Cyber ECHO brings greater stability to the excess cyber insurance market, Marsh says
By Janie Har
THE ASSOCIATED PRESS
SAN FRANCISCO _ Damage from two destructive Northern California wildfires that killed six and sent thousands fleeing their homes topped $1 billion in insured losses, according to a preliminary estimate by the state’s insurance department.
The two fires started days apart in September, burning more than 200 square miles of remote, mountainous territory north and northeast of San Francisco.
The preliminary figure announced Monday includes $700 million from a fire centred largely in Lake County that killed four and destroyed nearly 2,000 structures, including some 1,300 homes. The so-called Valley Fire is the third most destructive wildfire in state history, based on the number of structures lost, and the fifth-costliest based on insured losses.
Another fire in Amador and Calaveras counties caused an estimated $300 million in insured losses. That fire killed two people and destroyed more than 800 buildings, making it the seventh-most destructive wildfire to hit the state.
“A year-round fire season is California’s new reality,” said Insurance Commissioner Dave Jones in a statement. “Residents and communities, especially those in high-risk fire areas, must take precautions now before the next devastating wildfire strikes.”
This is the first damage estimate from the California Department of Insurance for the fires, compiled from insurance claims filed through December. A final figure is months away.
Insurers report they have received 5,600 claims for commercial and residential properties, vehicles and other items. Lake County residents have filed the bulk of claims.
Lake County Supervisor Jim Comstock said $1 billion sounds right.
“I’m not at all surprised because this Valley Fire sought out property with structures on it to burn, it seemed like,” he said. As for Lake County’s place in wildfire history, he said, “It’s an infamy, unfortunately.”
The $1 billion does not include uninsured losses nor does it include damage to public roads and utilities.
For that, global insurance company Aon Benfield estimated last year that the two fires did nearly $2 billion in economic damage, including business interruption. About $1.5 billion of that was in Lake County alone.
Aon reported insured losses for the two fires topped $1.2 billion, including $975 million in Lake County. That’s within ballpark range of the state’s figures, said Aon associate director Steve Bowen.
“These two fires by themselves were two of the costliest in the state of California since 2007,” he said. “We’re talking about a once-in-a-decade type of event in the losses alone.”
Bowen said the fire in Lake County is the fifth costliest wildfire in state and U.S. history in terms of insured losses.
The costliest remains the Oakland Hills Fire of 1991, with damage covered by insurance costing $2.9 billion when adjusted for inflation. The second costliest is a 2007 wildfire in San Diego County that caused about $1.8 billion in damage covered by insurance.
The cause of both Northern California fires remains under investigation.
AXA Strategic Ventures announced yesterday a $11 million investment in Neura, a company that uses machine learning to revolutionize the Internet of Things.
Neura : a customer-centric, smarter technology
Neura is a company that uses machine learning to create a digital identity map of individuals. Neura enriches apps and devices with insights about users’ past and present actions, as well as calculated predictions about what they will do next
Neura’s technology, utilized for healthcare, music services, connected cars or homes, lets people get to an unprecedented level of technology personalization by computing a constantly updated portrait of user behavior patterns. “We believe Neura’s approach is disruptive and is going to change the way we use and interact with data and devices on a daily basis in the future“, said Manish Agarwal, General Partner at AXAStrategic Ventures in New York.
$11M investment to foster Neura’s technological and business potential
AXA Strategic Ventures (AXA SV) is a global €230 million venture capital fund to support promising startups and companies. A Series A round, co-led by AXA Strategic Ventures and Pitango Venture Capital and with participation from Liberty Israel Venture Fund and Lenovo Group, led to an $11M investment to enable Neura to further realize its technological and business potential.
Coinciding with the first open release of the Neura development framework, designed to let developers personalize and contextualize their products, the new capital will be used to expand Neura’s business reach and make the service ubiquitous.
AXA Strategic Ventures: a key player in AXA’s relationship with startups
This investment in Neura completes the recent four investments made in the second half of 2015 in the U.S.: Bee, PriceMethod, GoldBean and CoPromote offer disruptive services fostering emerging strategic innovations in insurance and financial services. These five companies join AXA SV’s portfolio, which also includes investments in PolicyGenius, Limelight Health, VolunteerSpot in the U.S. and Climate Secure, Easy Proprietaires, Evercontact, Flyr, Fundshop, Widmee, Netheros, Particeep and Art2M in Europe.
Costs will push the insurer’s general insurance unit to a fourth quarter operating loss
ZURICH— Zurich Insurance Group AG, an insurance giant that remains without a permanent chief executive, saw its shares fall sharply on Wednesday after it said that its largest unit has continued to suffer losses.
The Zurich-based firm said it expects to report about $275 million in losses as a result of recent storms in the U.K. and Ireland, pushing its beleaguered general insurance unit to an operating loss for the fourth quarter of last year.
Zurich Insurance, which is expected to report financial results on Feb. 11, said the expected losses are based on preliminary estimates of damage inflicted by the heavy rainfall and flooding that hit parts of North England, Scotland, and Ireland late last year. “The final cost remains uncertain,” the company said.
