Месечни архиви: June 2015

Wildfire Report Shows 2 Millon California Homes at Risk as Drought Continues


Wildfire Report Shows 2 Millon California Homes at Risk as Drought Continues

A report issued today shows California has more than 2 million homes at “high” or “extreme” wildfire risk, as the multi-year drought continues stoke fears among some experts of a potentially devastating wildfire season.

Verisk Insurance Solutions released its 2015 FireLine State Risk report on Wednesday. The report summarizes wildfire risk in 13 wildfire-prone states in the West and Southcentral U.S., and it includes three states not in past reports: Montana, Oklahoma and Wyoming.

According to the report, more than 4.5 million U.S. homes are rated at “high” or “extreme” risk of wildfire.

The report rates California as the nation’s biggest wildfire risk. Of the state’s 13.68 million homes, more than 15 percent are at “high” or “extreme” wildfire risk. More than 1.66 million homes are considered to be at “moderate” risk.

Arindam Samanta, senior manager of underwriting products and analytics at Verisk, pointed to that 15 percent figure as a particular concern, because the brunt of losses in wildfires typically occur to properties in those riskiest categories.

CA Map“Historically, what we have seen is a very high percentage of losses – close to the 90 percent range – in the ‘high’ to ‘extreme’ category,” Samanta said.

Neil Spector, Verisk’s president of underwriting, was equally concerned about the pervasive drought.

“Worsening drought conditions in the western states indicate that 2015 has the potential to be one of the most devastating wildfire seasons on record,” Spector said in a statement.

An El Nin׉o pattern appears more than likely, but it’s debatable whether that will yield greater or fewer big wildfire outbreaks in California.

Samanta acknowledged the periodic weather pattern could bring more storms early on in the fall, California’s traditional wildfire season, and make for potentially more wildfires. However, it could just bring more rain and fewer wildfires, he said.

Heath Hockenberry, national fire weather program manager for the National Weather Service, said it’s likely El Nin׉o will bring more rain.

“California this summer is entering into a predictive strong El Nin׉o,” Hockenberry said.

Because of the potential El Nin׉o, Hockenberry’s current outlook is for a normal fire season for most of California, except for areas of Northern California where vegetation (fuel) growth has been strong in the last few years, as well as some parts of Southern California. He’s also forecasting above normal fire seasons for Washington, Oregon, and parts of Arizona, Idaho and Hawaii.

CA TableThe latest U.S. Drought Monitor report shows most of California and some of Nevada to be under “exceptional” drought conditions, the most several rating in that report. Even the normally wetter northern portion of the state is under “extreme” of “severe” drought categories.

Rains in May and an unusually dizzily June didn’t help much, according to the drought report.

The report shows that no improvements were made to the four-year-and-counting drought picture and it called the long-term hydrologic conditions “dire.”

“In fact, the green-up of vegetation and sprouting of grasses will most-likely provide extra fuel for wildfires,” the report states.

The Verisk report shows the top five California counties with the most homes in the riskiest categories are:

Los Angeles (444,200)
San Diego (251,100)
San Bernardino (112,200)
Ventura (81,600)
Alameda (76,800)

After California Texas has the next most homes (706,200) considered high to extremely high wildfire risk, followed by Colorado (363,900), Arizona (227,100), Idaho (163,500), Washington (157,900), Oregon (153,400), Oklahoma (148,800), Montana (130,200) and Utah (128,800).

The report shows states with the highest percentage of households at high or extreme risk of wildfire are Montana (27 percent), Idaho (25 percent), Colorado (16.4 percent), California (15.0 percent) and New Mexico (13.9 percent).

Related:

El Niño Strengthens as Pacific Temperatures Show Same Trend as ’97-’98
Report: 4.5 Million Homes in 13 States at Extreme Wildfire Risk
Report: Wildfire Risk to Homes in West Tops $237B
Effective Wildfire Prevention Hampered by Liability, Weather, Development
Verisk Expands Wildfire Risk Service to 3 More States

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Judge Denies Uber Arbitration in Dispute with Drivers


Judge Denies Uber Arbitration in Dispute with Drivers

Uber lost a bid to force arbitration in a lawsuit brought by its drivers, as a U.S. judge ruled the smartphone-based taxi service’s 2013 and 2014 employment contracts dealing with arbitration from were “unconscionable, and therefore unenforceable.”

