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INSURANCE DIGEST --NOVEMEBER 2008
Each month the Insurance Information Institute highlights studies and reports that are of key interest to the insurance industry.
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FINANCIAL CRISIS: PRIVATE AND PUBLIC SECTOR IMPACTS: CHALLENGES AMID ECONOMIC AND REGULATORY UNCERTAINTY
Robert Hartwig. Insurance Information Institute, New York, NY http://www.iii.org October 20, 2008. 103 pages
This PowerPoint report, presented by Robert Hartwig, president of the Insurance Information Institute, at the Southeastern Regulators Association Conference, analyzes the impact on both the private and public sectors of the current financial crisis. The presentation provides a point by point discussion of the most recent version of the federal government’s financial services rescue package and details of the Emergency Economic Stabilization Act of 2008. Sections of the report look at the government’s AIG rescue plan and how the regulatory response to the meltdown of the financial sector could be substantial, affecting all segments of the industry, including insurers. The presentation also includes an updated overview of the property/casualty insurance industry, with a focus on problems typically faced by southeastern states such as vulnerability to catastrophe losses and a poor tort environment. The full report can be accessed
on the I.I.I. Web site at http://www.iii.org/media/presentations/SERA/
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INSURERS TO PAY $11.5 BILLION IN THIRD QUARTER CATASTROPHE CLAIMS
ISO, Jersey City, NJ. http://www.iso.com. October 27, 2008. Two pages
U.S. property/casualty insurers are expected to pay homeowners and businesses an estimated $11.5 billion for third quarter property losses resulting from a total of 11 catastrophes in 22 states — the fourth largest insured property loss in a third quarter since 1998, according to preliminary analysis by ISO’s Property Claim Services (PCS) unit. PCS estimates the 11 catastrophes of third quarter 2008 generated 1.7 million claims. Of the 11 catastrophes, six were caused by severe weather (wind, hail, tornadoes, and flooding) and five were caused by tropical systems. Presently, the five states with the greatest insured losses are Texas ($6.4 billion), Louisiana ($1.9 billion), Ohio ($1.2 billion), Kentucky ($0.4 billion) and Illinois ($0.37 billion). The full release is posted on the Web at http://www.iso.com (See Press Releases).
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A FIRM FOUNDATION: HOW INSURANCE SUPPORTS THE D.C. ECONOMY
Insurance Information Institute, New York, NY http://ww.iii.org October 2008
The Insurance Information Institute (I.I.I) has produced a D.C. edition of its A Firm Foundation series. The resource highlights the myriad ways that the insurance industry contributes to state, local and national economies -- from offering employment and fueling the capital markets, to defraying the cost of catastrophes, to providing financial security and income to individuals and businesses through the payment of claims. The national, D.C. and state editions can be accessed on the Web at http://www.iii.org/economics
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2008 LITIGATION TRENDS SURVEY
Fulbright & Jaworski, New York, NY http://www.fulbright.com/ October 2008
Following two straight years of reporting declines in the number of new lawsuits and regulatory proceedings —-including a drop in large-dollar cases —- U.S.companies now anticipate an uptick in new actions and government probes, as well as the need to hire more in-house litigation staff to help manage the expected rise in disputes, according to the 2008 Litigation Trends Survey published by international law firm Fulbright & Jaworski.
