five years, stealing over $1 billion.

An ACGS report shows technical failures and human error are the most frequent generators of cyber claims, but the financial impact of these is limited:

“Losses resulting from the external manipulation of computers, such as distributed denial of service attacks (DDoS) or phishing and malware/ ransomware campaigns, account for the significant majority of the value of claims analyzed across all industry sectors (not just involving financial services companies).”

According to the report, regulators have turned their attention to cyber resilience and business continuity.

“Following a number of major outages at banks and payment processing companies, regulators have begun drafting business continuity requirements in a bid to bolster resilience.”

Not just cyber

The COVID-19 pandemic has taught the world a lot of lessons, not the least of which is how vulnerable the global supply chain – from toilet paper to semiconductors – is to unexpected disruptions. Demand for chlorine increased during 2020 as more people used their pools while stuck at home under social distancing orders and homeowners also began building pools at a faster rate, adding to the additional demand. Such disruptions can ripple through the economy in different directions.

Business interruption claims and litigation have been a significant feature of the pandemic for property and casualty insurers.

When the container ship Ever Given got wedged in the Suez canal – one of the most important arteries in global trade – freight traffic was completely blocked for six days. Even as movement resumed, terminals experienced congestion and the severe drop in vessel arrival and container discharge in major terminals aggravated existing shortages of empty containers available for exports. The ship’s owners and the Egyptian government remain locked in negotiations over compensation for the disruption, and the ship is still impounded.

Spurred in part by this event, the Japanese shipping community is considering alternative freight routes to Europe, both reliant on Russia: the Trans-Siberian Railway and the Northern Sea Route. Neither option is devoid of risks.

In an increasingly interconnected world, there is no bright line distinguishing man-made from natural disasters. After all, the Ever Given grounding was caused, at least in part, by a sandstorm. April’s power and water disruptions that left dozens of Texans dead and could end up being the costliest disaster in state history were initiated by a severe winter storm.

A resilience mindset focused on pre-emptive mitigation and rapid recovery is called for in both cases. There is no “either/or.”

National Hurricane Preparedness Week 2021

The start of what is forecast to be another “above-average” Atlantic hurricane season is weeks away and the Insurance Information Institute (Triple-I) is recommending homeownersrenters and business owners prepare now. 

“The U.S. experienced a record-setting hurricane season in 2020 and the early forecasts say 2021 is going to be an active one, too,” said Sean Kevelighan, CEO, Triple-I. “During National Hurricane Preparedness Week, everyone who lives in a hurricane-prone community should take a few moments to ensure you have adequate financial protection for your property and possessions while also taking steps to make your home or business more resilient to the impacts of wind and water. History has proven that virtually every community along the Gulf and East Coasts have faced the wrath of what is a hurricane’s catastrophic damage. And now with even more Americans living in harm’s way, it is even more critical for consumers and communities to take action.”

National Hurricane Preparedness Week starts on Sunday, May 9, and continues through Saturday, May 15. The 2021 Atlantic hurricane season begins on June 1 and ends on Nov. 30.

Review Your Insurance Coverage
Make sure you have the right type – and amount – of property insurance. The Triple-I recommends you conduct an annual insurance review of your policy(ies) with your insurance professional.

“You should ask your insurance professional if you have the right amount of insurance coverage to rebuild or repair your home, to replace its contents, and to cover temporary living expenses if your property is uninhabitable,” Kevelighan said. “You should also ask about flood insurance, which is an additional coverage to a standard homeowners and small business insurance policy. Nearly 90 percent of natural disasters involve flooding.”

The best place to start the insurance review process is by reading the declarations page of your policy. This one-page information sheet offers details on how much coverage you have, your deductibles and how a claim will be paid.

Standard homeowners insurance covers the structure of your house for disasters such as hurricanes and windstorms, along with a host of other disasters. It is important to understand the elements that might affect your insurance payout after a hurricane and adjust your policies accordingly.

Flood insurance, which is a separate policy from your property coverage, is offered through FEMA’s National Flood Insurance Program (NFIP) and several private insurers.

Protect Your Vehicles
Comprehensive auto, which is an optional coverage, protects your vehicle against theft and damage caused by an incident other than a collision, including fire, flood, vandalism, hail, falling rocks or trees, and other hazards. Nearly 80 percent of U.S. drivers opt to purchase comprehensive coverage.

