The vast majority of Americans believe COVID-19 relief should come via public policy solutions — and not litigation — according to polling released last week by the American Tort Reform Association (ATRA).
Key takeaways from the poll include:
59% say those harmed by the pandemic should get assistance from policies passed by elected officials, versus just 7% who say they should get payouts from lawsuits;
74% say small businesses affected by COVID-19 should be supported by government grants or loans versus 6% who say lawyers should help small businesses pursue legal claims.
Source: ATRA
More information on the polling results is available on ATRA’s website.
For information on the principles the broader insurance industry has put forth for a government-backed pandemic policy solution, click here
On January 20, in a historic inauguration ceremony surrounded by U.S. soldiers guarding against domestic terrorism — before a field of 200,000 illuminated flags representing Americans who could not attend the ceremony because of the coronavirus pandemic — President Joe Biden and Vice President Kamala Harris were sworn into office.
Sean Kevelighan, CEO, Insurance Information Institute (Triple-I), today released the following statement:
“Every four years—for more than two centuries—the United States has celebrated its Constitution, and that historic document’s invocation of “We, the People,” through the orderly and peaceful transfer of power atop the government’s executive branch. With today’s inauguration of President Joseph Biden and Vice President Kamala Harris, that solemn tradition continues in our nation’s capital only two weeks after unprecedented lawlessness descended upon Washington, D.C.
The U.S. economy is facing extraordinary challenges due to the COVID-19 pandemic. Yet the U.S.’s insurance industry will continue to provide essential financial protections to individuals and businesses while at the same time employing millions of Americans and paying billions of dollars in taxes to support crucial government services. The industry-supported Insurance Information Institute congratulates the Biden-Harris administration as it takes office. We also stand ready to provide its policymakers with the Triple-I’s unique, data-driven insights on insurance to inform public policy.”
The Biden administration has listed COVID-19, economic recovery, racial equity, and climate change among its top priorities.
In coming months, the property/casualty insurance industry is likely to encounter a frenetic pace of legislative activity on many issues affecting its operations. Here are just a few:
Climate Change – Senator Dianne Feinstein’s proposed Addressing Climate Financial Risk Act, intended to help federal regulators understand and mitigate risks from climate change within the financial system, would require a Federal Insurance Office (FIO) report on how to modernize and improve climate risk insurance regulation.
“The insurance industry is more directly affected by climate risk than other areas of the financial system,” said Feinstein’s press release. The report would be modeled on FIO’s 2013 report on modernizing state insurance regulation.
Rep. Carolyn Maloney introduced the Pandemic Risk Insurance Act, which is modeled after the Terrorism Risk Insurance Act enacted after 9/11. However, the bill has yet to gain widespread support. The insurance industry has advanced several pandemic risk mitigation proposals of its own.
Full federal marijuana legalization remains daunting, with a slim Democratic majority, according to Politico, but piecemeal legislation with wider bipartisan support, such as banking access for cannabis businesses and medical marijuana research, may have a better chance to advance. Conflicting state and federal laws have discouraged insurers from participating in the cannabis-related business market.
An expected increase in the corporate tax rate would mean higher tax liabilities for property/casualty insurers.
Risk-based insurance pricing is an issue that’s expected to heat up, and insurers will have to explain to a new set of legislators that the business of insurance hinges on predicting the level of risk a policyholder represents and charging a premium that corresponds with that level of risk.
On January 28, at Triple-I’s virtual Joint Industry Forum, CEOs from five major insurance industry trade associations will share their perspectives and public policy priorities for 2021. Click here to register for the complimentary event.
Auto insurance rates declined in 2020 for the first time in a decade, according to a recent survey by ValuePenguin.com. The survey results anticipate a 1.7 percent decline nationally.
A major factor in the decline are the pandemic-related discounts granted by insurers in 2020. These discounts have been valued at $14 billion, according to Triple-I estimates. Triple-I Chief Actuary James Lynch reported that many auto insurers are building these discounts into rates for 2021 and that driving declined by as much as 50 percent during spring lockdowns.
