The Florida Insurance Roundup from Lisa Miller & Associates®

The Thousand Oaks, California bar shooting.  The Pittsburgh synagogue massacre.  Just two of the recent mass shootings across the country involving what police term as an “active shooter.”   The worst to date in Florida was the Valentine’s Day 2018 shooting at Marjory Stoneman Douglas High School in Broward County, in which 17 people were killed and 17 others injured.

Beyond the tragic loss of human life are the lives of the survivors affected.  How can they ever be made whole again?  The insurance industry is responding to these attacks by offering “active shooter insurance” – designed to help organizations and businesses whose employees, property and reputation are impacted.  Host Lisa Miller, a former deputy insurance commissioner, talks with an underwriter on this new line of insurance and its growing sophistication in coverage options for events that used to be unthinkable.

Show Notes:

Data from the FBI show the average number of active shooter events in the U.S. has doubled over the past eight years compared with the previous eight years.  There were 30 such events in 2017 - more than any other year since 2000.  Just what is available in the insurance market to protect individuals and businesses?

Peter Bransden is an underwriter for Aspen Insurance, leading the firm’s Crisis Management team in Miami.   Aspen’s Active Assailant Insurance includes the acts of terrorism, kidnap and ransom, and product contamination. 

“Active Assailant Insurance has been designed to protect policyholders against a wider range of attacks involving a weapon.  It is often referred to as “active shooter” insurance, but these events are by no means limited to firearms, as we have seen vehicle rammings, knife attacks, and suicide bombings,” Bransden said on the podcast. 

Bransden explained that most policies include five main coverage categories:

Some insurance policies even include mitigation and training by ex-FBI active shooter response agents, who will train a business or organization on how to prepare and respond properly in the case of such a horrific event.

Most General Liability (GL) insurance policies do not cover active shooter events, leaving policyholders with potentially large liability exposure.  Many GL policies specifically exclude terrorism, following the 2001 911 attacks.  Bransden and host Lisa Miller discussed how the increase in shootings may prompt even greater policy exclusions.

“I fear that the tipping point, as is often the case in insurance, will be a court ruling.  By that that time there will be on the one hand, a client facing the fallout from an active assailant attack and, on the other hand, an insurance company denying a claim. Ultimately the losers are the victims,” Bransden said.

Miller noted that as the world becomes more complex, insurance companies have to adapt the products and services they offer to fit consumers’ changing needs.  Scenario-based modeling for casualty events and the practical insurance products that result, such as Active Assailant insurance, are good examples of innovation in insurance.

“While no one has a crystal ball and can predict human behavior and the terrible tragedies that have befallen the nation this year, technology and actuarial science are improving how we quantify that risk and price it accordingly.  It’s all about helping people and their organizations and companies become whole again, in the event of the unimaginable,” said Miller.

Links and Resources Mentioned in This Episode:

Aspen Insurance webpage

Determining the Risk of School Shootings – Florida’s new law may mean more lawsuits (LMA News Release, April 11, 2018)

The Florida Insurance Roundup podcast Modeling for School Shootings (April 3, 2018)

Visit The Florida Insurance Roundup webpage for full details and extras on this podcast.

** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to [email protected] **

The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State.  Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs.  On the web at www.LisaMillerAssociates.com or call 850-222-1041.  Your questions, comments, and suggestions are welcome!  Date of Recording 10/31/18. Email via [email protected]   Composer: www.TeleDirections.com  © Copyright 2017-2018 Lisa Miller & Associates, All Rights Reserved

Hurricane Michael struck Florida’s panhandle in October 2018 as a strong Category 4 storm, with sustained winds of 155 miles per hour.  At least 29 people in Florida died in the storm or its aftermath and another 10 people in Georgia, North Carolina, and Virginia, as of this recording.  Beyond the cost in human lives, is the cost of rebuilding homes, businesses, and infrastructure.  Estimates of insured losses alone are between $6 billion to $10 billion.

Just how well did Florida's building codes, both old and new, hold up against the devastating winds - and what's needed in post-hurricane mitigation as Florida rebuilds?  Host Lisa Miller, a former deputy insurance commissioner, talks with two catastrophe adjusters on the ground with Michael's damages and the head of a consumer insurance group that's fighting for stronger building codes in the Sunshine State.

Show Notes:

Although Florida is recognized as having the toughest building codes in the nation, a large share of homes and other buildings in the Florida panhandle were built before 1995, when Florida’s tougher post-Hurricane Andrew building code was established.  The newer Florida Building Code (FBC) requires structures statewide to be built to withstand winds of 111 mph and up.  But it wasn’t until 2007 that homes in the panhandle built more than one mile from the coast were required to follow the higher standard.  (The Miami area is a “high velocity hurricane zone” with higher standards, in excess of 170 mph.)