Make Sure Your Possessions are Adequately Protected
Imagine the out-of-pocket cost of repurchasing all your furniture, clothing, and other personal possessions after a hurricane. Whether you have homeowners insurance or renters insurance, your policy provides protection against loss or damage due to a hurricane.

Creating an inventory of your belongings and their value will make it easy to see if you are sufficiently insured for either the replacement cost or cash value of the items situated at your residence. When you create a photo or video catalog of your home’s possessions, it will also help expedite the insurance claims process if you sustain damage from a storm.

Make Your Property More Resilient
Invest in items that will harden your property against wind damage, such as a wind-rated garage door and storm shutters. The Triple-I also recommends you have your roof inspected annually by a licensed and bonded contractor to make sure it will hold up to high winds and torrential rains.

Other hurricane season preparation tips from the Triple-I include: 

  • Preparing a hurricane emergency kit with a minimum two-week supply of essential items such as non-perishable food, drinking water (1 gallon per family per day) and medications for every family member. Also make sure you have adequate supplies and medications for your pets.
  • Creating an evacuation plan well before the first storm warnings are issued. 

RELATED LINKS

FACTS & STATISTICS:
Hurricanes
Flood Insurance

CONSUMER INFORMATION:
Catastrophes: Insurance Issues
Hurricane Season Insurance Checklist
How to Prepare for Hurricane Season
Hurricane Season Insurance Guide
Hurricanes and Windstorm Deductibles
Understanding Your Insurance Deductible
Preparing an Effective Evacuation Plan
Brochure: Settling Insurance Claims After A Disaster
Spotlight on Flood Insurance
Facts About Flood Insurance
Recovering from a Flood

INFOGRAPHICS:
What Are Hurricane Deductibles?
How to Prepare for Hurricane Season
How to File a Flood Insurance Claim
Is Your Business Ready for Peak Hurricane Season?

EXTERNAL RESOURCES:
FEMA’s National Flood Insurance Program (NFIP)
NFIP Information for Insurance Agents

VIDEOS:
Phil Klotzbach, PhD, Discusses 2021 Hurricane Season Forecast
Insurance Check-Up: Homeowners and Hurricane/Flood Insurance
Hurricane Insurance Guide
Create a Home Inventory

Be prepared for hail

Hailstorms are among the most destructive weather events, with hailstones ranging in size from a pea to a grapefruit.  When these frozen missiles plummet from the sky, damage to cars and buildings can be severe.

Steve Bowen, a meteorologist at Aon and director of the broker’s Impact Forecasting unit, has said hail can contribute as much as 50 percent to 80 percent of severe convective storm losses in any given year, with tornadoes, wind and flooding providing the rest.


An April 28 storm that included apple-size hail in in some parts of the Dallas-Fort Worth region caused close to $400 million in insured losses, according to the Insurance Council of Texas. Spokesperson Camille Garcia says the loss estimate is based on 32,000 car and homeowners claims sent to insurers through May 3. Most came from Tarrant County and the city of Keller. Once roof inspections are completed many more claims are expected.

State Farm alone paid out $474.6 million in hail claims in Texas in 2020, according to the company’s most recent Hail Damage report.

While you can’t prevent hail from failing on your property, you can lessen the possible damage by putting vehicles in the garage and moving patio furniture under cover. Close blinds and curtains to prevent broken glass from blowing inside and possibly causing injuries or damage.

For homes without garages, which is common in the South, I’m told, hail-resistant car covers can be an effective option.

If you do experience hail damage, your auto and home insurance policies will cover it. Take lots of pictures of the damage and submit your claim as soon as you can.

If contractors come knocking on your door, hold off on signing repair contracts. Do your due diligence, deal with reputable contractors, and get references. Consult your insurance adjuster before signing any contracts.

Click here for more insurance tips.

For more on hail damage trends and mitigation tactics, see Triple-I’s paper Severe Convective Storms.

White House, FEMA Resilience Officials
Speak at Triple-I Event

Caitlin Durkovich, special assistant to President Biden and White House National Security Council senior director of resilience and response, discussed the administration’s climate and resilience priorities at Triple-I’s National Town Hall (highlights video below. Click here to view full event).

She and Paul Huang, acting associate administrator of resilience for the Federal Emergency Management Administration (FEMA), met virtually with Triple-I CEO Sean Kevelighan and Michel Léonard, Triple-I vice president and senior economist.

