Insurance claims from deadly California wildfires top $11.4B

BY KATHLEEN RONAYNE,

THE ASSOCIATED PRESS

SACRAMENTO, Calif. — Insurance claims from California’s deadly November 2018 wildfires have topped $11.4 billion.

State Insurance Commissioner Ricardo Lara said Monday that more than $8 billion worth of damage comes from the fire that levelled the town of Paradise and killed 86 people. About $3 billion more is from two Southern California wildfires that ignited the same week.

The $11.4 billion is just shy of the claims filed in a series of 2017 wildfires, including deadly blazes that tore through Northern California wine country.

The Paradise wildfire destroyed about double the number of homes than the wine country fires, but property values are lower in the rural Northern California region.

Including other major California fires in July 2018, total insurance claims from the year neared $12.4 billion.

Source: The Associated Press

 

Chubb Announces Key Cyber Security Trends to Watch in 2019

WHITEHOUSE STATION, N.J.Jan. 8, 2019 /CNW/ — As business decision-makers look to the year ahead, it is critical to address existing and new cyber security concerns. To help with that process, Chubb has launched its first annual cyber security predictions, which focus on the top risks in 2019 and beyond.

“The cyber risk landscape is constantly evolving — it’s vital to stay on top of potential risks as they emerge,” said Michael Tanenbaum, Head of Chubb Cyber North America. “We expect shifts in the regulatory landscape, changes to the fundamental models of cyber crime, and additional risks brought on by the explosive growth in Internet of Things (IoT) devices. It is critical to stay abreast of these things in 2019.”

“Throughout the years, we have seen everything from Y2K to today’s mega-breaches and the evolution of cyber crime,” said Bill Stewart, Division President of Chubb’s Global Cyber Risk practice. “We continue to stay ahead of the latest cyber risks to help our clients protect against and respond to an ever-increasing cyber threat.”

Chubb, an innovator in the cyber insurance space, has more than 20 years of experience writing cyber insurance policies. Based on that experience, the Chubb Cyber practice has issued the following three cyber security predictions for 2019 and beyond:

Cybersecurity regulation and enforcement will increase and focus more on actions taken by businesses pre-incident,in addition to post-incident protocol.

Until now, regulatory efforts have largely focused on steps businesses must take after a cyber incident, including fixing vulnerabilities, notifying law enforcement, and notifying customers. Chubb anticipates this will change as lawmakers also focus regulatory attention on companies’ data collection and data usage practices, as well as on the actions that organizations should take to better prevent a cyber incident from occurring in the first place. This phenomenon has already begun to take hold in the United States with laws such as the New York State Department of Financial Services (NYDFS) Cybersecurity Regulation and the California Consumer Privacy Act, which have put new obligations on organizations to not only protect the information they collect, but also to ensure that they are allowed to collect such information, that they are using that information legally, and that they remain responsible for that information when they share it with a third party.

Additionally, this trend has been seen globally, which impacts many more businesses now than ever before.  The internet and virtual connection has provided great opportunity to many organizations, but it could also be subjecting them to the laws of the jurisdictions in which their new customers reside.  Thus, organizations not only need to ensure that they are in compliance with the laws of the state in which they physically operate, but also determine if they are subject to the laws of the locations where they virtually operate.  In the coming years, organizations of all sizes can expect to see increased data regulation in the United States and abroad, which will focus on data privacy, data use, as well as data security.

Crime does pay, and business is booming: the business model of cyber crime will tilt heavily toward direct monetization attacks.

During the past 20 years, the dark market has become saturated with private records and personally identifiable information (PII). In 2019, rather than seeking additional PII, cyber criminals will prioritize attacks that result in direct monetization as they operationalize PII that they’ve already obtained. In order to pursue these types of attacks, criminals will continue to employ ransomware.

Already a threat on the rise, ransomware will continue to grow and will remain a top cyber threat for the next five years, and will become even more destructive and costly. Social engineering financial fraud also will ramp up, and cryptojacking — the unauthorized use of someone’s computer to mine cryptocurrency — will be employed heavily by cyber criminals.

Cyber criminals will target individuals just as much as businesses as billions of Internet of Things (IoT) devices come online.

