Insurance Careers Corner: Q&A with Annette Martinez, Senior Vice President, State Farm

By Kris Maccini, Social Media Director, Triple-I

Triple-I’s “Insurance Careers Corner” series was created to highlight trailblazers in insurance and to spread awareness of the career opportunities within the industry. This month, we interviewed, Annette Martinez, senior vice president, State Farm, who discusses her 33-year career in insurance, growing diversity and inclusion at her company, and the significance of Jake from State Farm.

Anette Martinez

Tell us about your role at State Farm and the work that you do. What attracted you to work in the insurance industry?

I’m currently a senior vice president at State Farm and that includes oversight of what I call the “people areas” – human resources, learning and development, public affairs, and the executive succession and development team. I’ve been with State Farm for over 33 years.

My degree is in Biology and Chemistry, and I was working for an R&D facility early in my career. My husband started with State Farm as an auto underwriter, and he encouraged me to come over because of the opportunities.

I began my insurance career in health underwriting. Every two to three years, I was able to recreate myself into new roles. I spent five years in life/health operations before moving to human resources. Within human resources, I was able to work in early succession efforts and then move into leadership in human resources. In 2002, I started the diversity and inclusion initiative and the trajectory of being able to move the organization forward. Like many in the insurance industry, I came in thinking I’d get great experience for a couple of years and now here we are 33 years later, and it’s been an amazing journey.

You launched the first office of diversity and inclusion at State Farm, initiated its diversity council, and started its affinity group program. You’ve also been recognized and awarded on numerous occasions for your work in diversity and inclusion. What inspired you to become a champion of diversity and inclusion?

From the time that I was young, fairness was always important to me, which may be in part because I was raised in an environment where I didn’t see people like me. However, for a long time I have and still believe that everyone should be treated with respect and dignity and have the same opportunities. Opportunity should be open to anyone who has the desire and the capability.

When I began the diversity initiative, I was already conducting diversity training in the organization. State Farm is a fantastic company and has been progressive in programming over the years. We started one of the first minority summer intern programs, but I knew there was more that we could do. My focus was on improving opportunity and bringing people into the organization who had a different pattern of thinking and could positively impact the company. That’s what diversity does. It’s not only a social imperative – we all get to benefit from that – it’s a business imperative about how we treat and gain new customers and how we move forward.

You mentioned that not a lot of people looked like you throughout your career. As a Latinx woman, what obstacles have you faced and overcome?

That’s correct, early on in my career, very few people looked like me. It was isolating. I had to understand that my voice mattered and that I had the opportunity to speak on behalf of many others. There was a lot of pressure with that.

I’ve had some amazing mentors over the years of all genders and races. There was a retired senior vice president, Dave Gonzales, who was the first Hispanic executive that took me under his wing. Dave told me it was going to be a difficult road, but he was and has always been a great support system for me.

We’ve always had mentorship programs at State Farm, but several years ago we started a more formal matching program for people who want to mentor or be mentored. It’s blossomed into a way of life and become part of the culture. I’m active as a mentor and a mentee. I’ve had senior leaders throughout my career who have coached me on to the next level. I’ve also had people [early in their careers] who have guided me into what’s happening at all levels. As a senior leader, it gives me insight into how our actions impact every employee.

How can we foster an honest and open culture at the workplace that welcomes and encourages employees to have conversations around race, discrimination, and equity?

In 2019, we decided to get bold in our conversations. State Farm started working with CEO Act!on For Diversity & Inclusion and implemented a program called “Conversations Worth Having.” In February 2020, we had our first session on racism. We knew that it was going to be a difficult and honest conversation. We had a panel that shared their stories about their lives, their children, and what they experienced.

We had no idea that COVID-19 would happen a month later. The social unrest throughout 2020 was foundational for what we needed to address last year and will continue to address this year. These open conversation forums have continued and are important in allowing people to express their frustration and allowing us to be part of the solution.

We learn every session. Setting ground rules is also important – trust that people’s intentions are honest, listen before you react – some basics in conversations that we talk about each session. If someone responds negatively to a session, we take the time to speak with them one on one to have conversations on a personal level as well.