“Resilience is a very important theme of this administration and of the priorities we have,” Durkovich said, elaborating that this includes preparation for and response to both natural and man-made events. The objective is to learn from every incident “so we don’t just bounce back but bounce forward.”

Referring to the administration’s infrastructure and clean-energy goals, she said, “We’re anticipating what the  world is going to look like 20 to 30 years from now, given the life span of our built infrastructure.”

Durkovich noted that there are several longstanding hazard-mitigation and hazard-response programs spread across multiple agencies.

“I think we have the opportunity to bring at least the federal community together to look at some of those programs and think about how we can modernize them, just like we’re modernizing infrastructure,” she said.

This will help communities “build back better” after an event.

But it’s going to take more than federal government to bring this about. Communities will have to be very involved, she said, adding, “It’s not just state and local planners, but it’s infrastructure owners and operators, it’s the finance side of the house, who are needed to work through some of these hard challenges before, so after an emergency, when money becomes available, you’re ready to make some significant changes.”

And as we invest in electrified transportation infrastructure, she said, “we have to make sure that infrastructure is resilient to power outages, to storms, and when we’re in the middle of a mass evacuation it can accommodate hundreds of thousands of people.”

Despite having to think about everything that could go wrong (what she described as “healthy paranoia”), Durkovich was upbeat: “It’s amazing to be having these conversations about designing resilience in at the beginning, instead of bolting it on at the end.”

FEMA’s Paul Huang echoed Durkovich’s enthusiasm for a “whole of government” and “whole of community” approach to resilience.

“We’re going to have to rethink how we do things,” he said.  “We have programs that have always been around. They’re good programs, but it’s not enough.  We have to think bigger and more creatively.”

Huang talked about a new FEMA program, Building Resilient Infrastructure and Communities (BRIC), that support states, local communities, tribes and territories in developing hazard-mitigation projects, reducing the risks they face from natural disasters.  “We’re hoping to see new ideas from industry, working with local and state government, to say, ‘This is something we can try together in partnership to get a bigger bang for our buck.’ “

Insurance Careers Corner: Q&A With Janthana Kaenprakhamroy, CEO, Tapoly

By Marielle Rodriguez, Social Media and Brand Design Coordinator

Janthana Kaenprakhamroy

Triple-I’s “Insurance Careers Corner” series was created to highlight trailblazers in insurance and to spread awareness of the career opportunities within the industry.

May is Asian American and Pacific Islander Heritage Month, and this month we interviewed Janthana Kaenprakhamroy, CEO of London-based insurtech, Tapoly. Although Janthana lives in the UK, we believe that Asian heritage should be celebrated no matter where you live. 

Founded in 2016, and backed by Lloyd’s of London, Tapoly is Europe’s first and fastest growing insurtech, providing on-demand flexible commercial insurance products for SMEs, freelancers, the self-employed and the gig economy. Recognized as Insurance Provider of the Year at the British Small Business Awards in 2018, Tapoly’s mission is to make insurance simple, accessible, and flexible.

We spoke with Kaenprakhamroy to discuss the role of AI and technology in her business, the boom of the sharing economy, and what the traditional insurance industry can learn from insurtech.

Tell us about your background and your interest in building a business. What led you to your current position and what inspired you to found your company, Tapoly?

I was born in and come from a small part of Thailand, grew up in Sweden, and have lived in London for the last 20 years. I have roots in different parts of the world, which has shaped my international way of thinking. I feel like I don’t fit a specific stereotype and can blend into different cultures.

I’m an accountant by trade and have worked in investment banking for almost my entire career. In late 2016, I decided to quit my job and build Tapoly. We provide technology solutions and insurance products locally in the UK as well as in Asia. 

I was never sure what I wanted to do until I came across a problem in 2016 when I was trying to buy insurance for my short letting over the summer, which you can only do for about 90 days a year. In 2016, no insurance companies were serving the types of products for the short letting space. Ever since then, we’ve been developing technology solutions and products to cover this massively underserved market within the micro, SME, and freelancing space. 

What is your organization’s mission? What role does tech and AI play in your platform? 

