Monthly Archives: October 2020

Disaster Preparedness, Earthquakes

Drop, Cover, and Hold On – Great Shakeout Earthquake Drills Take Place on October 15

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About half of all Americans are at risk of ground shaking from earthquakes. That’s why practicing what to do in the event of a quake is so important and why over 11 million people worldwide (and counting) are participating in this year’s Great ShakeOut earthquake safety drill on October 15.

The Great ShakeOut Earthquake Drills is a worldwide earthquake safety movement. Most participate by registering to practice “Drop, Cover, and Hold On.”

ShakeOut organizers recommend people follow the Seven Steps to Earthquake Safety, which starts with Step 1: Secure Your Space. Most earthquake injuries are entirely preventable and are caused by furniture and other objects that move or break when shaking occurs, resulting in trips, bruises, cuts, and more. You can secure your space by moving heavy objects down to lower shelves, relocate tall furniture away from entrances and exits, and secure cabinets with latches.

In California, a state where earthquakes are frequent, Earthquake Warning California is coordinating a statewide drill to coincide with ShakeOut. People who have downloaded the MyShake app to their phone will receive a TEST warning at 10:15am with guidance to Drop, Cover, and Hold On!

Due to the COVID-19 pandemic, some participants are adapting their ShakeOut activities through video-conferencing, choosing staggered or alternative dates, and following local health and safety guidelines.

To register for ShakeOut click here.

Additional Resources:

The Earthquake Country Alliance’s Safer At Home Webinar Series offer many safety tips and advice on how to minimize financial hardship.

Triple-I’s Facts & Statistics: Earthquake Insurance

Video: What’s covered by earthquake insurance

Disaster Preparedness, Floods

Hurricane Delta Surges Closer to Gulf Coast

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Hurricane Delta is surging closer to the U.S. Gulf Coast and is expected to land on the evening of October 9 somewhere on Louisiana’s southwest coast. Dr. Phil Klotzbach, CSU research scientist and Triple-I non-resident scholar gives an update on Delta in the video clip above.

The hurricane has grown in size since yesterday and a large area of the country will see impacts from the storm. Hurricane warnings are in place from High Island, TX to Morgan City, LA, and storm surge warnings extend from High Island, TX to the mouth of the Pearl River.

In addition to strong winds Delta is expected to bring storm surge as high as 7 to 11 feet along the coast of central LA, rainfall totals are forecast to be from 5 to 10 inches from southwest to central LA, with isolated totals of up to 15 inches.

Delta is on track to hit the same area of Louisiana where Hurricane Laura landed only six weeks ago. New Orleans, which will likely miss the storm, was still preparing for the possibility of tornadoes. Louisiana Gov. John Bel Edwards declared a state of emergency.  Mississippi Gov. Tate Reeves also declared a state of emergency, with forecasters saying southern Mississippi could see heavy rain and flash flooding.

Business Risk, Legal Environment

Tort Reform Group Promotes “Lawsuit Abuse Awareness”

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While ridiculous sounding lawsuits are common in our litigious society, some stand out because they sound so preposterous they could have been the plot of a “Seinfeld” episode.

For example, in 2019 an infamous Long Island attorney nicknamed the “Vanilla Vigilante,” sued Whole Foods for $5 million, claiming the store’s vanilla soy milk is flavored with ingredients in addition to vanilla. The American Tort Reform Association (ATRA) highlights this case and others as part of Lawsuit Abuse Awareness Week (October 5-9).

Food disappointments appear to be a common theme among these suits:

  • A December 2019 complaint filed in federal court alleged a Panera blueberry bagel purchased in Manhattan didn’t contain blueberries but “dyed lumps.”  The complaint argues that the bagel’s advertising breached the New York Deceptive and Unfair Trade Practices law, among others. 
  • A May 2020 lawsuit contends that Haagen-Dasz milk chocolate coated ice cream bars should be labeled as milk chocolate and vegetable oil coated chocolate bars. The company says vegetable oil is used as an ingredient to help overcome the difficulties of applying a coating of chocolate to ice cream; the oil is not otherwise included in milk chocolate.  
  • A June 2020 lawsuit against a snack food manufacturer alleges the “potato skin snacks” do not contain potato skins but potato starch and potato flakes.