How has State Farm addressed the current social and racial climate of this past year? Are there any actions or initiatives that State Farm has taken to support Black and Asian American Pacific Islander (AAPI) communities inside and outside the workplace?

State Farm named a Chief Diversity Officer in 2020, which was an important step for us. We also realized that we needed to be quicker with our communications and the acknowledgment that we stand against racism. In the past, we may have addressed it internally at a more moderate level, but we took the stand that State Farm is against racism and the hatred that leads to racism. This is who we are. We respect people – everyone should be treated with respect and dignity, and there is no place for racism in our organization.

There is more work to go into this. It’s an ever-evolving journey, and I think we’re learning as we communicate. We are the Good Neighbor organization. We care about all our neighbors, and we aren’t exclusive to anyone.

Our CEO, Chief Administrative Officer, and Chief Diversity Officer have also been involved in listening sessions to allow employees the opportunity to talk about an experience that they have had, even at State Farm, to better understand the work ahead of us. We want to be an organization that’s part of the healing process.

Jake from State Farm was recently recast as an African American man, actor Kevin Miles. How do you think this change has made an impact on diversity and representation in insurance and has it helped State Farm reach out to more people of color?

The first Jake from State Farm was an actual employee. We pivoted away to some other campaigns for a while, but then we did some research and realized that Jake from State Farm was still very relevant. We knew the needs in a marketing and advertising world today would require more than what we could ask of an employee, so State Farm began an external talent search. We are typically very intentional about diversity in our marketing and advertisements, but ultimately what we did was pick the right actor for the right role.

The actor [Kevin Miles] is from Chicago. One of my favorite stories involves an event early on in his role as Jake from State Farm. We invited him to do a meet and greet at headquarters. It was a big deal, and he brought his parents to the event. The atrium was packed with employees waiting to meet him. He was humbled, kind, and genuine, he spent hours talking to and taking pictures with employees. His success is not only impressive externally – it’s impressive internally as well. The traits you can see and feel from Jake from State Farm are also traits Kevin embodies. And because of that, we intentionally let a lot of Kevin come through in his role as Jake from State Farm.

Can you speak about any upcoming or future diversity and inclusion initiatives for State Farm that you’re excited about? What are your goals for 2021 and beyond?

We’re proud of the intentionality that we put behind diversity and inclusion. State Farm just kicked off a governance council in January, which is a group of senior leaders in the organization who will drive the future strategy of diversity and inclusion.

One focus area that we are looking at is more transparency. How do we tell our story internally so that our associates feel comfortable? How do we tell the story greater from an external perspective? We’re working on deliberate performance goals for all associates around diversity and inclusion, which will be part of their performance assessment and how they actively engage in that work. We are continuing to define our metrics and tangible ways to measure the progress that we are making as an organization. The “Conversations Worth Having” sessions are scheduled throughout the year as well as the listening sessions with our executive leadership. We’re excited about the continuation of programming and leaning into the opportunities ahead of us.

Climate Risk Is Not a New Priority for Insurers

Treasury Secretary Janet Yellen’s pledge to tackle climate change and warning about the economic consequences of failure to act underscore the fact that climate is no longer “merely” an ecological and humanitarian issue – real money is involved.

As long as climate was perceived as a pet project of academics and celebrity activists, driving behavioral change – particularly on the part of industries with billions invested in carbon-intensive technologies and processes – was going to be an uphill effort. But the Titanic has begun to turn, and no industry is better positioned than insurance to help right its course. Insurers are no strangers to climate-related risk – they’ve had a financial stake in it for decades.

Let’s look at the facts:

Global insured weather-related property losses have outpaced inflation by about 7 percent since 1950. Of the $1.7 trillion of global insured property loss reported since 1990, a third is from tropical cyclones, according to Aon data. Nine of the 10 costliest hurricanes in U.S. history have occurred since 2004, and 2017, 2018, and 2019 represent the largest back-to-back-to-back insured property loss years in U.S. history.