Our mission is very simple – we want to able to provide an insurance solution online that is quick and easy for people, in the most convenient way, which is one thing in the commercial lines space that’s not very well-developed. Most companies are buying insurance through their brokers, rather than online directly. We wanted to make commercial lines products easier and less time-consuming for customers to access, without making them answer several questions that they may or may not know how to answer. 

If you offer insurance online directly, then the underwriting decision must be prompt and that can only be achieved when you have data on your customers. There is data that traditional insurance companies aren’t using, for example, social media data, which can be cross-referenced with [the customer’s] profile. It’s all about augmenting data to amplify or make customers profiles more prominent for underwriting decisions – it’s something insurtech is doing well. Insurtech would allow data to flow from the point of the customer buying insurance to the point of the underwriter making the decision – this makes the process more seamless and transparent.

A lot of what we do at Tapoly is data analytics. It’s not only for risk selection and underwriting alone it’s also for customer acquisition and marketing. Customer segmentation is very important, and you can only do it with a certain level of good-quality data on your customers.

What do you see as the biggest pain points for customers within traditional insurance that insurtech can better solve?

Customers in the market segment that we serve, which is microbusinesses and freelancers, have three main pain points. One is the price, especially for customers who do ad-hoc jobs which are not part of their core competency or core activity. Second is the convenience – the ability to fill in a simple questionnaire and get insurance quickly. Third is the availability – some products are not available for some freelancers.  For example, a group of freelancers doing construction work in a certain environment are less likely to get certain insurance products due to their high risk profile.

Within the gig economy, there are job titles that are outside the norm and that don’t fall inside traditional insurance categories. We need to revamp the list of professions. In insurtech, we see gaps in coverage [in certain industries]. For example, marketplaces where the underlying risks may be different depending on what level of services and products the platform is providing. Another example may be the evolution of some professions, e.g. “virtual assistants”, where they may in some cases provide basic accounting services, which would previously be performed by certified professionals, because accounting is also moving online. There’s a lot of mismatch between the way insurers categorize their customers and the profession that customers recognize themselves as, and the ability to buy insurance automatically in the most convenient way.

Do you see innovation and transformation happening in the traditional insurance space?

I think the insurance industry is well-aware of the need for innovation and many companies are at the beginning of innovating, but innovation takes time. While we recognize the need, it will take time to implement. As a startup, we don’t have a hierarchical structure or have as many constraints. We can build anything we want without waiting for the approval of senior management. What insurtech can bring is the speed to market, the ability to adapt, and to implement changes and help insurers prove the concept in the most cost-effective way. 

In what ways has COVID-19 impacted the sharing economy and your business? What are your predictions for the growth and trajectory of the sharing economy?

A 2015 PWC report showed that revenue from the sharing economy was $15 billion in 2013 and would reach $335 billion in 2025. That’s a phenomenal increase in the market within 12 years. I think the COVID-19 pandemic really accelerated the sharing economy. There are so many businesses that did fantastically well during the pandemic, including businesses in logistics and delivery, and the insurtechs that are operating in that space. From the product delivery, customer-facing side, we didn’t have a problem because we were already set up to operate online. However, it did impact our customers and some of them didn’t renew their insurance or either postponed or changed their policy.

In terms of opportunities, there are many insurance companies or intermediaries that have started to think about innovation. COVID-19 has really accelerated that thinking because tech has become a big hurdle. There are a lot of operational challenges among larger insurance companies that are not set up to sell insurance digitally. That is something insurtech can take advantage of because we are already set up to do this.

Let’s talk about diversity in VC funding and entrepreneurship. A 2019 Diversity VC report showed that ethnic minorities are under-represented in venture capital and women are under-represented in senior roles. Another 2020 Extend Ventures report shows that female entrepreneurs receive just a fraction of available funding that male founders do. Were there any initial challenges in founding your company and attaining funding, and how did you overcome these obstacles? Are there any present challenges of being an Asian- and woman-owned business and founder?

In the beginning, not raising enough funding can cause a slowdown in your growth. Even with the best ideas, it’s hard to scale your business without capital. I certainly think that the confidence in a woman in running a business could be improved in the VC space. There are a lot of stereotypes and unconscious biases that people apply to their decisions. The VC space needs to work on being self-aware and educate themselves around these issues especially when judging a first-time entrepreneur. There is also uncertainty and a lack of data on startups that make it difficult for VCs to validate and invest in, on top of gender stereotypes.