Catastrophe claims adjusters Jason Brugh and Jeromy Harding spent much of the following week after Hurricane Michael struck, surveying the damage from ground zero at Mexico Beach, Florida to the Alabama-Georgia state lines.  They also spent several days in service to local communities, helping clear downed trees from roads and people’s property, re-righting travel trailers, and in one case, putting out a fully-involved house fire.  Both had building construction backgrounds prior to becoming insurance agents and claims adjusters.

Brugh, of Catalyst Insurance Management in New Port Richey said he and Harding saw total destruction in their travels in the panhandle, with nearly every structure suffering damage.  Their inspections revealed that standing seam metal roofs performed very well in the hurricane, while gable and three cap shingles were often completely gone.  

“FBC 110 mph-rated shingles came off like you’re peeling Post-It notes off a Post-It pad,” Brugh said on the podcast.  “We did see improperly installed metal roofs, where they were installed over existing shingles, allowing for an air gap between the two roof surfaces and those roofs were totally devastated.  Those peeled the roof decking off like a beer can.”  He added that the only damage he saw to properly installed metal roofs was impact-related.

Jay Neal, President and CEO of the Florida Association for Insurance Reform (FAIR), said Hurricane Michael is further proof that Florida needs to adopt the tougher Miami-Dade building code statewide.  “There’s no logic in having one higher standard for Miami-Dade County and not having it for the rest of the state,” he said. 

Neal and FAIR are pushing the Florida legislature to provide more funding for mitigation of existing structures; and to make homeowners more aware, too, of the difference installing impact-resistant windows and enhancing roof connections to walls can have on their home surviving the next hurricane.

“We spend about 15-cents per Florida resident giving cities, counties, and nonprofits the funds to spend on mitigation and that’s got to change,” Neal said.  He cited FEMA statistics that shows for every $1 invested in mitigation, $6 in damages are avoided.  It’s an issue FAIR will be presenting to the 2019 legislature.

Host Lisa Miller, a former deputy insurance commissioner, said there’s concern that a tougher statewide building code would increase the price of homes in areas like the panhandle, whose residents are predominantly lower income and couldn’t afford it.

“It’s an absolute no-brainer,” to have tougher building codes from an insurance standpoint, said Harding of the Barrett Harding Insurance agency in New Port Richey.  “From my experience out in the field and adjusting claims, they do work.  The newer building code homes in Hurricane Michael were survivable.  Yes, there was damage, but the structure is still there,” he said.  “Affordability is a Catch-22.  A lot of these people were uninsured.  So if those homes were built to a higher standard, they would come out on top whether there was insurance involved or not.”

Brugh said another issue he noticed with older homes built under outdated building codes: “a lot of them did not have hurricane clips, which when the wind got up in there, it upset trusses, it blew roof decks off, and the sort.”

Brugh pointed out that Florida’s wind mitigation credit program provides tremendous savings for homeowners in both shoring-up existing roofs and installing new ones.  Just mitigating a home’s existing roof with hurricane clips can provide an 18% savings on the wind portion of an insurance premium.  Installing a new shingled roof can result in 13%-16% savings.   He noted that decking would have to be re-nailed, which is another 13%-15% savings.  The wind portion of a premium can be 70%-80% of a homeowner’s insurance costs annually.

Host Miller noted that because most of the building stock in the panhandle is older, it’s more severely damaged than it might be otherwise and as a result, will drive-up claims costs.  Industry analysts expect Florida insurance companies should be able to cover all claims.  Reinsurance programs will cover those insurance companies’ bills.

“Today’s program was certainly an education and a great example of where the ‘rubber’ of public policy really meets the ‘road.’  And how the decisions we make today, will affect millions of Floridians in the future and billions of dollars in insured property value, as we weigh the costs and benefits of policy change – in this case, building codes and mitigation techniques,” Miller said.

So what do you think?  Does Florida need even tougher building codes?  And what lessons should we take away from Hurricane Michael when we rebuild what was damaged and destroyed?

Links and Resources Mentioned in This Episode:

What to Expect of Building Performance During Hurricane Michael (AIR Worldwide analysis October 11, 2018)

Premium Discounts for Hurricane Loss Mitigation (Florida Office of Insurance Regulation)

Florida Association for Insurance Reform (FAIR)

Lisa’s LMA Newsletter on Hurricane Michael (October 22, 2018)

Visit The Florida Insurance Roundup webpage for full details and extras on this podcast.

** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to [email protected] **

The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State.  Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs.  On the web at www.LisaMillerAssociates.com or call 850-222-1041.  Your questions, comments, and suggestions are welcome!  Date of Recording 10/26/18. Email via [email protected]   Composer: www.TeleDirections.com  © Copyright 2017-2018 Lisa Miller & Associates, All Rights Reserved

Former Florida Deputy Insurance Commissioner Lisa Miller was interviewed by Tom Flanigan on WFSU-FM, National Public Radio for Florida, just hours before Hurricane Michael made landfall on the Florida panhandle.  She shared with listeners the importance of staying safe prior to and during the storm, how to handle any damage and prepare an insurance claim, and the best methods for filing claims.  This includes taking pictures and video of the damage and collecting crucial information to share with the insurance company to help speed up the claims process, utilizing “fast-track” phone apps and other expedient methods.  For those policyholders needing assistance with claims, she shared the Florida Department of Financial Services Insurance Claims Assistance Hotline at 1-877-693-5236.

Lisa also discussed the need for flood insurance and how most standard homeowners insurance policies do not cover flood damage.  She pointed out that Florida has been a leader in the nation with model laws that have encouraged the creation of a thriving private flood insurance market as an alternative and complement to the National Flood Insurance Program.  Lisa urged listeners to contact their insurance company about the availability of innovative “add-on” flood coverage to their existing homeowners insurance policy.  As a courtesy to fellow residents and policyholders, she advised those with minor claims damage to so notify the insurance company when filing, so that greater priority can be given to more serious claims. 

Ownership and copyright 2018 , WFSU-FM, Tallahassee, Florida

Resources Referenced in the interview:

Florida Department of Financial Services Division of Consumer Affairs Insurance Resources

Florida Department of Financial Services Insurance Claims Assistance Hotline at 1-877-693-5236

www.WFSU.org

www.LisaMillerAssociates.com

It’s an insurance agent – it’s an adjuster – it’s an underwriter – no, it’s an Insurance Nerd!  In an industry that sometimes screams boring and is full of complex, technical jargon, comes a refreshing team of veteran insurance professionals that are out to change that. Their goal: to engage younger people considering different career paths and show them that insurance can be fun and personally satisfying work.  Along the way, they’re changing the stuffy corporate culture that is often a barrier to Millennials and Generation Z’ers joining the industry.

Host Lisa Miller talks with Nick Lamparelli, a 20+ year industry professional who is Chief Evangelist for the Insurance Nerds.  He talks about the talent gap that exists in the industry today, the surprising challenges he and his colleagues have encountered, and shares the answers they’ve uncovered to successful recruiting.

Show Notes:

Nick Lamparelli of New Hampshire has worn many hats in his insurance career.  He started his career as an insurance agent, then moved on to become a catastrophe modeler and a consultant for big firms, such as QBE, Marsh, and AIR Worldwide.  He’s Chief Underwriting Officer for reThought Insurance Corporation, a firm he co-founded in 2017.  Yet, something has been missing along the way.  When he was invited to join some like-minded industry professionals in a brand called “Insurance Nerds”, he tells Lisa Miller that he just had to say “Oh yeah!”

Insurance Nerds is a consultancy that is the go-to source for transformational talent delivery and career management serving the insurance ecosystem.  Lamparelli said that ecosystem includes insurance carriers, agents, brokers, third-party administrators, and reinsurers.  Not only do the Insurance Nerds figure out how to engage college students and recent graduates across disciplines to consider an insurance career, but they also make sure the industry is ready and attractive for these younger folks. 

Lamparelli said that rather than a boring, complex, and overly technical field of work, insurance in reality is science, economics, finance, and marketing.  “There’s a home for almost anybody here,” he told Miller. 

But Lamparelli said that employers “are not prepared – they have a cultural mindset that goes back to the 1970’s.”  So part of what Insurance Nerds has had to do is change that mindset so that young professionals can start their insurance job and have what he described as “the transformative moment” where they realize that insurance is indeed the career for them.

The Insurance Nerds have discovered that many younger adults have a total lack of knowledge about insurance because they’re usually not exposed to it until well into their adulthood, usually when it comes time to purchase auto insurance for the first time.

Host Lisa Miller, a former Florida deputy insurance commissioner, noted that insurance is a noble profession; that those working in it are helping people protect their lives, families, and property.  Despite that, there are shortages of talent in key functions, including agents, estimators, appraisers, and underwriters – whom Miller refers to as “the wizards of the insurance industry.”

