On May 8 the Labor Department reported that the U.S. labor market lost a historic 20.5 million
nonfarm jobs in April, sending the unemployment rate to 14.7 percent. The worst
affected sectors are leisure and hospitality, which lost 7.7 million workers.
Dr. Steven Weisbart,
Triple-I’s chief economist, points out that the employment data for March 2020*
for the insurance industry are startling largely because they are at odds with
employment changes in many other lines of work.
Employment
at property/casualty carriers held steady in March 2020 at 559,100–the same as
in January and only 800 fewer than February.
Employment
at life/annuity carriers held essentially
steady in March 2020 at 347,600–the same as in October 2019 and down a bit
from the 348,000-349,000 in November 2019 through February 2020.
Employment at health and medical insurance carriers rose in
March 2020 to 585,100–its highest-ever level, up 1,500 from February 2020.
Employment at agencies and brokerages rose in March 2020 to
852,400–its highest ever level, up 1,700 from February.
* The insurance industry/sector-specific data are not seasonally adjusted and are one month behind the national data.
U.S. auto insurers will return over $10 billion to their
customers nationwide, according to an Insurance Information Institute estimate, in response to reduced driving during the
pandemic.
We’ve listed many of the companies that are offering refunds here and here. These lists are not
exhaustive, so be sure to check with your insurer to see if they are offering
refunds or credits. All
premium and rate adjustments are subject to regulatory approval.
On May 5, Allstate
Corp. CEO Tom Wilson said the
insurer would probably grant another rebate to auto insurance customers. The second round of rebates would vary
according to region. On April 6, the insurer announced that it would return
more than $600 million in premiums to its policyholders because the nation’s
drivers were traveling 40 percent to 55 percent fewer miles following
stay-at-home orders. Wilson noted that American drivers are now traveling more
miles than in mid-April, but the total is still 30 percent to 40 percent lower
than before the pandemic. Wilson said the next refund would be more precise and
that Allstate is now distributing the initial payback, which represents 15
percent of monthly premiums in April and May.
Horace Mann, a provider of affordable insurance for educators,
is giving customers a credit of 15 percent of two months of auto premiums, as
well as a grace period through June on auto, property, supplemental and life
insurance payments; enhancing coverages, including extending personal auto
coverage to those delivering food, medicine, and other essential goods; and
including Identity Fraud Advocacy Services with its Educator Advantage Program
for all home, condo, and renters customers to protect against the increased
risk due to increased online activity.
Other customer support programs
Erie
Insurance is
adding gift card and gift certificate reimbursement coverage to the company’s
ErieSecure Home® policies, in response to the recent changes affecting
businesses across the United States. The additional feature, included at no
additional cost, would reimburse customers for remaining balances on eligible
gift cards that no longer can be used at independently owned and operated local
businesses due to business closures.
Supporting communities
Foremost Insurance and Bristol West Insurance, members of
the Farmers Insurance Group of Companies, announced they have
contributed $500,000 to the Trusted
Choice COVID-19 Relief Fund established by the Independent Insurance
Agents & Brokers of America, Inc. (IIABA – Big “I”). The Fund
provides economic aid to independent insurance agencies, brokerages, and their
owners and employees affected by the COVID-19 pandemic.
Horace Mann donated $100,000 to DonorsChoose “Keep Kids
Learning” fund, an initiative to help teachers equip the most vulnerable
students with educational materials at home. The company provides free online
teaching resources, to help teachers adapt to remote learning, and it supports
a number of foundations in its home state of Illinois.
Reach out to us in the Comments section and let us know what
your company is doing to help ease the impact of COVID-19.
Since people are driving less in the midst of COVID-19
related stay-at-home orders, many auto insurers have responded with premium
refunds totaling about $10 billion.
How are consumers reacting to these refunds? A May 5 webinar
co-hosted by Cambridge Mobile Telematics’ (CMT) VP of Insurance &
Government Affairs, Ryan McMahon, and J.D. Power’s VP of Insurance
Intelligence, Kyle Schmitt, shed light on this question.
J.D. Power has been conducting consumer sentiment surveys since March 24. Schmitt said that one key takeaway is that in light of pandemic related layoffs, customers are thinking pragmatically about auto insurance, so the timing of the premium relief announcements was excellent. However, it’s important to note that auto insurance is not top of mind for many consumers struggling to keep the lights on or food on the table, and not everyone is aware of refunds.
Here are a few other key takeaways:
McMahon noted that while miles travelled are
down, speeding and distraction both peaked in April based on CMT’s analysis,
and fatalities are up.
Schmitt said that changes in price stability
driven by broad market conditions (such as accident frequency) are not well
received by consumers who will shop around in response; in contrast to price
increases driven by a life event or an accident which consumers tend to take in
stride.
When it comes to telematics, value is key.
Consumers expect to continue to not drive as much in the foreseeable future and
are thinking about the cost savings offered by telematics programs, therefore
interest in telematics has spiked according J.D. Power surveys.
Of those that think their driving rates will
remain low 40 percent are interested in telematics.
The panelists were also asked to speculate about possible
increases in fraud, and McMahon said that fraud activity always comes with
economic reductions, however it’s possible that fraudulent claims may be easier
to spot because there are fewer claims.
When
you think of winemaking, you picture grapes on the vine and a hearty glass of
red on your table. But you probably don’t think of all the steps involved in
the production of wine and the fact that those grapes – and later, the finished
product – travel long distances to reach our palates.
That’s
where marine insurance comes in: to protect businesses along the supply chain
from the unexpected.
The
American Institute of Marine Underwriters (AIMU) drew a robust
crowd to its recent webinar, “From Vine to Wine and the Fire In Between,” where
participants learned of the risks associated with wine production and the
coverages that are designed to mitigate losses. The two-hour session is part of
AIMU’s extensive and popular educational series, and drew a crowd of
underwriters, claims experts and brokers from the ranks of marine insurers and
beyond.
“One
of the biggest roles we perform is education, and it’s not limited to our
members,” says John Miklus, President of AIMU. “Marine touches so many aspects
of business that there’s a real thirst for knowledge in the broader insurance
community and we try to quench that thirst.”
Pamela Schultz, Jonathan Thames and Erik Kowalewsky of Hinshaw & Culbertson opened by discussing the effects of the
2017 wildfires on the Napa and Sonoma wine growers and wineries, where 10
percent of the harvest was still on the vine when the fires started.
There
are nearly 20 steps involved in wine production, including include growing,
harvesting, fermenting, storage, barreling, aging, blending, bottling, labeling
and distributing. Each presents opportunities for things to go wrong.
Thames
explained that Stock Throughput is a form of marine coverage that insures goods
in all their physical states along the supply chain with the exception of damage
caused by the processes of turning the raw materials into the finished
products. He said policies are generally very broadly worded and cover all
risks.
Schultz
pointed out how marine insurance comes into play during shipment. Stock
Throughput policies are designed to cover supply chains and anything that moves
inventory against loss due to:
Extreme weather and
natural disasters can cause supply chain interruptions and even loss of product.
Transportation:
Obviously, wine has to get from the vineyard to the table and that table may be
anywhere in the world.
Trade
problems/disruption: This affects imports and exports, especially delays due to
current COVID-19 crisis.
Lack of Control: Products
are sometimes shipped long distances, and it’s difficult to know everything
about every link of the supply or travel chain.
Invaders: Yes, pests
have been known to get into wine and cause damage and so can fumigation.
CTL: Constructive Total
Loss becomes an issue if the wine is stolen. Most policies exclude consumption
of wine, but Schultz said that hasn’t stopped some insureds from trying to
claim it on that basis.
The
2017 California wildfires brought into focus the issue of smoke taint. The smoke
that lingers for weeks after the fires are extinguished can taint the grapes,
rendering a wine unpalatable, or worse, undrinkable.
Thames
noted that smoke taint claims don’t arise until after fermentation, after the
wine has been tasted, and the grower must prove damage with scientific evidence
and serve notice of potential loss within 60 days. However, he said there are
cost effective processes winemakers can put in place beforehand to mitigate the
effect.
The
presenters discussed the difference between crop insurance and whole farm
revenue protection, both of which offer only limited protection to the grower. Crop
insurance is not a 100 percent indemnity product; it only covers the grapes
pre-harvest, so there will always be a gap. Limits are based on past yields so it’s
difficult to expand limits in the first few years.
As a result of the 2017 fires in Oregon, one winemaker now requires
its growers to carry crop insurance and pays half the premium.
Whole
farm revenue protection insures against lost revenue, but doesn’t protect
particular crops as it is not a property policy. To make a claim on this policy
the insured must establish that farm revenue is down as a result of the winery
rejecting the grapes.
Participants
were invited to vote on their favorite wine, and the overwhelming choice was
Red, at 70 percent. White garnered 17 percent of the vote and Rose 12 percent.
By Kris Maccini, Director, Social Media, Insurance Information Institute
Triple-I
Employees Share Pet Adoption Stories
April 30 is
National Adopt a Shelter Pet Day–a day created to raise awareness for the
millions of animals waiting in shelters to find their forever homes.
According to
the Humane Society, 6-8 million animals enter shelters
in the US annually with 28 percent of dogs and 31 percent of cats completing
adoptions each year.
Several employees of the Insurance Information Institute (Triple-I) have also chosen to adopt rather than shop. These four-legged family members are an important part of our lives, and we’d like to share their stories with you in honor of #NationalAdoptAShelterPet day.
