CORONAVIRUS WRAP-UP: PROPERTY AND CASUALTY (4/21/2020)

Automobile Insurance
Acting on ‘Thin’ Data, Auto Insurers Retain Flexibility With Premium Credits
Speeders Take Over Empty Roads — With Fatal Consequences
Business Interruption
Triple-I Economists: Enforced COVID-19 Business Interruption Payouts Would Damage Industry
Fight Over Pandemic Insurance Intensifies
Restaurants vs. Insurers Shapes Up as Main Event In D.C. Lobbying Fight
Cyber Risk
Hacking Against Corporations Surges as Workers Take Computers Home
Directors & Officers
D&O Insurance May Help Non-Public Companies With COVID-19 Claims
Financial Impact
Despite Recent Market Rally, Pandemic Will Continue to Hit Insurers’ Investments
COVID-19 to deter M&A activity in 2020: Conning
Kidnap & Ransom
Pandemic Exposes Organizations to Kidnap for Ransom Risk
Litigation
U.S. Businesses Bring Wave of Class Action Lawsuits Against Insurance Companies for Denial of Business Interruption Claims in Wake of COVID-19Pandemic
Hiscox Faces Legal Action From Chef Raymond Blanc: Reports
Ending Virus Shutdowns Too Soon Poses Legal Risk for Businesses
Reinsurance and Insurance-Linked Securities
Lack of Exclusions, Poor Wordings the COVID-19 BI Threats to Reinsurers & ILS
Workers Compensation
Utah Passes Bill to Provide First Responders With Comp for COVID
Comp Premiums Likely to Dip as Employment Declines: NCCI

From The Triple-I Blog:
MIXED REACTIONS TO WORKERS COMP COVID-19 EXPANSIONS

CORONAVIRUS WRAP-UP: Data and Visualizations (4/20/2020)

The coronavirus crisis continues to generate data that can be valuable for understanding and decision making. Below are just a few resources that may be of interest to insurers and the people and businesses they serve.

COVID-19 Mortality Projections for U.S. States
Graphs from the University of Texas COVID-19 Modeling Consortium show reported and projected deaths per day across the United States and for individual states.
The Verisk COVID-19 Projection Tool
The Verisk COVID-19 Projection Tool has been made available to enhanceunderstanding of the potential number of worldwide COVID-19 infections and deaths. It provides an interactive dashboard that leverages the AIR Pandemic Model.
How State Insurance Departments Are Responding to COVID-19
This interactive map from PC360 highlights bulletins and procedures released by state insurance departments as of April 15, 2020.
Tracking U.S. Small and Medium Business Sentiment During COVID-19
Small and medium-size businesses account for roughly 44% of the U.S. economy and provide employment to about 59 million people. McKinsey is tracking their sentiment to gauge how their views on economic activity, employment, and financial behavior—as well as their expectations about financial institutions and public authorities—change as a result of ongoing public and private interventions.

Mixed Reactions
To Workers Comp
COVID-19 Expansions

State workers’ compensation boards around the country are amending rules for benefits payouts related to coronavirus, and several states have expanded or are considering widening access to workers comp coverage for COVID-19 beyond first responders and health care workers.

Kentucky and Illinois this week implemented emergency orders to provide access to public-facing essential workers, such as grocery, pharmacy, Postal Service and day care workers. And Minnesota’s legislature unanimously approved a bill that guarantees people in high-risk jobs who contract COVID-19 workers comp coverage without having to prove the infection was a direct result of their job. Most licensed peace officers, firefighters, paramedics, nurses, health care workers, correction officers, workers at secure state facilities, workers at long-term care facilities, and child-care providers are among the classes included in the Minnesota measure.

Lawmakers in Louisiana and New Jersey also have proposed legislation to expand COVID-19 coverage beyond first responders and health care workers, who traditionally are covered if they are exposed to a communicable disease in the course of their work.

While employee groups and unions applaud these moves, the changes could hurt the workers comp industry, some experts warn.