Findings are posted on the Web at http://www.fulbright.com/litigationtrends32
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VEHICLE-ANIMAL COLLISIONS
Insurance Institute for Highway Safety, Arlington, VA http://www.highwaysafety.org October 2008
November is the peak month for vehicle-deer collisions, according to a new analysis by the Highway Loss Data Institute (HLDI), an affiliate of the Insurance Institute for Highway Safety (IIHS). HLDI examined insurance claims for animal strikes under comprehensive coverage month by month from January 2005 through April 2008. The main finding is that insurance claims for animal collisions are nearly three times higher during November than during a typical month earlier in the year. For example, for every 1,000 insured vehicles 14 claims were filed in November 2007, compared with an average of 5 claims per 1,000 during January-September. Insurance claims usually do not specify the animal involved, but other data show that deer are the main ones. Further findings are posted on the Web at
http://www.iihs.org/news/rss/pr103008.html
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COMPETITIVE CONDITIONS IN GLOBAL PROPERTY AND CASUALTY INSURANCE MARKETS
Robert Hartwig. Insurance Information Institute. New York, NY. http://www.iii.org October 2, 2008 12 pages
This written testimony submitted to the United States International Trade Commission by Robert Hartwig, president of the Insurance Information Institute,
discusses how the property/casualty (auto, home and commercial) insurance marketplace is a dynamic, competitive and global business. It follows a public
hearing held by the Commission on "Competitive Conditions in Global Property and Casualty (P/C) Insurance Markets". Sections review how the P/C insurance market operates, economic effects of trade in P/C insurance, competition in the industry, factors affecting supply and demand of P/C insurance and foreign markets for P/C insurance. It concludes that the global nature of the P/C insurance business enables the transfer and spread of risk, ensuring that sufficient funds will be available to pay claims to businesses and individuals in the event of loss. The full testimony is available at: http://www.iii.org/media/met/globalpcmarkets/ .
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JD POWER: 2008 AUTO CLAIMS SATISFACTION STUDY
J.D. Power and Associates, 2625 Townsgate Road, Westlake Village, CA 91361. http://www.jdpower.com October 2008
Managing expectations, showing empathy, ensuring convenient service and effective communication are key themes in enhancing overall insurance customer satisfaction with the claims process, according to the J.D. Power and Associates 2008 Auto Claims Satisfaction Study. The study measures the experiences of auto physical damage claimants by examining satisfaction with the claims process. The study finds that implementing 10 specific service practices has a considerable impact on overall satisfaction with the claims process. Auto-Owners ranks highest in providing a satisfying claims experience for auto insurance customers with a score of 864. Auto-Owners, Amica Mutual and State Farm, the Hartford and Country ranked as the top five in terms of claims satisifaction. The management discussion based on the 2008 study findings are posted on the Web at http://www.jdpower.com/corporate/library/download/?files=9998937
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PERSONAL PENSIONS IN THE U.S.: A NEW RETIREMENT PLANNING ASSET CLASS
Conning Research and Consulting, Harford, CT. http://www.conning.com October 2008
Insurers are beginning to seize a unique opportunity to help employees minimize the risks associated with Defined Contribution Plans, such as 401(k) plans, and at the same time compete more effectively with mutual funds, according to a new study by Conning Research. The study, which presents retiree income needs and risks and analyzes how life insurers can fill the retirement security gaps in Defined Contribution plans, is available for purchase from Conning by calling (888) 707-1177 or from the company’s Web site at www.conningresearch.com
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ANALYSIS OF NO-FAULT AUTO INSURANCE CLAIMS IN MINNESOTA
Insurance Research Council, 718 Providence Road, Malvern, PA 19355-0725. http://www.ircweb.org October 2008
Chiropractors now account for a greater share of total provider charges in Minnesota's no-fault insurance system than all other types of treating providers combined. According to a new study from the Insurance Research Council (IRC), 58 percent of all provider charges for treatment of no-fault insurance claimants in 2007 were from chiropractors. In a study conducted five years earlier, IRC found that 41 percent of all treatment charges were from chiropractors. The study is based on a detailed review of more than 500 personal injury protection (PIP) insurance claims closed with payment in 2007. The claims were among the 42,038 claims examined in the IRC's countrywide report, Auto Injury Insurance Claims: Countrywide Patterns in Treatment, Cost, and Compensation. A news release and ordering information for the countrywide study are posted on the Web at http://www.ircweb.org/News/IRCMinnesotNR2008.pdf
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