Name: Happy Age: 9 years old
Happy was adopted from a shelter in August 2010. He was the smallest and quietest dog of the bunch. His mom Katrina noticed his big brown eyes, big ears, and cotton bunny-like tail. It was love at first sight. Happy likes to go on walks and will take his leash to “walk himself” out the door. He’s very particular about his squeaky toys and filter water and will insert himself into conversations by “politely” barking.
Name: Mellie Age: 2 years old
Mellie was a rescue from a puppy mill and was unnamed when adopted by her family. Her dad Scott named her after his paternal grandmother. Mellie is a very curious dog who has a fascination with TV remotes–10 replaced and counting! She loves being around people and shares her home with her older fur brother Maxwell.
Name: Maxwell Age: 4 years
Maxwell was adopted at 10 weeks from a litter of 10 puppies. His dad adopted him from a rescue organization. Maxwell loves swimming, walking, running, visiting the dog park, and eating treats. He knows exactly where the biscuits are and how to train humans to get what he wants.
Name: Snickers Age: Almost 6 years old
Snickers was adopted by her family around 3 months. She officially turns 6 in June 2020. Snickers appears to be head of household keeping her human family and dog brother in line. No beasts are victorious under her neighborhood watch including birds, hornets, and wasps.
Name: Bauer Age: 8 years old
Bauer was a rescue from Nairobi, Kenya and moved to the US with his dad a year after his adoption in 2014. Bauer has a playful personality. He loves lining up his toys and stockpile of biscuits every night before he goes to bed. Bauer is big in size with an even bigger heart.
Name: Bandit Age: Almost 2 years
Bandit was adopted from a shelter at six months old. He was rescued from a private home in 2018 along with 100 other dogs. After nearly two years with his family, Bandit has settled into a routine – greeting his mom Rita when she comes homes from work and cuddling with his human brother before bed. His mom says that, although he was shy at first, Bandit’s found a respected place in his family and is affectionately referred to as the “King of the Castle.”
These are some of the stories of animals who have joined the Triple-I family. We hope these brought joy during these uncertain times. If you have recently adopted a pet, we have some resources available to answer questions on insurance, sheltering in place with your pet, dog bite prevention, and pet care.
As the federal and state governments discuss plans for “reopening
the economy,” it’s important to recognize and plan for the fact
that the impacts of the virus and our responses to it will be playing out for
some time to come.
Were auto insurers too quick to give back?
Despite record-low vehicle miles traveled, Digital
Insurance reports, severe and fatal
crashes in U.S. cities have increased since COVID-19. There have been more
speeding and more severe and deadly crashes than before the business shutdowns
and sheltering in place instituted in response to the pandemic.
In New York City, traffic volume decreased between 78% and 92%
compared to January, but there was a 57% increase in speeding violations in the 10 days following the governor’s stay at home
orders. And there were six deadly crashes from
March 2 to April 8, which is more deadly crashes than the same time period in
any of the previous five years.
Numbers like these suggest the auto insurers that have returned
more than $10 billion to policyholders
through premium relief – on the premise that fewer cars on the road would mean
fewer crashes and claims – might have acted prematurely.
A.I. to enforce social distance, limit liability
Reuters reports that stores and other workplaces eager to avoid spreading the virus that causes COVID-19 are equipping existing security cameras with artificial intelligence software that can track compliance with health guidelines including social distancingA. and mask-wearing.
The software will allow them to show not only
workers and customers, but also insurers and regulators, that they are
monitoring and enforcing safe practices.
“The last thing we want is for the governor to shut all our
projects down because no one is behaving,” said Jen Suerth, vice president at
Chicago-based Pepper Construction, which introduced software this month to
detect workers grouping at a project in Illinois.
IICF’s crisis relief campaign enables donors to focus resources on children at risk of food insecurity, educational disruption, family homelessness and other issues exacerbated by COVID-19. With the support of insurance companies, associations and individual industry professionals, funds raised will benefit 14 nonprofit partners operating throughout IICF’s four U.S.-based divisions.
Overall, U.S. insurers and their charitable foundations have donated approximately $220 million in response to the COVID-19 crisis. And well in excess of $100 million has been contributed internationally, according to Insurance Information Institute (Triple-I) estimates based on information collected by IICF.
Insurance industry contributions have gone beyond
financial donations, as tracked by IICF. These efforts include:
More than 400,000 masks donated
to frontline healthcare workers
An industrywide commitment to
deliver more than 1 million meals to families in need
Hosting blood drives
Purchasing and donating to healthcare
workers gift cards from small businesses
Offering no-cost life insurance
policies to frontline healthcare workers
Providing additional time off to
volunteer in the community
Increased matching of employee
donations to local charities
In addition, insurance companies have made commitments
not to furlough workers due to the pandemic. And U.S. auto insurers will return
more than $10.5 billion to their customers nationwide as part of their COVID-19
response, Triple-I estimates.