The ruling, from U.S. District Judge Edward Chen in San Francisco on Tuesday, allows the lawsuits over driver background checks to continue in federal court. Arbitration is generally viewed as a more friendly forum for corporate defendants.

The decision is the latest in a host of legal and regulatory challenges facing Uber. Earlier this year, the same judge rejected Uber’s bid to deem its drivers independent contractors, which would have prohibited them from recovering a range of expenses. Chen said a jury would decide that question.

In a statement on Wednesday, Uber said it disagreed with the arbitration ruling and plans to appeal.

Plaintiff Ronald Gillette sued Uber late last year after he was told something surfaced in his consumer background report, and he was terminated. The lawsuit is a proposed class action alleging violations of fair credit reporting laws, among other claims.

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In the ruling this week, Chen said drivers’ right to opt out of arbitration was “illusory” because the language was buried on the second-to-last page of the 2013 agreement.

Andrew Lee, an attorney for Gillette, said they are pleased and look forward to litigating the merits of the case. The ruling could make it possible for more drivers to join other class actions currently pending against Uber, Lee said.

The case in U.S. District Court, Northern District of California is Ronald Gillette et al. vs. Uber Technologies et al., 14-5241.

(Reporting by Dan Levine; Editing by David Gregorio and Cynthia Osterman)

Related:

Uber Launches Safety Effort As Security Issues Mount
San Francisco Prosecutor Issues Warning to Lyft, Uber, Sidecar
Uber Ads Lie About Superior Safety California, Cabbies Say
Juries to Decide If Uber, Lyft Drivers Are Independent Contractors Copyright 2015 Reuters. Click for restrictions.

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Ironshore Names Whitehead Chief Underwriting Officer for Special Casualty


Ironshore Names Whitehead Chief Underwriting Officer for Special Casualty

Ironshore Inc. has named Kevin Whitehead as executive vice president and chief underwriting officer of the Specialty Casualty unit.  He will be responsible for setting underwriting guidelines and strategies for existing and new product lines for Specialty Casualty nationwide.

He is based in the New York office, reporting to Tim McAuliffe, president of Ironshore Specialty Casualty.

Whitehead has 25 years’ experience in underwriting and managing specialty lines for leading insurance companies.  He joins Ironshore from Zurich, where he served as senior vice president and head of Excess Casualty for seven years.  In 2011, Whitehead led the newly formed Excess Casualty unit for Global Corporate in North America.

After 10 years with Chubb Insurance Co., he served as underwriter for the Casualty Facultative Reinsurance Unit at CNA Re in the East Region.  He has held various senior management positions with AIG, including executive vice president and head of National Accounts Excess Casualty for American Home.

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Health Insurers Ask Pennsylvania Regulators for Big Rate Hikes


Health Insurers Ask Pennsylvania Regulators for Big Rate Hikes

A national upswing of health insurance rates is coming to Pennsylvania, and that could mean bigger-than-expected cost increases next year for at least a couple hundred thousand Pennsylvanians who bought insurance in the marketplace created by the 2010 federal health care law.

Last week’s deadline to file paperwork with the state Department of Insurance showed that some insurers selling plans on the marketplace want rate increases of almost 10 percent — or well above that — in one or more of their plans.

At one end of the spectrum is an individual health plan offered by a subsidiary of Milwaukee-based Assurant Health that is seeking an average 61 percent rate increase. About 3,300 people are covered by it now, according to the company’s filing.

At the other end is a group of plans for both individuals and small groups offered primarily by Harrisburg-based Capital Blue Cross. Rates in those plans would remain basically unchanged, according to company filings.

The Department of Insurance emphasized that it must approve any rate increase and that nothing is final.