Determining how much such losses are driven by climate versus other factors is complicated, and that’s part of the point.

“I know some have argued that this is a reason for us to move slowly,” Yellen said. “The thinking goes that because we know so little about climate risk, let’s be tentative in our actions—or even do nothing at all.  This is completely wrong in my view.  This is a major problem and it needs to be tackled now.”

Understanding the complexities of weather, climate, demographics, and other factors that contribute to loss trends requires data, analytical tools, and sophisticated modeling capabilities. Insurers invest heavily in these and other resources to be able to assess and price risk accurately. As a result, they’re uniquely well positioned to inform the conversation, drive action, and present solutions. 

And they’re leading by example.

Chubb Chairman and CEO Evan G. Greenberg is among the industry leaders who has been on the forefront of communicating about climate risk. When Chubb announced that it will not make new debt or equity investments in companies that generate more than 30 percent of revenues from coal mining or coal energy production, Greenberg said, “Making the transition to a low-carbon economy involves planning and action by policymakers, investors, businesses and citizens alike. The policy we are implementing today reflects Chubb’s commitment to do our part as a steward of the Earth.”

Swiss Re last month announced a similarly ambitious carbon reduction target of 35 percent by 2025 for its investment portfolio. Zurich Insurance Group last year announced the launch of its Climate Change Resilience Services to help businesses better prepare for current and future risks associated with climate. Aon annually publishes its Weather, Climate and Catastrophe Insight reports.

These are just a few examples of how the insurance industry already is recognizing its stake in addressing climate change and providing resources to help others attack the problem.  

ABIR Op-Ed: Working toward a sustainable future

By John Huff

As we celebrate Earth Day, it’s important to remember that every day is Earth Day in the re/insurance industry. Our industry plays a critical role in developing innovative adaptation solutions, in measuring and pricing climate risks to inform risk management, and in providing economic support to people and communities when disasters strike.

Climate risk is a priority for member companies of the Association of Bermuda Insurers & Reinsurers (ABIR). They bring their expertise, innovation, commitment and claims paying capacity to secure a more resilient world.

With partners from government, our internationally recognized consolidated regulator the Bermuda Monetary Authority (BMA), and the re/insurance industry with its historic legacy of leadership in responding to global natural catastrophes, Bermuda has the foundational elements to become a leader in climate risk finance.

The recently announced BMA climate sandbox will give Bermuda’s financial services ecosystem the requisite regulatory and supervisory guidance, support and parameters to pursue innovative solutions to climate change risk. When Bermuda innovation and entrepreneurship prevails, consumers around the world benefit. 

Over the past 20 years. Bermuda’s re/insurers have paid more than quarter of a trillion dollars in claims from natural and man-made disasters in the United States and European Union alone. All told, Bermuda represents over one-third of the global property & casualty reinsurance market and has a history of taking risks in some of the world’s most disaster-prone regions. At the heart of this commitment is talent. The people who work for our ABIR member companies are second to none when it comes to modeling, analytics and underwriting risk. 

Underpinning this risk assessment is scientific research. Because of its location, Bermuda is a ready-made climate lab, surrounded by an ocean that serves as a real-life classroom for studying the forces behind our changing climate. The Bermuda Institute of Ocean Sciences, or BIOS, observes and analyzes oceanographic and atmospheric conditions from a research vessel in the Sargasso Sea, which is one of the world’s most diverse open-ocean ecosystems.

The Bermuda market joins insurers and reinsurers across the world committed to activating the global sustainable agenda by fostering new mitigation technologies through their assumption of risk and by investing in sustainable assets.

Armed and informed with the latest research and data, Bermuda is working diligently to close the world’s protection gap of $113 billion in 2020 – the difference between natural catastrophe and man-made economic losses and insured losses.

Most of that gap exists in emerging economies, so ABIR member companies join with the Insurance Development Forum (IDF) in committing $5 billion of re/insurance capacity to developing nations by 2025. In addition, IDF and its affiliates are developing an accessible, open modeling platform – with Bermuda leadership – that will greatly improve predictive capabilities in some of the world’s most disaster-prone regions.