Links and Resources Mentioned in This Episode:

The Insurance Nerds (www.InsNerds.com)

Nick Lamparelli’s Profiles in Risk podcast (https://insnerds.com/insnerds-podcast-network/)

** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to [email protected] **

The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State.  Host Lisa Miller is a former Florida Deputy Insurance Commissioner.  Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs.  On the web at www.LisaMillerAssociates.com or call 850-222-1041.  Your questions, comments, and suggestions are welcome! Date of Recording 4/13/18. Email [email protected]   Composer: www.TeleDirections.com    © Copyright 2017-2018 Lisa Miller & Associates, All Rights Reserved

The real estate market and the insurance market are intertwined – in fact, “property” is literally the first word in property & casualty insurance.  Both are highly value-based, as higher property values require higher insurance premiums to provide adequate coverage.  But there’s a bigger picture: the connection between real estate and promoting investment and job creation, where property sales and insurance will then naturally follow.

Host Lisa Miller talks with John Sebree, a Florida real estate leader who is now CEO of the Missouri Realtors®.  While stressing that every state has or should have international business, Sebree shares how Florida’s natural connection to Latin American and Caribbean investors and increasingly the Europeans, are netting benefits for our real estate – and insurance markets.

Show Notes:

Real estate creation and increased sales create more property insurance sales and activity in related lines, such as automobile insurance.   A recent study by the National Association of Industrial and Office Properties (NAIOP) shows Florida’s commercial real estate sector contributed nearly $190 billion to the state’s economy in 2017, the third most of any state in the country.

John Sebree of the Missouri Realtors® talked about the connection between real estate and the economy, something he learned while on a trade mission to Germany with former Florida Governor Jeb Bush, a commercial realtor, while John was with the Florida Realtors®.  “He knew real estate wasn’t a widget,” said Sebree about Governor Bush, “and that if we’re going to bring jobs to our states, we need to be able to talk to them about quality of life, cost living, cost per square foot, so there is a natural connection.”

Countries including those in Latin America and the Caribbean are natural markets for Florida, followed by Europe, because it’s relatively close by being within a day’s airplane trip.  Real estate drives economic development and the insurance sector is one of the beneficiaries.   Sebree said he’s applied the same principle to his current work in Missouri, which is in the center of the U.S., has two rivers servicing coastal ports, and more rail lines than any state in the U.S.  The lesson: every state has international interests and potential to develop international markets.

Sebree shared with podcast host Lisa Miller his ideas on how to encourage that international investment and overcome challenges.  “Often times, they’re looking for a safe place to put their money,” he said.  Rather than focusing on selling property on these overseas missions, he said he focuses instead on promoting jobs and investment, because the property sales and insurance on those properties will naturally follow.   Looking at things as economic development opportunities creates more economic development.

He and Miller also discussed the impact of taxes and regulation on attracting economic investment.   Florida’s beaches, beautiful weather, navigable waterways for transportation, and no state income tax are all in the state’s favor.  Missouri’s selling points focus on its advanced manufacturing and agriculture technology, in which the Show-Me state is a leader, as well as in logistics.

To make it easier for foreign investors to do business in the U.S., the National Association of Realtors® has created a Certified International Property Specialist designation (CIPS).    A Realtor that has this designation is specially trained in helping foreign investors through a variety of real estate transactions and related needs.  The association’s website (www.nar.realtor) has a master database, sortable by foreign languages spoken by the CIPS Realtor.

Host Lisa Miller noted that with Florida’s economy firmly on the rebound, opportunities abound in the state’s thriving real estate market.  That means growing opportunities to supply the many insurance needs related to that real estate growth, too.  Needs not just centered on the actual properties, but also the new jobs and related economic input created by real estate activity that requires the protection that only insurance can provide.  “Food for thought indeed for those of us with our eye on growing our insurance business,” said Miller.

Links and Resources Mentioned in This Episode:

Commercial Real Estate Packing a Wallop in Florida (from the LMA Newsletter 3/26/18)

National Association of Realtors (https://www.nar.realtor)

Florida Realtors® (www.floridarealtors.org)

Missouri Realtors® (www.missourirealtor.org)

** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to [email protected] **

The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State.  Host Lisa Miller is a former Florida Deputy Insurance Commissioner.  Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs.  On the web at www.LisaMillerAssociates.com or call 850-222-1041.  Your questions, comments, and suggestions are welcome! Date of Recording 4/13/18. Email [email protected]   Composer: www.TeleDirections.com

The emerging distributed ledger software technology Blockchain, being developed for use in financial transactions, has applications in how we manage insurance information, too.  It could one day be used to reduce Florida’s nearly 27% rate of uninsured drivers – the highest in the nation – while providing added convenience and money-saving efficiencies to both consumers and insurance companies.  Blockchain technology is also touted as an answer to the current climate of data breaches and compromised personal information.

Host Lisa Miller, a former deputy insurance commissioner, talks with the leader of the insurance consortium applying Blockchain and a Florida State Senator who calls it the next wave in the insurance space, especially when it comes to fighting growing insurance fraud.  Guests on the podcast are Christopher McDaniel, Executive Director of the RiskBlock Alliance and Senator Jeff Brandes (R-Pinellas County) who discuss what exactly Blockchain is and isn’t, how it’s currently being used,  and the rapid growth opportunities this new technology represents.