My biggest daily challenge is finding enough capital to be able to grow my business. The difficulty for early-stage founders is balancing your own interests with the investor’s interests and figuring out how much you want to raise versus how much you can raise. To overcome this problem, we usually find strategic investors that can add a lot of value.


What are your goals for 2021 and beyond? Where do you see the traditional industry heading in the next few years given the pandemic?

We’re preparing for hockey stick growth in 2021 and want to exponentially grow our company in 2022. My aim is to raise enough money to be a larger team and to have the capacity to manage that level of volume and growth.

I think the traditional insurance industry will evolve slowly in the next couple of years. A lot of insurers have been badly hit due to COVID-19 because of claim costs and loss of investments. It would take a couple of years before we recover fully, and hopefully insurtech will still be relevant within this space. At least if anything, insurance companies will be spending more on innovation to reduce their claims and operating costs.

A Little Care Can Prevent Tree Damage to Property

People have a mixed relationship with trees. On the one hand, trees provide beauty and shade – along with reducing carbon dioxide in the atmosphere and providing much of the oxygen we breathe. 

But let one fall on your house or bring your car to a sudden stop and suddenly trees become a problem.

For advice on keeping your trees healthy, your family safe, and preventing property damage, Triple-I talked to certified arborist Dylan Brown.

Much of the damage trees can cause to property is often covered by insurance. Generally speaking, if a tree hits your home or other insured structure, your standard homeowners insurance policy covers the damage to the structure and its contents.

Properly selected, placed, and maintained trees can provide excellent wind protection for a house, which can reduce heating costs and noise from neighbors and traffic. By putting thought and energy into planting and maintenance, homeowners can reap these benefits  while preventing much potential damage.

To minimize damage from your own trees, it’s important to maintain their health and properly prepare them for winter weather and storms.

While some trees don’t handle wind well, others can withstand some of the most powerful gusts. Blue River Restoration Services in Indianapolis recommends live oaks and maples, crepe myrtles, and cypress trees as “safe bets” when considering wind damage.

“These trees have strong roots to keep them in place and thick bark that supports them in windy conditions,” Blue River’s website says. It also recommends not to plant large shade trees within 12 feet of structures that could be damaged by tree roots.

“While most trees’ roots are not invasive enough to cause damage to your house or pavement, some will,” the website says. “Aspens, willows, American elms, and silver maples all have root systems that can stretch for acres. With these types of trees, there is no way to control their roots that can disrupt the foundation of your home.”

Tree roots don’t destroy the foundation but instead shift the soil under and around them, causing them to become unstable.

“Some homeowners deal with intrusive roots by grinding down or removing them,” Blue River says. “This can be expensive and is very harmful to the tree. Wounding a tree’s roots creates points of entry for pathogens, leaving a tree vulnerable to disease.”

A diseased tree is more likely to have branches that will break off and cause damage during high winds. Trees with inadequate root systems may blow over or break off at the ground line. A general rule is that you should not plant any trees within 20 feet of your house.

Insurance “what ifs?”

What happens if a neighbor’s tree falls on your house? You’ll need to file a claim with your insurance company. If negligence can be proved—such as a diseased tree or tree that wasn’t properly maintained — your company may try to collect from your neighbor’s policy. If that happens, you may be reimbursed for your deductible.

If a tree falls on your car, damage is covered under the comprehensive portion of your auto insurance policy.

Standard home insurance polices also provide coverage for damage to trees and shrubs due to fire, lightning, explosion, theft, aircraft, vehicles not owned by the resident, and vandalism Coverage is generally limited to about $500 for any one tree, shrub or plant.

For more Information:

If a Tree Falls on Your House, Are You Covered?

Understanding Trees and Tree Maintenance (a Triple-I video)

Preventing Trees From Falling (a Triple-I video)

Flood: Beyond Risk Transfer

Half a billion people worldwide are affected by floods annually, and about 90 percent of all U.S. natural disasters involve flooding. The human and economic tolls are massive, and until recently insuring these risks and helping communities recover fell almost entirely on government programs. 

Improved data, analysis, and modeling have helped drive private-sector interest in flood-risk transfer and mitigation. But despite growing private involvement, many experts consider the current system unsustainable. A resilience mindset is required, and that demands more than insurance products.

A new Triple-I paper analyzes the current state of flood risk and resilience and discusses how governments, corporations, academia, and others are rising to the challenges and seizing the opportunities.