ABIR is proud to join its industry partners from around the world in these efforts. Championed by the Global Federation of Insurance Associations (GFIA), which represents nearly 90% of the global insurance market, we are contributing to the effort to build a sustainable planet. Leveraging their tools, talent and capital, all stakeholders will work together toward resilient and sustainable recovery. As an industry, we are strongly committed to this critical joint effort to #RestoreOurEarth.

On behalf of ABIR and its member companies, Happy Earth Day.

John M. Huff is President and CEO of the Association of Bermuda Insurers and Reinsurers (ABIR) and a former president of the U.S. National Association of Insurance Commissioners (NAIC).

Winter Storm Losses Seen Dominating P/C Earnings

Losses from winter storms that swept through the southern United States are expected to top the agendas of property and casualty insurance companies as they report first-quarter earnings, according to S&P Global.

“Ten of the 20 largest P&C insurers are expected to record revenue decreases, while nine are expected to log lower [earnings per share] year over year,” S&P Global said, based on an analysis of sell-side forecasts.

Snow, ice and record-low temperatures that paralyzed parts of the South, especially Texas, in February caused heavy damage and historic losses. Estimates ranged from $10 billion to $20 billion, which would make it the costliest winter storm in U.S. history.

During the first quarter, southern states also were pummeled by severe convective storms featuring destructive tornadoesflooding, and hail.

As states work to recover from these events, they will barely have time to breathe before contending with another above-average hurricane season. The Colorado State University Tropical Meteorology Project team, led by Triple-I non-resident scholar Dr. Phil Klotzbach, predicts 17 named storms during the 2021 Atlantic hurricane season. Of those, the researchers expect eight to become hurricanes and four to reach major hurricane strength, with sustained winds of 111 miles per hour or greater.

Extreme weather and populations shifting into coastal and other disaster-prone areas are major drivers of increasing storm losses in the United States. These growing losses underscore the importance of families, communities, businesses, and policymakers adopting a resilience mindset that focuses on what Triple-I vice president and senior economist Michel Léonard calls “pre-emptive mitigation” and rapid recovery from natural disasters.

That mindset requires going well beyond the traditional emphasis on insurance as a risk-transfer mechanism toward insurers acting as risk-management partners to get out in front of perils to ensure swift recovery. 

Cannabis Industry Prospects Brighten;
Risks, Challenges Remain

The future looks brighter every day for the cannabis industry.

From recent findings that cannabis components may lead to treatment or even prevention of coronavirus infection in lung cells to yesterday’s vote by the House of Representatives in favor of the Safe Banking Act, barricades to full legalization just keep falling.

This isn’t the first time the act – which would protect banks from federal penalties for doing business with cannabis-related businesses that comply with state laws – has made it through the House. It was first introduced in March 2019, and the House has approved it three times, only to have the Senate Banking Committee block its progress. But with the current Democrat majority, apparent bipartisan support, and growing public and state-government support for cannabis legalization, the fourth time just might be the charm.

Similar federal “safe harbor” legislation for the insurance industry – the Clarifying Law Around Insurance of Marijuana Act (CLAIM Act) – was introduced last month.

“More optimism”

The Drug Enforcement Agency characterizes cannabis as a Schedule I drug, defined as having “no currently accepted medical use and a high potential for abuse.” Without legislative change, banks and insurers can’t do business with business without risking running afoul of federal drug laws.

“There’s more optimism now and an assumption that they’re going to work to pass some of these bills that have been in motion for a while now, but never hit the point of actually moving forward,” said Max Meade, cannabis insurance advisor at Brown & Brown Insurance. “I’m also seeing more conversations around working to bundle some of these bills that they’ve been talking about and do a larger cannabis reform.”

As states continue to decriminalize marijuana to different degrees, one of the biggest issues facing cannabis businesses is the 280E federal tax burden, which means cannabis businesses can’t expense the normal cost of goods or anything a normal business can during the course of operation, from utilities to payroll and rent. This means marijuana businesses often pay federal income tax rates in the 65–75 percent range, compared to 15-30 percent  for other businesses. They are taxed on their gross revenues, unlike all regular businesses, which pay tax only on income after their expenses.