Show Notes:

Blockchain is a new technology that is changing how we manage insurance information.  Blockchain is a distributed ledger software that uses a continuously growing list of records – known as blocks – that don’t rely on a centralized third-party vendor to administer.  Instead, each party to a financial or other transaction is networked and has the original and updated versions of the transaction, which is contained on many different and anonymous blocks.   By its design, it’s advertised as being highly resistant to any data modification by any single participant, once recorded.

Christopher McDaniel of the RiskBlock Alliance said that Blockchain unfortunately has been made out to be very complicated and that it really isn’t, despite lots of jargon that has confused both consumers and the insurance industry.  And while Bitcoin also uses Blockchain technology for public currency exchange, he said there is no connection between the crypto-currency and the RiskBlock Alliance efforts.

“What Blockchain really brings first and foremost to the table is that the concept of transactions can go away.  Transactions being anything between two parties, whether that’s the consumer and their insurance agent or whether it’s the agent and the insurance carrier,” said McDaniel on the podcast.  “If you have a blockchain solution in place, everybody has ubiquitous instant access to that information.”  In addition to the information being made into an un-erasable permanent record, McDaniel said Blockchain is capable of using “Smart Contracts”, which use an “if-then” logic protocol to automate activities, saving time and cutting out middlemen.

While Blockchain applications are still very new to the insurance industry, there are applications underway right now.  Nationwide Insurance just implemented Blockchain for proof of insurance, simplifying verification of automobile insurance coverage in real time and eliminating the need for paper ID cards.  McDaniel pointed out that right now, neither party in an auto accident really knows the other person has auto insurance.  They have paper insurance cards that say they do, but that insurance may have since been cancelled, prior to the accident.

“Basically inside the mobile phone app is a plug-in, so that the two people involved in the accident can basically tap their phones together and in a matter of seconds it goes out to the Blockchain and it comes back down and says the other person has insurance and how much coverage they have,” explained McDaniel.

Florida tops the nation in the number of uninsured drivers on its roadways.  The Insurance Research Council (IRC) says 26.7% of Florida drivers drive without auto insurance, according to its latest study based on 2015 data.  The insurance industry puts the average cost of an uninsured motorist claim at about $20,000, excluding any vehicle damage.

The RiskBlock Alliance, which is part of The Institutes, an industry educational and research organization, has developed 30 different uses for Blockchain technology in managing insurance information.  The 23 companies currently involved in the Alliance include Nationwide, USAA, and Geico.  McDaniel said the number is expected to grow to nearly 60 companies by year end. 

Florida State Senator Jeff Brandes (R-Pinellas County) is a believer in Blockchain’s potential, especially in the Sunshine State, and has been urging greater awareness of the technology among his fellow legislators. 

“My sense is that this is the next wave in the insurance space for transactions and they (legislators) need to be able to understand and begin to find and contemplate some of the opportunities that come along with this new technology,” he shared with host Lisa Miller and McDaniel.   

Brandes and McDaniel agreed that Blockchain’s proof of insurance capability could be expanded to proof of driver licenses, which would assist law enforcement and Florida’s Division of Highway Safety and Motor Vehicles to identify people who shouldn’t be driving.  Brandes said that seems like an area where some legislative authority would be required to pursue.

“One of the big opportunities that Blockchain brings is the ability to reduce fraud.  To the extent that we can have all the other services and reduce fraud, I think you’re going to see a variety of businesses begin to use it.  Many of them won’t even know they’re using Blockchain technology – it’ll just be the new way to do business,” said Senator Brandes. 

Not only are insurance companies starting to use Blockchain, but they’re introducing it to their policyholders’ businesses, too.   McDaniel’s pointed to two sectors – energy and trucking transportation – as examples.

“All the pieces and parts that they have need to be insured.  We’re bringing efficiencies to them through the Blockchain.  A version of our proof of insurance solution for commercial trucking is reducing the current 30-minute manual process at depots…down to less than 30-seconds to prove insurance coverage.  That one check, with just one trucking logistics company, happens 200,000 times a day,” McDaniel said.

“I think the exciting thing is that we’re seeing rapid adoption of this technology, largely because it drives value for insurers,” added Senator Brandes.  “These insurance companies are very focused on reducing fraud.  Obviously they see that as a negative piece to their rate base and so the opportunity for them to speed along transactions, close things out quickly, and the idea of automatic transactions, I think really appeals to them and all are strong reasons why you’re seeing large insurers begin to make this shift over.  And I think over time, that’s only going to continue.” 