“A key thing we want to stress is these are proposed rates only, so they may not be what the rates are come the fall,” said department spokesman Ron Ruman. “We have the authority to review them and we are going to do that very carefully and our top priority is consumer impact. That’s important for folks to know.”

Antoinette Kraus, executive director of the Pennsylvania Healthcare Access Network, which works to help people get insured, said proposed rate increases last year also came down before they were finalized for 2015. One thing to consider, she said, is that if the rates go up, so will the size of the tax credits.

According to federal figures, about 473,000 Pennsylvanians enrolled in insurance plans for 2015 sold through the marketplace. Of those, about four in five people — 382,000 — qualified for a tax credit to help cover the cost of monthly premiums, according to the figures.

Analysts say that it is difficult to make across-the-board generalizations about the proposed rate increases.

Some insurers may have underestimated actual claims — Assurant says its prior year rates did not fully account for the claims it experienced — or are seeking a significant increase on a relatively low rate. Some plans may be attracting an unusually high proportion of people who are heavier users of health care.

In any case, the marketplace is a new experience for insurers, and they will be basing their 2016 premiums on a full year’s worth of data, the first time that’s happened on the 17-month-old exchanges.

“There’s a lot they have to learn: What the markets are and the profile of the people who are enrolling,” said Robert Town, a professor of health care management at the University of Pennsylvania. “They really went into it pretty blind, so it’s not surprising that they have to make adjustments.”

In some cases, insurers know that state regulators will pare down their requested rate increases, and insurers account for that in their original request, Town said.

Rates for 2016 should be final by early October. Enrollment for 2016 begins Nov. 1, giving people weeks to shop for a plan.

Some of the bigger increases are being requested by Pittsburgh-based Highmark, including a 25 percent increase for an individual plan that covers about 118,000 enrollees in western Pennsylvania.

Highmark spokesman Aaron Billger attributed the increases to heavy use of services, including expensive prescription drugs, by people who had not had insurance before they enrolled.

Nearly 50 percent of its marketplace enrollees were new to Highmark, and the insurer knew little about their insurance history, Billger said. That includes enrollees who rack up huge insurance bills, and then stop paying their premiums, Billger said.

“That’s an example of sort of what’s driving costs for everyone,” he said.

 

Copyright 2015 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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MarketScout Launches New High Net Worth Underwriting Facility


MarketScout Launches New High Net Worth Underwriting Facility

MarketScout, the national electronic insurance exchange and specialty MGA, has expanded its specialty high net worth underwriting practice with the addition of a new non-admitted $3.1 billion facility targeting agents with specialty expertise in the high net worth homeowners segment.

This exclusive new facility is only available to members of the Council for Insuring Private Clients.

According to Brian Botwinick, MarketScout’s senior vice president and lead underwriter for the facility, the practice will have a nationwide appetite and broad non-admitted coverages designed specifically for those with a specialty expertise in insuring private clients.

Underwritten by a consortium of international insurers, the facility is available in all 50 states for homeowners, builders risk, wind, quake, brush, and other unprotected risks, which are not eligible for standard market placement.

MarketScout is an insurance distribution and underwriting company headquartered in Dallas. The firm is a Lloyd’s Coverholder and MGA for U.S. insurers. MarketScout owns and operates the MarketScout Exchange as well as over 40 other online and traditional underwriting and distribution venues. MarketScout founded the Council for Insuring Private Clients (CIPC) and the Entrepreneurial Insurance Alliance (EIA). MarketScout has offices in California, Connecticut, Florida, Illinois, Indiana, Michigan, Nebraska, New Jersey, Rhode Island, Tennessee, Texas, and Washington, D.C.

 

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Alliant Insurance Services Names Strassner Managing Director in California


Alliant Insurance Services Names Strassner Managing Director in California

Alliant Insurance Services has named Jeffrey Strassner a managing director in surety in its construction services group.

Strassner is based in the Los Angeles, Calif. office. He is charged with expanding the commercial surety expertise at Alliant and delivering contract surety advice to construction firms.