The estimate of just how much rates are declining depends on the metrics you use. The Consumer Price Index (CPI) report for December 2020 indicates that auto insurance rates declined by 4.8 percent nationwide compared with the same month last year. By contrast, the CPI showed the cost of new vehicles rising by 2 percent in December and by 0.5 percent for the full year 2020.
A comprehensive July 2018 assessment of the Missouri auto insurance market by the state’s Department of Insurance discovered even larger declines. It found that, when adjusted for inflation, the typical Missouri driver has seen a 17 percent decrease in auto insurance premiums since 1998.
The Insurance Information Institute (Triple-I), an affiliate of The Institutes, has released its 2021 InsuranceFact Book, an essential resource for anyone who needs up-to-date information on insurance.
This year The Insurance Fact Book has new content to address many of the past year’s events, in such areas as: insurer response to the pandemic; civil disturbances; and homeowners high-risk markets.
Highlighted in the “Emerging and Evolving Insurance Issues” section are five unique insurance risks that have been impacted by the COVID-19 pandemic: business income (interruption) insurance; workers compensation; extreme weather; social inflation; and cyber.
“2020 provided a good illustration not only ofhow the disruption continuum is evolving, but also how the insurance industry is able to adapt and lead,” said Sean Kevelighan, CEO, Triple-I. “While the year began fairly normally, we very quickly encountered a global pandemic that still rages; a 2020 Atlantic hurricane season for the record books; and Western wildfires that burned their way through homes and businesses. All the while claims for covered catastrophes were paid in new and innovative ways, and many customers experienced premium rebates and returns from auto insurers, given the lack of driving during economic lock-downs.”
The 2021 Insurance Fact Book is a digital publication available for purchase from the Triple-I online store. It is available free of charge to Triple-I members. The Insurance Fact Book, issued annually since the Triple-I’s inception in 1960, helps inform the decisions of policymakers and business leaders and is an essential resource for journalists, researchers, and academics, among others.
The Fact Book includes thousands of facts, figures, statistical tables, and charts documenting primarily the property/casualty insurance industry in the U.S. and worldwide. The publication offers details on auto, homeowners, and business insurance markets, with data on direct premiums written and the factors impacting the cost of these coverages. Additionally, there is voluminous information on the life/annuity insurance and reinsurance industries.
So far, the impact of COVID-19 on workers compensation has not been as great as first feared. The National Council on Compensation Insurance (NCCI) reported that as of the second quarter 2020, out of every 100,000 active workers comp claims, COVID-19 medical claims accounted for only about 200, depending on the jurisdiction.
Still, the pandemic presents uncertainties and concerns for workers compensation, just as it does for many other sectors.
NCCI’s annual survey found that COVID-19 was the top concern of workers compensation executives going into 2021. Executives worry about uncertainty surrounding the duration of the pandemic, the size and number of claims that could develop, recovery time for workers sickened by COVID-19 and whether there would be long-term needs or lasting adverse effects.
Executives also mentioned state compensability presumptions that have arisen during the pandemic. These presumption rules, passed by various states, say that COVID-19 infections in certain workers are presumed to be work-related and covered under workers compensation. This presumption places the burden on the employer and insurer to prove that the infection was not work-related making it easier for those workers to file successful claims.
The executives surveyed by the NCCI expressed concern about the variations developing across states and the complexity of legislation and regulations that adds to the challenge of the rapidly evolving environment. Several noted issues and questions related to reinsurance for presumptive claims. Others are anticipating that compensability presumptions for contagious diseases, such as those instituted for COVID-19, will be widely adopted and permanently enacted or even expanded, in some cases, to include other common diseases.
In many states, immigrants are eligible for workers compensation benefits regardless of their legal status. A recent blog post by a legal expert showed how a decision by the Supreme Court of Nevada reiterated that the state’s workers’ compensation statutes clearly and unambiguously protected every person in the service of an employer, whether lawfully or unlawfully employed. The high court affirmed the judgment of the state district court that denied judicial review to an appeals officer’s decision awarding permanent total disability benefits to an undocumented worker.
