All posts by Maria Sassian

Americans are becoming less fearful of driverless vehicles

A survey published last week by AAA found that Americans are warming up to the idea of driverless vehicles with 63 percent of U.S. drivers reporting feeling afraid to ride in a fully self-driving vehicle down significantly from 78 percent in early 2017.

Men (52 percent) are less afraid than women (73 percent) of riding in a self-driving vehicle, and millennials are the least afraid (49 percent).

 “Education, exposure and experience will likely help ease consumer fears as we steer toward a more automated future,” said AAA Automotive Engineering and Industry Relations Director Greg Brannon.

The survey also found that U.S. drivers continue to report high confidence in their own driving abilities. Three-quarters (73 percent) of U.S. drivers consider themselves better-than-average drivers. Men tend to be most confident in their driving skills with 8 in 10 considering their driving skills better than average. This is despite of the fact that more than 90 percent of crashes are the result of human error.

 

The week in a minute, 1/25/18

The III’s Michael Barry briefs our membership every week on key insurance related stories. Here are some highlights. 

California Insurance Commissioner Dave Jones said this week the state’s policyholders should benefit from the “reduced taxes paid by insurance companies,” a reference to the recently-enacted federal tax reform law.

A tsunami warning was issued and then rescinded after a 7.9-magnitude earthquake occurred offshore, about 150 miles south of Kodiak, Alaska, on Tuesday morning, January 23.

Five workers were killed after a gas rig explosion in Quinton, Oklahoma on Monday, January 22.

 

Thomas wildfire to cost insurers between $1 billion and $2.5 billion

Catastrophe risk modeling firm RMS puts insured and reinsured losses stemming from the December Thomas fire in Southern California at somewhere between $1 billion and $2.5 billion, reports the Artemis blog.

The fire, which started on December 4, became the largest in California history and was followed by devastating mudslides in burned areas stripped of vegetation.

RMS estimates include losses from burning or smoke damage to personal and commercial lines and insured losses due to business interruption and additional living expenses. They don’t include automobile and agriculture losses, or damage related to the recent mudslides.

 

The I.I.I. has Facts & Statistics on wildfires here.

The overlooked employee lawsuit risk of family-owned businesses

One might think that family-owned and operated businesses would be relatively immune from employee lawsuits, but that’s not the case according to a recent Gen Re article.

The reasons family-owned businesses get sued include: most family owned businesses employ at least one non-relative; the non-relative is likely to be first to be fired when the business is struggling; and family members are reluctant to discipline each other for bad workplace behavior, especially if the family patriarch is the one misbehaving.

The article gives several examples of lawsuits against family businesses and the awards paid out, concluding that a family-owned business would benefit from including employment practices liability insurance (EPLI) as a part of its insurance package.

 

The week in a minute, 1/12/2018

The III’s Michael Barry briefs our membership every week on key insurance related stories. Here are some highlights. 

Autonomous vehicles at the 2018 Consumer Electronics Show

At the massive Consumer Electronics (CES) show held in Las Vegas from January 8 – 12, self-driving technology took up much of the spotlight, heralding the unstoppable advent of the era of autonomous cars.

The activity went beyond the convention floor, with Aptiv (formerly Delphi) and Lyft partnering to offer rides in self-driving cars to attendees.

The Wall Street Journal reports that Renault-Nissan Chief Executive Carlos Ghosn said at a CES press conference: “[We are] going to see complete arrival and mass marketing of autonomous driving in the next six years. … The speed at which mass marketing will happen will not depend only on us. It will depend on country by country to make this a mass marketing phenomenon, not only a prototype… But this is going to happen.”

At the CES Research Summit, AIG’s Lex Baugh, chief executive officer for North America general insurance, said that the company is figuring out how autonomous vehicle risk might involve auto manufacturers, software providers and parts suppliers, as well as infrastructure and communications providers, reports A.M. Best.

Gaurav D. Garg, CEO of global personal insurance at AIG, said that he expects that jury decisions and awards in litigation related to autonomous vehicles will be a part of shaping the future of the technology.

