Stormstruck? There’s An App for That

I’ll huff, and I’ll puff, and I’ll blow your house in. No, I’m not talking about the Three Little Pigs.

The Federal Alliance for Safe Homes (FLASH) is launching StormStruck ®, a new 3D animated app from the USA Science and Engineering Festival in Washington, DC today.

This new app allows users to create an intense windstorm with a simple swipe of a finger and see in 3D the kind of damage it can do to an average home.

Users then choose from a variety of upgrades that protect the home and enable it to withstand damage. Everything from garage doors to roof connections can change the fate of the home and increase its chance of survival.

The aptly-named StormStruck app is free and compatible with the iPhone, iPad and iPod touch.

It is available now for download in the  iTunes App Store.

Once you’ve seen how severe weather has the potential to damage your house, you might want to make a home inventory of your personal possessions. The good news is that the Insurance Information Institute (I.I.I.) has a new home inventory app for iPhone to make the process even easier.

The I.I.I.’s Know Your Stuff ® – Home Inventory is Web-based software that can be found at If you have an iPhone, you can also download the  free Know Your Stuff ® – Home Inventory app in the iTunes App Store.

Terrorism and Political Risk Increase

Companies that operate internationally need to ensure they protect their employees, physical assets and business continuity amid a growing risk of terrorism and political violence around the world.

Civil unrest drove the downgrade of 37 countries in the Aon 2012 Terrorism and Political Violence Map.

Austerity measures and spending cuts in Europe sparked civil unrest, riots, strikes and student protests across Europe, leading to 43 percent of the downgrades in Aon’s analysis. The UK, France, Germany, Italy, Portugal and Spain were all downgraded from low risk to medium risk.

Meanwhile, terrorism remains relevant to the security of businesses, with some 46 percent of all countries assessed possessing the risk of terrorist incident icon, according to Aon.

It notes that the death of Osama bin Laden last year signified the decline of a truly globalized radical Islamist terrorism capability, but regionally active groups continue to be inspired by al-Qaida’s ideology.

While South Asia and the Middle East remain focal points for Islamist terrorist groups, Africa has shown the most dramatic shift in terrorism threat in the last year, Aon says. The ratings of six African countries have been downgraded with Senegal receiving a double downgrade from low to high risk.

In a press release Dr. David Claridge, managing director of Aon Risk Advisory, comments:

“Once again the map highlights the challenges businesses face in ensuring the security and continuity of their global operations. For the first time since the map’s inception, we have recorded significant negative ratings in Western Europe that reflect civil disorder in economies traditionally seen as stable. With further austerity measures still to be imposed and the eurozone crisis only in remission, economic and social degradation are likely to be important drivers of future unrest.†

The Arab Spring also features heavily in Aon’s analysis, both for its contribution to civil unrest and as post-uprising states fail to guarantee local and regional security.

Companies should consider insurance as part of their risk management program, Aon adds.

Check out PC360 for more on this story.

April Nor’easter

A Nor’easter storm brought heavy rains and snow to many parts of the Northeast yesterday.

The National Weather Service defines a nor’easter as a strong low pressure system that affects the Mid Atlantic and New England states and can form over land or over coastal waters.

Nor’easters are most commonly associated with winter storms, but can occur at any time of year.

Here are the Snowpril snow totals so far, courtesy of the Weather Channel.

Over at Wunderblog, Dr. Jeff Masters remarks that we’ve now had two major Nor’easters this season: one in October and one in April:

What’s crazy about this Nor’easter is that it is only the second significant Nor’easter of the 2011-2012 snow season. The other major Nor’easter occurred October 30-31. It’s pretty bizarre to have your only two significant Nor’easters of the season occur in October and April – and none in November, December, January, February and March.†

Dr. Masters adds that word on the street is that NOAA’s National Climatic Data Center will probably end up classifying last year’s October 30-31 Nor’easter as 2011’s 15th billion-dollar weather disaster.

Here’s NOAA’s animation of the storm’s movement April 20-23 from the GOES-13 satellite:

Deepwater Horizon Disaster Two Years On

The two-year anniversary of the Deepwater Horizon oil rig explosion and spill in the Gulf of Mexico is understandably attracting some news headlines.

The Washington Post writes that many experts are reassessing U.S. progress since the accident, while environmentalists are assessing damages.

Pending spill litigation is the focus of a piece by the Huffington Post. It reports on the finalization by BP of a $7.8 billion settlement with more than 100,000 businesses and individuals harmed by the spill.

Yet according to legal experts cited by the HuffPost, the settlement with private plaintiffs, while significant, represents a relatively minor step in the resolution of the spill litigation.

Still to come is a civil trial brought by the federal government and several Gulf states against BP and its corporate partners, plus possible federal criminal charges related to the disaster.

Pending litigation from the Deepwater Horizon event is listed among the underwriting issues insurers continue to monitor in the Willis Energy Market Review published earlier this week.

