Latest Studies

Aon plc surveyed thousands of risk managers in 60 countries across 33 industries to ascertain key risks and challenges their organizations are facing. The 2019 survey respondents ranked economic slowdown as their No. 1 risk. Damage to reputation or brand was cited as the No. 2 concern, reflecting the potential for significant consequences when corporate mishaps occur amidst a 24/7 news cycle on social medial platforms.  Accelerated rates of change in market factors stemming from an increase in protectionist international trade policies, which include rising regulatory activity and geopolitical tension, which ranked 38th in the previous survey, ranked 3rd on the 2019 list. An aging workforce is ranked at 20 and is predicted to rise to 13 by 2022. Aging populations coupled with workforce shortages not only change the social and economic trajectory of a country but also create volatility within organizations. Climate change moved from a ranking of 45 in 2017 to 31 in 2019, as the frequency and severity of natural catastrophes contribute to rising concerns about the impact on the global economy. Cyberattacks and data breaches rank at 6 and are expected to jump to the third-highest overall risk in 2022. Cyber continues to hold the top spot among those responding from North America. Disruptive technologies are a growing concern for survey respondents, rising from a ranking of 20 in 2017 to 14 in 2019 globally. Full report

Verizon's annual data breach investigations report is based on real-world data from 41,686 confirmed security incidents and 2,013 data breaches spanning 86 countries worldwide. Key findings include: C-suite level executives are 12 times more likely to be the target of security incidents and nine times more likely to be the target of data breaches than the prior year; Financial social engineering attacks targeting these business executives rose from single digits to dozens; 43 percent of all breaches occurred at small businesses; Financial gain remains the number one driver of all data breaches (71 percent); Cyber-espionage represents 25 percent of all breaches, and 96 percent of these are attributed to state-affiliated groups or nation-states.  Full report

The Workers Compensation Research Institute (WCRI) has released a new edition of its study on fee schedules, which aims to help policymakers who are looking to adopt, reform, or update medical fee schedules in their state workers compensation system. The study highlights some of the most important design choices that public officials face in adopting, reforming, and updating a fee schedule. These decisions, which often become the center of intense policy debates, include the following: How high or low should the fee schedule level be set?; How frequently should fee schedules be updated; Should the fee schedule be based on the relative value units of different professional medical services, or based on some other metric (e.g., historical charges or usual and customary charges)?; If based on relative value units, should the fee schedule for physician services use the relative values developed for the Medicare program or some other relative value scale? According to the study, the fee schedule level is very important. If fee schedule rates are set too high, savings will be negligible, and the fee schedule will not achieve its cost containment goal, setting rates too low makes treating injured workers uneconomical for providers and jeopardizes workers’ access to quality care. For more information about this study or to purchase a copy, visit WCRI’s website.

This report from website ValuePenguin.com found that nearly three-quarters of U.S. adults think weather events like hurricanes are getting worse, and more than 40 percent of Americans have encountered weather events that damaged their property or forced them to evacuate. Despite these concerns almost 90 percent of American families are not adequately insured against floods. The report includes table ranking states by share of homeowners with flood insurance (estimate based on the ratio of NFIP policies in force to owner-occupied housing units). The states with the highest percentage of homeowners with flood insurance are Louisiana (44 percent), Florida (36 percent) and Hawaii (23 percent). The states with the lowest rate of flood coverage are Minnesota (0.6 percent), Utah (0.6 percent) and Michigan (0.8 percent). Overall, just 7 percent of American homeowners have a flood insurance policy, compared to 91 percent who have homeowners insurance. The report also contains a table ranking the cost of a flood insurance policy by state. While flood insurance premiums vary widely across the country, the average cost of a flood policy though the National Flood Insurance Program is $699 per year. Flood insurance is most expensive in Connecticut, Rhode Island, Vermont, Massachusetts and Pennsylvania, where premiums are 69-100 percent higher than the national average. Flood insurance is cheapest in Texas, Maryland and Florida, where premiums cost 17-21 percent below the national average. Full report

There were 85 insurtech deals with a total value of $1.42 billion announced in first-quarter 2019, according to this quarterly report from Willis Towers Watson plc. Deal count increased by 35 percent but total funding decreased by 11 percent from Q4 2018. Property/casualty (P/C) transactions reached 56, however, P/C funding was off 27 percent from fourth-quarter 2018, but up 160 percent from first-quarter 2018. In Q1 2019, 54 percent of all insurtech deals took place outside of the U.S, compared with 42 percent of all insurtech deal activity that took place outside of the U.S in 2016. The trend of larger deals continued in the first quarter, with a record high of 10 deals valued at more than $40 million, a 67 percent increase from Q4 2018. A thought leadership section discusses the rising importance of flexibility and agility in pricing for insurers. A transaction spotlight examines the recent $45 million Series B funding round of Pie Insurance, a start-up based in Washington, D.C., offering workers compensation coverage targeted to the unique needs of small businesses. Full report