Blockchain provides a unique set of data from which you can then apply analytics to ferret out fraud right from the beginning and put a stop to it in a more comprehensive way than previously available. 

The other big consumer benefit to Blockchain technology is data security for its users.  McDaniel said the RiskBlock Alliance is looking closely at adopting the GDPR Rule, a European standard on information privacy and ownership, anticipating it will one day be the rule in the United States. 

“Everybody’s seen all the stuff in the news lately about Facebook.  It really centers around the customer’s safety of their data, their right to control their data, and the right to be forgotten.  We’re going to that level here right from the beginning in what we’ve built,” McDaniel said. 

On the podcast, McDaniel also shares the RiskBlock Alliance’s efforts to partner with the B3i, a European effort on the use of Blockchain technology in reinsurance.

Host Lisa Miller noted that Blockchain represents an opportunity to bring insurance innovators together with public policy innovators to collaborate on creating new and better insurance products and services for the marketplace.  And what better place to do so than here in Florida?  She said that Blockchain could also help regulate our new medical marijuana industry here in Florida.  “There are exciting times indeed to look at technology that can help us work smarter – not harder – while providing enhanced consumer value and protection,” said Miller.

Links and Resources Mentioned in This Episode:

** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to [email protected] **

The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State.  Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs.  On the web at www.LisaMillerAssociates.com or call 850-222-1041.  Your questions, comments, and suggestions are welcome! Date of Recording 4/13/18. Email via [email protected]   Composer: www.TeleDirections.com

The aftermath of the Parkland, Florida school shooting and other major casualty events can greatly impact the insurance companies that provide liability policies to schools, hotels, and other venues.  While these policies traditionally cover a variety of more ordinary events, some policies never contemplated – and priced the risk for – the increasingly unusual catastrophic events seen over the last few years.   Now there are new tools to help insurers and their reinsurers better calculate previously difficult and unmanageable risks, leading to better coverage for these venues and ultimately those they serve.

Host Lisa Miller talks with Robin Wilkinson, Vice President and Managing Director of Casualty Analytics at AIR Worldwide, a Verisk company, about its new scenario-based Casualty Risk Modeling.  Ms. Wilkinson explains how the modeling works with mass casualty events, how it’s helping insurers and reinsurers better rate the risk of both sudden and systemic events, and the types of scenarios the model is being applied to currently.

Show Notes:
In the aftermath of the Parkland, Florida school shooting, there are a myriad of civil lawsuits against the school district and other organizations and individuals that insurance companies will now be involved in defending.  How do insurers contemplate such a horrendous event?  And from an insurance perspective, how can they really rate the risk of such an event?  The answer is they can’t – at least not well enough in today’s increasingly unpredictable environment. 

Scenario-based casualty risk modeling can be used to calculate the commercial liability losses from extreme events, such as mass shootings, and in a variety of venues.  Such recent events include the Parkland, Florida school shooting, the MGM Grand Hotel Las Vegas massacre, the 2016 Bastille Day attacks in France, and the 2013 Boston Marathon.  Most scenarios impact more than one insurance line.  

“We first try to understand the event, then ask – and determine – how much loss is likely to be an insured loss in that portfolio,” Robin Wilkinson, Vice President and Managing Director of Casualty Analytics at AIR Worldwide explains to host Lisa Miller.  “You’re reducing the problem from saying ‘Wow, how big could this event be?’ to ‘How much of that loss is likely to be in my portfolio?’” 

This modeling tool helps venues consider the footprint or potential spread of an event, by simulating losses to a portfolio.  Liability is assessed on products and services along the supply chain utilizing a variety of information.  Insurers and reinsurers then overlay their portfolio to calculate aggregate exposure to the event, with losses cascaded down from the industry level, to the company level, and then down to individual policies.   

While new modeling and technology have been a game-changer on the property insurance side, casualty modeling is more difficult and uncertain, explains Ms. Wilkinson.  “Casualty catastrophe modeling uses an economic, rather than a geographic framework, to provide the proximity and explain why various policies may be caught up in the same event,” she said.  The other challenge, Wilkinson shares, is that the future might not necessarily resemble the past, because of changing technology, regulation, and even social mores.   “It gives us essentially the casualty equivalent of a regional peril model for property.”

AIR Worldwide is modeling both “sudden trigger” and “systemic” events.  Florida has seen a lot of both over the years.  Sudden trigger events are those that happen at one time and in one place, such as the Parkland school shooting, the recent FIU pedestrian bridge collapse, and the BP Deepwater Horizon oil spill in the Gulf of Mexico.  Systemic events, while arising out of a single trigger, occur over time and involve more parties.  The contaminated Chinese drywall issue in Florida in the 1990’s, asbestos contamination, opioid abuse, and even the Bernie Madoff financial swindle are all examples.