2021 is already looking brighter. Triple-I is presenting not one, but two, Joint Industry Forums in 2021! We’re kicking off the year with our virtual forum—Virtually Together: Insuring Our Way Forward—on Jan. 28. Then we’re making plans to gather in June in Washington, DC.
Registration for our first virtual Joint Industry Forum is complimentary. Plus, attendees to the virtual Forum receive a discounted registration for the in-person event.
Our virtual Forum focuses on the industry’s shared work to insure and protect. We have three sessions on tap for the day featuring dynamic industry thought leaders.
Trade Winds Navigation: More Rough Waters or Smooth Sailing Ahead?
Climate Change Risk & Resilience: Facing the Facts
CEO Perspectives
Confirmed Speakers (with more to be announced soon!)
• Tim Adams, President and CEO, Institute of International Finance
• Charles Chamness, President and CEO, National Association of Mutual Insurance Companies
• Sean Kevelighan, CEO, Insurance Information Institute
• Peter Miller, President and CEO, The Institutes
• Frank Nutter, President, Reinsurance Association of America
•David Sampson, President and CEO, American Property Casualty Insurance Association
Triple-I also offers these tips to help make sure everyone is safe and injury-free this holiday season.
Decorations
According to the U.S. Consumer Product Safety Commission (CPSC), there are approximately 200 decorating-related injuries each day during the holiday season, with about half involving falls. During the 2018 holiday season, 17,500 people were treated in emergency rooms due to holiday decorating-related injuries, with six deaths associated with holiday season decorations in 2019.
Our Tips: Choose the correct type of ladder for hanging lights, making sure they are indoor lights for indoors or outdoor lights for outdoors; do not nail, tack, or stress wiring when hanging lights; and keep plugs off the ground and removed from puddles and snow.
Fires
Christmas trees are involved in about 200 home fires per year, according to the National Fire Protection Association (NFPA). Home Christmas tree fires caused an average of six deaths, 16 injuries*, and $14.8 million in direct property damage annually from 2011 to 2015.
Electrical distribution or lighting equipment was involved in 40 percent of the home Christmas tree structure fires. About 26 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, which are another major fire hazard. The top three days for home candle fires were Christmas, New Year’s Day and New Year’s Eve, according to the NFPA.
However, cooking fires remain the number one cause of residential fires, an average of 1,700 cooking fires occur on Thanksgiving Day each year. Christmas day and Christmas eve are also peak times for cooking related fires.
Our Tips: Do not leave cooking food unattended and keep children away from the cooking area; keep candles at least 12 inches away from anything that can burn; blow them out when you leave the room or go to bed; be careful if someone in the household is using oxygen; and keep candles away from children.
Gift Giving
Although giving toys as presents during this season should be celebrated, there are also risks associated with them. According to a CPSC study from 2019, there were approximately 162,700 toy-related, emergency department-treated injuries and 14 deaths of children under 15 years old, with most related to choking on small parts, like small balls and small toy parts and riding toys.
Our tips: Choose toys in the appropriate age range, with toys with small parts not given to children under three and toys that must be plugged into an electrical outlet not gifted for children under 10; and be aware of toy recalls. Non-motorized scooters in particular are associated with a high rate of accidents, though that has been declining.
Home Care
We also remind you to keep your home heated to at least 65 degrees, let hot and cold faucets drip to prevent freezing and to keep your fireplace flue closed when it is not being used.
*These do not include firefighter deaths and injuries which are recorded separately by the NFPA.
Work from home arrangements necessitated by the coronavirus pandemic are predicted to become permanent for some employees as companies like Google contemplate ‘hybrid models‘ with more flexible work options.
And though remote work is nothing new, an increase in the numbers of people working from home in the coming post-pandemic years is bound to lead to some thorny workers compensation questions.
In a recent report called “Digital Business Accelerated,” which examines digital transformation trends that small and mid-sized businesses are pursuing, Chubb pointed out that makeshift home offices that don’t properly address ergonomic best practices may lead to an increase in long-term injuries.
Relaxed work habits and environmental inconsistencies in air quality and lighting can also affect the overall wellbeing and performance of employees. And the risk of slips and falls remains in the home, just as it does in the office, said the report.
An injury or illness that occurs while an employee is working at home will be considered work-related if it occurs while the employee is performing work for pay or compensation in the home, and the injury or illness is directly related to the performance of work rather than to the general home environment or setting, according to OSHA.
For example, OSHA goes on to say, if an employee drops a box of work documents and injures his or her foot, the case is considered work-related. If an employee is injured because he or she trips on the family dog while rushing to answer a work phone call, the case is not considered work-related. If an employee working at home is electrocuted because of faulty home wiring, the injury is not considered work-related.
There’s a lot of ambiguity around such claims.
“It is much more difficult to prove that an injury was work-related because there is usually less evidence available in these home office scenarios,” said Gary L. Wickert, an insurance trial lawyer, in a Claims Journal article. “An accident at a business or job site may have witnesses or be caught on security footage. Work at home employees often are all by themselves while they work, so there is often no one present to corroborate a sudden injury or accident or to help determine the precise conditions of the injury.”
Holding a third party responsible (subrogation) for an accident also becomes more complicated in cases of at home injuries.
“When the employee is injured in their home, subrogation targets tend to shrivel up and blow away,” said Wickert. “If an employee is injured at home or while taking kids to the daycare prior to, during, or after the workday… A subrogated carrier cannot sue the employee in the name of the employee – neither can the employee,” he said.
Employers and workers also need to be aware of mental health issues which can develop. Though many tout the mental health benefits of working remotely, others find that remote work leads to anxiety, depression and burnout. The Center for Workplace Mental Health has suggestions for workers that include exercise and keeping a regular schedule, as well as for employers, which includes staying connected and recognizing the impact of isolation.
To reduce the changes for injuries in the home, of which poisoning and falls are the most common, check out the CDC’s Home and Recreational Safety page. For tips for setting up an ergonomically correct workstation read this Mayo Clinic article.
As the holiday season continues to ramp up, it’s important to remember that this time of year is particularly risky for driving. That’s why December has been officially designated Drugged and Drunk Driving Prevention month.
According to National Safety Council, the average number of traffic deaths during New Year’s Day over the last five holidays is almost 68 percent greater than the average number of traffic deaths during nonholiday periods, with 175 deaths compared to the usual 104 deaths.
Drunk driving is not the only reason people get into dangerous accidents during the holidays. Extreme weather can also contribute to risks during the blustery winter season, including snow, black ice, high winds and hail. Fatigued and stressed driving is also an issue during the holidays, with individuals potentially traveling further than they usually do. And in 2020, anxiety related to the coronavirus pandemic may make these stress-related issues worse.
With this in mind, it’s important to remember some tips to remain safe while driving during the holiday season, including:
Drive defensively by taking precautions while driving, paying close attention to the cars around you. Even if you’re not drinking or driving recklessly, others may be.
Do not drive if you are drinking, making sure you have safe, sober transportation, regardless of how far you’re traveling.
Plan for inclement weather by checking weather forecasts and changing your plans if necessary.
Remember: the holidays can be a busy and stressful time for people, but that’s no reason to let your guard down while driving.
Did you know that December 14 is international monkey day? This delightful holiday to honor everyone’s favorite simians was invented by two Michigan State art students in 2000.
Of course, here at the Triple-I, the holiday naturally got us thinking about people who keep monkeys and other exotic and unusual pets, and the insurance implications.
Nevertheless, according to one animal advocacy group, about 15,000 primates are kept as pets in the U.S., and the American Veterinary Medical Association estimates that 1 in 10 American households has an exotic pet (defined as any animal native to a foreign country).
Injuries caused by pets, if they are covered by insurance, would be covered under a comprehensive homeowners insurance policy. However it’s important to read your policy and see exactly what’s covered. If you’re not sure, speak to your insurance agent. You should expect to pay more for coverage and carry higher liability limits if you legally own exotic animals. And homeowners insurance also frequently excludes any physical damage caused by pets.
Exotic animals can require expensive veterinary treatments. While pet health insurance is becoming increasingly available and affordable, many insurers cover a restricted list of species. Pet Assure, a discount program available through some employers, is accepted for many kinds of animals.