The expected fourth-quarter operating loss for the company’s general insurance unit, Zurich Insurance’s biggest business, comes after the same unit posted a $183 million operating loss in the third quarter. Overall, Zurich Insurance reported a 79% decline in net profit for the period.
The news of further losses comes shortly after the departure of former CEO Martin Senn, who stepped down last month. Mr. Senn’s exit was hastened by ongoing problems at the general insurance business, which Zurich Insurance has slated for roughly 200 job cuts.
In addition, problems at the general insurance business caused Zurich Insurance to back away in September of last year from an ambitious plan to acquire U.K.-based RSA Insurance Group PLC, in a deal that was potentially valued at more than $8 billion.
Mr. Senn has been replaced on an interim basis by Zurich Insurance Chairman Tom de Swaan. No permanent successor has yet been named.
Parker Beauchamp | Huffington Post
Whether it’s TV, the newspaper or social news feeds, today’s media coverage is a constant reminder of the violence and civil unrest around the world.
As a father and business owner, the idea of having the safety of my family and community threatened is unimaginable. Unfortunately, however, in many parts of the world (and even here in America), it’s a legitimate concern. While the idea of terrorism is an unappetizing discussion, we’d be remiss not to consider and prepare ourselves for the unthinkable. These tragedies happen more often than they should, and businesses (large and small) should prepare accordingly in case acts of terrorism strike close to home.
According to Insurance Information Institute, roughly 60% of U.S. companies carry terrorism insurance, yet there is often confusion about what this type of insurance covers and who should consider investing in it. Below are a few helpful answers to clear up some of these common questions.
Terrorism Insurance: What It Is, What it Covers
In the U.S., terrorism insurance is offered as an addition to your standard commercial insurance policy. This type of insurance often covers damages to your building and equipment following a terrorist attack. (Note: The U.S. Department of the Treasurymust certify the event as an act of terrorism before a claim can be filed).
Depending on your policy, you may also be covered for any losses stemming from an interruption to your business operation. If you manage insurance for your organization, talk to your insurance provider to see if your company would be covered for this type of loss, or if you should also consider adding business interruption insurance to your policy. The cost of this addition varies based on several factors, including your business’ needs, perceived risks, size and location. Talk to your insurance provider to receive an accurate quote to consider.
Terrorism Insurance: Quick Background
Following the devastation of 9/11, many insurance companies began limiting (and even eliminating) terrorism coverage for clients. To help solve this problem, President Bush signed the Terrorism Risk Insurance Act (TRIA) in November 2002. This temporary federal program was designed to enable the insurance industry to share losses with the federal government following a major terrorist attack–which “effectively limit[ed] insurers’ losses [and] greatly simplif[ied] the underwriting process.” The act was renewed in 2005, and named the Terrorism Risk Insurance Extension Act (TRIEA) of 2005.
In January 2015, President Obama signed the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) of 2015. This program “amended and extended” the TRIA of 2002, and is effective until December 31, 2020.
For more information about the amended Act, including filing procedures for property and casualty insurers, visit the National Association of Insurance Commissioners.
Terrorism Insurance: Who Needs It?
Investing in terrorism insurance is entirely up to your organization and the level of perceived or known risks associated with your operation. If you’re unsure if you should invest in this type of policy, contact your insurance agent to discuss your risks and exposures.
Your agent will likely assess:
- Your company’s location (urban areas are at greater risk than rural and residential areas).
- Your industry (the travel industry, chemical facilities and entertainment venues, for example, face heightened risks).
- Your budget (the cost of terrorism insurance is declining across the country, but your agent will assess if the expenses align with your budget).
The news that Maurice Tulloch is to step down from his post as CEO of Aviva’s UK general insurance business should not have come as much surprise.
At just over two years in the role, he has easily served his time based on the tenures of the previous incumbents who all – on average – had shorter stints.
When his predecessor Robin Spencer departed I wrote a blog painting him as a “fall guy”. Someone who happened to be in the wrong place at the wrong time, and thus carried the blame for some of the bad news that had impacted the business over the previous 12 months.
So what will Tulloch’s legacy be?
1) Repositioned Aviva as a broker favourite
Given that the last CEO of Aviva Canada to take the UK role – Igal Mayer – very much divided the broking community with his verbose approach, there might have been some understandable trepidation with Tulloch, given he was seen as one of Igal’s star pupils.
Ben Cohen, analyst at Canaccord Genuity, told Post at the time: “It will be interesting to see how [Tulloch] deals with moving to what is a very different market environment in the UK.
“Others that have moved have not found it an easy to transition. You had Igal Mayer who made the move and that ultimately didn’t end well.”
They needn’t have worried. Within weeks Tulloch was making all the right noises, and 12 months on the firm was reaping the rewards.
Brokerbility chairman Ashwin Mistry for one described Tulloch as “an absolute breath of fresh air”, adding: “He’s dynamic, broker focussed, and really wants to do business. It’s a very positive move as far as we’re concerned, especially after the three or four changes Aviva had prior to that.”
Tulloch opened his tenure as CEO with the gambit: “I have spent the best part of 22 years engaging brokers to ensure that they win and we win.” And he seems to have built a positive connection with the market.