Risk & Insurance articles from February 2007

Risk & Insurance archives from February 2007

In need of a makeover.(LETTERS TO THE EDITOR)(Letter to the editor)
February 1, 2007... Dear Editor, I read with interest Ernesta G. Proeope's article, "It Is Hip to Be Square," in the December 2006 issue of Risk & Insurance[R]. She rightly points out the need to enhance the profile of risk management and insurance among...

Welcome to the Power Brokers 2007.
February 1, 2007... Welcome to the second annual Power Broker issue of Risk & Insurance[R], our effort to select brokers who were especially deserving of attention in 2006 for the work they did for clients in their respective industry categories. We received...

Time to celebrate the broker rookies.
February 1, 2007... When it comes to brokers, there's one criterion that matters above all else to clients: What have you done for me lately? In the case of our Power Broker rookies, it doesn't matter how old they are, or even how much experience they have. In the...

Lifting the veil on professional liability: two key benchmarking projects release much-anticipated results to build on in 2007.(UPFRONT: News, Updates and Other Emerging Strategies from Around the World)
February 1, 2007... Health-care risk managers and their insurers are still trying to get their arms around professional liability. Two 2006 benchmark studies deliver different but similarly encouraging findings that could help--one, that the frequency of liability...

Back to backdating: the stock-options practice is still on the minds of D&O buyers and sellers--and the SEC.(UPFRONT: News, Updates and Other Emerging Strategies from Around the World)
February 1, 2007... The backdating issue still has forward momentum. On Dee. 27, 2006, UnitedHealth Group Inc. announced that the Securities and Exchange Commission was formally investigating its stock-options practices. The feds' eyes are also on CEO Steve Jobs...

Fraudster netted: the catch of the day for MEMIC: claimant who lied about commercial fishing.(UPFRONT)
February 1, 2007... Call it sweet justice that the crustaceans caught by a man while he received workers' comp benefits came back to pinch him. William Fennelly was sentenced in December to seven months in jail for two felony counts of perjury related to a...

State of emergency preparedness: report ranks states on health disaster preparedness.(UPFRONT)
February 1, 2007... Trust for America's Health, a nonprofit public health advocacy group, released its fourth annual report "Ready or Not? Protecting the Public's Health from Disease, Disasters, and Bioterrorism." The finding: Emergency preparedness in most states...

Reinsurers breathe easier: they look for windfall from higher rates, and few catastrophe claims.(UPFRONT)
February 1, 2007... In recent years business as usual hasn't always been possible at the annual reinsurance gathering in Germany's spa town of Baden-Baden. Its late October timing has placed it in the wake of catastrophes that have violently upset the assumptions...

Paying paramedics properly: a case in Pennsylvania could better define municipalities' overtime pay liability for paramedics.(UPFRONT)
February 1, 2007... City risk managers may be able to breathe easier about employers' practice liability, care of a recent case out of the United States District Court, Eastern District of Pennsylvania, in Philadelphia. The issue is whether the City of Brotherly...

Worth repeating.(UPFRONT)
February 1, 2007... "Either we've got them totally confused or put them to sleep." George Dale, Mississippi insurance commissioner, reacting to a lack of questions from the audience at the Joint Industry Forum 2007, in New York City on Jan. 9 "The nation...

Customer disservice.(ROGER ON RISK)
February 1, 2007... All businesses are people businesses. The level of customer service depends entirely on the qualities of the people delivering it. Honesty, determination and dedication are among the most important characteristics in a good employee....

Options: back to the future.(THE LAW)
February 1, 2007... Most lawyers make good money. I know I do, especially for someone born in a row home and whose father never finished high school. But when conversation drifts to the "outrageous" money made by some lawyers, I have a well-worn response:...

A West Virginia transformation.(WORKERS' COMP)
February 1, 2007... When I come upon workers' compensation professionals who, facing a hard puzzle, behave with an intelligence rising to brilliance, I itch to tell you. Step in their shoes. How do you think they're doing? I am writing about the people running...