Such cases are fun to laugh about, but increasing willingness of plaintiffs to bring suits of all kinds – and of juries to pay out large settlements, known as “nuclear verdicts” – feeds the phenomenon of social inflation, which drives up claims costs for insurers and premiums for policyholders.

ATRA warns that a wave of such lawsuits is expected against businesses as they reopen during the ongoing COVID-19 pandemic.

Corporate Social Responsibility, Insurance Industry

Insurance Industry’s Week of Giving Kicks Off Saturday Across the U.S.

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The Insurance Industry Charitable Foundation (IICF) invites insurance professionals to volunteer for their community nonprofit organizations during the annual Week of Giving (October 10-17, 2020).

With many in-person projects cancelled this year due to the COVID-19 pandemic, the IICF lists many ways to safely make an impact in the communities where we live and work.

Some of the suggested activities include:

AARP Create the Good: Search AARP’s virtual volunteer database here for an opportunity in your community.

American Red Cross 
– Missing Maps Program
– Blood donation

Hire Heroes USA: Help veterans with mock interviews, career coaching remotely.

Homemade PPE Masks: For healthcare workers, homeless programs/shelters, etc. Many opportunities are listed on VolunteerMatch.com.

Smithsonian Institute: volunteer by transcribing historical documents.

Track bird populations and migration patterns. 

Trevor Project: Trevor Chat/TrevorText volunteers are trained to answer chat messages or texts online from young people who are struggling with issues such as coming out, LGBTQ identity, depression, and suicide. 

United Nations: Apply to volunteer with the UN.

UPchieve: Be a virtual Academic Coach to at-risk students.

Virtual Tutoring –Provide tutoring services and support for high school students in statistics and government courses through virtual Microsoft TEAMS and Zoom platforms.

Write letters to Service Members:
– Operation Gratitude 
– A Million Thanks 

Read more about IICF volunteerism during COVID-19 here.

The IICF also provides volunteering opportunities throughout the year. It has hosted the Week of Giving since 1998, generating over 300,000 hours of volunteer service, and contributing $40 million in community grants since its founding in 1994.

Disaster Preparedness

Delta to be 5th Hurricane to Make U.S. Landfall in 2020

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Residents from eastern Texas to the Florida Panhandle should prepare for Hurricane Delta, which is forecast to make landfall in Louisiana on Friday, October 9.

The National Hurricane Center (NHC) warns Delta’s impacts will include destructive winds, torrential rain, life-threatening storm surge, flash flooding, isolated tornadoes and widespread power outages.

Delta may intensify to a Category 3 storm as it approaches the U.S.’s Gulf Coast states. The region will begin to experience the storm’s impacts on Thursday, October 8.

In what has become the second most active Atlantic hurricane season on record with 25 named storms (there were 27 in 2005), Delta will be the fifth hurricane and record-setting 10th tropical cyclone to make landfall in the continental U.S. this year. Previous 2020 landfalls include Hurricanes Hanna, Isaias, Laura and Sally, and Tropical Storms Bertha, Beta, Cristobal, Fay and Marco.

Preparedness tips for Alabama, Florida, Louisiana, Mississippi, and Texas residents who may be impacted by Delta:

  • Review your evacuation plan and, if you have a pet, your pet’s evacuation plan
  • Make sure your hurricane kit includes a minimum seven-day supply of non-perishable food and drinking water (one gallon per person, per day) for all family members and pets, as well as a one-week supply of medications for everyone in your household. Also include COVID-19 safety supplies such as two face coverings per person and hand sanitizer
  • Write down the name and phone number of your insurer and insurance professional and keep this information either in your wallet or purse
  • Purchase emergency supplies, such as batteries and flashlights
  • Prepare your yard by removing all outdoor furniture, lawn items, planters and other materials that could become airborne in high winds
  • Fill your car’s gasoline tank because long gas lines and fuel shortages often follow in areas impacted by a storm

Damage caused by hurricanes and tropical cyclones are covered under different insurance policies. Wind-caused property damage is covered under standard homeowners, renters and business insurance policies. Renters’ insurance covers a renter’s possessions while the landlord insures the structure.