“New products alone will not close the protection gap,” says Triple-I CEO Sean Kevelighan. “Risk transfer is just one tool in the resilience toolkit. Our understanding of loss trends and expertise in assessing and quantifying risk must be joined at the hip to technology, public policy and finance, and science. We need to partner with communities and businesses at every level to promote a broad resilience mindset focused on pre-emptive mitigation and rapid recovery.”

The Triple-I paper describes how this is happening. Tapping its own resources and the expertise of its insurance and risk-management network, Triple-I is pleased to bring you this analysis of the current state of flood risk and resilience.

Partnering to Improve Flood Resilience

Improved access to data, analytical tools, and sophisticated modeling capabilities has turned flood insurance from a virtually untouchable risk for insurers to an area of increasing business opportunity. These developments also have put the pieces in place for powerful collaborations between corporations, governments, and nonprofits to drive flood resilience for communities and businesses.

Stormwater management is one example. Triple-I CEO Sean Kevelighan recently participated in a panel at the P3 Water Summit to discuss flooding and water quality challenges and how insurers, municipalities, rating agencies, and other entities are incorporating flood and climate risks into their businesses.

The view from the middle

“Insurance is in the middle of all of this,” Kevelighan said, referring to three major global crises the moderator had mentioned – biodiversity loss, climate change, and the COVID-19 pandemic – “and I might add geopolitical risk and social unrest, as well as disruption due to technology and innovation. Triple-I is here to inform all those discussions.”

Climate risk, he said, “is certainly on the forefront of all the discussions we’re having right now, in terms of the larger disruption continuum.”

For decades, he noted, the industry has been looking for ways not just to help customers recover from natural catastrophes but to get out in front of the risks and promote methods to make them more resilient.

Flooding is a particularly pressing risk, Kevelighan noted, because “every year you’ve got about a half billion people who are impacted by floods. About 90 percent of all U.S. natural catastrophes involve some form of flooding. This is a critical part of the catastrophe cycle – and one that is significantly underinsured.”

Flood insurance and recovery assistance historically have fallen to federal and state government to manage. But even as improved data and other capabilities have made writing the coverage an increasingly attractive opportunity for insurers, Kevelighan said, it also has become clear that risk transfer through insurance isn’t enough to close the “protection gap.”  Public-private partnerships and other approaches are essential.

Bringing it all together

Richard Seline, managing director of Resilient H2O Partners and co-founder of the Resilience Innovation Hub, talked about his companies’ efforts to “introduce emerging technologies, existing equipment, put it together with public and private interests” to promote activities and behaviors supportive of resilience.

“The Innovation Hub is intended to bring together the best ideas, the best experience, the best capital, and network it more efficiently and effectively,” Seline said. “We’re in lots of discussions with engineering firms, architecture firms, a lot of private equity firms. I didn’t know until a year ago that the Nature Conservancy has its own venture fund! Those are the types of folks we’re pulling together.”

Like Kevelighan, Seline pointed to the importance of data in making these collaborations possible: “Unless we have the data available to do the cost-benefit analysis and the return on investment, it’s all theoretical.”

Thanks to partnerships between organizations like Triple-I and Resilient H2O, he said, it’s now possible to marry hydrological data to financial and economic risk models to better inform investment planning and decision making.

Ready to ‘take off’

Stacey Mawson, director at Fitch Ratings, said the environment now seems ripe for stormwater public-private partnerships to “take off.”

“Over the past couple of years we’ve been seeing more projects coming to us for ratings,” she said. These have included water transport, flood mitigation, privatization of utilities because they need additional investment. “We’re seeing an increased focus on water in all its aspects.”

Companies that issue bonds and other forms of debt rely on rating agencies’ assessments of their creditworthiness to keep their borrowing costs low. A bad rating may cause bond buyers to demand a higher interest rate in return for the greater risk such a rating implies.

Rating agencies like Fitch can play a strong role in advancing environmental and social objectives by incorporating climate and social risks into their rating processes. Mawson discussed Fitch’s environmental, social, and governance (ESG) scores and suggested that, over time, if bond-issuing entities aren’t paying sufficient attention to such considerations it could become a rating issue.

For more information and insight on flood risk, check out our new research paper, Flood: Beyond Risk Transfer.