The deception of risk perception.(RISK MANAGEMENT)
February 1, 2007... Human beings are not good risk managers. The brain is not wired to correctly assess what is going to actually kill us and what will simply worry us to death. We spend an inordinate amount of time worrying about the things that will never happen...

Gender gap still too wide.(BROKERAGE)
February 1, 2007... Why does the insurance industry treat its women so poorly? It's certainly not the first time I've raised the question in my own mind over the past 40 years, but why does it persist? I got to thinking about this all over again in light of...

2007 Power Brokers: the standouts: a Power Broker in 2007 is likely to be a man with 21 years of experience working at one of the nation's big four brokerages. Beyond that, who they are, where they've come from and what makes them stand out is anyone's guess.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)(Cover story)
February 1, 2007... Power Brokers: Now you see them, now you don't; here today, gone tomorrow--in search of more capacity for clients, of course. So, just who are these polished, urbane and often highly educated members of a nomadic tribe of middlemen (and women)...

Ruffling feathers: Willis CEO Joe Plumeri elbows his way into a patriarchal and complacent "gentlemen's club" only to be rebuffed in his quest to become the world's No. 1 broker. No one believes they've seen the last of him, or that a man not even trained as an insurance broker may still have a lesson to teach the industry.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... Nobody ever accused Willis Group CEO Joe Plumeri of being the shy, retiring type. In the six years he's been at Willis, he initially focused on that "vision thing," transforming what's been called a sleepy, British broker into what's probably...

Integro: we're here to win: having attracted assignments from more than 250 clients, the upstart broker is poised to make a move in the big-client market.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... Integro Insurance Brokers went from zero to 50, that is $50 million, in near record time. In its first full calendar year of operation, the newly formed broker that focuses on the biggest, most complex risks--and the largest clients--seems to...

Gallagher: middleman to the middle market: a focus on industry niches, overlaid with a regional approach, has paid off for Arthur J. Gallagher & Co., the world's No. 4 broker.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... Seven years ago, with the soft market pressuring revenues at all brokerage firms, Arthur J. Gallagher & Co. revised its business strategy. Gallagher, long the leading middle-market broker, looked to further penetrate and expand in its...

Getting off the renewal merry-go-round: utilizing a two-step proposal process takes time and effort, but it yields more competitive bids.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... It seems since the Spitzer investigations there's been an increase in the frequency of insurance shopping. For many companies the renewal process too often goes like this: The risk manager may put out parts or the entirety of her insurance...

Power brokers: automotive.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... With its big exposures, the automotive sector has faced a tough market and a challenging year once again. As in most industries, a thorough understanding of the property insurance market and its pricing, terms and conditions tops the list of...

Power brokers: aviation & aerospace.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... Brokering in the aviation and aerospace sector has become increasingly challenging. Pricing has dropped steadily and significantly due to the outstanding loss experience of U.S. and overseas airlines, forcing intense competition across a wider...

Power brokers: chemicals.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... The chemical sector is a new category this year, broken out from the energy group, and by itself, it covers a range of companies and risks. The impact of catastrophic loss is potentially high, but instances are surprisingly few. This past year,...

Power brokers: construction/design.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... Insurance coverage for the home-building sector of the construction industry has dried up as a result of significant claims and mass litigation. Most of the carriers that used to write home builders have left the market, and there are now very...

Power brokers: education.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... Innovative is probably the best way to describe the risk management action going on in the education markets this past year. It's innovative for a private, independent school to set up a risk management committee at the recommendation of its...

Power brokers: benefits consultants.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... High-priced health care for current and retired employees is sinking some of the biggest Blue Chips out there, let alone midsize and smaller companies. Employers are desperate for answers on how to lower the costs of their benefits, whether...

Power brokers: energy.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... What if brokers and their clients planned for a crisis that never materialized? At the end of 2005, brokers and their clients were bracing themselves for tight, even nonexistent underwriting capacity, major increases in premiums, and harsh new...