Property damage to a home, a renter’s possessions, and a business – resulting from a flood – is generally covered under FEMA National Flood Insurance Program (NFIP) policies, if the homeowner, renter or business has purchased one. A growing number of private insurers also offer flood insurance.

Private-passenger vehicles damaged or destroyed by either wind or flooding are covered under the optional comprehensive portion of an auto insurance policy.

Triple-I has additional hurricane and flood preparedness resources:

Hurricane Season Insurance Checklist
How to Prepare for Hurricane Season
Hurricane Season Insurance Guide
Hurricanes and Windstorm Deductibles
Understanding Your Insurance Deductible
Preparing an Effective Evacuation Plan
Settling Insurance Claims After A Disaster
Facts About Flood Insurance
Recovering from a Flood

Business Insurance, Business Risk, Emerging Risks

COVID-19 & Beyond: Study Highlights Claims Trends

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Coronavirus

Commercial insurance loss estimates related to the COVID-19 pandemic vary widely, with Lloyd’s estimating global claims as high as $107 billion in 2020 and analysts from investment bank Berenberg projecting total claims between $50 billion and $70 billion.

But a new Allianz paper says the unprecedented size of pandemic-related claims is only part of the story. The paper discusses the changes in loss patterns and causes spurred by the pandemic that “may be the prologue to more far-reaching and disruptive changes in years to come.”

Shifting exposures

The pandemic has reduced risk in some areas while heightening it in others. The paper points to “material reductions [in claims] in some lines of property and liability insurance, most notably in the aviation sector.”

Reliance on technology and the shift to homeworking for staff and remote monitoring of industrial facilities make companies more vulnerable to cyber-attacks. Reduced air travel and increased emphasis on hygiene standards could benefit the risk profile of many industries, while changes in production line processes to facilitate social distancing could increase error rates.

According to Allianz, the cost of business interruption not related to COVID-19 fell in many cases as many manufacturers, their customers, and their suppliers either shut down or scaled back operations. On the other hand, COVID-19 containment measures have led to longer disruptions and more costly claims in some cases.

“For example, a fire at a chemical plant in South Korea forced the closure of the facility,” Allianz reports. “Restricted access due to the coronavirus lockdown prolonged the reinstatement period, increasing the overall cost of the standstill.”

The hibernation of some industries, such as aviation, doesn’t mean all loss exposures have equally disappeared, Allianz says. They’ve just changed, creating new risk accumulations: “For example, large parts of the worldwide fleet are grounded in airports, many of which might be exposed to hurricanes, tornados, or hailstorms. The risk of shunting or ground incidents, when large aircraft fleets are parked temporarily, also increases and can result in costly claims.”

Business resumption brings its own risks. Opening factories and restarting production lines are high-stress situations that can involve machinery breakdowns and fires.

Eye on supply chains

Allianz points to “the current rethinking and de-risking of global supply chains to achieve more operational resilience” as a trend to watch.

“Many companies are reviewing their supply chain strategies and evaluating options such as parallel supply chains with more redundancies or some reshoring from low-cost countries back to more developed markets,” Allianz says. “This will have an important impact for insurers, both in terms of generating demand for new protection solutions, as well as new claims scenarios.”

Potential also exists for claims to materialize from long-tail lines, such as directors and officers (D&O) or professional liability, as well as workers’ compensation, if any negligence or failures to adequately protect against the coronavirus outbreak have been perceived.

Insurance Industry

Insurance Organizations Are Often Missing This…

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By John Novaria

A wise insurance executive once told me, “People try to make insurance too complicated.” As a communications professional, that was music to my ears.

Don’t get me wrong. Complexity comes with the territory when your job is protecting assets while balancing the interests of policyholders, regulators and shareholders.

There has to be a counterbalance, and that’s why Triple-I exists: to demystify insurance. It’s a meaningful mission given that everyone has numerous encounters with insurance in their lifetime. A product that is essential – and often required by law – should be understandable and accessible.