Robert Hartwig, clinical associate professor and director of the Risk and Uncertainty Management Center at the University of South Carolina in Columbia, said the changes present “a potentially enormous and unfair burden on workers compensation insurers that’s completely unprecedented in history.”

Hartwig pointed to the difficulty proving that the transfer of a communicable disease occurred on the job and added, “This is potentially extraordinarily costly to workers comp insurers, but also to many large employers who have either very high-deductible programs or are largely self-insured.”

He said these changes also could be “potentially catastrophic” to workers compensation state funds.

CORONAVIRUS WRAP-UP: PROPERTY AND CASUALTY (4/17/2020)

Auto Insurance
Stay-at-home Pandemic Orders Reduce Auto Claims Almost by Half
As Coronavirus Empties Streets, Speeders Hit the Gas
Business Interruption
UK Watchdog Orders Insurers to Pay Small Business Claims Quickly
Cannabis Insurance
Pandemic Could Shrink Cannabis Insurers’ Premiums, Market
Cyber Insurance
Preventing Losses Due to Growing Cyber Crime During Coronavirus Crisis
As Attacks Rise, Paladin Offers Cybersecurity Platform Free to Insurance Agencies
Disaster Preparedness
‘Uncharted Territory’ as Wildfire Fighting Adapts to Pandemic
Insurance-Linked Securities
Artemis Live: Interview with Tom Johansmeyer, Head of PCS
Litigation
Nashville Bar Sues Insurer Over COVID-19 Loss Claim. Experts Say It Won’t Be the Last
Businesses Warn Fear of Liability Lawsuits Could Stall Rebooting of Economy
P/C Industry Impact
Suddenly There is Big Demand for Pandemic Cover, Says Underwriter
Chubb CEO: Forcing Insurers to Pay Pandemic Loss Claims is ‘Plainly Unconstitutional’
Allianz CEO: Pandemic Hit “Like a Metororite”
From Hacker Attacks to Shareholder Lawsuits, Insurance Industry Braces for COVID-19 Fallout
Public Health and Safety
What FDA Says About Food Safety Amid COVID-19
Travel Insurance
Travelers Consider Their Risk Tolerance
HOLIDAY HELL How to Get a Refund on Your Holiday if it’s Cancelled and How Long Should it Take to Get Cash Back
Workers Compensation
Workers Compensation in Wake of COVID-19

From the Triple-I Blog:
INSURERS RESPOND TO COVID-19 (4/17/2020)
TRIPLE-I BRIEFING: SURPLUS IS KEY TO INSURERS KEEPING POLICYHOLDER PROMISES
PUTTING CAR INSURANCE PRICES INTO PERSPECTIVE

Insurers Respond to COVID-19 (4/17/2020)

Auto insurance refunds

U.S. auto insurers will return more than $10 billion to their customers nationwide, according to an estimate released on April 11 by the Insurance Information Institute (Triple-I).

We’ve listed many of the companies that are offering refunds in a previous post.  This week, several other auto insurers have announced refunds or credits. This is not an exhaustive list, so be sure to check with your insurer to see if they are offering refunds or credits. All premium and rate adjustments are subject to regulatory approval.

Chubb‘s auto insurance clients will receive a credit reflecting a 35% premium reduction for the months of April and May, with additional discounts for subsequent months, as the situation warrants, upon renewal. Across Chubb’s portfolio, the average credit is expected to be $110 per vehicle.

COUNTRY Financial announced that every client with a personal auto insurance policy as of April 1, 2020 will receive a 15% refund for two months of auto premium in anticipation of a decrease in driving activity in April and May.

CSAA Insurance Group is giving a 20 percent refund for two months of auto premiums, March and April 2020.

ERIE has announced that lowering personal and commercial auto rates would be the best option for providing additional relief to customers. The company estimates the total rate reduction impact to be approximately $200 million throughout the 12 states and District of Columbia where ERIE operates.

Ohio Mutual Insurance Group is offering personal auto premium credits on more than 80,000 personal auto policies for an estimated total of $6 million. Ohio Mutual is voluntarily providing a 25% personal auto premium credit that applies to an 11-week period (March 16 – May 31, 2020) for all policies in-force on May 31. Credits will be automatically applied to customers’ first invoice after June 1. Those with a balance less than the credit will receive a refund by check.