Some 11 crewmen lost their lives in the explosion and fire that resulted in the April 22, 2010 sinking of the Deepwater Horizon oil rig in the Gulf of Mexico. The explosion of the rig, which caused $1 billion in insured property losses, was the biggest man-made disaster of 2010 (not including liability losses) and the tenth most costly insured catastrophe loss of 2010, according to Swiss Re.

Check out I.I.I. facts and statistics on energy.

P/C Industry Outlook: Challenging

The outlook for the U.S. property/casualty industry in 2012 is a challenging one, according to I.I.I. president Dr. Robert Hartwig.

In his commentary on the industry’s 2011 year end results, Dr. Hartwig says:

The outlook for 2012, given the continued potential for high catastrophe losses, the prospect of high underwriting losses associated with non-cat losses and more uncertainty in the investment markets, is for a challenging year for insurers.†

The U.S. property/casualty insurance industry turned in a relatively weak performance in 2011 in terms of underwriting performance and overall return on average surplus, Dr. Hartwig notes.

High catastrophe losses, along with high underwriting losses in key non-catastrophe exposed lines such as workers compensation, helped push the industry’s combined ratio to 108.2 – its highest level since 2001.

Meanwhile, the industry’s annualized statutory rate of return on average surplus fell to 3.5 percent last year, down from 6.6 percent in 2010.

Dr. Hartwig comments:

Notably, underwriting losses more than tripled to $36.5 billion last year, up from $10.5 billion in 2010, resulting in the second largest annual underwriting loss ever, behind the $52.3 billion underwriting loss in 2001.†

The industry’s profitability receded despite a surprising $2.8 billion, or 5.2 percent, improvement in investment earnings and a 3.3 percent increase in net premiums written, the strongest growth since 2006.

Overall net income after taxes (profits) in 2011Â  dropped 46 percent to $19.6 billion from $35.2 billion in 2010.

The industry’s results were released by ISO and the Property Casualty Insurers Association of America (PCI).

Tax Day Road Risk

Be careful on the roads tomorrow.

A new study published in the Journal of the American Medical Association suggests that U.S. motorists are more prone to fatal road crashes on income tax deadline day than normal days.

Conducted by researchers at the Sunnybrook Health Sciences Center in Toronto and the University of Toronto, the study used road safety information for the U.S. from the National Highway Traffic Safety Administration for 30 years (1980 through 2009).

Researchers examined the number of fatal crashes on each tax deadline day as well as the same weekday one week before and after to control for prevailing risks.

They found that a total of 19,541 individuals were involved in fatal crashes during the 30 tax days and 60 control days. The 30 tax days accounted for 6,783 fatalities, equivalent to 226 per day. In contrast, the 60 control days accounted for 12,758 fatalities, equivalent to 213 per day.

The upshot: the risk of traffic fatality was 6 percent higher on income tax deadline day.

The increased risk on tax day included passengers and pedestrians and extended across different regions, daylight hours, demographic groups, and alcohol consumption.

In the words of Sunnybrook researcher Dr. Donald Redelmeier:

The increased risk could be the result of stressful deadlines leading to driver distraction and human error. Other possibilities might be more driving, sleep deprivation, lack of attention, and less tolerance toward hassles.†

According to the authors, these risks could be mitigated by some simple measures such as reminders about the importance of safe driving, such as the need to wear seatbelts, avoid excessive speed, minimize distractions and avoid alcohol.

More on this story at the Wall Street Journal’s Driver’s Seat blog.

Check out I.I.I. facts and statistics on highway safety.

Microinsurance: Rapid Expansion

Some 500 million people worldwide are now covered by microinsurance, a low-cost form of insurance for individuals generally not covered by traditional insurance or government programs.

In fact there has been a more than 500 percent increase in the number of people covered by microinsurance in just the past five years, according to the Microinsurance Innovation Facility of the International Labor Organization (ILO) and the Munich Re Foundation.

The second volume of Microinsurance Compendium, Protecting the poor just published by the two organizations says the number of people covered by microinsurance rose from 78 million in 2007 to 135 million in 2009, reaching nearly 500 million today.

Their findings show that Asia – with its two microinsurance powerhouses China and India – is spearheading the trend, covering roughly 80 percent of the market. Latin America accounts for 15 percent of the market and Africa 5 percent.

Large and dense populations, interest from public and private insurers, property distribution channels and active government support, are some of the reasons why Asia is ahead of the game, the report says.

While microinsurance policies are typically thought of as products for emerging markets, a recent blog post over at Insurance & Technology suggests that microinsurance projects are applicable to mature economies too.

In the post, Marik Brockman, of PWC Insurance Advisory Services, says:

Even though developed economies do not have the same customer segments, per se, as emerging ones, they too have significant numbers of working poor. The constraints of remote geographies, the working poor’s difficulty in affording insurance, and differing technology infrastructures in emerging markets have led to innovations to and efficiencies in microinsurance schemes that are applicable to low growth and under-penetrated mature life, health and property & casualty markets.†

Brockman concludes that developed markets experiencing stagnating economies, increasing income disparity, and the risk of more consumers dropping below the poverty line are likely to see insurers adapt microinsurance schemes to increase insurance adoption and drive growth.

