Diaper Dilemma

As mom to a toddler and an eight-month old, the news that global production of disposable diapers could be affected following an explosion and fire at a chemical plant in Japan over the weekend, more than caught my attention.

Nippon Shokubai Co’s plant in Hyogo Prefecture produced acrylic acid, a key ingredient in a resin called SAP that is used in disposable diapers.

According to an NBCnews.com blog post, the plant produces about 20 percent of the world’s SAP and 10 percent of global output of acrylic acid.

NBC cites the Nikkei business daily saying that operations at the plant are likely to be halted for a long time and other manufacturers of SAP resins are operating in full production mode, leaving little room for back-up production.

Over at Chubb’s business blog Industry Exposure, Barry Tarnef, an assistant vice president and a senior loss control specialist for Chubb, observes that the incident serves as another reminder that supply chains are fragile.

Industrial accidents, natural disasters, labor issues (such as strikes and shortages), production problems and political upheaval, and trade disputes are just some of the main causes of supply chain disruption, according to the Insurance Information Institute (I.I.I.).

The I.I.I. notes that it can take two years or more for a company to recover from a supply chain failure and that the purchase of supply chain insurance can help protect businesses. However, insurance is only part of the solution.

As Loretta Worters, vice-president with the I.I.I. says:

Sound loss prevention engineering can best help protect the supply chain from property loss, so that insurance becomes a last resort rather than a first line of defense.†

Check out this I.I.I. presentation on how to protect your global supply chain.

Policy Bundling Drives Customer Satisfaction with Homeowners Insurance

Customer satisfaction with homeowners insurance companies reached an all-time high in 2012 due to policy bundling, according to an annual study by J.D. Power and Associates.

Its 2012 U.S. National Homeowners Insurance Study found that overall satisfaction with homeowners insurance companies averages 785 in 2012 (on a 1,000-point scale), a 16 point improvement from 2011, and the highest level in the history of the study.

In addition, J.D. Power found customer satisfaction improves by 19 points among customers who bundle their auto and homeowners policies with the same insurer, compared with an improvement of 10 points among customers who have their auto policy with another insurer.

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

The increase in satisfaction with policy offerings is directly related to customer perceptions that insurers are doing a better job in offering the right coverage options at competitive prices when policies are bundled.†

The study finds a direct relationship between bundling any additional products and higher customer  satisfaction.

Satisfaction among customers who insure only their home with their homeowners insurer is 712. However, when one additional product is bundled (typically an auto policy), satisfaction increases to 792. When four or more products are bundled with the insurer, satisfaction further increases to 861.

Bundling also increases customers’ intent to renew their policy with the same insurer. Among customers who bundle two policies, 46 percent say they “definitely will” renew with their insurer, and this increases to 66 percent when four or more policies are bundled.

The J.D. Power  study measures customer satisfaction with homeowners insurance companies by examining five factors: billing and payment; claims; interaction; policy offerings; and price.

In 2012, customer satisfaction is higher in all five factors year over year, with the greatest gains in policy offerings (+35 points) and billing and payment (27 points).

According to J.D. Power, the gains in policy offerings are more pronounced among customers who bundle their auto and homeowners policies than among those who have their auto policy with another insurer: +39 points vs. +25 points, respectively.

The competitiveness of discounts and variety of coverage options are key differentiators among those customers who bundle their insurance, it adds.

The 2012 U.S. National Homeowners Insurance Study is based on responses from more than 12,600 homeowners insurance customers. The study was fielded between May and June 2012.

Check out I.I.I. facts+statistics on homeowners insurance.