The Hanover Insurance Group announced it has created The Hanover CARES Refund, through which the company will return 15% of April and May auto premiums to its eligible personal lines customers, providing financial relief during the coronavirus pandemic.

MAPFRE Insurance announced its Staying Home Refund program, which will return 15 percent of April and May premium to its voluntary personal auto policyholders in Massachusetts, totaling over $30 million. On average, most policyholders will receive a credit of approximately $40.00. A similar credit will be provided to the company’s personal auto policyholders in its other states of operation for the same time period.

Westfield announced a 15 percent policy credit to their eligible personal auto insurance customers for three months.

Supporting communities

Chubb has announced a support program designed to help ease the financial burden of the COVID-19 pandemic on its small business clients in the United States and provide direct support to healthcare workers and other front-line responders.

Chubb’s U.S. small business clients whose policies renew between April 1 and August 1, 2020 will receive an automatic 25% reduction in the sales and payroll exposures used to calculate their premium as well as a 15% reduction in premiums for their commercial auto insurance. In addition, Chubb will purchase $1 million in gift cards from small business clients around the country, which will be donated to healthcare workers and other first responders on the front lines of the pandemic in their communities.

Fundación MAPFRE, a global nonprofit foundation created by MAPFRE, announced it will donate $2.3 million to support urgent medical and community needs across Massachusetts, as the coronavirus continues to spread. The funding is part of a global $38 million aid package by the foundation for medical providers and communities around the world.

Hanover announced customer relief measures and a commitment to contribute $500,000 to nonprofits in local communities to address needs arising from the public health crisis.

State Farm has donated $1 million and partnered with Salesforce to provide one million masks and other protective equipment to healthcare workers in areas of urgent need identified by FEMA (Federal Emergency Management Agency). Since the start of COVID-19, State Farm has provided about $5 million in neighborhood relief across the country.

Swiss Re Group pledged to donate CHF 5 million to support the needs of people and communities affected by the COVID-19 pandemic around the world. Through its non-profit grant foundation, the Swiss Re Foundation, the funds will be distributed to organizations tackling the crisis, particularly in developing countries.

The Westfield Insurance Foundation is helping communities in Northeast Ohio and across the country by donating nearly $1.5 million dollars to nonprofit partners focused on family stability and disaster recovery. These dollars will help stabilize communities and help those who need economic support. 

Triple-I Briefing: Surplus
Is Key to Insurers Keeping
Policyholder Promises

The insurance industry can meet its obligations to policyholders in the midst of the coronavirus pandemic – but government interventions being discussed threaten to unravel this safety net and could make it impossible for insurers to affordably provide essential coverage in the future.  

These are among the conclusions shared by Triple-I chief economist Steven Weisbart and senior economist Michel Léonard in a briefing today that explained how the industry already has been affected by the pandemic and subsequent recession; how policyholder surplus ensures funds are available to cover claims; and how any attempt to retroactively apply this pandemic to business interruption policies would cause irreparable harm to the financial stability of the property-casualty insurance industry. 

“Insurers price their policies for expected claims, with additional monies set aside for unexpected claims, such as those which are filed during exceptionally severe hurricane seasons,” Dr. Weisbart said. “The policyholders’ surplus backs up every line of insurance each insurer writes. It is calculated as assets, minus liabilities, and rises and falls due to changes in asset values.”   

Dr. Weisbart and Dr. Leonard explained in detail how surplus works and showed how – under a variety of plausible scenarios – retroactively rewriting insurance contracts could make it impossible for insurers to play their critical role as financial first responders

“If insurers nationwide had to pay business interruption policy claims for which they collected no premium, it could cost the industry each month anywhere from roughly $150 billion to nearly as high as $380 billion,” said Léonard, noting that the smaller amount accounted for the U.S.’s small and medium-size businesses that currently have business interruption coverage and the larger amount includes those who do not. “Pandemic-caused losses are excluded from standard business interruption policies because they impact all businesses, all at the same time.”   