An interesting idea.

Check out further Insurance Information Institute (I.I.I.) information on microinsurance.

Data Breach Opportunism

As commentators debate next steps in the wake of the Global Payments data breach disclosed two weeks ago, a perhaps surprising finding of a recent report by Verizon is that most data breaches are opportunistic.

The 2012 Verizon Data Breach Investigations Report finds that 79 percent of attacks represented in the report were opportunistic.

By opportunistic, Verizon means that the victim isn’t specifically chosen as a target. Rather, they were identified and attacked because they exhibited a weakness the attacker knew how to exploit.

In addition, 97 percent of the attacks were avoidable, without the need for organizations to resort to difficult or expensive countermeasures.

According to Verizon, some 85 percent of targets of opportunity are organizations with fewer than 1,000 employees and nearly three-quarters of them hit the retail/trade and accommodation/food service industries.

Verizon says this appears to support the argument that large-scale automated attacks are opportunistically attacking small to medium businesses, and POS (point of sale) systems frequently provide the opportunity.

It observes:

Smaller organizations often do not have the knowledge or resources necessary to address flagrant weaknesses in their Internet accessible assets that cause them to be identified for opportunistic attacks.†

At the end of the report Verizon encourages readers to cut out a card listing POS security tips to give to restaurants, retailers, hotels or other establishments that they frequent.

Key tips for small businesses:

— Change administrative passwords on all POS systems; and

— Implement a firewall or access control list on remote access/administration services

Verizon adds:

These tips may seem simple, but all the evidence at our disposal suggests a huge chunk of the problem for smaller businesses would be knocked out if they were widely adopted.†

The 2012 Verizon report spans 855 data breaches across 174 million stolen records, with the participation of law enforcement partners around the globe.

Check out I.I.I. facts and statistics on identity theft and cyber security.

Homeowners Insurance: Customer Satisfaction Increases

As 2012 appears to be continuing the trend of heavy thunderstorm losses (hail and tornadoes) seen in 2011, the just-released 2012 U.S. Property Claims Satisfaction Study from J.D. Power and Associates makes for a timely read.

The study, which measures customer claims experiences based on homeowners claims filed during 2011, found that overall satisfaction in 2012 improves to 833 on a 1,000-point scale, an increase of 10 points from last year’s study.

The improvement comes despite the record number of storm losses seen in 2011, when there were 99 weather-related disasters in the U.S., 14 of which totaled more than $1 billion in damages each, according to the Insurance Information Institute (I.I.I.).

In a press release, Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates, says:

A period of tremendous volatility in the industry, caused by a large number of devastating storms, led us to anticipate that satisfaction would decline, but that clearly was not the case.†


The industry as a whole did well in not only handling the day-to-day claims, but also the large volume of claims associated with those major events.†

Other key takeaways from the study, include the fact that high wind claims, which include tornado and hurricane damage, accounted for 33 percent of all claims filed, an increase from 21 percent in last year’s study.

Yet, among those who filed a claim for high wind damage, satisfaction remained stable, relatively unchanged with last year.

Claims experience by region shows mixed results, however. For example, satisfaction in the South Atlantic and Northeast regions, both of which had increase in high wind claims due to hurricanes in 2011, improved 36 points and 18 points respectively on the prior year’s study.

In contrast, overall satisfaction the East North Central Region, which also had an increase in high wind claims due to tornado damage, satisfaction declined by 14 points. The West South Central region which saw an increase in hail-related claims also saw an eight-point drop in satisfaction year over year.

Not surprisingly, the study finds that a positive claims experience fosters significantly higher long-term loyalty among claimants, while a negative claims experience may cause claimants to be more likely to switch insurers.

Check out I.I.I. facts and statistics on homeowners insurance and tips on how to file a homeowners claim.

Texas Tornadoes and Hail

As well as strong winds and heavy rains, hail – ranging from pea to baseball size – was a feature of the massive tornadoes that touched down in the Dallas Fort Worth area yesterday.

Specifically, the Dallas-Fort Worth international airport reported that more than 100 aircraft were damaged by hail, according to CNN.

Hail causes about $1 billion in damage to crops and property each year, according to the National Oceanic Atmospheric Administration (NOAA).

Pea size hail measures an estimated  ¼ inch in diameter, while baseball size hail would measure about 2  ¾ inches.

The Insurance Information Institute (I.I.I.) reminds us that hail damage is covered under standard homeowners insurance. It is also covered under your auto policy provided you have comprehensive coverage.

Some insurers may have special deductibles in hail prone areas, to help keep insurance premiums at affordable levels.

Physical damage to aircraft as a result of hail would be covered under a hull insurance policy.

The I.I.I. reports there were over 9,000 major hail storms in 2010, according to statistics from NOAA’s Severe Storms database. Texas had the largest number of severe hail events in 2010, followed by Kansas, Missouri, Nebraska and Oklahoma.

Learn  how  to protect your home from hail in this I.I.I. video: