Category Archives: Business Risk
Triple-I CEO Among Panelists Discussing Business Interruption Insurance Legislation
Triple-I CEO Sean Kevelighan today joined legislators and legal experts to discuss proposed measures that could retroactively rewrite business interruption insurance policies.
“The insurance industry is applying forward-thinking solutions to take care of its customers, communities, and employees during the COVID-19 crisis,” Kevelighan said, citing more than $10 billion so far returned to customers through premium relief; $200 million in charitable donations; and insurers pledging not to lay off employees during the crisis and implementing innovative solutions to conduct daily operations while respecting social distancing. “We’re deeply engaged in mitigating the economic impact of this pandemic.”
But the industry can only do these things – while keeping its promises to policyholders and preparing for impending catastrophes – if policyholder surplus isn’t eliminated, as it could be if some of the proposed legislative “solutions” were enacted.
Legislation has been discussed or introduced in Louisiana, Massachusetts, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, and South Carolina that would retroactively enact business interruption coverage into existing policies despite an absence of the physical damage required in property policies and/or express exclusions for communicable diseases in those policies.
Kevelighan explained how policyholder surplus provides a cushion that enables insurers to meet their obligations, even when large, unexpected catastrophes occur. He showed how retroactively rewriting insurance contracts could make it impossible for insurers to play their critical role as “financial first responders.”
The scenarios he discussed could cost the industry $150 billion and $380 billion per month – “quickly eliminating the surplus it has taken the industry centuries to accumulate.”
And they would do this in the midst of a tornado season that is shaping up to be the deadliest in eight years and as a “more active than normal” hurricane season approaches.
Kevelighan made his remarks during a webinar sponsored by the National Council of Insurance Legislators (NCOIL) and the Rutgers Center for Risk and Responsibility at Rutgers Law School. Other panelists included NCOIL President and Indiana Rep. Matt Lehman; New Jersey Assemblyman Lou Greenwald; and Jay Feinman and Adam Scales, Professors of Law at Rutgers Law School and Co-Directors of the Rutgers Center for Risk and Responsibility.
The panelists all expressed support for the creation of a COVID-19 Business Interruption and Cancellation Claims Fund, similar to the 9/11 Victims Compensation Fund enacted by Congress in 2001, for businesses suffering from costs related to the interruption of their businesses, as well as the many associations that have had to cancel events. Funded by the federal government and operated by a special federal administrator, it would facilitate distribution of federal funds and liquidity to impacted businesses during this time of incalculable business interruption.
Click here to view the presentation.
CORONAVIRUS WRAP-UP: PROPERTY AND CASUALTY (4/22/2020)
CORONAVIRUS WRAP-UP: PROPERTY AND CASUALTY (4/21/2020)
CORONAVIRUS WRAP-UP: Data and Visualizations (4/20/2020)
The coronavirus crisis continues to generate data that can be valuable for understanding and decision making. Below are just a few resources that may be of interest to insurers and the people and businesses they serve.
| COVID-19 Mortality Projections for U.S. States |
| Graphs from the University of Texas COVID-19 Modeling Consortium show reported and projected deaths per day across the United States and for individual states. |
| The Verisk COVID-19 Projection Tool |
| The Verisk COVID-19 Projection Tool has been made available to enhanceunderstanding of the potential number of worldwide COVID-19 infections and deaths. It provides an interactive dashboard that leverages the AIR Pandemic Model. |
| How State Insurance Departments Are Responding to COVID-19 |
| This interactive map from PC360 highlights bulletins and procedures released by state insurance departments as of April 15, 2020. |
| Tracking U.S. Small and Medium Business Sentiment During COVID-19 |
| Small and medium-size businesses account for roughly 44% of the U.S. economy and provide employment to about 59 million people. McKinsey is tracking their sentiment to gauge how their views on economic activity, employment, and financial behavior—as well as their expectations about financial institutions and public authorities—change as a result of ongoing public and private interventions. |
CORONAVIRUS WRAP-UP: PROPERTY AND CASUALTY (4/16/2020)
Litigation during the coronavirus pandemic
By Brent Carris, Research Analyst, Triple-I
The coronavirus crisis is taking a toll on the U.S. legal system as courts are restricting access and altering procedures. Dentons, a global law firm, addressed the impact of COVID-19 on ongoing cases in a recent webinar led by Michael Duvall, Partner; David Quam, Counsel; and Kelly Graf, Managing Associate.
Litigators have ongoing responsibilities to their clients to keep up with key deadlines, during the “slowdown.” These responsibilities include keeping them informed of scheduling, continuing to meet filing deadlines, and advocating for the clients’ interests. Judges have significant discretion to keep their cases moving along.
The webinar covered some of the litigation risk facing businesses with “enterprising” plaintiff’s lawyers actively looking for clients. The risks include data breaches arising from remote workers using unsecured home computers to access confidential data; safety and compliance issues related to remote work; exposure to the virus by employees who are not working remotely; event cancellation; claims of false or misleading advertising against companies capitalizing on demand for products like hand sanitizer; and price gouging.
Dentons has put together a 50-state tracker that it’s maintaining of coronavirus-related orders, directives, financial assistance, health and business directives, and updates on court and legislative sessions.
