Courtesy of iii.org

This white paper examines the current exposure to cyberrisk and how insurers are responding:

• Interest in cyber insurance and risk continues to grow beyond expectations in 2016 in part due to high profile data breaches, but also due to awareness of the almost endless range of exposures businesses face.
• Attacks and breaches have grown in frequency, and loss costs are on the rise.
• Insurers are issuing an increasing number of cyber insurance policies and becoming more skilled and experienced at underwriting and pricing this rapidly evolving risk. More than 60 carriers now offer stand-alone cyber insurance policies, and it is estimated the U.S. market is worth over $3.25 billion in gross written premiums in 2016, with some estimates suggesting it has the potential to grow to $7.5 billion.

Some observers believe that exposure is greater than the insurance industry’s ability to adequately underwrite the risk. Attacks have the potential to be massive and wide-ranging due to the interconnected nature of this risk, which can make it difficult for insurers to assess their likely severity. The underreporting of attacks means that accurately evaluating exposures is challenging. Several insurers have warned that the scope of the exposures is too broad to be covered by the private sector alone, and a few observers see a need for government cover akin to the terrorism risk insurance programs in place in several countries.

Click here to download Cyberrisk: Threat And Opportunity, October 2016, a companion slideshow, that highlights key findings from this white paper. (Access limited to I.I.I. Members and subscribers)

Please click on the file name below to view the white paper in PDF format. You will need Adobe Acrobat Reader to view the file.

Download cyber_risk_wp_102716-91.pdf

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Courtesy of iii.org

While surveying the motorcycles on display at the New York Motorcycle Show this weekend, keep in mind that motorcyclists who travel on public roads or highways need an insurance policy that meets their state’s requirements as well as their individual needs, according to the Insurance Information Institute (I.I.I.).

“Motorcycle insurance coverage can be purchased as either a stand-alone policy or as an endorsement to a personal automobile policy,” said Michael Barry, vice president, Media Relations, at the I.I.I.

Insurers will be among the exhibitors at the Progressive International Motorcycle Show, to be held between Friday, December 9, and Sunday, December 11, 2016, at the Jacob K. Javits Convention Center, 655 West 34th Street, New York City.

As with cars, some insurance coverages are required for motorcyclists whereas others are optional.

1. Required coverages: Most states require motorcyclists to carry a minimum amount of liability insurance, to cover bodily injury and property damage costs caused to other people involved in an accident. In addition, uninsured/underinsured (UI/UIM) motorist coverage is recommended, or even required, in many states as part of a motorcyclist’s insurance policy to cover expenses for damage caused by another driver who does not have insurance or whose insurance is inadequate.The mandatory minimum liability limits for these coverages in states where they are required for motorcyclists are generally similar to those required for automobiles.

2. Optional coverages:
   a) Collision—covers damage resulting from a collision with another vehicle, an object or as a result of flipping over.b) Comprehensive—covers damage caused by events such as fire, flood, falling objects, theft or vandalism.

   c) First-party medical coverage—covers your own medical expenses if they were incurred in an accident while operating your motorcycle.

   c) Emergency road service—covers towing and roadside assistance costs.

   d) Accessories and customization—covers the repair or replacement of accessories, like helmets and safety jackets, and customized equipment added to the motorcycle after purchase, such as exhaust pipes, saddle bags, and seats.

Beyond the types and amount of coverage purchased, several other factors will also affect how much you pay for motorcycle insurance, including:

• Your age and driving record
• Where you live
• The model, make and horsepower of your motorcycle
• Where you store and drive your motorcycle

Courtesy of iii.org

The 2016 Atlantic hurricane season concluded on November 30th with 15 named storms generating seven hurricanes, three of which were considered major ones, according to the Insurance Information Institute (I.I.I.).

The National Oceanic and Atmospheric Administration (NOAA) said it was the busiest Atlantic hurricane season since 2012, when 19 named storms developed, and 10 of the 19 became hurricanes. Major hurricanes are those that are designated a Category 3 storm, or higher, with sustained wind speeds of at least 111 miles per hour. A named storm is considered a Category 1 hurricane when its wind speeds consistently exceed 74 miles per hour.