Power brokers: entertainment-media.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... For the insurance segment of the entertainment and media world, 2006 was marked by a quiet, concerted effort by insureds and insurers, and the brokers serving them, to keep the market calm and under control. "Everybody wanted to have a stable...

Power brokers: entertainment-sports.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... In 2006, following Hurricane Katrina, getting the right kind of coverages at an affordable price in the sports entertainment realm was very difficult. Reassessing business income was high on the priority list. That put the onus on brokers to...

Power brokers: environmental.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... Here's the basic problem with environmental risk: How do you insure and protect yourself against future risks that are unknown? Environmental risk management and insurance remain essential to making real-estate deals work. Brownfield...

Power brokers: financial institutions.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)(Company overview)
February 1, 2007... Financial institutions are a breed apart from other commercial accounts. In the financial institutions world, operational risk is covered by E&O and D&O policies. Because the risks are low frequency, high severity, many underwriters shy away...

Power brokers: fine arts.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... During 2006, the fine art and specie market experienced big changes, especially with large risks. Underwriters were concerned about the rise in the value of public and private collections, as auction houses broke records, and they were also...

Power brokers: gaming.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... Gaming companies are still shaking off the hit that hurricanes Katrina and Rita put on them in 2005. At issue is collecting on claims and perhaps even pending litigation. Then comes insuring for the future and staring down property-catastrophe...

Power brokers: health care.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... Some would say that big institutional health-care organizations don't need creativity from their brokers. The professional-liability crisis has abated, and most large institutions are self-insured to the point that their creativity must come...

Power brokers: long-term care.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... Long-term care is an exclusive current within the health-care ocean, but the fish swimming in it are not from one school. Within its ranks are organizations that provide assisted living, independent living, skilled nursing and/or hospice care,...

Power brokers: hospitality/leisure.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... Risk managers of hotel and resort chains will tell you that no other industry has seen a tougher insurance market in the past year than they have. Tougher ratings requirements for insurers, tightening calibrations on catastrophe models,...

Power brokers: marine.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... In 2006, the marine market was, as one top broker put it, "the land of opportunity." Early speculation was that 2006 renewal rates would harden, thanks to hurricanes Katrina and Rita in 2005. But that wasn't the case. On the contrary, the...

Power brokers: pharmaceuticals.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... Big Pharma continues to be the target of the latest plaintiffs' bar campaign, making product liability a continuing problem with both price and coverage. But that has even spilled over into D&O and potential securities litigation. These risk...

Power brokers: public sector.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... From county school districts to statutory risk management funds to religious denomination purchasing groups, public entities cover a range of nonprofit organizations. Brokers who work in this market must have a special understanding of this...

Power brokers: real estate.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... For the past year, it hasn't been a matter of how much property coverage in Florida would cost, but whether that coverage was available at all. Ever since the brutal 2005 hurricane season, capacity for property coverage has dried up, making 250...

Power brokers: retailing.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... By all accounts, retail is a risky business. At the extreme end, big-box stores like Wal-Mart and Target have hundreds of trucks on the road supplying thousands of properties 24 hours a day, with their tens of thousands of employees and...

Power brokers: technology/general.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... The technology world moves very fast, Companies that want to remain competitive have to keep up or risk being left behind. Constantly changing corporate strategies and business models can mean that risk management strategies that worked last...

Power brokers: technology/hardware.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... The computer hardware business constantly faces the challenges brought on by Moore's Law, which states that computer processing power will double about every two years. Yesterday's leading-edge products are today's commodities. The drive to...

Power brokers: technology/software.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... Software makes technology work. To address the constantly evolving hardware and business demands of the computer age, software firms must innovate constantly while navigating a potential minefield of regulator, privacy and intellectual-property...

Power brokers: telecommunications.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... The telecommunications revolution has transformed the modern world. From the Internet to mobile phones, handheld computers and Wi-Fi, business today communicates in a wide and new variety of ways. To meet their clients' needs, brokers in...

