U.S. Startup launches insurance for Uber, Lyft passengers

By Sarah Skidmore Sell

THE ASSOCIATED PRESS

Grabbing a ride from Uber or Lyft? Now you can get an insurance policy from your phone for the ride too.

Startup SURE says it has partnered with underwriter Chubb to launch a new service that allows passengers to buy accidental medical, death and dismemberment insurance coverage for the ride.

While ride-hailing companies typically provide liability insurance coverage for U.S. drivers that would cover passengers in an accident, this product aims to fill in any potential gaps.

The program, called RideSafe, works by connecting a customer’s Uber or Lyft account to their SURE Insurance app, and once coverage is initially authorized, the passenger’s ride is automatically insured.

The company said Thursday that future versions of its RideSafe product will include coverage for passengers riding in autonomous vehicles used for ride-sharing.

Arthur J. Gallagher & Co. Acquires Majority Interest In Hesse & Partner AG And Hesse Consulting GmbH

ROLLING MEADOWS, Ill., June 11, 2018 /CNW/ — Arthur J. Gallagher & Co. today announced that it has acquired a majority interest in Zurich, Switzerland-based Hesse & Partner AG and Hesse Consulting GmbH. Terms of the transaction were not disclosed.

J. Patrick “Pat” Gallagher, Jr. – Chairman, President and CEO of Gallagher, global insurance brokerage, risk management and consulting services firm (PRNewsfoto/Gallagher)

Founded in 1997, Hesse is a commercial property/casualty broker and consultant offering coverages and risk advisor services primarily to industrial, manufacturing and construction clients with a particular specialism in the waste-to-energy industry. Guido Hesse, Tanja Jung and their associates will continue to operate from their Zurich location under the direction of Vyvienne Wade, head of Gallagher’s overseas division.

“Hesse brings us an outstanding team of specialists in the growing waste-to-energy industry and positions us for further growth in the region,” said J. Patrick Gallagher, Jr., Chairman, President and CEO. “I am pleased to welcome Guido, Tanja and their associates to our growing Gallagher family of professionals.”

Arthur J. Gallagher & Co. (NYSE: AJG), a global insurance brokerage, risk management and consulting services firm, is headquartered in Rolling Meadows, Illinois. The company has operations in 34 countries and offers client service capabilities in more than 150 countries around the world through a network of correspondent brokers and consultants.

Cyber insurance market sees steady growth as awareness increases

By Modestus Anaesoronye | Business Day

Cyber attacks were once again in the spotlight in 2017, with increasing frequency and severity, offering plentiful opportunities for growth of insurance, especially in small and medium-sized companies, according to A.M Best report.

The WannaCry and NotPetya ransomware attacks and the Equifax data breach received significant media attention and affected millions of people and businesses. The NotPetya attack in particular highlights the growing business interruption exposure associated with cyber risks. Also, in October 2017, Yahoo! updated its 2013 data breach tally from one billion to three billion of its accounts, potentially making this the most substantial, most extensive cyber breach ever recorded.

These events highlight the vital need for cyber insurance, but the market is bifurcated. On the one hand, national accounts and Fortune 500 companies seem to be embracing the need to partner with insurers and brokers as a way to counter cyber risks.

Financial institutions and healthcare companies are acutely aware of their cyber exposures and are increasing their coverage. Average policy limits are rising, with some of the largest companies’ coverage towers above the half-billion dollar mark.

On the other hand, the take-up rate for small to medium-sized enterprises (SMEs) remains in the low teens, presenting an area where insurers would like to see growth.

In 2017, cyber packaged policies in force increased 28 per cent, some of which was due to the addition of affirmative cyber coverage to packaged policies. This increase is significant, but this is still something of a fledgeling business, and an increase of this magnitude, while material, does minimal to close the protection gap. However, interest from SMEs does seem to be gaining traction, and capacity from insurers is ample.

In the short term, despite the inherent challenges in managing aggregations and pricing, we believe the cyber insurance market presents a favourable opportunity for insurers. Demand is expected to grow due to the accelerating adoption of technology and the increasing awareness of cyber risks, especially among SMEs. Given the abundant supply of capital and the cautious growth strategies of insurers, we expect the overall exposure of the property and casualty industry.

However, as insurers expand their cyber offerings, they will need to be prudent in establishing underwriting standards and limits, and exercise appropriate risk management and mitigation measures to ensure that these exposures remain aligned with the company’s risk tolerances and appetites.

The extent to which an insurer grows its cyber business should also lend to a broader understanding of this relatively new risk and a company’s ability to aggregate, monitor, and manage its exposure in various scenarios. Data quality is a crucial factor when insurers provide information to regulators, other stakeholders.