Hermine and Matthew were the only two named storms to make landfall in the U.S. in 2016 as hurricanes. Both caused extensive property damage and flooding, with property/casualty (P/C) insurer claim payouts from Hermine and Matthew combined totaling more than $700 million in Florida alone, according to the state’s Office of Insurance Regulation. Hermine was a Category 1 hurricane when it struck near Tallahassee, Florida, on September 2. It was also the first hurricane to make landfall in the Sunshine State since Hurricane Wilma in 2005. Matthew arrived north of Charleston, South Carolina, on October 8, as a Category 1 hurricane.

Even before the two hurricanes made landfall on the U.S. mainland in the second-half of 2016, U.S. property/casualty insurer claim payouts for natural disasters stood at $14.5 billion for January 1 – June 30, 2016, up significantly from the $11 billion in natural disaster-caused insurer claim payouts in the first six months of 2015.

Besides Hermine and Matthew, there were five other 2016 Atlantic hurricanes: Alex, Earl, Gaston, Nicole and Otto. Claire Wilkinson offered additional analysis on the just concluded season on the I.I.I.’s award-winning Terms + Conditions blog yesterday (November 30).

Wind damage from both tropical storms and hurricanes is covered under standard homeowners, renters and business insurance policies. Flood damage resulting from storm surge caused by hurricanes is excluded under these policies; flood coverage is available, however, from FEMA’s National Flood Insurance Program (NFIP) and from a few private insurance companies.

Damage to cars from either tropical storms or hurricanes is covered under the optional comprehensive portion of an auto insurance policy. This includes wind damage, flooding and falling objects such as tree limbs.

FIRE LOSSES

Great strides have been made in constructing fire-resistant buildings and improving fire-suppression techniques, both of which have reduced the incidence of fire. However, in terms of property losses, these advances have been somewhat offset by increases in the number of and value of buildings. In 2014, on average, a fire department responded to a fire every 24 seconds in the United States, according to the National Fire Protection Association. A structure fire occurs every 64 seconds; a residential structure fire occurs every 86 seconds and an outside property fire occurs every 52 seconds.

STRUCTURE FIRES

There are about a half million fires in structures each year, according to the National Fire Protection Association (NFPA). In 2014, 78 percent of structure fires were in residential properties and 22 percent were in non-residential structures, including storage facilities, stores and offices, and industrial properties, and public assembly. Public assembly fires include fires in eating and drinking places and other entertainment venues, houses of worship and other places where people congregate. There are approximately 7,600 structure fires in eating and drinking establishments each year, according to a NFPA report based on data between 2006 and 2010.

According to the NFPA, fires in nightclubs are among the most deadly public occupancy fires, because they contain a large number of people in one main space. In January, 2013 a deadly nightclub fire in Brazil claimed over 230 lives, making it one of the most deadly nightclub fires on record. The deadliest nightclub fire in world history was the 1903 Iroquois Theater fire in Chicago, Illinois in which 602 people were killed, followed by a 1942 Cocoanut Grove fire in Boston, Massachusetts which claimed 492 lives and a fire at the Conway’s Theater in Brooklyn, New York in 1876 which killed 285 people. The 2003 Station Fire in Rhode Island claimed 100 lives, and ranks as number eight. The complete top ten ranking is posted at NFPA: Nightclub Fires.

HOLIDAY FIRE LOSSES

Fireworks

On Independence Day in a typical year, far more U.S. fires are reported than on any other day, and fireworks account for two out of five of those fires, according to the National Fire Protection Association (NFPA). Fireworks caused an estimated 17,800 reported fires, including 1,200 total structure fires, 400 vehicle fires, and 16,300 outside and other fires in 2011, according to a fireworks fact sheet from the NFPA. Key stats include:

• Fireworks fires resulted in an estimated eight reported civilian deaths, 40 civilian injuries and $32 million in direct property damage.
• In 2013, U.S. hospital emergency rooms treated an estimated 11,400 people for fireworks related injuries; 55 percent of those injuries were to the extremities, and 38 percent were to the head.
• The risk of fireworks injury is highest for young people under age 4, followed by children 10 to 14.

