All posts by Maria Sassian

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.

Business Insurance, Insurance Industry, Regulation

Assessing Financial Support for Businesses During the Pandemic

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On September 29, the American Action Forum (AAF) hosted an event convening experts to discuss the urgency of government-backed financial relief for businesses whose incomes have suffered under the coronavirus pandemic conditions and what challenges lie ahead.
 
Entitled “Assessing Financial Support for Businesses During the Pandemic,” the discussion was centered on the following key topics:

  • The impact and success of the Paycheck Protection Program and the Federal Reserve’s emergency lending programs, particularly the Main Street Lending Program
  • Pandemic business interruption insurance and the potential for a federal pandemic program
  • Protecting businesses from shouldering excessive costs due to the new field of coronavirus litigation

Among the event participants was Insurance Information Institute (Triple-I) CEO Sean Kevelighan. In a discussion with AAF’s Director of Financial Services Policy Thomas Wade, Kevelighan provided an overview of the business interruption (BI) insurance landscape in the context of the pandemic. Key highlights included:

  • Global pandemics are largely uninsurable. “Compared to other covered catastrophes—hurricanes, wildfires, vandalism from civil unrest—a pandemic is not limited to time or geography. What we’re seeing now with COVID-19 is impacting every community, every economy, and all at the same time. And with this, from an industry that relies on the law of large numbers, you simply can’t price risk in a way that would be efficient.”
     
  • Standard business interruption (BI) insurance necessitates direct physical damage. “Beyond the enormity of a pandemic catastrophe, a virus does not cause direct physical damage, which is nearly always needed to trigger a property insurance policy, particularly for businesses insurance and business interruption insurance policies.”
     
  • The lack of a federal system to provide the critical financial relief businesses has created an opportunity for trial attorneys to capitalize on business owners’ desperation. “Sensing [business owners’] desperation, trial attorneys have unfortunately dusted off their playbooks and seized on the opportunity. They’re selling a false sense of hope to consumers; they’re filling court houses with litigation that is attempting to retroactively rewrite contracts by manipulation of language and interpretations.”
     
  • As insurers work to meet promises for policyholders facing covered events such as wildfires, forcing insurers to retroactively cover pandemic-related losses is detrimental to the insurance industry—a backbone of the economy. “The insurance industry is concerned about these misguided and costly attempts—mainly by trial attorneys—to take capital away that we’ve set aside for claims that are actively being paid right now as we are in the midst of extreme seasons of hurricanes and wildfires. We’ve also seen incidents of rioting and civil unrest. To be clear, our own economic analysis at Triple-I shows that any attempt to retroactively pay business interruption claims would put systemic strain on the insurance industry. Notably, this industry was one of the financial services industries that weathered our previous recession well because of how safely we manage our capital. But in this case, it would only take a matter of months to bankrupt the industry.”

More about this discussion and the broader state-of-play for business relief is available from a companion report released by Thomas Wade. For more information on the ongoing business interruption debate, visit fairinsure.org

A recording of the event can be viewed below.

Health & Safety

Is COVID-19 covered by disability insurance?

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Many people are wondering if disability insurance will cover them if they come down with COVID-19. The answer, as is often the case, is a qualified yes.

There are basically three types of disability income insurance: Employer-paid disability insurance, Social Security disability benefits and individual disability income insurance policies.

Short-term disability insurance may cover coronavirus if your illness requires medical quarantine that leaves you unable to complete your work.

For disability coverage to apply “there has to be a medical reason you can’t work” according to Nicholas Mancuso, manager of the disability and advanced planning team at Policygenius. Social quarantines, such as when states mandate that people work from home, do not qualify you for disability benefits.

Some survivors of COVID-19 are reporting lingering symptoms, including fatigue, joint pain, and shortness of breath. These people may be eligible for long-term disability.

“It’s generally more difficult to qualify for long-term disability benefits with the coronavirus because of elimination periods for long-term policies,” said Mancuso.

The elimination period of a disability insurance policy is how long you must be unable to work — for medical reasons — before you can start receiving benefits. Long-term disability policies have elimination periods of at least 90 days.

Employer-paid disability insurance is required in most states, and so is the most common. Most employers provide some short-term sick leave. Many larger employers provide short-term and long-term disability coverage as well, typically with benefits of up to 60 percent of salary lasting from five years to age 65. In some cases, long-term disability insurance is extended for life. Disability benefits from employer paid policies are subject to income tax.

However, individual disability income insurance policies are the best way to ensure adequate income in the event of disability for most workers, even those with some employer-paid coverage. When you buy a private disability income policy, you can expect to replace from 50 percent to 70 percent of income. Insurers won’t replace all your income because they want you to have an incentive to return to work. However, when you pay the premiums yourself, disability benefits are not taxed.