Power brokers: transportation.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... Trucking firms and railroad companies have to worry about keeping rigs on the road and trains on the rails. But after Sept. 11, 2001, their perceived exposures jumped, and many transportation companies saw the cost of insurance skyrocket. Good...

Power brokers: utilities.(THE POWER BROKERS: TOP INSURANCE BROKERS IN 2007)
February 1, 2007... Brokers with a knack for nukes were glowing in 2006. Although 2006 saw no new generating capacity, more could be on-line as early as this year. Suddenly, special exposures such as builders' risk have become in vogue for the first time in...

Analyzing the life cycle of an insolvency: the "life" cycle of a property/casualty insurer insolvency often takes place in an opaque world bereft of accountability. Taxpayers and policyholders end up paying the most.(INSURANCE)
February 1, 2007... The principal public-policy objective of an insurance insolvency proceeding is to return to policyholders and claimants as much as possible of their claim as quickly as possible. One need only look at the case of Transit Casualty Co. and...

Clarification.(Correction notice)
February 1, 2007... In the January 2007 article "Failing at Failures" about the history of insolvency laws and guaranty funds, a photo of executives at the former Kemper Insurance Cos. was inadvertently used to illustrate the article. Although Kemper was placed...

Twists and turns thread comp and disability show: the annual National Workers' Compensation and Disability Conference & Expo was not without controversy nor irony, if you knew where to look.(WORKERS' COMP)
February 1, 2007... In the 15 years that the National Workers' Compensation and Disability Conference & Expo has been in existence, never has it been as popular as it was last November. More than 2,400 attendees registered--double the 2005 attendance--and the...

Worth repeating.
February 1, 2007... "WHY ARE THE YOUNG NOT GOING INTO THESE JOBS? HAVE YOU SEEN THEM? HAVE YOU SEEN THEM IN THE MALLS? HAVE YOU SEEN HOW LOW THEY WEAR THEIR PANTS? YOU CAN SEE THEIR UNDERWEAR, AND UNDERWEAR, I CAN TELL YOU, IS NOT THE SAME AS WHEN I WAS...

Prices flat, rates stable: commercial insurance buyers, catastrophe-coverage purchasers notwithstanding, are in for price stability in 2007.(PROPERTY)
February 1, 2007... Summary * Buyers can expect to face stable prices this year. * Executives and analysts do not expect commercial lines and workers' comp to turn a profit in 2007. * A consensus on the creation of a federal fund to pay for natural...

PricewaterhouseCoopers LLP.(EXECUTIVE MOVES)
February 1, 2007... PricewaterhouseCoopers LLP has appointed IAN DILKS as the new global head of its insurance group. Dilks has been a partner at PricewaterhouseCoopers LLP since 1986, and in his new role, he will be responsible for the leadership of assurance,...

Assurant Health.(EXECUTIVE MOVES)
February 1, 2007... Milwaukee-based Assurant Health, a provider of individual medical, small-group and specialty health insurance products, promoted MIKE NORDERHAUG to vice president of sales strategy. After holding various sales executive positions over the past...

Brown Smith Wallace.(EXECUTIVE MOVES)
February 1, 2007... Brown Smith Wallace, the second-largest, locally owned, independent, full-service CPA and business consulting firm in Missouri, promoted TWILA FARRIS to manager of its insurance and reinsurance services practice. In her new role, Farris will...

Penn Mutual Life Insurance Co.(EXECUTIVE MOVES)
February 1, 2007... The Penn Mutual Life Insurance Co. has announced that KIRSTEN PEDERSEN has joined the company as vice president, product development. Her previous position was vice president, product development, for AIG/American General Life in Houston. ...

Grange Mutual Casualty Group.(EXECUTIVE MOVES)
February 1, 2007... Columbus, Ohio-based Grange Mutual Casualty Group, a $1 billion insurance and financial-services provider, has appointed MICHAEL FERGANG vice president and chief information officer for Grange Insurance. Prior to the five years he spent at...