In January 2019 Corinium Global Intelligence interviewed 100 senior data and analytics executives who lead the discovery and implementation of new technologies within the insurance sector. When asked how open their business was to embracing AI and machine learning, the results were a mixed bag somewhere between a little (47 percent), to a certain extent (33 percent), to a lot (20 percent). The top three drivers according to respondents were to cut costs (58 percent); increase efficiency (57 percent); and improve decision-making (46 percent), followed by improving customer experience (42 percent). The respondents were also asked which subsets of AI they implemented and are considering implementing with machine learning, neural networks and computer vision implemented by 88, 62 and 62 percent, respectively. Excessive legacy technology was seen as the main challenge of adapting AI by 70 percent of respondents. Full report

McKinsey’s 2019 analysis of their Global Insurance Pools database offers a detailed look at the insurance industry by region and line of business. The global industry grew by more than 4 percent in 2017, the same level as its compound annual growth rate from 2010 to 2016. At the regional level, Asia–Pacific (APAC) expanded by 8 percent from 2016 to 2017, the highest growth rate, followed by the Americas and EMEA (Europe, Middle East, and Africa) with 4 and 1 percent, respectively.  The report covers property/casualty, life/health and distribution. Full report

Property/casualty (P/C) insurance companies have shown marked improvement in many of their digital offerings—particularly mobile self-service functionality but still have work to do to meet customers’ rising expectations. According to the study, specific areas where insurers come up short when compared with mainstream digital consumer companies are with ease of shopping and servicing their policies, household-level policy management and inconsistent use of social media. “Digital has become so important to the modern insurance company by delivering two essential characteristics consumers seek from carriers: ease and accessibility,” said Tom Super, Vice President Property and Casualty Insurance Intelligence at J.D. Power. “In many cases, mobile apps and insurer websites are the primary faces of these consumer brands. As consumer behavior continues to evolve, insurers must keep pace as part of their overall distribution strategy or run the risk of irrelevancy.” Press release.

This article summarizes the findings of a study conducted by the Transportation Research Institute on the vulnerabilities of the existing traffic control system in a connected environment. Research into the cybersecurity of transportation systems has been mainly focused on inter-vehicle communications. But, existing traffic control systems have a great impact on the safety and efficiency of urban traffic flow and are highly vulnerable to cyberattacks because of a systemic lack of security awareness. The traffic control system can be breached either directly, by hacking into the signal controller and roadside units and changing the signal-timing plans or indirectly, by tampering with data from vehicle detectors and/or onboard units. Usually indirect attacks are more realistic to conduct. In a recent example, an Argentinian security expert hacked into New York City’s wireless vehicle detection system with a cheap wireless device. The vulnerabilities he found allowed anyone to take complete control of the devices and send fake data to the traffic control systems. Although traffic signals were not directly controlled, fake vehicle data could cause severe traffic congestion and increase crash risks. The researchers examined various potential attacks on traffic control systems and developed a defense framework. Full text

According to a study published in JAMA Network Open, professional football players have a somewhat elevated risk of death, including higher risk of succumbing to cardiac and neurodegenerative diseases, compared with professional baseball players of similar age. The analysis was the first to compare elite professional athletes of similar ages. The findings are based on a retrospective analysis of death rates and causes of death in 3,419 NFL (National Football League) and 2,708 MLB (Major League Baseball) players for a period of more than 30 years. There were 517 deaths among NFL players and 431 deaths among MLB players between 1979 and 2013. The difference translates into a 26 percent higher mortality among football players compared with baseball players. NFL players had a nearly threefold greater likelihood of dying of neurodegenerative conditions, compared with MLB players. They also had a nearly 2.5-fold risk of dying from a cardiac cause, the study showed. There were 498 deaths stemming from cardiovascular causes among the NFL players and 225 such deaths among MLB players. The study identified 39 deaths from neurodegenerative conditions such as Alzheimer's disease, ALS and Parkinson’s in NFL players and 16 such deaths in MLB players. There were 11 suicides among the NFL group and five in the MLB group. The results point to the existence of sport-specific differences in sport-related injuries and athlete conditioning as important contributors to disease development. Head trauma, repetitive head injuries and sub-concussive blows in NFL athletes may contribute to the onset of pathologies that eventually lead to certain neurologic conditions, the researchers said. Full text