To donate to the IICF Children’s Relief Fund, please
visit the
IICF website and designate the region of the
country you’d like to support.
“For more than 25 years IICF has marshaled the philanthropic will and resources of the insurance industry in support of communities. By uniting philanthropically through the industrywide IICF Children’s Relief Fund, we’re able to help children across the country be safer and healthier. “
Bill Ross, CEO, IICF
Donations can also be made directly to IICF here
to support the organization on a national level with its mission to help
communities in need.
U.S. auto insurers will return more than $10 billion to their
customers nationwide, according to an estimate released on April 11 by
the Insurance Information Institute (Triple-I).
We’ve listed many of the companies that are offering refunds in
a previous post. This week, several
other auto insurers have announced refunds or credits. This is not an exhaustive list, so be sure to check
with your insurer to see if they are offering refunds or credits. All premium and rate adjustments are subject to
regulatory approval.
Chubb‘s auto insurance clients will receive a credit reflecting a 35%
premium reduction for the months of April and May, with additional discounts
for subsequent months, as the situation warrants, upon renewal. Across Chubb’s
portfolio, the average credit is expected to be $110 per vehicle.
COUNTRY
Financial announced that every client with a personal auto insurance policy
as of April 1, 2020 will receive a 15% refund for two months of auto premium in
anticipation of a decrease in driving activity in April and May.
CSAA Insurance Group is giving a 20 percent refund
for two months of auto premiums, March and April 2020.
ERIE
has announced that lowering personal and commercial auto rates would be the
best option for providing additional relief to customers. The company estimates
the total rate reduction impact to be approximately $200 million throughout the
12 states and District of Columbia where ERIE operates.
Ohio Mutual
Insurance Group
is offering personal auto premium credits on more than 80,000 personal auto
policies for an estimated total of $6 million. Ohio Mutual is voluntarily
providing a 25% personal auto premium credit that applies to an 11-week period
(March 16 – May 31, 2020) for all policies in-force on May 31. Credits will be
automatically applied to customers’ first invoice after June 1. Those with a
balance less than the credit will receive a refund by check.
The Hanover Insurance
Group announced it has
created The Hanover CARES Refund, through which the company will return 15% of
April and May auto premiums to its eligible personal lines customers, providing
financial relief during the coronavirus pandemic.
MAPFRE Insurance announced its Staying Home Refund program,
which will return 15 percent of April and May premium to its voluntary personal
auto policyholders in Massachusetts, totaling over $30 million. On average,
most policyholders will receive a credit of approximately $40.00. A similar
credit will be provided to the company’s personal auto policyholders in its
other states of operation for the same time period.
Westfield
announced a 15 percent policy credit to their eligible personal auto insurance
customers for three months.
Supporting communities
Chubb has announced a support program designed to
help ease the financial burden of the COVID-19 pandemic on its small business
clients in the United States and provide direct support to healthcare workers
and other front-line responders.
Chubb’s U.S. small business clients
whose policies renew between April 1 and August 1, 2020 will receive an
automatic 25% reduction in the sales and payroll exposures used to calculate
their premium as well as a 15% reduction in premiums for their commercial auto
insurance. In addition, Chubb will purchase $1 million in gift cards from small
business clients around the country, which will be donated to healthcare
workers and other first responders on the front lines of the pandemic in their
communities.
Fundación MAPFRE, a global nonprofit foundation created by
MAPFRE, announced it will donate $2.3 million to support urgent medical and
community needs across Massachusetts, as the coronavirus continues to spread.
The funding is part of a global $38 million aid package by the foundation for
medical providers and communities around the world.
Hanover announced customer relief
measures and a commitment to contribute $500,000 to nonprofits in local
communities to address needs arising from the public health crisis.
State
Farm has donated $1 million
and partnered with Salesforce to provide one million masks and other protective
equipment to healthcare workers in areas of urgent need identified by FEMA
(Federal Emergency Management Agency). Since the start of COVID-19, State Farm
has provided about $5 million in neighborhood relief across the country.
Swiss Re Group pledged to donate CHF 5 million to support
the needs of people and communities affected by the COVID-19 pandemic around
the world. Through its non-profit grant foundation, the Swiss Re Foundation,
the funds will be distributed to organizations tackling the crisis,
particularly in developing countries.
The Westfield Insurance Foundationis
helping communities in Northeast Ohio and across the country by donating nearly
$1.5 million dollars to nonprofit partners focused on family stability and
disaster recovery. These dollars will help stabilize communities and help those
who need economic support.