Strassner has 28 years of experience in construction, commercial, environmental and international surety. Prior to Alliant, he was a managing director at a retail insurance broker. He also has experience as a surety underwriter with Safeco Insurance.

Newport Beach-based Alliant is a large insurance brokerage that provides property/casualty, workers’ compensation, employee benefits, surety and financial products and services.

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Texas Pounded by Weather Extremes in May


Texas Pounded by Weather Extremes in May

Even though it means the commencement of hurricane season, weather-beleaguered Texans are likely pleased that May 2015 has come and gone.

Texas was pelted during the month of May with all kinds of violent and deadly weather, including hail storms, an unusually high number of tornadoes, high winds, torrential rains and massive flooding.

The Associated Press reported that at least 31 people were killed in storms that began in Texas and Oklahoma over Memorial Day weekend. Twenty-seven of the deaths have been in Texas, and at least 10 people were still missing as of June 1.

While the violent May weather — tornadoes and flooding in particular — caused significant property damage, the ratings agency A.M. Best suggests that insurers operating in Texas likely will not be subject to ratings actions as a result.

While property insurers will face claims from tornadoes, wind and hail, in a briefing titled, “Southern Plains Rain and Flooding to Have Minimal Impact on Regional Writers,” Best noted that property insurers have relatively little exposure to flood losses as flooding is not covered in a standard homeowners policy.

As of May 29, the Federal Emergency Management Administration, which manages the National Flood Insurance Program, had not yet reported loss figures for Texas. Texas ranks number two, behind Florida, in the number of flood insurance policies in force.

Auto insurers may be the hardest hit from the massive flooding that has occurred in Texas. The Insurance Council of Texas estimated that auto losses from flooding may go as high as $350 million.

Still, A.M. Best said the “impact on most auto physical damage writers is anticipated to be mitigated given the generally large economies of scale of major writers in the market.”

The National Insurance Crime Bureau warned that many of these flood damaged autos could be put up for sale without any indication that they were impacted by flooding. The NICB said it is working with law enforcement agencies, insurance and car rental companies to identify and catalog water-damaged vehicles to keep them from being resold to unsuspecting consumers.

In Texas, the most weather-related deaths occurred in Memorial Day flooding in Wimberley when the normally tame Blanco River rose hard and fast. Others were killed in tornadoes in Van, Eastland and Milam County during May, the ICT reported.

Texas Governor Greg Abbott declared 70 Texas counties as disaster areas as a result of tornadoes and flooding, and on May 29, President Obama issued a disaster declaration for Harris, Hays and Van Zandt counties.

The number of tornado watches in Texas during the month was three times higher than the norm, according to the storm prediction center in Norman, Okla.

Greg Carbin, warning coordination meteorologist for the center, said the state also had an explosion of super cell thunderstorms during May, which caused hundreds of millions of dollars in damage from the Red River to the Gulf of Mexico.

“There was no shortage of weather catastrophes this past month and insurance companies and adjusters have been working overtime in reaching all of those who have had property damage,” said Mark Hanna, a spokesman for the Insurance Council of Texas. “Building contractors and auto body shops will have plenty of work in the coming months.”

The lead meteorologist for AnythingWeather, Joshua Jans, said 68 Texas counties had golf ball size hail or larger in May.

“Texas had 18 days in May where golf ball size hail was recorded and hail was reported in Texas for eight straight days from May 4 – 11,” said Jans.

Hurricane Season Begins

June 1 signified the official start to the Atlantic hurricane season and forecasts predict fewer than normal named storms for this year.

Colorado State University researchers Philip Klotzbach and William Gray said cooler ocean temperatures and favorable atmospheric conditions likely will continue through the summer months, resulting in fewer hurricanes.

The Gulf Coast and East Coast both have a 15 percent chance of getting hit by a hurricane this year, well below the average of 30 percent, the researchers say. Their forecast released in April called for seven named storms, three of which are predicted to become hurricanes with wind speeds of 74 mph or higher.