If you missed the briefing, you can view the presentation.  

Related Links: 

Coronavirus: Issues and impacts  

Triple-I Fact Sheet: Insurers Are Engaged In the COVID-19 Crisis
Triple-I Publication: A Firm Foundation: How Insurance Supports the Economy

Triple-I Publication: A Firm Foundation: How Insurance Supports the Economy

 
Triple-I Blog

COVID-19: Learning From History 

COVID-19: A Teachable Moment for Thinking About Risk 

Putting Car Insurance Prices Into Perspective

As car insurers help their customers cope with the pandemic’s economic impact through premium refunds and other relief measures and some groups complain the efforts are insufficient and ask regulators to make insurers pay more, it’s worth noting that the cost of insuring motor vehicles  has grown more slowly than inflation over the past 12 months and well below prices for hospital services and car repairs – two key drivers of car insurance claims.

As the chart below shows, year-over-year increases in auto insurance prices have trailed growth in the Consumer Price Index, the most widely used measure of inflation. 

“Auto premiums are kept relatively low by competition among insurers,” explained Triple-I chief economist Steve Weisbart. “This has been happening even as two major contributors to claims have grown much faster. In the case of hospital services, prices have not just been rising – growth has been accelerating since last July.”

You read that right. Even as two of the biggest contributors to claims – the money insurers pay policyholders after accidents – have grown faster than inflation, the prices policyholders pay for coverage have grown more slowly than consumer prices generally.

Many factors come into play when an insurer determines an individual’s premium payment – age, driving record, where and how far one generally drives, and much more; and, let’s face it, no one likes to pay for insurance or to see their payments go up. 

But think about it: even though you might roll the dice if your state didn’t require you to have insurance, would that really be a wise move? Would you really want to be on the hook for the full cost of damage to your car or that of another driver? Or for the liability associated with someone’s injury or death?

That premium payment provides an awful lot of value in terms of peace of mind – IF you think about it.  And, if you think further about it, you have more control over how much you pay for car insurance than you do over other products and services.  You can shop around. You can change how much or what type of coverage you buy. You can bundle auto with other coverages. You can get fewer tickets and improve how you handle your credit.

And as usage-based insurance, powered by telematics, gains traction, your options will only increase.

Compare this with, say, cable and satellite TV. Your ability to shop around is quite limited (though improving with each new streaming opportunity that comes online). The products you really want come bundled with others you would never pay for if you had a choice.

And the prices of these services, as the chart below shows, continue to grow at rates well above both CPI and car insurance.

CORONAVIRUS WRAP-UP: PROPERTY AND CASUALTY (4/16/2020)

Legislation and regulation
Democrats Plan Legislation to Force Insurance Companies to Pay Out for Pandemic Losses
Thompson Introduces the Business Interruption Insurance Coverage Act
Lawmakers Advocate Stimulus Aid to Insurers on Business Interruption
SC Proposes Bill Over Coronavirus-related Business Interruption Claims
NJ offers grace period for insurance premium expenses
Coronavirus Regulations: A State-By-State Week In Review
Litigation
COVID-19, business interruption and bad faith litigation
P/C Industry Impact
No Evidence COVID-19 Industry Loss Will Match Large Catastrophe Years: Flandro
How Insurance Claims Pros Are Adjusting to Pandemic Complications
COVID-19 Response ‘Could Bankrupt the Insurance Industry’: Insurance Defense Lawyer
Coronavirus response: Short- and long-term actions for P&C insurers
Auto Insurance
Analysts: Auto Insurance Coronavirus Rebates a Solid Move in Short Term
Will Fewer Drivers on the Road Mean Lower Auto Losses? It Depends
Auto Insurers Offer Rebates as Traffic Abates During Pandemic
Business Interruption
Neglecting Idle Facilities Amid COVID-19 Will Cost Companies, Warns FM Global
Cyber
Working From Home? Don’t Let Cyber Criminals Break In
Hospital Hackers Seize Upon Coronavirus Pandemic
Workers Compensation
COVID-19 Comp Expansions Could Have Significant Impact on Industry

Dog Bite Prevention Coalition: Tips for Sheltering at Home with Pets

Most Americans are under stay-a-home orders at this stage of the coronavirus pandemic, and stress is running high for myriad reasons.