• The National Fire Protection Association (NFPA) says Thanksgiving Day is the leading day for home cooking fires, with three times as many occurring on Thanksgiving as any other day of the year. In 2013, there were 1,550 fires on Thanksgiving, a 230 percent increase over the daily average.

Home Fires

• The National Fire Protection Association (NFPA) says Thanksgiving Day is the leading day for home cooking fires, with three times as many occurring on Thanksgiving as any other day of the year. In 2013, there were 1,550 fires on Thanksgiving, a 230 percent increase over the daily average.

• U.S. fire departments responded to an estimated annual average of 210 home structure fires that began with Christmas trees from 2009 to 2013, according to a fact sheet from the National Fire Protection Association (NFPA).
• Home Christmas tree fires caused an average of seven civilian deaths, 19 civilian injuries and $17.5 million in direct property damage annually from 2009 to 2013.
• Electrical distribution or lighting equipment was involved in 38 percent of the home Christmas tree structure fires. About one-quarter (24 percent) occurred because some type of heat source was too close to the tree. Decorative lights were involved in 18 percent of these incidents. Eight percent of home Christmas tree fires were started by candles.
• The top three days for home candle fires were Christmas, New Year’s Day and Christmas Eve, according to another NFPA fact sheet.
• During the five-year-period of 2009-2013, the NFPA estimates that decorations were the item first ignited in an estimated average of 860 reported home structure fires per year. These fires caused an estimated average of one civilian death, 41 civilian injuries and $13.4 million in direct property damage per year, according to an NFPA fact sheet.

For information about Holiday Safety and Preparedness, see our Pinterest board.

 

 

Courtesy of iii.org

Auto insurers price their policies based on a number of factors. Sometimes these cost factors go up, and sometimes they go down. In most states, costs are currently rising. Your actions, as a policyholder, can affect what you pay, too. For instance, if you add another car, or a teenaged driver to your policy, your costs will increase. Alternatively, your costs will decrease if you drop either a car or a driver from your policy.

But there are also other factors outside of your control that could cause rates to increase, such as the crashes other people are involved in. The number of crashes, and the cost of these crashes, are a component of auto insurance pricing in every state. For example, drivers living in large metropolitan areas are likely to pay more. This is simply because more cars, therefore more crowded roadways, increase the number of car crashes in those cities. On top of all that, speed limits are also being raised. Speed is the single-biggest contributor to crashes in which driver error is cited as the cause. Distracted driving is an issue everywhere. In big cities and small, people texting, talking or otherwise occupied with another activity while driving is being blamed in part for more crashes.

Auto insurance covers more than vehicle repair. It also covers the cost of injured crash victims’ medical care and lost wages as well as the repairs and/or replacement of vehicles and any property damaged in a crash. In recent years, medical and auto body repair costs have increased at a rate much faster than inflation. Legal costs have gone up, too.

Another trend affecting the cost of auto insurance is that with the unemployment rate falling, more people are driving both to and from work. And with more disposable income, they are presumably driving more for leisure. They also have the means to purchase more expensive cars. And while many of these cars have all types of safety features that might help in accident avoidance, these cars’ often high-tech components are also more expensive to fix and replace once damaged.

Auto insurers are committed to reducing U.S. crash rates. They fund the Insurance Institute for Highway Safety (IIHS), support efforts to combat distracted driving as well as drunk or drugged driving. In addition, auto insurers offer discounts to policyholders who take defensive driving courses or drive fewer miles.

Consumers can take proactive and positive steps to reduce auto insurance costs. Talk to your insurance professional to make sure you’re getting all of the discounts to which you’re entitled. And if you’re not satisfied, shop around to see if another auto insurer offers you a policy which meets your needs at a lower cost.