The Small Business Tax Equity Act would provide an exception into the Internal Revenue Code to let cannabis operators – as long as they’re in compliance with state laws – make the same deductions as any other business.

Easier to operate

Passage of these laws would make it easier for cannabis-related businesses to operate. The CLAIM Act would let these businesses obtain insurance to cover the same risks of theft, damage, injury, loss, and liability as all other businesses.  

“There are upwards of 30 surplus lines carriers and several managing general underwriters that currently service the cannabis industry across many lines of coverage,” the National Law Review reports. “There also is a small handful of admitted carriers that operate in California, and most recently in Arizona.”

While market capacity for property, commercial general liability, product liability and workers’ compensation coverage has expanded – these policies remain more expensive than the same coverage purchased by similar companies in other industries. Passage of the CLAIM Act would open the doors for more insurers and should bring the cost of insuring marijuana-related businesses much less expensive.

THC persistence a challenge

But challenges will remain – particularly with respect to the workplace. When marijuana was illegal under both state and federal law, employers would typically prohibit employees or employment candidates from using marijuana off-duty as a condition of employment. But as states have begun to permit medical marijuana, things have gotten a bit hazier.

No state requires companies to accommodate on-duty marijuana use. As with recreational marijuana, no state that permits medical marijuana requires employers to accommodate on-duty marijuana use, possession, or impairment. States will often explicitly state that medical marijuana laws don’t affect an employer’s drug-free workplace policy.

Does workers compensation cover a workplace accident in which the injured employee tested positive for marijuana? Persistence of THC – the main psychoactive compound in marijuana – complicates this question, and state courts have differed on this issue, depending on the individual details of each case.

THC persistence also complicates issues around impaired driving.

Insurance Is a Key Part
of Financial Literacy

Many people think of financial literacy primarily in terms of saving and investing – which is understandable, since watching your wealth grow is the most rewarding aspect.

While fiscal discipline and the magic of compound interest are foundational, it’s important not to overlook wealth protection. Insurance plays a critical – and widely misunderstood – role in ensuring that your wealth-building efforts won’t be overtaken by a costly event or accident.

April is Financial Literacy Month, during which organizations across the United States conduct events and carry out initiatives to improve financial literacy – especially among the nation’s youth. While such awareness-building initiatives are important, financial literacy is a year-round, long-term concern — and the COVID-19 pandemic appears to have added urgency.

Two dozen states are now considering legislation on financial literacy. Proponents say student debt and heightened interest in economic inequality are behind the efforts. As of early 2020, high school students in 21 states were required to take a personal finance course to graduate, according to the Council for Economic Education.  That was a net gain of four states since the council’s previous count two years earlier.

“I do think the pandemic is bringing more attention to the topic,” said Billy J. Hensley, president and chief executive of the National Endowment for Financial Education. He noted that after the financial crisis more than a decade ago there was also a flurry of financial literacy proposals in state legislatures.

Nearly half of respondents to a survey from financial planning firm D.A. Davidson said having more financial literacy education would have helped them manage their money better through the pandemic. The study, which surveyed 1,047 U.S. adults, found that 21 percent felt insurance was the subject they understood least – second only to investments. 

Triple-I provides information and insights individuals and businesses need to make educated decisions, manage risk, and appreciate the essential value of insurance. Our website, blog, and social media channels offer a wealth of data-driven studies, videos, articles, infographics and other resources dedicated to explaining insurance. 

Triple-I: Drivers Benefit from a Competitive Auto Insurance Market

To maintain a competitive private-passenger auto insurance market, state lawmakers must allow insurers to use rating factors aimed at having lower-risk drivers pay less for coverage, according to the Insurance Information Institute’s (Triple-I) Chief Actuary.