Insurance Marketplace Standards Association.(EXECUTIVE MOVES)
February 1, 2007... The Insurance Marketplace Standards Association has named TIMOTHY F. KNEELAND the new chairman of the board. Kneeland is president of Life Investors Insurance Co. of America, a member of the Aegon Group. He has been with the company for more...

Essex Insurance Co.(EXECUTIVE MOVES)
February 1, 2007... Essex Insurance Co. has named JACK MILLER the new vice president of property claims. For the last six years, Miller served as an assistant vice president and territory manager for the casualty claims department. His past experience includes...

American International Group Inc.(EXECUTIVE MOVES)
February 1, 2007... American International Group Inc. has named ANASTASIA D. KELLY executive vice president, general counsel, and senior regulatory and compliance officer. Kelly was previously executive vice president and general counsel at MCI/ WorldCom and...

TRIA extension expected.(NEWS & NOTES)
February 1, 2007... Leaders of the property/casualty insurance industry expect Congress to extend the Terrorism Risk and Insurance Act in 2007, according to a survey conducted by the Insurance Information Institute, an industry trade group. A total of 89 percent...

Cats clawless in 2006.(NEWS & NOTES)
February 1, 2007... A total of 33 catastrophes in 2006 cost $8.8 billion in insured property damage and resulted in 2.27 million claims, according to Insurance Services Office Inc. In comparison, catastrophes in 2005 caused a total of $61.9 billion in insured...

Fiserv aligns units.(NEWS & NOTES)
February 1, 2007... Three vendors selling into the workers' compensation industry, P2P Link, a Dallas-based provider of Internet-based solutions for workers' comp providers and payers; DirectCompRx, a Memphis, Tenn.-based pharmacy care solutions provider; and...

Broker offers browser.(NEWS & NOTES)
February 1, 2007... Beecher Carlson, the Atlanta-based brokerage and risk management consulting firm, has launched a new tool for doctors, health-care risk managers and other health professionals to purchase and manage large medical-malpractice liability insurance...

SIIA expands scope.(NEWS & NOTES)
February 1, 2007... The Self-Insurance Institute of America Inc. has created a new committee to further research and education on self-insurance around the world. Called the International Committee, it represents SIIA's goal of increasing awareness of U.S.-style...

A buy for USI.(NEWS & NOTES)
February 1, 2007... Broker USI Holdings Corp. gave the green light for its sale to the private equity firm GS Capital Partners, which is an affiliate of Goldman, Sachs & Co. The $1.4 billion deal was recommended by USI's board of directors to its stockholders,...

Capacity up at Lloyds.(NEWS & NOTES)
February 1, 2007... Lloyd's of London announced its opening capacity for 2007 is $31.7 billion, up 9 percent compared with the same time last year. The largest direct providers of capital are Catlin Group Ltd., QBE Insurance Group Ltd. and Amlin PLC.

Markel lands onshore.(NEWS & NOTES)
February 1, 2007... Markel Global Marine & Energy, a Houston-based member of specialty insurance underwriter Markel Corp., has launched a division to underwrite onshore property, time element and builder's risk coverage, the company said. Called Onshore Energy...

New capacity launched.(NEWS & NOTES)
February 1, 2007... Marsh Inc. has launched a "sidecar" facility to provide its large corporate clients with access to more capacity to fill gaps in property-catastrophe coverage, the broker has announced. Called Marsh Risk Innovations, or MaRI, it delivers this...

P/C executives surveyed.(NEWS & NOTES)
February 1, 2007... A total of 81 percent of property/ casualty insurance executives said they would prevail in wind vs. water lawuits related to the 2005 storms, according to a questionnaire by the Insurance Information Institute.

Upcoming events.(Calendar)
February 1, 2007... MARCH 1-3 NAPSLO Workshop The National Association of Professional Surplus Lines Offices' 2007 Mid-Year Educational Workshop will be held in Palm Springs, Calif. In addition to programming Friday and Saturday, the Derek Hughes...