Overall, cyber insurance take-up remains low, as SMEs remain complacent about these risks, under two assumptions: that hackers target only more prominent businesses such as Target or Home Depot or that they already have coverage under another policy when they might not. However, this sentiment and tepid interest in cyber insurance among SMEs may be changing, in light of the near daily reminders of cyber-threats, attacks, and breaches feeding social media.

Pricing is another factor, as more business owners see the cost benefits and also realize their vulnerabilities due to their interconnectivity with vendors, suppliers, and customers.

A data breach is only one factor in cyber risk, however many SMEs may be underestimating business interruption risks, and the impact on smaller enterprises of business interruption could be much higher, as they may not be as resilient or diverse as national account clients.

Source: Business Day By Modestus Anaesoronye
Edited for ILSTV

Chinese retail tycoon’s fraud conviction thrown out

China’s supreme court threw out a retail tycoon’s fraud conviction on Thursday, May 31, 2018 in an unusual show of leniency toward entrepreneurs amid a string of high-profile detentions that has rattled the Chinese business world.

Zhang Wenzhong, former chairman of one of China’s biggest retail chains, Wumart Stores Inc., was released in February after serving 12 years in prison on charges that included improperly obtaining technology development subsidies.

The Supreme People’s Court ruled that while Zhang, a computer scientist who studied at Stanford University and founded Wumart in the 1990s, violated rules in applying for the subsidies, he did so unintentionally and his company was eligible to receive them.

Zhang and another executive who was convicted had no `”subjective intention” to commit fraud, the court said. It said their convictions were a “misapplication of the law and should be corrected.”

The ruling was a rare success by a high-profile defendant in the midst of a marathon anti-corruption crackdown led by President Xi Jinping.

It reflected the ruling Communist Party’s desire to `”strengthen the protection of the legitimate rights and interests of entrepreneurs,” said a Supreme Court official quoted by the website of the Shanghai newspaper The Paper.

In a possible effort to reassure entrepreneurs about their status in the state-dominated economy, the unidentified official acknowledged they face uncertainty about evolving rules and sometimes need to make unorthodox arrangements.

“In some places, there has been an unfair and unreasonable treatment of private enterprises,” the official was quoted as saying. The official said when authorities find “irregular practices” they should be examined in a “developmental perspective.”

A series of Chinese businesspeople have been prosecuted or detained for questioning since 2016 about possible offences including fraud, embezzlement and bribery.

On Wednesday, May 30, 2018 a lawyer for the imprisoned founder of China’s biggest privately owned insurance company said he will appeal an 18-year prison sentence on fraud charges. Wu Xiaohui of Anbang Insurance, which owns New York City’s Waldorf Hotel, was convicted of improperly raising billions of dollars from investors and diverting company money to his own use.

The founder of a Shanghai-based company that was buying a stake in Russia’s biggest oil producer, Rosneft, was detained in March, according to news reports. A Chinese-born Canadian businessman disappeared from Hong Kong in early 2017 and news reports say he might have been abducted by mainland police for possible trial.

Zhang was accused of improperly obtaining 31.9 million yuan ($4.9 million) from a government program for a logistics and information management project. Prosecutors said only state-owned companies were eligible and Zhang colluded with a subsidiary of a government enterprise, China Chentong, to obtain the money.

The supreme court said the rules had changed by the time Wumart applied and private companies were eligible.

“It is in accordance with the industrial and development policies of that time,” the court said.

It gave no indication why a lower court that upheld Zhang’s conviction in 2009 failed to notice the rule change that would have freed him.

Zhang stepped down as chairman of Wumart’s parent company after being detained in 2006.

The supreme court also overturned Zhang’s conviction on charges he and other investors improperly used 40 million yuan ($6.1 million) from a customer’s account at an insurance company to trade stocks.

The facts of that case were unclear and “lacked sufficient evidence,” the court said.

Former head of China’s Anbang group appeals prison sentence

The founder and former head of the sprawling Chinese insurance group that owns New York’s famed Waldorf Astoria Hotel is appealing his sentence of 18 years in prison for fraud.

A lawyer for Wu Xiaohui told The Associated Press on Wednesday, May 30, 2018 that his client would seek to have the charges against him dismissed.

Lawyer Chen Youxi said the charges were not supported by evidence, but declined to provide further information.

Prior to Wu’s sentencing earlier this month, his Anbang Insurance Group acquired a vast range of global assets and discussed possibly investing in a Manhattan skyscraper owned by the family of U.S. President Donald Trump’s son-in-law and adviser, Jared Kushner. Those talks ended last year with no deal.

