The industryÃ¢â‚¬â„¢s overall net income after taxes (profits) surged by 72.3 percent in 2012 to $33.5 billion from $19.5 billion in 2011, pushing the industryÃ¢â‚¬â„¢s return on average surplus to 5.9 percent for the year, up from 3.5 percent in 2011.
Despite paying $35 billion in catastrophe losses Ã¢â‚¬“ the fourth highest year on record on an inflation adjusted basis Ã¢â‚¬“ the industry benefited from a 4.3 percent jump in net written premiums, nearly a full point above the 3.4 percent gain a year earlier.
This was the strongest growth so far recorded in the post-crisis era, according to Dr. Hartwig.
In another sign of strength, overall industry capacity (policyholdersÃ¢â‚¬â„¢ surplus) rose to a record $586.9 billion as of December 31, 2012 Ã¢â‚¬“ up $33.1 billion or 6.0 percent from $573.0 billion as of year-end 2011.
The increasing number of cyber attacks, along with breaches in security and privacy, are forcing corporate risk managers to reconsider how they protect their companyÃ¢â‚¬â„¢s data and proprietary business information.
Towers WatsonÃ¢â‚¬â„¢s Risk and Finance Manager Survey found that the average policy limits purchased for network security/privacy liability policies were $18.1 million Ã¢â‚¬“ a significant 46 percent increase year over year.
In addition, nearly two-fifths (39 percent) of respondents purchased network security/privacy liability policies, up 11 percentage points from last year.
When asked why they had not purchased a policy, some 31 percent (a 10 percentage point decrease from last year) said their internal IT department/controls were adequate.
Towers Watson warned that the financial and reputational costs companies face could be enormous if they donÃ¢â‚¬â„¢t develop comprehensive risk strategies to thwart cyber attacks.
However, this is changing, according to the I.I.I. Recent industry analysis suggests that more companies are now purchasing cyber coverage and that insurance has a key role to play as companies and individuals look to better manage and reduce their potential financial losses from cyber risks in future.
Business Insurance reports that in the wake of the disaster, questions about risk management planning adequacy and insurance coverage abound.
It quotes Joe Woods, vice president of state government relations for the Property Casualty Insurers Association of America, saying that the incident could trigger a broad range of insurance coverage that includes commercial property, business interruption, third-party liability, health and personal lines.
PC360 also reports on the insurance implications of the event here.
Dr. WooÃ¢â‚¬â„¢s comments came as investigators moved closer to identifying possible suspects in MondayÃ¢â‚¬â„¢s bombing which left 3 dead and more than 170 injured.
RMS says most of the property damage appears to be within 10-20 feet of the explosions, and insured property losses are unlikely to exceed $1 million. However, it believes the costs of business interruption as a result of security restrictions made after the event may be a larger source of insurance claims.
RMS noted that the use of smaller sized lethal explosive devices has been the preferred attack mode in recent terrorist plots. Street events, like the marathon, are inherently vulnerable because while they are very large crowds public access is unrestricted.
Dr. Woo added that plots involving a small number of operatives, such as seems to be the case in the Boston bombing, are the most difficult to prevent:
While itÃ¢â‚¬â„¢s too early to answer many of the questions arising from twin explosions at yesterdayÃ¢â‚¬â„¢s Boston Marathon, what we do know is that three people are dead and more than 140 injured in the bombings.
Our thoughts and prayers are with the victims, all those injured and their families.
The Boston Globe reports that much of Back Bay is locked down to protect the crime scene and the investigation underway is being directed by the FBI.
In an interview with PC360, Dr Hartwig said it was too soon to know the insurance implications of the event, but it looked like damage to property was light. Dr. Hartwig added that injured public safety and marathon workers would certainly be covered by workers compensation.
An I.I.I. advisory suggestsÃ‚ reporters with questions about the potential insurance implications of the Boston Marathon explosions contact Dr. Hartwig.
While the dangers of texting and driving get a lot of headlines, you might be surprised at the findings of a new study by Erie Insurance that show daydreaming behind the wheel is even more dangerous.
ErieÃ¢â‚¬â„¢s analysis found that 62 percent of distracted drivers involved in fatal car crashes were described by police as daydreaming or Ã¢â‚¬Å“lost in thoughtÃ¢â‚¬ .
The police report data analyzed by Erie in the Fatality Analysis Reporting System (FARS) reveal that of the more than 65,000 people killed in car crashes over the past two years, one in 10 were in crashes where at least one of the drivers was distracted.
Erie didÃ‚ point outÃ‚ that because FARS data on distraction is based largely on police officers’ judgment at the time of the crash, and because some people may be reluctant to admit they were distracted when being interviewed by police after a fatal car crash, the numbers are difficult to verify and may, in fact, under-represent the seriousness and prevalence of driving distractions.
As well as daydreaming, police listed several more specific types of distractions.Ã‚ Below are theÃ‚ top 10 distractions involved in fatal car crashes:
Meanwhile, London-based consortium Tropical Storm Risk is calling for 15 named storms, of which it predicts eight will become hurricanes, and three major hurricanes. TSR forecasts Atlantic basin tropical cyclone activity at about 30 percent above the 1950-2012 long-term norm, but slightly below the recent 2003-2012 10-year norm.
Richard Kerr, CEO of MarketScout noted that while historically brand name or large accounts have benefited from more aggressive pricing, in March 2013 underwriters more frequently charged an appropriate premium.
The statistics which cover the cargo, ocean hull and offshore energy sectors remain a litmus test for the marine insurance market and the impact of Sandy will define 2012 in the eyes of underwriters, IUMI said.
While Superstorm SandyÃ¢â‚¬â„¢s main areas of impact were the states of New York and New Jersey, it was one of the largest storms ever and its impact stretched over 1,000 miles from the Great Lakes to Boston.
Lessons learned from Superstorm Sandy are among the topics to be addressed at the 20th Biennial Marine Insurance Issues Seminar sponsored by the American Institute of Marine Underwriters (AIMU) on May 8 in New York City. The conference will be held at the New York Marriott Downtown, 85 West St.
To register for the seminar or for further information click here.
The study, now in its sixth year, measures satisfaction with the property claims experience among insurance customers who filed a claim for damages covered under their homeownersÃ¢â‚¬â„¢ policy by examining five factors: settlement; first notice of loss; estimation process; service interaction; and repair process.
In a press release Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates, says:
Another key takeaway from the study is that satisfaction with the service interaction process declined by nine points in 2013, compared with 2012.
J.D. Power reports that much of that decline in satisfaction likely is due to the continuing trend of homeowners filing their claim via direct channels Ã¢â‚¬“ typically online or by calling a call center Ã¢â‚¬“ rather than through an agent.
Some 68 percent of customers file their recent homeowners claim through direct channels, up from 57 percent in 2012, but satisfaction is 50 points higher among customers who file a claim through their agent, than those who file a claim via direct channels.