But just one storm can make a huge difference. For instance, in 1992 only one major hurricane was predicted. That was the year Hurricane Andrew hit South Florida, including Miami, with Category 5 winds. Andrew caused $15.5 billion (1992 dollars) in Florida and Louisiana, making it at the time the costliest hurricane ever to hit the United States, according to the Insurance Information Institute.

Two of the nation’s costliest hurricanes caused damage in Texas: Hurricane Ike in 2008 ($12.5 billion total, $9.8 billion in Texas) and Hurricane Rita in 2005 ($5.6 billion total, $2 billion in Texas), according to the I.I.I.

Insurance Council of Texas and Associated Press reports contributed to this story. Graphic provided by AnythingWeather.

Related:

Damage Assessments Begin as Texas Flooding Recedes
Deadly Storms Leave Devastation Behind in South Central States
Van, Texas, Tornado Blamed for $40M in Damage
5 Dead After Twisters Hit Texas, Arkansas
Is This the End of Active Hurricane Era?

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US Appeals Court Revives Suit in NH School’s Missing Policy Case


US Appeals Court Revives Suit in NH School’s Missing Policy Case

The U.S. Court of Appeals for the First Circuit has revived a New Hampshire private school’s lawsuit seeking to prove that it is still covered by an insurance policy from almost 50 years ago even though there are no longer any copies of the policy and there is no definitive proof of the policy’s existence.

In reviving the lawsuit previously dismissed by the U.S. District Court in New Hampshire, the U.S. Court of Appeals in Boston stated on May 27 that the school made “a plausible showing” that the policy had been issued by the New Hampshire Insurance Co., a unit of American International Group, for the 1967-1968 school year.

The case involves the Cardigan Mountain School, a private middle school in Canaan, New Hampshire. The court documents show that in 2013, the school received a demand letter asserting a claim based on events that allegedly occurred during the 1967-1968 school year. No further details about the claim were provided.

In response, the school asked the New Hampshire Insurance Co. to defend against the claim as the carrier of the school’s comprehensive general liability insurance policy for that time.

But the insurer rejected the request, explaining that the company was not able to locate any policy covering the school for that time period, and thus it was not the school’s carrier at that time and had no duty to defend against this claim.

The school didn’t find a copy of the policy in its own records either and subsequently filed this lawsuit in New Hampshire state court. New Hampshire Insurance Co. then removed the suit to federal court.

New Hampshire Insurance Co. moved to dismiss the suit for failure to state a claim. The U.S. District Court in New Hampshire granted the insurer’s motion and dismissed the suit, concluding that the school’s complaint did not plausibly show the existence of the policy. The school’s appeal followed.

In its lawsuit, the school offered circumstantial evidence to prove that it had insurance with the carrier during the policy year in question. The school provided an audit report for the school dated September 1971, which showed that from September 1970 to September 1971, the school had a “Special Multi-Peril” insurance policy from New Hampshire Insurance Co. and that the policy included $1,000,000 in general liability coverage.

The school then stated in its complaint that one of the principals in the accounting firm that prepared the audit report believes that if the school had changed carriers between the 1969-1970 school year and the 1970-1971 school year, “then the auditors would have noted the change.” But no such change was noted in the audit report.

The school also quotes its former business manager from the 1967-1970 period who said he is “certain the school had insurance during his tenure” and that he does not believe the school changed carriers while he worked as business manager.

The school also said in the complaint that its former business manager at the time worked with a local insurance brokerage to secure the school’s insurance, and that brokerage “had a close association with” New Hampshire Insurance Co. and “advised most of its commercial clients like Cardigan to place their commercial lines of insurance with New Hampshire Insurance Co.”

In response, New Hampshire Insurance Co. argued that, except for the allegation concerning the audit report, the school’s lawsuit brings “nothing more than speculation and conjecture.” The District Court agreed with the insurer and dismissed the suit.

But in overturning the District Court’s decision and reviving the lawsuit, the U.S. Court of Appeals ruled that the school’s arguments are specific and factual. The complaint refers to individuals with relevant knowledge who are recalling facts plausibly known to them, the U.S. Court of Appeals said.