But unfortunately not many people have individual disability income insurance. More than half of U.S. workers forego disability coverage, according to a recent study. And baby boomers, who are more likely to get injured or sick, are even more likely to forego the coverage (7 out of 10).

If you are 40 years old, you have about a 40 percent chance that between now and age 65 you’ll be disabled for 90 days or more for any reason. Injury accounts for 10-15 percent of the reasons why people have long-term disability. Illness is the other 85-90 percent. And if you are disabled for 90 days or more, there is about a 50 percent chance that you’ll continue to be disabled for up to two years, according to Triple-I’s chief economist Dr. Steven Weisbart.

Disaster Resilience, Technology

Virtual Discussion: Responding to Disaster During a Crisis

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On September 24 a virtual discussion hosted by the Department of Homeland Security’s Science and Technology Advisory Committee will inform community leaders about how new science and technology applications are enhancing resilience and protecting lifeline systems and networks.

During the discussion experts will describe how technologies can inform risk-based decision-making in areas of neighborhood health monitoring, supply chains, evacuation planning, crisis communications, and information sharing among frontline responders. Innovation in predictive analytics, modeling and simulation, and mobility offer new solutions to tackle immediate challenges and prepare for emerging threats.

The panel will also cover how new public-private partnerships are accelerating new solutions and business models to prepare for day-to-day emergencies.

The discussion will include Michel Léonard, PhD, CBE, Vice President & Senior Economist, Insurance Information Institute; and Richard Seline, Managing Director, ResilientH20Partners.

About the virtual discussion:

September 24, 2020. 1:00 – 2:30 p.m. ET

Click here to register.

Speakers:

David Maurstad, Deputy Associate Administrator, FEMA

Duane Caneva, Chief Medical Officer, DHS Countering WMD Office

Ted Smith, Ph.D., Wastewater Based Epidemiology, Professor of Environmental Medicine, University of Louisville and Advisor to Louisville Mayor, Greg Fischer

Catherine Cross, Deputy Under Secretary, DHS Science and Technology Directorate (S&T)

David Corman, Program Director, Cyber-Physical Systems and Smart and Connected Communities, National Science Foundation

Richard Seline, Executive Director, Accelerate H2O, Houston, Texas

Michel Léonard, Vice President and Senior Economist, Insurance Information Institute

Moderator: David Alexander, Director of Resilience Research and Partnerships, DHS S&T

The Insurance Information Institute’s Resilience Accelerator was created to build awareness and adoption of insurance as a frontline defense against the impact of extreme weather events on households, businesses and communities.

Business Insurance, Business Risk, Disaster Preparedness, Insurance Industry

Small businesses share how they prep for and successfully recover from disaster

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September is National Preparedness Month, and this years’ theme of “Disasters Don’t Wait. Make Your Plan Today” could not be more timely as many areas of the country experience record-breaking wildfires and storms.

On September 16, the Insurance Institute for Business & Home Safety (IBHS), the Small Business Administration (SBA), and the Insurance Information Institute (Triple-I) conducted a live webinar on how to prepare for severe weather, COVID-19 interruptions, and other forms of disaster that can have significant impacts on small businesses.

A recording of the webinar is available here.

The webinar showcased two small businesses’ stories of preparation and recovery from disaster. The webinar also covered small business loans that are available after a disaster, tools are available to help businesses prepare, and what you need to know about insurance coverage.

Alex Contreras, Director of the Office of Preparedness, Communication and Coordination in the SBA’s Office of Disaster Assistance (ODA), was the first speaker. The SBA offers low-interest disaster loans to businesses of all sizes, as well as to homeowners and renters. These loans are the primary source of federal assistance to help private property owners pay for disaster losses not covered by insurance.  Borrowers are required to obtain and maintain appropriate insurance as a condition of most loans.

The SBA can also fund disaster mitigation efforts, such as installing fire-rated roofs, elevating structures to protect from flooding or relocating out of flood zones.

Janice Jucker, co-owner at Three Brothers Bakery in Houston, TX is the  2018 Phoenix Award Winner for Outstanding Small Business Disaster Recovery. After Hurricane Harvey, the bakery had five feet of water. Thanks to a business recovery plan, the business was fully operational after six weeks.

According to Jucker, part of an effective recovery plan is building a recovery team that includes a restoration company (find one now, don’t wait) an accountant, a contractor, an SBA loan officer and an insurance agent. Another important recovery team member is your local lawmaker – know who they are and make sure they know you, regardless of whether you agree with their politics. They can play a key part in making sure you get what you need to recover from a disaster.

Gail Moraton, business resiliency manager at IBHS, talked about the free business continuity planning tool called OFB-EZ (Open for Business E-Z) available from the IBHS.  The first step to planning is to know your risk – both the likelihood of each type of disaster for your location and the amount of damage it could cause your business. Another step is having an up-to-date list of all your employees, vendors and other important contacts. A training exercise is also included with the planning tool.

