Lloyd’s City Risk Index: $546 billion at risk from 22 threats

As the world’s population becomes increasingly concentrated in cities, they become more vulnerable to risk events. To understand the risk, Lloyd’s compiled a City Risk Index, detailing the threat landscape for the world’s leading 279 cities.

The index estimates how much economic output (GDP@Risk) a city could potentially lose due to 22 different threats ranging from stock market crash to solar storm.

Here are some highlights from the report:

  • Across all 279 cities, $546.50 billion is at risk from all 22 threats.
  • Man-made threats account for 59 percent of the total GDP@Risk – with market crash the largest single threat, with cities exposed to losses of $103.33 billion on an annual basis.
  • The 10 cities with the highest exposure have a combined $126.82 billion of GDP@Risk, almost a quarter of the global total, with Tokyo standing to lose more than any other city.
  • Climate-related risks account for $122.98 billion of GDP under threat, and this sum will grow as extreme weather events grow in frequency and severity.
  • If cities were to improve their resilience, global GDP exposure to loss would drop by $73.4 billion.

AN OPEN LETTER TO COLLEGE GRADUATES From I.I.I. CEO, Sean Kevelighan

By Sean M. Kevelighan,
CEO, Insurance Information Institute

Dear College Graduate:

Do you know exactly where you want to work after graduation? If your answer is no, then you’re in good company.

A lot of people I’ve encountered during my time in the insurance industry share a common story: Looking back at their college years, they’re still a bit surprised to be working in insurance. However, now that they’re here, they cannot imagine being in any other field. And this is the essential truth about insurance careers: That you can make the most of your knowledge, talent, passions and ambitions, no matter what you’ve studied or where you want to go. So here’s your chance not to be “surprised” by the amazing range of careers in insurance. Instead, we urge you now to take control of what could be the opportunity of a lifetime.

Making a real difference in the world—every day

Insurance has a long heritage as the bedrock on which progress is built that dates back to the Age of Exploration. Today, the insurance industry is growing and evolving. We’re looking to recruit and hire the people who will power the future by embracing and innovating the breakthroughs that will help us fulfill our primary mission: to make communities safer, more resilient, and more productive—and to rebuild lives, households, and businesses after a loss.

Presently, the insurance industry employs more than 2.8 million people—art historians and actuaries; data scientists and drone pilots; marketers and M & A specialists; underwriters and overachievers of every stripe—all of whom enjoy careers that offer opportunities to earn and grow, and serve. Insurers invest in their workers by building corporate cultures that embrace diversity and inclusion, offer outstanding work/life balance, and serve their communities through organizations such as the Insurance Industry Charitable Foundation.

Take the first step—you’ll be glad you did

As you embark on a path that will take you through life, I encourage you to investigate the limitless opportunities that insurance careers offer. To give you a sense of what you will find in the insurance industry, here are some facts and figures, as well as five stories of students and young professionals who are making their education and experience count: https://www.iii.org/article/careers-in-insurance.

On behalf of everyone at the Insurance Information Institute, we offer our congratulations on earning your degree and wish you the best of luck as you meet the next great challenges in life.

Sean Kevelighan, Chief Executive Officer

The Insurance Information Institute | www.III.org

 

 

 

 

CoreLogic: 6.9 million homes worth over $1 trillion at risk for storm surge in 2018

Weather experts, including I.I.I. non-resident scholar, Dr. Phil Klotzbach, are predicting a slightly below average hurricane season for 2018, but that does not mean that the dangers of potential storm damage are negligible.

CoreLogic, an analytics company, released its annual Storm Surge report on June 5. The report found that along the Gulf and Atlantic Coasts, about 6.9 million coastal homes worth over $1 trillion are at risk. CoreLogic estimates reconstruction costs for 2018 increased 6.6 percent from a year ago, mirroring increased regional construction, equipment, and labor costs.

The Atlantic Coast has more than 3.9 million homes at risk of storm surge with reconstruction cost value of more than $1 trillion, up by about $30 billion from 2017. Gulf Coast homes with the same risk total more than 3 million, with more than $609 billion in potential exposure to total destruction damage, a $16 billion increase compared to 2017.

The reconstruction cost value is calculated based on 100 percent destruction of the residential structure, using the combined cost of construction materials, equipment and labor costs.