National Adopt a Shelter Pet Day

(Photo by Robert Alexander/Getty Images)

Whenever my friend Jane and I walk her chihuahua, Bowser, people stop to admire him. Bowser just has that type of dynamic personality and good looks. They invariably ask how old he is and Jane always proudly declares that he’s a rescue dog, so she’s not exactly sure. We’re not even sure if he’s really a chihuahua, he’s way too mellow. One thing’s for certain, he’s a bundle of joy.

This Friday, April 30, is National Adopt a Shelter Pet Day. The day was created to raise awareness of the millions of animals living in shelters across the country that need loving homes.  Adopting a shelter pet has many benefits, the top one being that you’re saving a life.

Pet adoptions have surged during the pandemic and some shelters are experiencing shortages. A survey from the Insurance Research Council (IRC), found that 21 percent of homeowners reported adopting a dog in 2020.

If you’re thinking about adopting a cat, dog, bird, guinea pig or any other pet, you’re probably factoring the financial costs of taking care of the animal into your budget. Veterinary bills can be a large portion of these expenditures, and pet health insurance can help cover these costs.

Pet health insurance works like human health insurance, in that both include annual premiums, deductibles, co-pays and caps.

The pet insurance market has been growing in the United States, with an expected increase of 7 percent, compounded annually, through 2027, according to Acumen Research and Consulting.

Insurance regulators are taking notice of the burgeoning market, with a model law in development to establish regulatory standards. And in California, in response to the pandemic pet adoption surge, Insurance Commissioner Ricardo Lara has sponsored a bill to require insurers to fully cover spaying and neutering.

Additional links:

Insurance Careers Corner: Q&A with Annette Martinez, Senior Vice President, State Farm

By Kris Maccini, Social Media Director, Triple-I

Triple-I’s “Insurance Careers Corner” series was created to highlight trailblazers in insurance and to spread awareness of the career opportunities within the industry. This month, we interviewed, Annette Martinez, senior vice president, State Farm, who discusses her 33-year career in insurance, growing diversity and inclusion at her company, and the significance of Jake from State Farm.

Annette Martinez

Tell us about your role at State Farm and the work that you do. What attracted you to work in the insurance industry?

I’m currently a senior vice president at State Farm and that includes oversight of what I call the “people areas” – human resources, learning and development, public affairs, and the executive succession and development team. I’ve been with State Farm for over 33 years.

My degree is in Biology and Chemistry, and I was working for an R&D facility early in my career. My husband started with State Farm as an auto underwriter, and he encouraged me to come over because of the opportunities.

I began my insurance career in health underwriting. Every two to three years, I was able to recreate myself into new roles. I spent five years in life/health operations before moving to human resources. Within human resources, I was able to work in early succession efforts and then move into leadership in human resources. In 2002, I started the diversity and inclusion initiative and the trajectory of being able to move the organization forward. Like many in the insurance industry, I came in thinking I’d get great experience for a couple of years and now here we are 33 years later, and it’s been an amazing journey.

You launched the first office of diversity and inclusion at State Farm, initiated its diversity council, and started its affinity group program. You’ve also been recognized and awarded on numerous occasions for your work in diversity and inclusion. What inspired you to become a champion of diversity and inclusion?

From the time that I was young, fairness was always important to me, which may be in part because I was raised in an environment where I didn’t see people like me. However, for a long time I have and still believe that everyone should be treated with respect and dignity and have the same opportunities. Opportunity should be open to anyone who has the desire and the capability.

When I began the diversity initiative, I was already conducting diversity training in the organization. State Farm is a fantastic company and has been progressive in programming over the years. We started one of the first minority summer intern programs, but I knew there was more that we could do. My focus was on improving opportunity and bringing people into the organization who had a different pattern of thinking and could positively impact the company. That’s what diversity does. It’s not only a social imperative – we all get to benefit from that – it’s a business imperative about how we treat and gain new customers and how we move forward.

You mentioned that not a lot of people looked like you throughout your career. As a Latinx woman, what obstacles have you faced and overcome?

That’s correct, early on in my career, very few people looked like me. It was isolating. I had to understand that my voice mattered and that I had the opportunity to speak on behalf of many others. There was a lot of pressure with that.

I’ve had some amazing mentors over the years of all genders and races. There was a retired senior vice president, Dave Gonzales, who was the first Hispanic executive that took me under his wing. Dave told me it was going to be a difficult road, but he was and has always been a great support system for me.

