Latest Studies

Hurricane Season: More Than Just Wind and Water
Jeff Dunsavage
Insurance Information Institute;
September 01, 2020

This paper examines trends and how insurers, risk managers, individuals and businesses are responding to improve community resilience to hurricanes through: Improved modeling and forecasting; Advances in aerial imagery; Better building codes; and Boots-on-the-ground information. Despite improved forecasting, more advanced analytical tools and greater public awareness, hurricane-related losses continue to climb. The 2020 hurricane season arrived on the heels of a global pandemic that complicated this year’s convective storm season and has not yet ebbed. “Bigger homes filled with more valuables; more vehicles; all the infrastructure that goes with increasing populations – the data suggest that demographic changes play a greater role in natural catastrophe-related claims and losses, even than weather and climate do,” said Jeff Dunsavage, Senior Research Analyst, Triple-I, and author of the paper. Full report

15 years after Katrina: Would we be prepared today?
Marla Schwartz Pourrabbani
Swiss Re Institute;
August 18, 2020

This report details how Hurricane Katrina in 2005 dramatically altered the re/insurance industry as the most expensive natural catastrophe for the global insurance industry to this day, as well as the lack of preparation many U.S. coastal states still face if confronted with another major hurricane. The report discusses changes such as population growth in high-risk areas (though the population in New Orleans has actually decreased), flood-protection efforts and building code requirements, improved flood-assessment tools and the increasingly detrimental climate change. Although New Orleans has made major efforts to decrease its risk, many other coastal cities have not followed its lead, and therefore remain woefully unprepared. A Katrina-like storm would cause insured losses of around $60 billion if it hit the U.S. in 2020. The total economic toll from such an event could likely exceed $175 billion. Full report

Natural Hazards Mitigation Saves Lives
National Institute of Building Sciences;
August 01, 2020

Disaster liability costs in the U.S. now total $100 billion each year, and the costs are increasing at an annual rate of 6 percent, 10 times more than the population growth. This report indicates that pre-disaster mitigation can produce savings that far exceed costs even though communities have not invested heavily in mitigation. The National Institute of Building Sciences (NIBS) has set a goal of developing a set of incentives that will result in finance, insurance, real estate and government infrastructure stakeholders shouldering some mitigation costs. These incentives can be incorporated into mortgages, insurance policies, taxes, grants and other financial resources. The roadmap developed by the NIBS’s Multi-Hazard Mitigation Council provides details of incentives that reduce how much it costs owners to change existing infrastructure in disaster mitigation. The report includes multiple exhibits. Full report

Will infrastructure bend or break under climate stress?
Jonathan Woetzel et al.
McKinsey Global Institute;
August 31, 2020

This report explores 30 potential combinations of climate hazards, sectors and geographies. The authors found that the hazards affect five crucial socioeconomic systems: livability and workability; food systems; physical assets; and infrastructure services and natural capital. The analysis focused on nine cases to show the exposure of these systems to extremes of climate change. Full report

COVID-19: Returning to the workplace in a new reality
Dean Clune et al.
Gallagher/Business Insurance;
August 31, 2020

The workplace and the workforce must deal with complex new challenges, from how people socialize and consume goods and services to the measures used to evaluate employee performance. This report discusses the pressures that the new reality adds to the physical, emotional, career and financial well-being of the individual, and how employers must now consider providing tools and resources that were formerly considered unessential or voluntary. Attention is also given to strategies for healthcare spending in 2021 and changes in consumer behavior that affect employee spending and saving. The report states that the following cultural factors have a positive effect on resilience: trusting coworkers, having a reasonable workload, understanding what is needed for successful job performance and comfort in reporting safety issues. Full report

Employment litigation post COVID-19 & other class action developments
Stephanie L. Adler-Paindiris, David R. Golder, Eric R. Magnus
National Law Review;
August 12, 2020

This article addresses the changes that the pandemic can be expected to bring to employment litigation and jury trials. The article summarizes the factors that may influence jurors’ sympathies for employers and employees and outlines recent legal developments in class litigation. Full text

Countrywide mega claims
California Workers Compensation Insurance Rating Bureau;
August 01, 2020

Mega claims are a relatively infrequent, highly unpredictable component of most workers compensation systems, with total costs between $1 billion and $2 billion each year. This study attempts to identify whether mega claims (defined as claims with incurred losses at 2018 cost levels of $3 million or more) have become more or less common and attempts to characterize these claims in terms of size, claim type, industry segment and whether those characteristics have changed over time. The report also discusses the unique characteristics of mega claims in select states. Full report

Machine intelligence in insurance: Insights for end-to-end enterprise transformation
Jonathan Anchen, Jeffrey Bohn, Rajeev Sharan
Swiss Re Institute;
August 12, 2020

This report discusses the significant revenues and cost savings that many industries have attained by using machine intelligence (MI), which has become widely used. MI has helped insurers attain higher returns through improved customer analytics and claims processing, and the use of these tools is expanding. A review of Swiss Re’s survey data shows that only 10 percent of firms in all sectors have introduced MI approaches into numerous processes. Furthermore, the absence of meaningful data is preventing this transformation from happening at scale. Full report