Terror / Disaster insurance

  • Terrorism insurance2014 uncertainty over renewal of Terrorism Risk Insurance Act changed consumer behavior

    Terrorism insurance take-up rates dropped off toward the end of 2014, due to the anxiety stemming from the unexpected expiration of the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA). Through much of 2014, there was uncertainty whether Congress would renew the program, which initially passed in the wake of the 9/11 terrorist attacks. This uncertainty led customers, and potential customers, to change their insurance buying plans.

  • Flood insuranceTying insurance rates to flood risk for low-lying structures

    Current methods used by the National Flood Insurance Program for setting risk-based insurance rates do not fully capture the flood risk for low-lying structures, which are more likely to incur losses because they are subject to longer duration and greater depth of flooding and are flooded more frequently and by smaller flood events, says a new report from the National Research Council. The report offers alternative approaches for calculating risk-based premiums for these structures, ranging from incremental changes to current methods to a complete overhaul of the system, although it does not recommend which approach the NFIP should adopt or what the new rates should be.

  • CyberinsuranceUnderwriters of cyberinsurance policies need better understanding of cyber risks

    Demand for insurance that covers an ever-increasing range of cyberattacks is growing and evolving rapidly, and a number of insurance companies are seeking advice through sponsored events that can gradually educate their work forces. At Standard & Poor’s Rating Services 2015 Insurance Conference last week, a panel of insurance experts stressed the importance of insurance underwriters gaining a better understanding of cyber risks in order to make better property and risk assessments.

  • Emerging threatsOverstretched global food system vulnerable to disruptive shocks: Lloyd's report

    The vulnerability of the overstretched global food system to sudden shocks, and the wide repercussions for communities, businesses, and governments was highlighted yesterday by a report published by Lloyd’s. The reports highlights the far-reaching economic and humanitarian consequences that disruptions such as weather catastrophes or plant pandemics – many of which are exacerbated by climate change — could have on the global economy. This series of shocks has the potential to trigger food riots in urban areas across the Middle East, North Africa, and Latin America, leading to wider political instability and knock-on effects for a wide range of businesses.

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  • Flood insuranceNational Flood Insurance Program to focus more on victims’ needs

    Roy Wright, the newly appointed director of the National Flood Insurance Program (NFIP), said that he will push it to better focus on the welfare and individual needs of disaster victims, following years of scandal within the organization. Wright, who will preside over the federal program beginning this week, criticized the insurance loopholes and complicated rules of private insurance companies that were perpetuated by the NFIP to “nickel-and-dime” policyholders and undermine their abilities to rebuild following a flood.

  • Flood insuranceFEMA considering overhauling the National Flood Insurance Program

    Federal legislators and officials with the Federal Emergency Management Agency (FEMA) are trying to overhaul the National Flood Insurance Program which relies on eighty-three companies to sell policies, collection premiums, and calculate damages after disasters. The program covers roughly 5.2 million homes and businesses nationwide. The move comes just as FEMA is in talks to settle almost 1,800 lawsuits filed by homeowners claiming they were underpaid on flood insurance claims after Superstorm Sandy. The flood insurance program was launched in 1968 after private insurers increased their coverage prices due to newer risk assessments, leaving most homeowners unable to afford them.

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  • Cyber insuranceTo bolster the world’s inadequate cyber governance framework, a “Cyber WHO” is needed

    A new report on cyber governance commissioned by Zurich Insurance Group highlights challenges to digital security and identifies new opportunities for business. It calls for the establishment of guiding principles to build resilience and the establishment of supranational governance bodies such as a Cyber Stability Board and a “Cyber WHO.”

  • Catastrophe bondsPhilippines mulls issuing catastrophe bonds to cover costs post-typhoon rebuilding

    After Super Typhoon Haiyan ravaged the Philippines in 2013,  killed at least 6,300 people and inflicting $13 billion in damage, the Philippine government is now looking at mitigating the costs of rebuilding and protection through catastrophe bonds. The bond sale would help the country with the rebuilding costs and should cover the cost of any future disasters on the same scale as Haiyan. Just last year, the World Bank had issued catastrophe bonds relating to earthquake and cyclone risks in sixteen Caribbean countries.