Behind every insurance transaction there are trade organizations setting rates, lobbying and advocating for consumers. They’re the backbone of an industry that contributes $630 billion to the GDP, employs 2.8 million people and paid $404 billion in claims last year.

All of this doesn’t magically happen. The insurance industry functions effectively only when everyone’s on the same page. There’s power in partnership. And in order to succeed, these organizations rely on communications to work together. In fact, communicating with impact and immediacy has never been more important. In the current crisis, it’s imperative for unifying people, conveying confidence and ensuring transparency.

Over time, Triple-I has seen an increased demand for PR services from trade associations and professional organizations that have limited communications staff or seek a stronger connection to the industry. To address this need, we developed an agency model and engaged professionals with strong communications and insurance background to steer the effort.

The result is Amplify, a public relations consultancy designed to help insurance industry organizations drive increased awareness of their mission and deepen their industry engagement.

Some of our clients are the American Institute of Marine Underwriters (AIMU), Casualty Actuarial Society (CAS), Lightning Protection Institute (LPI), National Conference of Insurance Guaranty Funds (NCIGF), National Insurance Crime Bureau (NICB) and Workers Compensation Research Institute (WCRI). From coalition building to professional development to research, each plays a vital role and has unique communications challenges. To meet those challenges, Amplify draws from the collective resources of Triple-I and The Institutes, delivering a rare combination of insurance acumen and communications proficiency.

Here’s more on Amplify, and in the coming weeks we’ll be sharing some early client successes. If you want to talk about your organization and its challenges and opportunities, I love to listen.

John Novaria is executive director of Amplify. He can be reached at johnn@iii.org.

Disaster Preparedness

Hurricane Delta takes aim at northern Gulf Coast

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Hurricane Delta is strengthening rapidly as it heads for Cancun, Mexico. It’s expected to reach Louisiana by Saturday morning. If the storm makes U.S. landfall, it will become the 10th named storm to do so this year – a new record.

Louisiana Governor John Bel Edwards warned coastal parishes to prepare for the storm now. “It is common for many people to experience hurricane fatigue during a busy season, but we need everyone to take this threat seriously,” he said.

Other states along the northern Gulf Coast expected to be impacted include Mississippi, Alabama and Florida.

Please click on the links below for Triple-I’s hurricane preparedness guides:

Triple-I’s Mark Friedlander offers hurricane safety tips in the video below.

Business Risk, Cyber Risk, Emerging Risks

Ransomware claims rise in severity since start of pandemic

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During the last week in September, Universal Health Services Inc., one of the largest hospital chains in the United States, began taking some ambulances out of service because of disruptions caused by a ransomware attack. Universal said no patients were harmed, but systems that support medical records, laboratories and pharmacies were taken offline at approximately 250 facilities.

This incident is part of a disturbing trend of healthcare institutions being targeted by ransomware attacks  as the software used by hackers becomes more sophisticated and their attacks broader.

While cyber insurance claims impacted businesses of all types and sizes certain industries, including consumer businesses (retail, hospitality and food), healthcare and financial services were more frequent targets of cyberattacks in the first half of 2020, according to a recent report by Coalition, a provider of cyber insurance.

Overall, ransomware (41 percent), funds transfer loss (27 percent), and business email compromise incidents (19 percent) were the most frequent types of loss—accounting for 87 percent of reported incidents and 84 percent of claims paid in the first half of 2020.

“We’ve seen a sharp increase in ransom demands over the past quarter as threat actors have exploited COVID-19 and changes in company operating procedures. Although the frequency of ransomware claims has decreased by 18 percent from 2019 into the first half of 2020, we’ve observed a dramatic increase in the severity of these attacks,” said the Coalition report.

Since email is the single most targeted point of entry for a hacker, taking a few basic email security measures and implementing an anti-phishing solution would go a long way toward securing your business from criminals.

Coalition reports that, for each claim processed, cyber insurance played a critical role in helping the insured recover operationally. For example, a nonprofit organization providing child and family services grants to other nonprofits was duped into transferring $1.3 million to criminals. Coalition worked with law enforcement and the financial institutions involved to recover the stolen funds.