As billions of additional IoT devices come online during the next year, cyber criminals will have even more avenues to target individuals. As device use overlaps between enterprise and individual, we will see more targeted ransomware and phishing attacks. Video and audio capabilities on devices — from smartphones to refrigerators, smart assistant devices, and nanny-cams— will help cyber criminals gather personal information and images. Bad actors can gain access to businesses through personal devices — particularly when businesses allow individuals to connect with their personal devices through an enterprise server. As an increasing number of IoT devices come online, businesses will need to monitor vigilantly to intercept and short-circuit cyber risks.

As always, business leaders should look to defend their companies from cyber attacks rather than react to cyber attacks. As cyber threats evolve, cyber insurance will play a key role in the awareness, preparedness, and resiliency of governments, corporations, and individuals.

To learn more, visit www.chubb.com/cyber. Here you will find a host of cyber-related resources, including access to The Chubb Cyber IndexSM, which provides real-time access to proprietary Chubb claims data and insight into current cyber threats and how you can protect your company against them.

About Chubb:
Chubb is the world’s largest publicly traded property and casualty insurance company, and the largest commercial insurer in the United States. With operations in 54 countries and territories, Chubb provides commercial and personal property and casualty insurance, personal accident and supplemental health insurance, reinsurance and life insurance to a diverse group of clients. As an underwriting company, we assess, assume and manage risk with insight and discipline. We service and pay our claims fairly and promptly. The company is also defined by its extensive product and service offerings, broad distribution capabilities, exceptional financial strength and local operations globally. Parent company Chubb Limited is listed on the New York Stock Exchange (NYSE: CB) and is a component of the S&P 500 index. Chubb maintains executive offices in Zurich, New York, London and other locations, and employs approximately 31,000 people worldwide. Additional information can be found at: chubb.com.

SOURCE Chubb

Insurers sue California utility over wildfire damages

By Jonathan J. Cooper

THE ASSOCIATED PRESS

SACRAMENTO, Calif. _ Several insurance companies have filed lawsuits blaming Pacific Gas & Electric Co. for a deadly California wildfire that destroyed 14,000 homes and triggered billions of dollars in insurance claims.

The lawsuits filed by Allstate, State Farm, USAA and their subsidiaries come on top of several other cases filed by victims of the Camp Fire, which devastated the towns of Paradise, Magalia and Concow north of Sacramento after it started Nov. 8.

Investigators have not pinpointed a cause for the fire. But the insurance companies note in their lawsuits that flames ignited near the site of a transmission-line irregularity reported by the utility. They also note a potential second ignition point involving PG&E distribution lines.

Under California law, PG&E is held entirely liable if lawyers can prove the fire is linked to the utility’s power lines or other equipment a fact that sent shares of the company tumbling following the start of the fire.

Following a series of deadly fires in 2017 in Northern California’s wine country, PG&E executives and lobbyists tried to convince state lawmakers to change the legal standard and reduce the company’s liability. Lawmakers declined, but they allowed the company to pass along some of the costs from the 2017 fires to its customers in hopes of sparing it from bankruptcy. The law does not help the company for the 2018 blazes.

The lawsuits were filed last month in Sacramento County Superior Court. They were first reported by the Sacramento Business Journal.

“We are aware of lawsuits regarding the Camp Fire,” Lynsey Paulo, a PG&E spokeswoman, said in a statement.  “Our focus continues to be on assessing infrastructure to further enhance safety and helping our customers recover and rebuild.”

PG&E, one of the nation’s largest electric utilities with more than 5 million customers in Northern and Central California, is facing legal and regulatory challenges on a number of fronts, including the potential for criminal charges.

The California attorney general told a judge last week that PG&E could face charges as serious as involuntary manslaughter or murder if investigators determine that reckless operation or maintenance of power equipment caused any recent wildfires in the state.

A federal judge overseeing a case that resulted in a criminal conviction for the company following a 2010 pipeline explosion has asked PG&E to explain any role it may have had in the Camp Fire. The judge could impose new requirements on the utility if it’s found to have violated its probation in the pipeline case.

Top Causes of Loss for Global Businesses: Allianz

The top causes of global corporate insurance losses as compiled by Allianz

This analysis encompasses over 470,000 claims from over 200 countries and territories.