“It seems clear that all parties sincerely want a more equitable society,” stated James Lynch, the Triple-I’s Chief Actuary, in testimony today to the National Council of Insurance Legislators’ (NCOIL) Special Committee on Race in Insurance Underwriting. “Working cooperatively, we can find solutions that address the issue of systemic racism while preserving the competitive environment that allows the insurance industry to keep its promises and protect its customers. At the same time, it is important that the discussion be based on thorough, fact-based research.”

In his prepared remarks to NCOIL’s 2021 Spring Meeting, Lynch underscored the importance of fact-based research when pricing accurately a private-passenger auto insurance policy. The Triple-I’s Chief Actuary emphasized how actuarial evidence supports the effectiveness of auto insurance rating factors (e.g., a driver’s age and driving record).  These factors, combined with dozens of others, such as credit-based insurance scores, effectively gauge the likelihood a driver will file a claim, multiple studies have found. In addition, Lynch noted rating factors are approved by state-based insurance regulators and insurers cannot use information about either a driver’s race or income when pricing their policies.

While addressing NCOIL’s Committee members, Lynch pointed out flaws and errors associated with a 2017 study conducted by ProPublica, in conjunction with Consumer Reports. It alleged insurers systematically overcharged drivers in minority communities in four states: California, Illinois, Missouri, and Texas.

“Once elemental errors in this report are corrected, findings show the exact opposite of what ProPublica asserted: auto insurers charge prices that properly reflect the actual risk in majority white and majority nonwhite neighborhoods,” Lynch stated.

Lynch shared in his testimony findings from Pinnacle Actuarial Solutions, a highly respected actuarial firm retained by the Triple-I, that found “multiple concerns with the analysis and resulting conclusions” in the ProPublica study. Moreover, Lynch also cited state regulators who disputed the key assertion made in ProPublica’s 2017 study.

A comprehensive analysis by the state of Missouri in 2018 determined, “no evidence was found that would indicate that higher-rated territories are charged more relative to risk than lower-rated territories.” Private-passenger auto insurers generally charge drivers more in higher-rated territories.

“The growing awareness of historical injustices make these unprecedented times,” Lynch added. “As the insurance industry, along with the rest of America’s business and governmental institutions, examines past injustices and appropriate remedies, it makes sense to incorporate high-quality, relevant research.”

RELATED LINKS:

White Paper:    Insurance Rating Variables: What They Are and Why They Matter (2019)

Infographics:   What Determines the Cost of My Auto Insurance?

Insurance Rating Variables: What They Are and Why They Matter

Distracted driving during the pandemic

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Activities that take drivers’ attention off the road, including talking or texting on mobile devices, eating, and talking with passengers, are a major safety threat.

During the pandemic, while overall driving decreased, unsafe behavior by drivers rose in an alarming way. Motor vehicle deaths were up 8 percent in 2020 from the prior year – the highest percentage increase in 13 years, according to the National Safety Council.

Perhaps unaware of the danger, one in four drivers thinks roads are safer today than they were before the pandemic, yet a growing number of people reported using their mobile devices in unsafe ways while driving, according to the 2021 Travelers Risk Index on distracted driving.

The study found increases in the following behaviors:

  • Texting or emailing (26 percent, up from 19 percent pre-pandemic).
  • Checking social media (20 percent, up from 13 percent pre-pandemic).
  • Taking videos and pictures (19 percent, up from 10 percent pre-pandemic).
  • Shopping online (17 percent, up from 8 percent pre-pandemic).

“Traffic volumes were lower during the early days of the pandemic, which may have given drivers a false sense of security,” said Chris Hayes, Second Vice President of Workers Compensation and Transportation, Risk Control, at Travelers. “Not only did distracted driving increase, data from our telematics product IntelliDrive shows that speeding also became more prevalent. As travel restrictions are lifted around the country, it’s critical to slow down and stay focused on the road by eliminating distractions.”

Travelers’ findings suggest that many people may be feeling increased pressure to always be available for their jobs. This year, 48 percent of business managers said they expect employees to respond frequently to work-related calls, texts or emails, compared to 43 percent pre-pandemic. One in four respondents said they answer work-related calls and texts while behind the wheel, citing the following reasons:

  • 46 percent said they think it might be an emergency.
  • 29 percent said their supervisor would be upset if they don’t answer.
  • 22 percent said they are unable to mentally shut off from work.

