Report: Catastrophe losses dampened auto insurers' 2012 results | Medical cost-shifting may boost auto insurance costs, report says | Calif. workers' comp changes led to more lien filings, bureau says
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March 22, 2013
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Alaska Senate panel OKs bill on credit-score use in renewals
An Alaska Senate committee has endorsed legislation that would allow the use of consumers' credit scores in determining insurance rates at renewals. Insurers are permitted in 48 states to examine customers' credit history when considering new policies; Alaska is the only one of those that disallows the use of credit scores at policy renewals, PCI's Kenton Brine says. Anchorage Daily News (Alaska) (free registration)/The Associated Press (3/21)
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Industry News
Report: Catastrophe losses dampened auto insurers' 2012 results
Hefty catastrophe losses and higher claims costs caused the auto insurance segment's underwriting performance to improve only moderately last year, despite rate increases, Fitch Ratings says. "Natural catastrophe related losses rose inordinately in 2012 due to Superstorm Sandy in the fourth quarter. The large flood related losses in densely populated areas led to higher auto related claims than past storms boosting auto insurers' combined ratios," Fitch said in a report. PropertyCasualty360 (3/21)
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Medical cost-shifting may boost auto insurance costs, report says
Auto insurance costs could increase in the coming years as a result of shifts in medical costs, a report from Assured Research says. "As health care economics shift in favor of ever-larger institutions, auto insurers may find they have less power to contain prices or utilization. The age of accident victims is also rising -- a dynamic that will magnify the effects of cost-shifting," Assured's William Wilt says. Insurance Networking News (3/21)
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Calif. workers' comp changes led to more lien filings, bureau says
Lien filings by workers' compensation service providers were up in California following changes to the state's workers' compensation system, the California Workers' Compensation Insurance Rating Bureau said at a legislative hearing. The state could see 640,000 workers' comp liens this year, while a fee could reduce lien filings by 30% and reduce workers' comp costs by $480 million, the bureau said. Business Insurance (tiered subscription model) (3/21)
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Catastrophic Risk
Report: NFIP needs updated assessment of flood risk behind levees
The National Flood Insurance Program needs to improve its approach to assessing flood risk behind levees so that the program can help address such risk appropriately, according to a report from the National Research Council. "The whole idea that a levee is good or bad because water will or will not go over its top belies integrity issues, failure of structures, or whether gates will be left open," said Gerald Galloway of the University of Maryland. A focus on levee height has led to some flood insurance being priced below actual cost, with taxes making up for the discount, he said. The Times-Picayune (New Orleans) (3/20)
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Marine insurance market's losses from Sandy could hit $3B, group says
The marine insurance industry's losses from Hurricane Sandy are estimated at $2.5 billion to $3 billion, canceling out the industry's total premiums last year, according to the International Union of Marine Insurance. "Some severe major losses hit several lines of marine insurance business in 2012," Ole Wikborg, the group's president, said in a statement. "Although the claim frequency and cost are beyond our control, we're going to do our part to turn it for the better in 2013." Business Insurance (tiered subscription model) (3/21)
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States should brace for flooding, drought this year, NOAA says
North Dakota, Minnesota and other states in the Midwest and South could experience major flooding this spring, as areas along the Mississippi River and its tributaries are at increased flood risk, according to the National Oceanic and Atmospheric Administration. Drought could worsen in Florida as well as California and several Southwestern states, the NOAA said. PropertyCasualty360 (3/21)
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Policy and Law
Measure on firearm-liability coverage fails to clear Ill. House
An Illinois bill seeking to require individuals who have concealed weapons to carry $1 million in liability insurance has been voted down in the state House. People would pay up to $2,000 for such coverage, said state Rep. Kenneth Dunkin, D-Chicago, who filed the bill. Other lawmakers said that amount would be too costly for the insurance and that such coverage is not offered by the insurance industry. Insurance Journal/The Associated Press (3/21)
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Teen panel backs tighter penalties for distracted driving in Ga.
An all-teenager commission formed by Georgia Gov. Nathan Deal has submitted road-safety recommendations to lawmakers, including tougher penalties for teens who violate laws against smartphone use behind the wheel. The commission also called for revamped driver-education strategies for teens to place more attention on the risks posed by distracted driving. Insurance Journal/The Associated Press (3/21)
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Association News
Abbey Klaassen to speak at PCI's Marketing & Underwriting Professionals Seminar
Abbey Klaassen, editor of Advertising Age, is one of several key industry speakers featured at PCI's Marketing and Underwriting Professionals Seminar, April 28 to 30 in Fort Lauderdale, Fla. During her presentation, she will address how data, digital and distributed power are changing marketing, entertainment and creativity forever. Don't miss out on this exciting program; register today.
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If we were all given by magic the power to read each other's thoughts, I suppose the first effect would be to dissolve all friendships."
-- Bertrand Russell,
British philosopher, mathematician and historian
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