In the aftermath of the February 2018 Parkland school shooting, the Florida legislature passed the “Marjory Stoneman Douglas High School Public Safety Act” to improve campus safety through best practices.   Wilkinson said the law could impact liability in future similar situations, by setting a new bar for school performance.  Failure to comply with new standards might make schools more vulnerable to lawsuits.  “So instead of focusing on the shooter or perpetrator (the seeming trend now is) to looking at how those events are being managed and how those venues are being managed.  This trend could result in liability insurers paying-out for losses that might be insured or uninsured losses…and where the insurers haven’t really contemplated or quantified their potential exposure,” Wilkinson said.

Host Lisa Miller noted that casualty risk modeling is the latest innovation in insurance - taking an existing product or method and developing a new way of looking at it, with new tools.   Miller, a former Florida Deputy Insurance Commissioner, discussed how better data enables better prediction and ultimate outcome.  “Enhanced modeling is improving the way insurers rate risk.  More accurate pricing of risk benefits insurance interests and consumers.  It’s also providing opportunities for new markets of enhanced insurance products,” said Miller.

Links and Resources Mentioned in This Episode:

 ** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to [email protected] **

The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State.  Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs.  On the web at www.LisaMillerAssociates.com or call 850-222-1041.  Your questions, comments, and suggestions are welcome! Date of Recording 3/28/18. Email via [email protected]   Composer: www.TeleDirections.com

Congress is pushing into 2018 a decision on how to reform the beleaguered National Flood Insurance Program (NFIP) that 1.8 million Floridians depend on for their property flood protection. Congress must reauthorize the program as well, because without it, federally-backed home mortgages which require flood coverage for high-risk zoned properties could come to a standstill.  But the taxpayer-subsidized NFIP is $25 billion in debt and still using old flood data and maps, with rates that don’t match risk.  Congress is considering reauthorization under a package of reform bills called the 21st Century Flood Reform Act.

Host Lisa Miller, a former Florida deputy insurance commissioner, explores two of those key reforms on this program: what to do with grandfathered properties that are still enjoying 1960’s-era premiums and riddled with repetitive losses, and how best to encourage private flood insurance market alternatives.  It’s estimated that 77% of Florida properties would see lower premiums with private market policies.  Joining Lisa are guests Brian Squire, Managing Executive Senior Vice President at Hays Companies in Destin, Florida and Helen Devlin, Senior Lobbyist with the National Association of Realtors in Washington D.C.  Together, they outline what’s at stake for Florida NFIP policyholders and ideas on how best to balance flood insurance affordability with NFIP sustainability, without hurting Florida’s growing real estate market.

Show Notes:         

The bill passed by the U.S. House would strip grandfathered NFIP rates after two future claims, with rates then rising 10% per year until hitting the current risk-rate. A third claim would raise rates 15% per year.  The podcast discusses how this is meant to relieve some of the financial burden to the heavily subsidized federal government program, while providing greater cost accountability and sharing with those properties that continually have losses and keep getting rebuilt or repaired, only to have sometimes identical losses re-occur during the next event.

Brian Squire said the key to a more sustainable NFIP and one that encourages private flood insurance alternatives is to change the grandfathering provisions so current recipients can have safe harbor to move into the private market and move back into the NFIP without losing benefits, should the private market not work for them.  He noted it’s also important that private insurance companies be properly vetted and with state regulation to provide needed consumer confidence to make the switch.

Helen Devlin noted it’s important to have a private market compliment to NFIP and that the National Association of Realtors has been working for years with Congress to make improvements necessary to safeguard property owners.  Allowing portability of grandfathered benefits and more insurance options for consumers are key.   She also noted the rates charged versus true risk “are out of whack” and that better utilizing improved modeling technology and other advances will create better coverage for more people without “sticker shock” premiums.

Links and Resources Mentioned in This Episode:

Brian Squire, Managing Executive Senior Vice President at Hays Companies in Destin, Florida www.hayscompanies.com

Helen Devlin, Senior Lobbyist with the National Association of Realtors in Washington D.C. https://www.nar.realtor/

21st Century Flood Reform Act (H.R. 2874) (https://www.congress.gov/bill/115th-congress/house-bill/2874/text)

The National Flood Insurance Program (NFIP) (https://www.fema.gov/national-flood-insurance-program)

FEMA webpage on NFIP Reform (https://www.fema.gov/flood-insurance-reform)

Flood Insurance Writers in Florida (from the Florida Office of Insurance Regulation) (https://floir.com/Sections/PandC/FloodInsurance/FloodInsuranceWritersFL.aspx)

