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Insurance News Beat: Climate change, low interest rate toll, auto thefts & more

Climate Change Altering Insurers' Risk Assessment - Industry Week features an article looking at how, "climate change is creating more frequent and more unpredictable extreme weather events, forcing insurers to change how they assess the risk of natural disasters hitting a specific area." The story is based on the recent release of a 38-page report, titled "Warming of the Oceans and implications for the (re)insurance industry" by global insurance think-tank, the Geneva Association. "A paradigm shift from historic to predictive risk assessment methods is necessary," it stressed, adding that the insurance industry needed to support scientific research to gain a better understanding of when and where weather-related disasters will hit." The report also suggests that, "The best way to ensure that "ambiguous risks" remain insurable, the study said, was for the insurance industry to help promote risk mitigation today."


Related: Insurance firms 'adapting' to climate change


Property and casualty carriers face mounting pressure with low interest rates - Strained investment returns are translating into property and casualty rate increases. The National Association of Insurance Commissioners puts the net yield for insurance carrier invested assets at an all-time low of 3.68%. "Insurance carriers are in a precarious spot because many had little to do with creating the economic environment they’re now forced to contend with, and many invest conservatively in safer bonds. Additionally, since many of the policies for property-casual lines of insurance often take decades before claims have to be paid out, insurance carriers can be at a disadvantage in their selections of bonds, unable to rely as much on higher yielding but riskier bonds that might be more readily used in other financial circles."


Vehicle Theft Rates in Northeast - Insurance Journal reports on The National Insurance Crime Bureau's (NICB) report on auto theft rates. The report offers a per capita review of cars stolen from the nation’s Metropolitan Statistical Areas (MSA). While California dominates the top 10 list, many MSAs in New England figure prominently on the list.

  • Connecticut: New Haven-Milford, CT Metropolitan Statistical Area, with 1,918 thefts, for a rate of 222.30 per 100,000 population. Ranked 105th nationally in NICB’s per capita vehicle theft ranking.
  • Massachusetts / Rhode Island: Providence-Warwick, RI-MA Metropolitan Statistical Area, with 3,389 thefts, for a rate of 211.63 per 100,000 population. Ranked 113th nationally in NICB’s per capita vehicle theft ranking.
  • New Hampshire / Massachusetts: Boston-Cambridge-Newton, MA-NH Metropolitan Statistical Area, with 5,869 thefts, for a rate of 126.47 per 100,000 population. Ranked 232nd nationally.

    Keys to Maximizing Agent Potential - In Insurance & Technology, Erik Sandquist talks about what insurance agents need to do to remain viable and relevant with their customer base: integrate with Internet, social media and mobile capabilities, so that customers can obtain information and quotes through their chosen channel. Although agents remain the preferred way for consumers to set up and pay for auto & home insurance according to a recent Accenture survey, they are increasingly turning to the internet for information and quotes. "When asked their primary preference for obtaining quotes, 43% of respondents chose websites, while 26% chose the telephone and 26% said they prefer to do so in person. A much smaller percentage (4%) chose mobile applications. And, when it comes to getting information about products and prices, almost three-quarters (72%) of respondents expressed a strong or moderate preference for going to an insurer's website." Sandquist discusses four key elements for insurers and agents in the process of providing customized experiences based on an understanding of customer preferences.


    Pet Perks - Associated Press reports that more employers are offering pet insurance as a benefit to employees. "The nation's oldest and largest pet insurer, Veterinary Pet Insurance, offers policies at one in three Fortune 500 companies, as well as 3,400 other companies and associations across the nation, said company president Scott Liles." VPI offers insurance to companies with more than 100 employees, who can choose payroll deductions or direct billing.


    Feds exempt insurers - Arthur D. Postal reports for "Insurers, even those which operate thrifts, will be temporarily exempt from new tighter capital standards imposed on larger financial institutions under the Basel III capital regimen, the Federal Reserve Board opined today in a new 972-page final rule. The Fed also said in the new regulation that insurers will be exempt from capital standards imposed on large banks, and do not have to use Generally Accepted Accounting Principles to prove they are exempt, but will be allowed to estimate."



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      State News of Note

      • Rhode Island: 7.4% Workers’ Comp Loss Cost Increase Approved
      • Rhode Island: Commissioner approves increases in R.I. health premiums next year
      • Massachusetts: RMV Officials Charged With Extortion And Fraud
      • Connecticut: Newtown Struggling to Divvy Up Donations for Sandy Hook Shooting Victims
      • Vermont: Waste Facility Sues Insurer to Recover Payouts
      • Rhode Island: Insurers’ Group Urges R.I. Governor to Veto Auto Body Legislation
      • Connecticut: Enacts Bill to Establish Disaster Claims Mediation Program
      • Maine: paying a premium for homeowners' insurance
      • Massachusetts: employers likely to get 18-month reprieve from health insurance penalty 
      • Connecticut: insurers to rebate $5.6 million to customers under Obamacare rule
      • Massachusetts:  Showdown at Gillette stadium over liability insurance
      • Massachusetts: Boston Man Arraigned on Charges of Filing $2M False Claim to Victims Fund


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