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Auto Insurance, Insurance Industry

Insurers Respond to COVID-19 (5/08/2020)

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Auto insurance refunds

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.

Auto Insurance, Insurance Industry

How are consumers perceiving auto insurance during the COVID-19 crisis?

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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.

Business Insurance, Business Risk, Insurance Industry

A Toast to Marine Insurance!

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By John Novaria, Managing Director, Amplify

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.

Upcoming AIMU courses include Yacht Insurance Fundamentals, which offers 6 CE credits, and Introduction to Static Risk Insurance: Warehouse Basics, offering 3 credits.

Insurance Industry

National Adopt A Shelter Pet Day – April 30, 2020

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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.

Pet Insurance

Liability and Safety Tips for Dog Owners

Dog Bite Prevention Tips

Webinar – Dog Bite Prevention Week: Sheltering in Place with Your Pets

Insurance Industry

Navigating COVID-19 And Its Aftermath

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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.

In other COVID-19 reporting:

Automobile Insurance

Detroit Car Makers Target May 18 U.S. Restart Date (The Wall Street Journal, 4/27/20)

Expect an Increase in Auto Insurance Adaptations (Property/Casualty 360, 4/27/20)

Liability and Litigation

The Legal Fight Between Insurers and Businesses Is Expanding (The Wall Street Journal, 4/29/20)

Fearing Raft of Lawsuits, Businesses Seek Shield From Pandemic Liability (The New York Times, 4/29/20)

Most Firms Neglected Pandemics in Annual Risk Assessments: Study (Insurance Journal, 4/28/20)

Marine Insurance

Insurance Considerations for Cargo Owners During COVID-19 (Property/Casualty 360, 4/28/20)

Workers Compensation

Calif.: Immigrant Workers Eligible for COVID-19-Related WC Benefits (Property/Casualty 360, 4/28/20)

States Aim to Expand Workers’ Compensation for COVID-19 (The Wall Street Journal, 4/27/20)

Employers plot strategies for bringing workers back onsite (Business Insurance, 4/24/2020)

From the Triple-I Blog:            

SOME WAYS TO THINK ABOUT VIRUS’S IMPACT ON AUTO INSURER PROFITABILITY

ARE LIFE INSURERS DENYING BENEFITS FOR DEATHS RELATED TO COVID-19?

FAQs ABOUT COVID-19’S IMPACT ON WORKERS’ COMP

Insurance Industry

Insurers Respond to COVID-19 (4/24/2020)

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The Insurance Industry Charitable Foundation (IICF), announced today that it has raised nearly $500,000 in just over 3 weeks through its national fundraising campaign, the COVID-19 Crisis: IICF Children’s Relief Fund.

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.

To view a list of insurance organizations that have made philanthropic contributions related to COVID-19 please click here and view IICF Children’s Relief Fund contributors.

Health & Safety, Insurance Industry, Life Insurance

Coronavirus wrap-up: life and health insurance (4/22/2020)

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Health insurance

Buying health insurance? What to know during the coronavirus pandemic

Care providers may need $100B more as industry faces further COVID-19 losses

What to Do if You Can’t Pay for Insurance Due to Coronavirus

Health Insurance Rates Could Be Weirdly Stable: Actuaries

How Will COVID-19 Affect the Health Care Economy?

Life insurance

Certain US life insurers suspend senior applications

Consumers Looking To Buy Life Insurance

More States Mandating Forgiveness On Life Insurance Premiums

Implications of coronavirus for North American life and annuities writers

What an Annuity Giant Is Telling Investors About COVID-19 Risk

Auto Insurance, Corporate Social Responsibility, Insurance Industry

Insurers Respond to COVID-19 (4/17/2020)

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Auto insurance refunds

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 Foundation is 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. 

Auto Insurance, Business Insurance, Insurance Industry, Specialty Coverage, Workers Compensation

CORONAVIRUS WRAP-UP: PROPERTY AND CASUALTY (4/14/2020)

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Automobile Insurance
Auto Insurers Issuing $10.5 billion in Coronavirus Refunds
CA Orders Insurers to Pay Back Premiums Due to Virus
Business Interruption
FL Restaurant Files Class Action Seeking Virus Cover
Trump Suggests Insurers Should Pay Virus Business Interruption Claims
Trump Pressures Insurers Over Coronavirus Business Coverage Gray Area
GOP Senators Urge Trump to Protect Insurers From State Legislation
Pandemic Insurance/Catastrophe Bonds
Pandemic Insurance Has Yet to Pay Out to Poor Countries
World Bank Pandemic Cat Bonds and Swaps Not Triggered for Payout Yet
Workers Compensation
OSHA backtracks on recordability of COVID-19
KY Extends COVID-19 Workers Comp to Grocery Workers
IL expands COVID-19 Comp Protections to Most Frontline Workers
New Workers’ Comp Rule Slammed by Business Groups
Have You Considered COVID-19’s Workers’ Comp Implications for Frontline Workers?
MN Legislature Passes COVID-19 Workers’ Comp Bill for First Responders
CA Boosts Worker’s Comp, Insurance Benefits for COVID-19 Diagnosis
Health Strategy Associates Surveys Workers’ Comp Payers on COVID-19
Coalition Against Insurance Fraud: Rapid National Response Urged to Head Off Coming Wave of COVID-19 Insurance Scams

Auto Insurance, Insurance Industry

Triple-I: U.S. Auto Insurers to Return $10.5 Billion to Customers

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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).

“Insurers are again fulfilling their role as economic first responders by providing financial relief to customers when they need it most,” said Sean Kevelighan, CEO, Triple-I. “If the rest of the nation’s private-passenger auto insurers are as generous as the companies the Triple-I knows about, we project insurers will be giving customer refunds, discounts, dividends, and credits totaling $10.5 billion.”

The Triple-I’s $10.5 billion estimate is based on its analysis of 14 U.S. auto insurers who announced this week premium refunds, discounts, dividends, and credits totaling $8.1 billion.  These insurers cited reduced policyholder mileage and the receipt of fewer claims amid the COVID-19 crisis as the reasons they were able to make these decisions.

Given there are hundreds of companies that sell private-passenger auto insurance in the U.S., the Triple-I looked at the industry’s cumulative market share and estimated an additional $2.4 billion in refunds, discounts, dividends and credits were forthcoming. The Triple-I has updated its Fact Sheet, Insurers Offer Forward-Looking Solutions For COVID-19 Recovery, to reflect the latest steps taken by the nation’s auto insurers.

“These are challenging financial times for millions of Americans, and the country’s auto insurers are making it easier for their customers to get through this extraordinary time in U.S. history,” Kevelighan stated.

The Triple-I estimates the typical U.S. auto insurance customer spent $1,113 in 2019 to cover a single private-passenger vehicle.