We’ve always had mentorship programs at State Farm, but several years ago we started a more formal matching program for people who want to mentor or be mentored. It’s blossomed into a way of life and become part of the culture. I’m active as a mentor and a mentee. I’ve had senior leaders throughout my career who have coached me on to the next level. I’ve also had people [early in their careers] who have guided me into what’s happening at all levels. As a senior leader, it gives me insight into how our actions impact every employee.

How can we foster an honest and open culture at the workplace that welcomes and encourages employees to have conversations around race, discrimination, and equity?

In 2019, we decided to get bold in our conversations. State Farm started working with CEO Act!on For Diversity & Inclusion and implemented a program called “Conversations Worth Having.” In February 2020, we had our first session on racism. We knew that it was going to be a difficult and honest conversation. We had a panel that shared their stories about their lives, their children, and what they experienced.

We had no idea that COVID-19 would happen a month later. The social unrest throughout 2020 was foundational for what we needed to address last year and will continue to address this year. These open conversation forums have continued and are important in allowing people to express their frustration and allowing us to be part of the solution.

We learn every session. Setting ground rules is also important – trust that people’s intentions are honest, listen before you react – some basics in conversations that we talk about each session. If someone responds negatively to a session, we take the time to speak with them one on one to have conversations on a personal level as well.

How has State Farm addressed the current social and racial climate of this past year? Are there any actions or initiatives that State Farm has taken to support Black and Asian American Pacific Islander (AAPI) communities inside and outside the workplace?

State Farm named a Chief Diversity Officer in 2020, which was an important step for us. We also realized that we needed to be quicker with our communications and the acknowledgment that we stand against racism. In the past, we may have addressed it internally at a more moderate level, but we took the stand that State Farm is against racism and the hatred that leads to racism. This is who we are. We respect people – everyone should be treated with respect and dignity, and there is no place for racism in our organization.

There is more work to go into this. It’s an ever-evolving journey, and I think we’re learning as we communicate. We are the Good Neighbor organization. We care about all our neighbors, and we aren’t exclusive to anyone.

Our CEO, Chief Administrative Officer, and Chief Diversity Officer have also been involved in listening sessions to allow employees the opportunity to talk about an experience that they have had, even at State Farm, to better understand the work ahead of us. We want to be an organization that’s part of the healing process.

Jake from State Farm was recently recast as an African American man, actor Kevin Miles. How do you think this change has made an impact on diversity and representation in insurance and has it helped State Farm reach out to more people of color?

The first Jake from State Farm was an actual employee. We pivoted away to some other campaigns for a while, but then we did some research and realized that Jake from State Farm was still very relevant. We knew the needs in a marketing and advertising world today would require more than what we could ask of an employee, so State Farm began an external talent search. We are typically very intentional about diversity in our marketing and advertisements, but ultimately what we did was pick the right actor for the right role.

The actor [Kevin Miles] is from Chicago. One of my favorite stories involves an event early on in his role as Jake from State Farm. We invited him to do a meet and greet at headquarters. It was a big deal, and he brought his parents to the event. The atrium was packed with employees waiting to meet him. He was humbled, kind, and genuine, he spent hours talking to and taking pictures with employees. His success is not only impressive externally – it’s impressive internally as well. The traits you can see and feel from Jake from State Farm are also traits Kevin embodies. And because of that, we intentionally let a lot of Kevin come through in his role as Jake from State Farm.

Can you speak about any upcoming or future diversity and inclusion initiatives for State Farm that you’re excited about? What are your goals for 2021 and beyond?

We’re proud of the intentionality that we put behind diversity and inclusion. State Farm just kicked off a governance council in January, which is a group of senior leaders in the organization who will drive the future strategy of diversity and inclusion.

One focus area that we are looking at is more transparency. How do we tell our story internally so that our associates feel comfortable? How do we tell the story greater from an external perspective? We’re working on deliberate performance goals for all associates around diversity and inclusion, which will be part of their performance assessment and how they actively engage in that work. We are continuing to define our metrics and tangible ways to measure the progress that we are making as an organization. The “Conversations Worth Having” sessions are scheduled throughout the year as well as the listening sessions with our executive leadership. We’re excited about the continuation of programming and leaning into the opportunities ahead of us.

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