Zurich Insurance Group, is one company looking to get a jump on auto technology advances. Zurich acquired Bright Box HK Ltd., in a move which the company said would increase its capabilities in connected car technologies and mobility and strengthen Zurich’s proposition for car drivers, car dealers and original equipment manufacturer. The acquisition will also facilitate new insurance services leveraging telematics-enabled data analytics.

Will cyber insurance cover the Meltdown and Specter bugs?

Last week news broke of two security flaws in computer processors that affect virtually all computers, smartphones and smart devices such as televisions and refrigerators.

The first flaw, nicknamed “Meltdown,” applies specifically to Intel chips. The second flaw called “Spectre,” is more difficult for an attacker to exploit but has no available patches yet and lets attackers access the memory of devices running Intel, AMD, and ARM chips.

This article from Woodruff Sawyer & Co., an insurance and risk management company, considers the cyber insurance underwriting implications of these flaws. The article states that once a bug becomes known and a patch or solution is available, the burden shifts to the device owner to download the patch and update their device. Cyber underwriters will want to know if business owners have patched all vulnerable devices, and how long it took to do that after the patches became available.

Another area of underwriting focus will be device obsolescence. Intel has stated that the patches released to address the vulnerability will focus on devices introduced in the last five years. Since manufacturers are not motivated to keep updating old equipment, and it may be difficult for companies to ensure that their entire network is free of the vulnerability if they don’t migrate to newer machines.

The article concludes that companies that are proactive in dealing with the chip vulnerabilities will improve their cyber security – and their ability to secure good cyber insurance.

Adapting to flooding with amphibious architecture

The New Yorker magazine reported recently on the work of the Buoyant Foundation Project, an organization that provides architectural flood mitigation solutions for vulnerable populations.

Amphibious architecture allows an otherwise-ordinary structure to float on the surface of rising floodwater. An amphibious foundation retains a home’s connection to the ground by resting firmly on the earth under usual circumstances, but allows a house to float when flooding occurs.

A buoyant foundation is specifically designed to be retrofitted to an existing house that is already slightly elevated off the ground and supported on short piers.  Under the house the foundation’s buoyancy blocks provide flotation, vertical guideposts prevent the house from floating away, and a frame ties everything together.  Any house that can be elevated can be made amphibious.

Amphibious retrofitting has not yet gained widespread acceptance, and buildings with amphibious foundations are not eligible for subsidized policies offered by the National Flood Insurance Program.

The week in a minute, 1/5/18

The III’s Michael Barry briefs our membership every week on key insurance related stories. Here are some highlights. 

With a snowstorm headed up the Atlantic Seaboard, the Weather Channel offered details on the East Coast states to be impacted by this week’s extreme cold.

California’s Thomas Fire is now the largest in the state’s history, having burned an estimated 282,000 acres in Santa Barbara and Ventura counties since the blaze began on December 4, 2017.

Global insurers purchased more U.S. asset managers in 2017 than in any year in two-plus decades, The Wall Street Journal reported, in its December 30-31, 2017 Weekend print edition.

2017 sets record for highest insured disaster losses

Munich Re has released its 2017 catastrophe review, and disaster related insured losses for the year are the highest on record at $135 billion.

The record losses are driven by the costliest hurricane season ever in the United States and widespread flooding in South Asia. Overall losses, including uninsured damage, came to $330 billion.

The United States made up about 50 percent of global insured losses in 2017, compared with just over 30 percent on average. Hurricane Harvey, which made landfall in Texas in August, was the costliest natural disaster of 2017, causing losses of $85 billion. Together with Hurricanes Irma and Maria, the 2017 hurricane season caused the most damage ever, with losses reaching $215 billion.

The United States also suffered a devastating wildfire season and at least five severe thunderstorms across the country, accompanied by tornadoes and hail.

Mark Bove, a senior research meteorologist at Munich Re, said in a New York Times interview that losses jumped in the United States because so many of the disasters hit highly populated areas: the Houston bay area, South Florida, Puerto Rico. It’s a trend that he expects to continue.

The I.I.I. has data on natural disasters here.