The Shanghai No. 1 Intermediate People’s Court said Wu pleaded guilty at trial to fraudulently raising billions of dollars from investors.

The court also ordered the confiscation of 10.5 billion yuan ($1.6 billion) in assets from Wu, who founded privately-owned Anbang in 2004.

Wu was accused of misleading investors and diverting money for his own use. He was detained last year and regulators seized control of Anbang in February. He was shown on state TV in March admitting guilt.

Wu initially had denied his guilt at his one-day trial, according to a court statement.

Court documents quoted by state media said Wu concealed his ownership of shares in companies controlled by Anbang, filed false statements with financial authorities and lured investors by offering a rate of return above that offered elsewhere. Much of the business relied on selling insurance products to raise investment capital.

They said he used more than 100 companies under his control to manage funds and used his position to misappropriate 10 billion yuan ($1.5 billion) in Anbang’s deposits.

As lava destroys Hawaii homes, owners ask: Am I covered?

By Jennifer Sinco Kelleher

THE ASSOCIATED PRESS

HONOLULU _ Patricia Deter moved from Oregon to Hawaii to be closer to her two daughters, but the Kilauea volcano burned down her home only a month after she bought it.

Now Deter and others who have recently lost homes to the lava-spewing mountain are on an urgent quest for answers about insurance, desperate to learn whether their coverage will offer any help after molten rock wiped out most of what they owned.

The eruption has destroyed about two dozen homes in the Leilani Estates subdivision on the Big Island.

Authorities on Tuesday reported a new fissure opened in the adjoining Lanipuna Gardens subdivision, bringing the number of cracks in the ground spitting out lava and toxic gas to nearly 20 since the eruption began May 3. Another fissure that opened up last weekend was sending molten rock crawling toward the ocean at about 20 yards (18 metres) per hour.

Few insurance companies will issue policies for homes in Leilani Estates because it is in an area deemed by the U.S. Geological Survey to have a high risk of lava.

But homeowners are not without options. One possibility is the Hawaii Property Insurance Association, a non-profit collection of insurance companies created by state lawmakers in 1991 to provide basic property insurance for people who are unable to buy coverage in the private market.

The horror of seeing houses turned to ash has motivated some people who had no insurance to scramble to purchase a policy. The association announced last week that it would issue policies to uninsured homeowners in the affected area _ but they will have to wait six months.

Some homeowners believe fire coverage will suffice for homes burned by fire from the lava. And a list of frequently asked questions from the Hawaii Insurance Division supports that idea, saying that lava damage may be covered “as a fire peril.”

However, there are exceptions. If policies specifically exclude lava damage, the fire coverage will not apply, said Judy Moa, an insurance broker who specializes in catastrophic coverage for Hawaii.

“The cause of damage is lava at the end of the day,” she said. “If lava came down the hill, and they have lava exclusion and trees catch fire, which burn the house, that’s not covered.”

Some homeowners forgo policies that include lava coverage because they can cost more than $3,000 per year, said Moa, who has fielded many calls from anxious homeowners.

The same insurance questions haunt people whose homes are standing but could still be torched by future lava flows.

Todd Corrigan and his wife left their Leilani Estates home on May 4 after a magnitude-6.9 earthquake knocked belongings off their shelves. That jolt convinced them it was time to evacuate.

Corrigan said the most stressful part of the experience might be the uncertainty about what insurance will cover. His policy will pay for damage from a fire but not from lava. His insurer also cautioned him that it will not cover damage if he has not been at home for 30 days. That requirement could be a problem if he is gone for a long time.

“You have to worry about that stress when you’re trying to deal with everything else,” Corrigan said.

Coverage details vary depending on policies and companies, said Insurance Division Commissioner Gordon Ito, who encouraged homeowners to contact agents to find out what is covered.

State Farm stopped writing policies for homes in the two highest-risk lava zones in the 1990s, but the company grandfathered-in any existing policies, said Kim Silva, a State Farm sales executive in Hawaii.

The company’s policies cover fire from volcanic activity, she said, “but every claim has to be handled on its own merit.”

Deter’s daughters live in the same area as their 88-year-old mother. They know the eruption risks, so they made sure their mother’s home was covered by a policy that included lava.

The family’s Hawaii-based insurance agent assured daughter Vickie Pruitt that her mother’s house was fully covered for lava.

But a phone call from an adjuster on the U.S. mainland told them it looked like the damage was from an earthquake not the lava and that the home would not be covered.

“I’m like, ‘What?”’ Pruitt said. “I’m laughing hysterically. But it’s not funny. It’s tragic.”

They were waiting for a follow-up call they hoped would provide more clarity.

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