Alison Bishop, internal operations manager at Spry Health Inc., talked about her company’s use of OFB-EZ. “It takes an overwhelming concept and makes it accessible and achievable,” she said.

Loretta Worters – vice president, media relations at Triple-I, went over different business insurance coverages that are available and pointed out that having the right coverage is a crucial part of disaster recovery, as well as an essential element of an overall business plan.

Like the other speakers, Ms. Worters said having a thorough inventory of all your business assets is of paramount importance. She listed different types of business policies that are available, including: property, business income interruption, extra expense, flood and civil authority. Separate coverage is also available for items that are frequently damaged in a storm, such as fences and awnings.

Click here to listen to a recording of the webinar, which offers many more useful tips for seeing your business through a disaster.

Floods, Insurance Industry

Tropical Storm Beta Moves Toward Texas Coast

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The outer bands of Tropical Storm Beta are lashing the Texas coast but official landfall is forecast to be late this evening. Beta is also bringing tropical storm conditions to parts of the southwestern Louisiana coast where 2 to 4 feet of storm surge is possible.

The storm is going to bring heavy rainfall to areas that were hit by Hurricane Laura.

High tide on Tuesday could bring “life-threatening storm surge” in areas of Texas and Louisiana, according to the National Hurricane Center (NHC). “Persons located within these areas should take all necessary actions to protect life and property from rising water and the potential for other dangerous conditions,” NHC said. “Promptly follow evacuation and other instructions from local officials.”

The storm could also create tornadoes near the middle-to-upper Texas coast or the southwestern Louisiana coast, NHC said.

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

Disaster Preparedness, Earthquakes

Earthquake Country Alliance’s Minimize Financial Hardship Webinar

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The Earthquake Country Alliance will host a webinar on how to be financially prepared for an earthquake as part of its Seven Steps to Earthquake Safety series.

The webinar will focus on Step 4 – Minimize Financial Hardship. It will include tips on organizing important documents, strengthening your property and insurance. Experts listed below will discuss each of these elements, along with “live” demonstrations.

Date:   Wednesday, September 23, 2020 Time: 11am – 12pm PDT 

Presenters:

  • Janet Ruiz (Director – Strategic Communications, Insurance Information Institute)
  • Dante Randazzo (Federal Preparedness Coordinator, FEMA Region 9)
  • Janiele Maffei (Chief Mitigation Officer, California Earthquake Authority)
  • Glenn Pomeroy (Chief Executive Officer, California Earthquake Authority)
  • Randy Braverman (Project Manager Earthquake Brace + Bolt Program, Safe-T-Proof)
  • Tim Kaucher (Engineering Manager Southwestern U.S., Simpson Strong-Tie)

Register to attend

You can view recordings, presentations, and other resources for previous webinars:

Step 1 – Secure Your Space

Step 2 – Plan to Be Safe

Step 3 – Organize Disaster Supplies

Disaster Preparedness, Flood Insurance, Homeowners Insurance

Poll: Homeowners Gain in Disaster Prep; Coverage Understanding Still Lags

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The 2020 Triple-I Consumer Poll found that homeowners are protecting their properties against disasters like flooding and hurricanes at a higher rate than previously reported, a welcome development as the 2020 Atlantic hurricane season got off to an early start and is expected to produce a higher-than-average number of storms.

 “The insurance industry’s focus on resilience is starting to pay dividends as more Americans recognize the very real risks their residences face from floods, hurricanes, and other natural disasters,” said Sean Kevelighan, CEO, Triple-I. “There is still time to act. Hurricane Sally today became the eighth named storm to make landfall in 2020 but the Atlantic hurricane season continues through the end of November.”

However, the poll also found that greater consumer understanding on insurance coverage is still needed.

In something of a surprise, 27 percent of homeowners surveyed reported they have flood insurance, the highest level of flood coverage reported since the Triple-I began asking Americans this question in 2007. Most insurance industry and FEMA National Flood Insurance Program (NFIP) sources estimate anywhere from 10 to 15 percent of U.S. residences are covered under a flood insurance policy.

It is possible a number of Triple-I Consumer Poll respondents with homeowners insurance believe they have flood coverage when they actually do not. The discrepancy between those who have flood insurance and those who think they do gives insurers an opportunity to inform their customers about the need to purchase flood insurance, either from the NFIP or a private insurer, according to the Triple-I.

In addition to floods and hurricanes, the poll looked at how Americans assessed their risks from wildfires and earthquakes and surveyed the percentage of U.S. drivers who received auto insurance premium relief this year after the pandemic reduced miles driven nationwide. 

The poll was conducted in July and is available here.