Top 10 Facts About the National Flood Insurance Program (from Lisa Miller & Associates) (http://lisamillerassociates.com/wp-content/uploads/2017/06/Top-10-Facts-About-the-National-Flood-Insurance-Program.pdf)

The federal Biggert-Waters Act and Florida Impacts (from the Florida Office of Insurance Regulation) (https://floir.com/Sections/PandC/FloodInsurance/FloodInsurance.aspx)

Aligning Natural Resource Conservation, Flood Hazard Mitigation, and Social Vulnerability Remediation in Florida (Journal of Ocean and Coastal Economics: Vol. 4: Iss. 1, Article 4.  Summer 2017) which found Florida has 15,000 “Repetitive Loss Properties”.  Those properties collectively filed more than 40,000 claims against the National Flood Insurance Program between 1978 and 2011 - more than 1,200 claims per year, on average. (https://cbe.miis.edu/joce/vol4/iss1/4/)

Since 1978, 12 Counties Have Accounted for a Third of U.S. Flood Insurance Claims (Forbes, November 16, 2017) (https://www.forbes.com/sites/zillow/2017/11/16/since-1978-12-counties-have-accounted-for-a-third-of-u-s-flood-insurance-claims/#d2a72781a8e5)

Florida Homeowner Claims Bill of Rights (From the Florida Office of Insurance Regulation) (http://floir.com/siteDocuments/HomeownerClaimsBillofRights2014.pdf)

** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to [email protected]**

The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State.  Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs.  On the web at www.LisaMillerAssociates.com or call 850-222-1041.  Your questions, comments, and suggestions are welcome! Date of Recording 12/5/17. Email via [email protected] Composer: www.TeleDirections.com

Florida homeowners, businesses, and other property owners have been assessing the damage from Hurricane Irma and begun filing claims with their insurance companies.  Those claims are expected to number in the hundreds of thousands from the first major hurricane to hit Florida in 12 years.  How are insurance companies responding?  How will they be able to meet the challenges of such an onslaught of claims?  

Joining host Lisa Miller from the road are the president of American Integrity Insurance Company in Tampa, Bob Ritchie and professional claims adjuster Jason Evans, CEO of Evans Claims Service, in Huntsville, Texas.  They explain on this podcast how claims are being handled, why Hurricane Irma has stressed the supply of adjusters needed to handle them, and the ability of Florida’s insurance companies to pay claims.  They also share advice with policyholders and other consumers hit by damage and reveal how insurance industry best practices are being put to the ultimate test with Irma.

Show Notes:
"There is no question that the industry has not been better capitalized, both in terms of the primary insurance carriers, but also the supporting carriers, including the Florida Hurricane Catastrophe Fund, Citizens Property Insurance, and the world’s reinsurers,” Ritchie said on the podcast.  He noted that because the hurricane weakened in the hours before landfill, “this is a high-frequency, high number of claims, and much lower severity, much lower total incurred losses event than what it would have been if it had stayed on the west coast and scraped the entire coast.  What makes Irma different is that the entire peninsula was faced with a direct hit,” Ritchie said.   He believes damage estimates Evans Claims Service (www.evansclaims.com)in the range of $25 billion are accurate.

“Florida is much more a wind and water event than Hurricane Harvey, which was predominantly a flood event” said Evans, whose adjuster teams have worked Harvey claims and are now in Florida assessing Irma claims.  Evans said Irma has stressed the supply of adjusters to handle claims, especially coming so soon after Hurricane Harvey, but that there are enough adjusters to handle the volume of claims.  “When you have two storms of this magnitude, it stresses the supply of adjusters undoubtedly…but you have companies emergency licensing adjusters and bringing in additional people to settle these claims…we’ll get ahead of it and get everyone’s claim taken care of in a timely fashion.”

The program discusses the technological advances that are making the claims process easier and efficient for both policyholders and insurance companies.  “But nothing replaces the tender loAfter Irma, Report Losses Quickly and Protect Yourself from Unlicensed Individuals (advice from DFS/OIR News Release of 9/12/17) (http://floir.com/PressReleases/viewmediarelease.aspx?id=2210)ving care at the first notice of loss,” Ritchie pointed out.  “It’s a people business.  When you have a crisis, people want to talk to a live person.  Where technology is important is that everyone is equipped to take the first notice of loss within a few minutes and to reassure the customer that they have coverage.  You have one chance to form the right first opinion.”

Links and Resources Mentioned in This Episode:

** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to [email protected]**

The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State.  Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs.  On the web at www.LisaMillerAssociates.com or call 850-222-1041.  Your questions, comments, and suggestions are welcome! Date of Recording 9/14/17. Email via [email protected]   Composer: www.TeleDirections.com