“We thus conclude that the school’s allegations set forth above are entitled to the presumption of truth at the motion to dismiss stage,” the U.S. Court of Appeals stated. “In our view, although the question is close, the school’s allegations, and the ‘reasonable inferences’ we must draw from them, do make a plausible showing that New Hampshire Insurance Co. issued an insurance policy to the school for the 1967-1968 school year.”

The U.S. Court of Appeals stated that the school has alleged specific facts concerning an audit report that showed that the school had an insurance policy from New Hampshire Insurance Co. as of 1971. The school then linked that to the recollections of specific individuals involved in relevant events who expressed the view that the school had a general liability policy in the preceding years, including the 1967-1968 school year, and that there had been no change in carrier during that period.

“We thus reverse the District Court’s dismissal of this action for failure to state a claim, and we remand the case for further proceedings consistent with this opinion,” the Court of Appeals stated.

However, the Court of Appeals also noted that whether the school can provide the evidence that will be required to make the more demanding showing the school will need to make as the lawsuit moves forward is, “of course, a different question that we need not address in this appeal.”

The case is Cardigan Mountain School, Plaintiff, Appellant, v. New Hampshire Insurance Company, Defendant, Appellee, No. 14-2182, May 27, 2015, U.S. Court of Appeals for the First Circuit.

 

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Crawford Names Fraser as EVP of Strategy Performance Development to Atlanta Office


Crawford Names Fraser as EVP of Strategy Performance Development to Atlanta Office

Crawford & Company, a global independent provider of claims management services, has named Ken Fraser, a senior claims and risk management executive, as its executive vice

president of strategy and performance development. In this role, Fraser will partner with business segment leaders and corporate executives to conceive and execute strategic, long-term financial plans for Crawford.

Ken Fraser

Ken Fraser

He will lead a team of professionals around the world in managing the company’s corporate financial planning and analysis, strategy and its Manila-based Global Business Services Center from the company’s Atlanta headquarters.

He also will develop analyses of the competitive landscape to contribute to decisions about new markets, products and pricing. Fraser’s responsibilities will also include managing the enterprise risk management function for the company and evaluation of merger & acquisition opportunities. Fraser reports to President and Chief Executive Officer Jeffrey T. Bowman and becomes a member of Crawford’s Global Executive Management team.

Most recently, Fraser was executive vice president for Wells Fargo Insurance, where he was responsible for the company’s Risk Management, Benefits and International Practices as well as its BridgeStreet Consulting Group and the Wells Fargo Global Broker Network. Prior to that role, for approximately 25 years he served in a variety of regional and national management positions with several of the Marsh & McLennan Companies in the USA and UK.

Fraser holds the certifications of a Fellow of the Chartered Insurance Institute (FCII), a Fellow of the Institute of Risk Management (FIRM) and Chartered Insurance Broker (CIB), and is an Arbitrator for the State of Georgia. He holds a bachelor’s degree with Commendation in Risk Management from Glasgow Caledonian University in the United Kingdom.

Crawford & Company’s global network serves clients in more than 70 countries.

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CNA Enhances General Liability Coverage for CNA Paramount


CNA Enhances General Liability Coverage for CNA Paramount

CNA has enhanced package policy for mid-sized businesses, CNA Paramount, to offer broader, more flexible, proprietary general liability coverage.

The new enhancement includes industry-specific general liability extension endorsements (GLEEs). Through these industry-specific GLEEs and CNA Paramount’s modular structure, agents can customize coverages for the needs of their clients.

The seven proprietary GLEEs include:

Architects and engineers
Contractors
Financial institutions
Manufacturers
Real estate
Technology
Basic general liability

CNA Paramount General Liability is currently approved in 46 states.

CNA’s insurance products include standard commercial lines, specialty lines, surety, marine and other property and casualty coverages. CNA’s services include risk management, information services, underwriting, risk control and claims administration.

 

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