Fire/Explosion: 24%

Aviation collision/crash: 14%

Faulty workmanship/maintenance: 8%

Storm: 7%

Defective products: 6%

Damaged goods (including handling/storage): 5%

Machinery breakdown (including engine failure): 5%

Water damage: 3%

Ship sinking/collision: 2%

Professional Indemnity (e.g. negligence/misadvice): 2%

U.S. and Britain to Sign Pact After Brexit to Bring Stability to Insurance Industry

Members of the U.S. Trade Representative’s Office and the U.S. Treasury Department made a statement on December 11, 2018 that they have intentions to sign a post-Brexit bilateral insurance agreement with Britain that will bring regulatory stability and continuity to the industry.

According to officials the Agreement will be consistent with a similar one signed with the EU back in 2017.

Unless Brexit is somehow reversed, Britain is scheduled to leave the EU on March 29, 2019.

The timing of the announcement is not a coincidence. The U.S. Congress requires a 90-day notification period before it can be signed and officially put into effect.

U.S. officials say the pending agreement will affirm the U.S. state-based system of insurance regulation and should help in the competitiveness of U.S. insurance and reinsurance firms.

Antony Philliopson, Britain’s Trade Commissioner for North America, welcomed the announcement and said it’s an example of the work the British government is doing to ensure business continuity with the U.S. and said they will continue studying and looking into further bilateral trade ties.

Calif. police use Tesla system to halt sleeping man’s car

By Tom Krisher

THE ASSOCIATED PRESS

DETROIT _ The Autopilot system on a Telsa Model S may have helped the California Highway Patrol stop the car after its driver fell asleep on a freeway.

Similar systems, now offered by nearly all automakers, use cameras and radar to detect objects in front of them and automatically keep a safe distance or even stop or slow the vehicles before a crash. The systems also can keep cars in their lanes. Tesla’s Autopilot feature allows the vehicle to change lanes automatically when prompted by the driver, navigate interchanges and exit freeways.

In the case of the driver who fell asleep, California Highway Patrol officers spotted him Friday afternoon as they were looking for drunken drivers. They pulled alongside the grey Model S on U.S. 101 and saw that the driver was asleep. When the driver didn’t respond to their lights and siren, they slowed traffic behind him and tried to figure out if Autopilot or other driver-assist systems were engaged, according to Officer Art Montiel, a CHP spokesman. They then pulled in front of the car and slowed down, and the car eventually stopped.

No one was hurt and the car didn’t crash. The 45-year-old driver was arrested on suspicion of driving under the influence.

Systems like Tesla’s semi-autonomous Autopilot are the building blocks of self-driving vehicles, but humans still must be ready to take control. Here are answers to questions about how the systems work and the incident in the San Francisco suburb of Redwood City:

Q: Was the driver using Autopilot system?

A: Maybe. Montiel said officers believe it was on but they haven’t confirmed that yet. Telsa won’t comment. The car’s automatic cruise control system, which keeps it a safe distance from vehicles in front of it, could have been operating without Autopilot being engaged, as could its automatic emergency braking system. Authorities are investigating which systems were in use.

Q: Isn’t the system supposed to stop the car if the driver is not paying attention?

A: Telsa’s Autopilot is designed to safely pull over if a driver doesn’t put force on the steering wheel. But some drivers have been able to fool the system. It’s unclear whether that happened in the case of the sleeping driver. A similar system from General Motors called Super Cruise monitors the driver’s eyes and will stop the car if they are not paying attention. Tesla CEO Elon Musk wrote on Twitter that it is  “default Autopilot behaviour” to gradually slow to a stop and turn on the hazard lights. “Looking into what happened here,” Musk wrote.

Q: Can’t these cars drive themselves?

A: No, they can’t. All manufacturers, including Tesla, warn drivers that the systems are for assistance only and they must pay attention and be ready to take over driving. Tests by AAA and theInsurance Institute for Highway Safety both found that the systems can’t handle every situation they encounter on the roads. Safety advocates criticized Tesla for naming its system Autopilot, especially after an Ohio man died in a crash while using it in Florida two years ago. The National Transportation Safety Board is investigating several other crashes in which the drivers appeared to place too much confidence in Autopilot, including one fatality earlier this year near Mountain View, California.

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