CORONAVIRUS WRAP-UP: PROPERTY AND CASUALTY (4/13/2020)
Coronavirus Wrap-up: Property and Casualty (4/8/2020)
An article in Claims Journal: Anticipated Coronavirus Claims Scenarios Across Major Coverage Lines discusses the wide range of insurance lines in which claims could rise, whether as a direct result of the pandemic or of social, institutional, and governmental reactions to it.
The Financial Times reports on two shareholder lawsuits relating to coronavirus that have already been launched in the United States, one against Norwegian Cruise Lines, the other against a pharmaceutical company called Inovio.
And, in a new publication, Allianz Global Corporate and Specialty (AGCS), Coronavirus: Safety Measures for Businesses Forced to Temporarily Close Their Premises, AGCS experts provide an overview of general security and prevention measures to help avoid physical damages.
An NBC6 (Miami) report highlights actions that some major insurers are taking to provide relief to their customers who are facing financial difficulties due to the coronavirus pandemic. Said Sean Kevelighan, CEO of Triple-I, “In the insurance community, we refer to ourselves often as financial first responders and you’re really starting to see that kick in right now.” Some companies are allowing customers to delay payments without penalties or initiate a personal payment plan. A few are offering relief in the form of paybacks to customers.
Other recent articles related to coronavirus from a property and casualty insurance perspective:
Auto
A New York Daily News article describes the rebates auto Insurers are offering to their customers due to coronavirus-induced driving lull. Liberty Mutual, American Family and Allstate are among the companies offering refunds.
Triple-I’s CEO Sean Kevelighan was quoted in a Los Angeles Times column and appeared in a Miami NBC affiliate segment about economic relief for drivers.
A Winknews report discusses the assistance available to customers during the coronavirus pandemic and includes an anecdote from a policyholder who was told by his insurer that he couldn’t get an extension. Triple-I’s Mark Friedlander says this customer’s experience is not the norm.
Business Interruption
Triple-I CEO Sean Kevelighan was quoted in Washington Examiner and Santa Rosa, Calif. Press Democrat articles on business interruption coverage.
Artemis published this interview with PCS’s Tom Johansmeyer on silent pandemic risk.
The Financial Times reported on the growing controversy over how much companies can claim from their business interruption insurance policies related to the coronavirus pandemic.
Cyberrisk
Cyber Perspectives on Coronavirus – Audio panel on the PLUS Blog
The National Insurance Crime Bureau (NICB) and the Cybercrime Support Network (CSN) announced they are partnering to educate online users about scams surrounding COVID-19, and what consumers need to watch out for when surfing the web, working online, or e-learning from home. NICB and Cybercrime Support Network Partner to Warn the Public About COVID-19 Scams
Additional resources:
- Cybercrime Support Network Scam Alerts
- NICB ID Theft Brochure
- ID Theft Infographic
- FraudSupport.org
- FBI Urges Vigilance During COVID-19 Pandemic
- FTC: Coronavirus Scams
Flood
As local, state and federal agencies scramble to react to the public health needs of COVID-19, cities and towns must also keep one eye on the weather forecast and river levels, according to this Chicago Tribune article.
Workers Compensation
The Minnesota Legislature passed a workers’ compensation bill Tuesday to cover first responders, health care workers and daycare workers. The legislation is effective April 8 and is in place until May 1. Minnesota to Ensure Workers Comp to Responders With COVID-19
Triple-I’s Daily newsletter covered many of the preceding stories this morning. To subscribe to the Triple-I Daily contact daily@iii.org.
Triple-I: Insurers Offer Solutions For COVID-19 Recovery
U.S. insurers are meeting the challenges faced by their customers, communities, and employees amid the COVID-19 crisis, according to a fact sheet released April 3 by the Insurance Information Institute (Triple-I).
“The nation’s insurers continue to work actively on immediate and forward-looking solutions that will assist its customers and communities in recovering from COVID-19,” said Sean Kevelighan, CEO, Triple-I.
The fact sheet, Insurers Offer Forward-Looking Solutions for COVID-19 Recovery, outlines how the industry is easing its customers’ financial burdens, working with government to create a COVID-19 Recovery Fund, and making sure it has the resources to pay future claims from events such as hurricanes, tornadoes, and wildfires.
Immediate Customer Solutions: Insurers are offering payment relief and extending coverage to customers who are in financial distress while at the same time keeping its employees on the job to serve these same customers, the Triple-I notes.
Government-Backed Solutions: Trade groups representing insurers have voiced support for the proposed COVID-19 Business and Employee Continuity and Recovery Fund. It would be financed by the federal government and provide essential funds to impacted employers and employees.
Facing Challenges Head-On: Workers compensation insurers in multiple states are covering the healthcare workers and first responders who face exposure to COVID-19 while auto, home, and business insurers are setting aside the resources needed to pay the claims arising out of future natural disasters even as insurer investment portfolios have faced their own headwinds. A Triple-I non-resident scholar predicted yesterday the likelihood of an ‘above-normal’ Atlantic hurricane season.
Insurers have also contributed financially to food banks and organizations providing medical supplies.
RELATED LINKS:
Triple-I Presentation: The Impact of COVID-19 On P/C Insurance
Triple-I Publication: A Firm Foundation: How Insurance Supports the Economy
Triple-I Blog:
COVID-19 coverage