Yet, a higher number of employers are concerned about liability from distracted driving. More than one-quarter (27 percent) indicated that they worry a great deal about their liability should an employee be involved in a crash because of distracted driving, up from 21 percent pre-pandemic.

April is Distracted Driving Awareness Month. Here are a few resources to help reduce preventable crashes and keep everyone safe on the road:

Travelers Distracted Driving Prevention Materials
National Safety Council
National Highway Traffic Safety Administration
OSHA Guidelines for Employers to Reduce Motor Vehicle Crashes

Detained in Dubai
for Getting High
Legally in Las Vegas

A U.S. citizen is reported to have been detained in Dubai for having smoked marijuana.

In Las Vegas.

Where it’s legal.

Peter Clark, 51, had been in Dubai for one day when he fell ill with pancreatitis and was rushed to the hospital, according to the Daily Mail. Nurses took a urine sample that showed traces of the drug. As required by Dubai law, they informed the police of the results.

Clark had last smoked marijuana days before flying from his home in Las Vegas on a business trip in the United Arab Emirates. Since being released from the hospital he has been required to stay in his hotel while awaiting a decision as to whether prosecutors will charge him.

“I was absolutely stunned to learn that I was being charged due to residual marijuana in my system,” he told the Mail. “I smoked it legally back in America long before I even got on the plane. I knew about Dubai’s strict drugs laws but never for one moment did I think something I legally did in my own country would lead to my arrest.”

Not the first time

This isn’t the first time a foreigner has been arrested in Dubai or elsewhere for legal behavior performed before arriving in the country where the same action is illegal. In 2019, U.K. citizen Laleh Shahravresh was arrested for insulting her ex-husband’s new wife in a Facebook comment, according to Detained in Dubai.  Shahravresh reportedly had made the posts three years earlier when she was in London, but she and her teenage daughter were detained when they flew to the Dubai to attend a funeral. 

Under the UAE’s cyber-crime laws, a person can be jailed or fined for making defamatory statements on social media. Her case eventually was settled with a fine.

It’s impossible to overstate the importance of understanding the laws and culture of countries you intend to visit. In some countries, those swimsuit selfies you posted several years ago might be deemed pornographic.  In others, anti-depressants, painkillers, and even over-the-counter cough syrups are banned or have specific rules around them that could cause you problems.

In Singapore, chewing gum is illegal, except for medical use.

Even harder to anticipate, that portable safe you carry your valuables in – cleverly disguised as an iced tea can – might be lined with plaster that could be mistaken by airport security for cocaine when some of it breaks and leaks out into your luggage.

That’s what happened to North Carolina businesswoman Amanda LaRoque on the island of Roatan, Honduras in 2017. LaRoque spent 10 days in a jail cell known as “the cage” – provided only with water and whatever food or other luxuries gracious locals might bring her – before being released.

No insurance coverage, but…

There is no insurance product that will pay your legal bills if you run afoul of the law in a foreign jurisdiction. However, some travel insurers engage “assistance companies” that will refer insurers’ clients to emergency legal service providers.

Richard Atkins, a principal and legal counsel for Philadelphia-based International Recoveries LLC, is one such provider. For more than 30 years, he has operated an international 24/7 legal hotline.

“We do it for the travel insurance industry, to make sure foreign travel is safer from a legal perspective,” Atkins said in an interview. “We also do it for insurers that cover expats and business travelers, as well as for study-abroad programs.”

Atkins typically works through retainers with assistance companies and sometimes directly with insurers or their in-house assistance providers. The service involves an initial consultation with a lawyer with international experience. Sometimes, Atkins said, the matter can be handled and solved just through that call. Other times that consultation also involves a conference or individual call with or selected network lawyer in the foreign county, and many times that solves the legal problem.

“Where the consultations don’t solve the problem, we make a referral to a colleague in the foreign country,” Atkins said. “That initial call is covered, so for all of this, there is no charge to the caller.  In other cases, where the individual or family have no funds to expend for a lawyer, we help obtain the services of free counsel – either court appointed or the public defender.” 