  • Flood insuranceRising sea level-induced floods cause increase in flood insurance rates

    Long-term sea level rise has made tidal flooding a near-daily event in many cities, compared to 1950 when it occurred about once every two years. As sea level rises, threatening more homes along flood zones, flood insurance claims are expected to increase. The Home­owner Flood Insurance Affordability Act of 2014 (HFIAA), which went into effect on 1 April, means that primary homeowners would see an average 10 percent increase in flood insurance premium yearly, along with an extra $25 annual surcharge. Secondary owners of vacation houses and condominiums can expect about an 18 percent rate increase, plus a $250 annual surcharge.

  • Flood insuranceOptions for providing affordable flood insurance premiums

    The National Flood Insurance Program (NFIP) within the Federal Emergency Management Agency (FEMA) faces dual challenges of maintaining affordable flood insurance premiums for property owners and ensuring that revenues from premiums and fees cover claims and program expenses over time. A new report found that these objectives are not always compatible and may, at times, conflict with one another. The report discusses measures that could make insurance more affordable for all policy holders and provides a framework for policymakers to use in designing targeted assistance programs.

  • Man-made quakesOklahoma warns insurers not to deny claims for man-made-earthquake damage

    Oklahoma Insurance Commissioner John Doak is warning insurers about the practice by some insurance companies to exclude “man-made” earthquakes from their policies without clear intent. Some companies are marking quakes caused by waste water injection wells — or “fracking” — as “man-made” and therefore outside of the scope of coverage of policies. This denial of coverage follows a dramatic increase of tremors in the state since 2013. The increase in fracking activity in the state has been accompanied by a dramatic increase in the number of earthquakes: Last year, the Oklahoma Geological Survey identified 567 tremors at or above a 3.0 magnitude, the point at which such quakes can be felt by humans and cause property damage.

  • Aviation securityAviation industry under-prepared to deal with cyber risk: Expert

    The aviation industry is behind the curve in terms of its response and readiness to the insidious threat posed by cyber criminality whether from criminals, terrorists, nation states, or hackers, according to Peter Armstrong, head of Cyber Strategy for Willis Group Holdings, the global risk adviser, insurance and reinsurance broker. Armstrong explained that the aviation industry’s under-preparedness is noteworthy in a sector that abhors uncertainty and works tirelessly to eradicate it.

  • Flood insuranceFlorida lawmakers want homeowners to have more flood insurance options

    Lawmakers in Florida are planning for a future in which coastal communities can no longer depend on the federal government for affordable flood insurance coverage. The Federal Emergency Management Agency’s (FEMA) flood program is facing insolvency after recent disasters such as hurricanes Katrina and Sandy, so Congress has moved to increaseflood insurance rates across the nation.Legislation proposed by Florida state senator Jeff Brandes (R-St. Petersburg) will give homeowners more coverage options in the local private insurance market. If passed, Brandes’s bill could lower premiums by excluding coverage of a detached garage or covering only the value of a home’s mortgage rather than its full replacement cost.

  • DisastersWinter storms costly for Western economies: Aon Benfield

    Aon Benfield’s January 2015 catastrophe report reveals that a series of four powerful windstorms over a seven-day span during January in different regions of Western Europe caused economic and insured losses were expected to reach hundreds of millions of euros. The catastrophe study highlights that two separate winter weather events impacted northeastern parts of the United States during the month, caused total economic damage and losses, including business interruption, estimated at $500 million.

  • Coastal infrastructureCoastal communities can lower flood insurance rates by addressing sea-level rise

    City leaders and property developers in Tampa Bay are urging coastal communities to prepare today for sea-level rise and future floods in order to keep flood insurance rates low in the future. FEMA, which administers the National Flood Insurance Program(NFIP), is increasing flood insurance premiums across the country, partly to offset losses from recent disasters such as hurricanes Katrina and Sandy. Cities can reduce insurance premiums for nearly all residents who carry flood coverage by improving storm-water drainage, updating building codes to reflect projected rise in sea-levels, moving homes out of potentially hazardous areas, and effectively informing residents about storm danger and evacuation routes.