The pandemic has affected pets too. “Dogs that are used to kids being at school and adults at work are now finding themselves surrounded by their families 24/7,” according to Victoria Stilwell, CEO of Positively.com and the Victoria Stilwell Academy of Dog Training and Behavior. “Most welcome the company, but some dogs are having a hard time adjusting to the constant noise, attention and lack of space,” said Stilwell.

In some cases, dogs will exhibit anxious, aggressive, or destructive behaviors.

The National Dog Bite Prevention Week Coalition offers the following tips to help you and your pets cope while sheltering at home:

  • Create a den-like space or “safe zone” in your home that is a “dog only” zone. This can be a crate where the door always remains open or a quiet location your dog can go to when it needs some space.
  • Small children should be supervised around any dog. To make it easier, you can use baby gates to keep dogs and kids separated if you can’t actively supervise them.
  • This is the time to teach your dog some new skills. Challenge your dog to learn new cues. If you need the help of a trainer, many now offer virtual consultations.
  • If you can take your dog out for a walk, make sure you keep it on leash. Do not allow your pet to socially interact with other dogs or people. While humans are observing social distancing rules, they should help their dogs do the same.
  • Having a plan in place for your pets is important. Individuals who become too sick or require hospitalization will need to have someone to take care of their animals while they heal. Just like any disaster preparedness plan, have a “bug out” bag ready.

Members of the National Dog Bite Prevention Week Coalition will share information during several webinars this week focused on how COVID-19 is impacting pets and pet owners. Experts will provide safety tips for sheltering at home with dogs, how to support animal shelters and rescues, and release 2019 dog-related injury claims data.

The Next webinar will take place on Friday, April 17 at 1:00 PM CST/2:00 PM EST

Zoom webinar for the general public (Registration Required):
https://zoom.us/webinar/register/WN_9cO7OQTVQXSdZb2UXs9ufQ

In a previously recorded webinar, Janet Ruiz, Strategic Communications Director, Triple-I, explained that when it comes to dog bite claims, it’s important to note that these are just incidents that were reported to insurance companies and that the actual number of dog bites is likely to be much higher.  In 2019 homeowners insurers paid about $796.8 million as a result of 17,802 dog bite claims.

National Dog Bite Prevention Week (NDBPW) is April 12-18, 2020. Members of the National Dog Bite Prevention Coalition include the American Veterinary Medical Association (AVMA), State Farm®, Insurance Information Institute (Triple-I), American Humane, and the Victoria Stilwell Academy for Dog Training and Behavior. The coalition joins forces each year to draw attention to how people can reduce the number of dog bites.

CORONAVIRUS WRAP-UP: PROPERTY AND CASUALTY (4/15/2020)

Litigation
Legal Experts Prepare for Battles Over Business Interruption Cover
Travelers Sued Over Coronavirus Coverage
Meal Delivery Services Sued Over Restaurant Prices Amid Pandemic
Pandemic Relief
Swiss Re Donates CHF 5 Million to Support COVID-19 Relief Efforts
Axis Capital, Swiss Re Pledge Donations to Pandemic Relief
Australia’s QBE to Raise $825 Million to Counter Coronavirus Crisis
CA Workers Comp Fund Creates Virus Relief Programs for Policyholders
Coronavirus Litigation Against Nursing Homes Takes Off in Tennessee
Regulation and Legislation
AL Regulator Eases Process for Auto Insurers to Reduce Policyholder Premiums
CA Insurers Ordered to Give Refunds
Politicians Push Insurers to Resolve Mounting Disputes Over COVID-19 Losses

Related:
Risk Manager is Suddenly a Hot Job
How Homeowners Insurance Claims Have Changed During the Pandemic