Navigating legal proceedings in foreign countries is as much a matter of understanding the culture as the law. A simple matter could easily be exacerbated by missteps in etiquette or failure to demonstrate sufficient remorse or deference. Atkins described a case in which a traveler was facing incarceration for having torn up a wad of the local currency – a serious offense in Thailand.

“We were able to show that the defendant had received psychological treatment as a child for behavior that included tearing up his parents’ money,” Atkins said. “When the judge understood the man’s psychological history, he dismissed the case.”

Penny wise, pound foolish

As I’ve written previously, too few international travelers buy travel insurance – and those who do tend to purchase trip cancellation/interruption coverage only, foregoing medical/medical evacuation coverage. A report by the U.S. Travel Insurance Association (USTIA) found that cancellation/interruption coverage accounted for nearly 90 percent of benefits purchased, while medical and medical evacuation benefits accounted for just over 6 percent. 

Remember Peter Clark? The headlines about him focus on the cannabis angle, but his troubles began with an unexpected hospitalization. You’re just as likely to become ill or injured abroad as you are at home – maybe more so, due to lack of familiarity with terrain and customs and sensitivity to food and climate. Why would you venture forth without providing yourself with coverage analogous to what you have in your home country?

And while you’re less likely to be arrested than to get sick or injured, the consequences of legal trouble in a foreign country can be extreme. If you’re planning to travel abroad, buy the medical coverage and ask about emergency legal assistance.

Bermuda has it covered from start to finish

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Triple-I welcomes the Association of Bermuda Insurers & Reinsurers (ABIR) as an Associate Member.

ABIR CEO John Huff writes about the influx of investment that solidifies Bermuda’s role in the global re/insurance industry.

Much is made of the word “finish.” Finish strong, they say, in sports. A fight to the finish yields the strongest competitor. But there’s also a lot to be said for the word “start.” People often yearn for a “fresh start” or talk of “the start of something big.”

Bermuda’s startup insurers are proud of the moniker, but don’t be fooled by the name. Yes, they bring fresh capital and innovation, but they are led by industry veterans and backed by sophisticated investors eager to balance their portfolios with uncorrelated risks like natural catastrophes and social inflation.

Still, every startup is like a seed that needs the proper environment to thrive. It’s no accident that they choose Bermuda. It’s a place where these firms can grow, with an abundance of talent and an uncommon agility fostered by a regulatory system that has earned unparalleled recognition around the world.

Recently, the Association of Bermuda Insurers & Reinsurers, or ABIR, welcomed three of these international startup companies as new members: Canopius Reinsurance, Conduit Reinsurance and Mosaic Insurance. Canopius Re Bermuda CEO Charles Craigs, Conduit Re CEO Trevor Carvey and Mosaic CEO Mitch Blaser have been named to the ABIR board of directors. The three new companies bring ABIR’s total membership to the largest in its 28-year history and they join well established ABIR members, who collectively do business in 150 countries – offering global, well-regulated re/insurance products, protection and peace of mind to consumers and businesses.

These startups, along with Bermuda’s legacy companies, are changing the face of insurance, providing the diversification and spread of risk that today’s world demands. Climate change and cyberrisk in particular pose new and evolving challenges, which these re/insurers are eminently qualified to tackle – with their superior analytics, underwriting and capital deployment strategies.

If you’re looking for proof that there’s something special happening here, just heed the saying, “Follow the money.” Private equity is redoubling its investment in Bermuda, pouring an estimated $19 billion to the island in the past year. Our industry is very strong and it is attracting international attention from investors who won’t shy away from, but in fact relish, the hardening, complex market and everything it brings.

On behalf of the Bermuda financial community, I want to extend a warm welcome to these companies. The hard market will be a marathon, and with their addition we’re off to a good start.

John M. Huff is President and CEO of the Association of Bermuda Insurers and Reinsurers (ABIR) and a former president of the National Association of Insurance Commissioners (NAIC).