Discover “How Insurance Drives Economic Growth”

By Sean M. Kevelighan,
CEO, Insurance Information Institute

Most people understand insurance as their first line of defense against financial losses. However, the insurance industry’s commitment to a strong economy goes much deeper.

Insurers and reinsurers in many ways are the very foundation of growth and progress for the modern economy. For individuals and businesses of all sizes faced with managing risk amid increasingly complex challenges, insurance is there to ease uncertainties. It’s the safety net that lets families, businesses, and communities plan for future success, confident that they will be able to bounce back no matter what lies ahead.

In a new research study from the Insurance Information Institute (I.I.I.), “How Insurance Drives Economic Growth,” the I.I.I.’s chief economist, Steven Weisbart, lists 10 ways which insurers and reinsurers create value and drive economic growth by serving as “financial “first responders,” risk mitigators, partners in social policy, job-creators, and as a leading investor in innovation.

Through statistics, analysis and insights this publication tells a story that we’re proud of: How insurers not only make individuals and communities more productive and resilient, but also how the industry provides stability to financial markets and the overall economy, and helps to effectuate civic and social change to help promote the common good.

44% of Drivers Killed in Crashes Test Positive for Drugs, Study Shows

Evidence continues to pour in about the increase in drug use by drivers.

From behind The Wall Street Journal paywall:

Drug tests of car drivers killed in crashes in 2016 found more drivers had marijuana, opioids or other substances in their system than a decade ago, a report shows.

The report from the Governors Highway Safety Association, which represents state highway-safety offices, found that 44% of drivers who died and were tested had positive results for drugs in 2016, up from 28% in 2006.

By contrast, the percentage of fatally injured drivers who were tested fell slightly. In 2016 37.9 percent of all drivers with known test results were alcohol-positive, compared with 41.0 percent a decade earlier.

Marijuana was the most commonly detected drug; 38 percent of those testing positive had marijuana in their system. Sixteen percent tested positive for opioids. Another 4 percent had marijuana and opioids. (The rest tested positive for other drugs.)

The report calls for a series of actions to combat driving while under the influence of opioids and alcohol, including:

  • Adding drug-impaired driving messages to impaired-driving campaigns.
  • Training patrol officers to spot impaired drivers and Drug Recognition Experts (remember there is no commonly accepted breath test for drugs other than alcohol).
  • Monitoring the development of marijuana breath test instruments.

Reminder: Highway Loss Data Institute research shows that states that legalized recreational marijuana sales see a significant increase in accident rates. And here at Triple-I we have presentations discussing the science of driving while high as well as the disconnect between what people know (don’t ride with a high driver) and what they do (too often they say they will).

Update: A webinar discussing the report will be held on June 5 at 1 p.m. EDT. Register at bit.ly/GHSA-DUIDwebinar.

From the I.I.I. Daily: Our most popular content, May 25 to May 31

Here are the 5 most clicked on articles from the I.I.I. Daily newsletter.

  1. Today’s Uncertain Economy: Implications for P/C Insurance (III Presentation)
  2. Root Insurance wants to do to auto coverage what Amazon has done to retail (Columbus Dispatch)
  3. Uber Self-Driving Car That Struck, Killed Pedestrian Wasn’t Set to Stop in an Emergency (Wall Street Journal)
  4. The Places in the U.S. Where Disaster Strikes Again and Again  (New York TImes)
  5. ‘No words to describe the devastation’ after Ellicott City flooding in Maryland (USA Today)

To subscribe to the I.I.I. Daily email daily@iii.org.

Fitch: P/C Insurers Financially Prepared for Hurricane Season

Via Business Insurance:

U.S. insurers are well prepared at the start of the 2018 hurricane season to withstand a significant catastrophe this year after suffering through last year’s volatile hurricane season, according to Fitch Ratings Inc.

Fitch cited a 7.5 percent increase in surplus last year, to a record $765 billion.

Surplus grew thanks to healthy investment gains, Fitch noted, which more than offset hurricane-driven underwriting losses. U.S. insurers ceded a significant portion of catastrophe losses to offshore reinsurers and alternative capital. And much of the flood loss in the Houston area from Hurricane Harveywere borne by the National Flood Insurance Program.

The heavy reinsurance losses did cause the bottoming out of rates in property and catastrophe reinsurance, Fitch indicated, but increases were “not to the degree that many market participants had anticipated.”