The tornado that swept through Joplin, Mo., on May 22, 2011, has generated $2.16 billion in insurance claims payouts to Missouri policyholders, according to an Insurance Information Institute analysis of data from ISO’s Property Claims Service (PCS) and other sources.

“The people of Joplin, Missouri, endured a great tragedy on May 22, 2011, as the site of a tornado that resulted in the greatest single loss of life since such records began being kept in the United States,” said Dr. Robert Hartwig, president of the I.I.I. and an economist. “But the insurance industry is proud of the role it has played in helping Joplin’s survivors, and those residing and working in other tornado-stricken Missouri communities, recover financially from these life-altering events.”

The Joplin, Missouri, tornado was deemed an EF-5 on the Enhanced Fujita scale, and no tornado can be rated higher on this scale when it comes to wind strength and intensity. The National Oceanic and Atmospheric Administration (NOAA), when releasing a report on disaster preparedness in September 2012, called the Joplin tornado, “the largest and most powerful type, and it traveled 22 miles on the ground.”

The I.I.I. found that about 61,000 insurance claims were filed in Missouri due to damages incurred between May 20 and May 27, 2011, leading to insurance policyholder payouts totaling $2.16 billion. Nearly two-thirds ($1.39 billion, or 64 percent) of these monies went to commercial policyholders, even though the businesses themselves constituted only 11 percent of the tornado-related Missouri claims in late May 2011.

Missouri’s homeowners received $675 million, or 31 percent of the claim payouts, and auto insurance policyholders the remaining $100 million, or 5 percent of the total, for property damages incurred because of the severe weather events during late May 2011.

Missouri accounted for 31 percent of the $6.9 billion in insurance claims paid to auto, homeowners, and business insurance policyholders in a dozen-plus other U.S. states due to the severe weather events that occurred between May 20 and May 27, 2011.

A total of 180 tornadoes touched down in the central and southern United States within that time period.

Source: I.I.I.

 

Arthur J. Gallagher & Co. has appointed Eric C. Dean, Jerome S. Hanner and Cara Richardson as corporate vice presidents.

Dean joined the company in 2012 and has more than 30 years of business experience in various key technology functions. He began his career at Arthur Andersen, now Accenture, and over the years was the chief information officer for Andersen Worldwide and United Airlines. Most recently, he worked for Liquidity Services Inc. as CIO.

Hanner joined the company in 2004 and has more than 30 years of experience serving in various legal and business capacities for large, international insurance brokerage firms. Since 2010, he has served as the company’s deputy general counsel. He is responsible for coordinating and providing guidance on all transactional matters including mergers and acquisitions, commercial contracts, real estate and insurance regulatory matters.

Richardson joined the company in 2005 and has more than 20 years of financial and insurance business experience. She began her career at Ernst & Whinney, now Ernst & Young, in its insurance practice group and over the years, has served as the chief financial officer, general manager and vice president of Account Development for various travel organizations. Most recently, she was the vice president of sourcing for Aon Corporation.

She currently is the company’s vice president-Sourcing and Services and is responsible for corporate sourcing, real estate and other cost savings and organizational sourcing initiatives. Richardson is a Certified Public Accountant.

 

A court has ruled that the head of a Bossier City, La., taxi cab business cannot be held personally liable in a lawsuit over the death of a 12-year-old boy.

The victim in the case was Justin Bloxom, whose body was found two years ago in DeSoto Parish.

Cab driver Brian Horn was charged with first-degree murder in the case.

Prosecutors say Bloxom was lured to a meeting by someone posing as a young girl in cellphone text messages.

A lawsuit filed by Bloxom’s mother includes David McFarlin, president of a taxi company, as a defendant.

It says McFarlin, president of Blue Phoenix Trading Co., the parent company of Action Taxi, hired Horn even though he knew from his driver’s license that he was a convicted sex offender.

The state 2nd Circuit Court of Appeal ruled that McFarlin cannot be held personally liable in the lawsuit.

Other defendants include the taxi cab corporation, city of Shreveport, Hallmark Insurance Co. of Texas and Horn.

The three-judge 2nd Circuit panel, with Judge D. Milton Moore, of Monroe, writing the opinion, said District Judge Robert Burgess properly found that Justin Bloxom’s “tragic injury and death fell outside the scope of McFarlin’s duty or reasonable care in hiring drivers for his corporation.”

The appellate judges said the “crux of the case is the scope of protection element: was this particular risk too remote from McFarlin’s personal conduct?” The nature of the corporate structure makes courts hesitant to impose personal liability on officers for their corporate acts, the ruling states, according to a summary of the ruling in The Times of Shreveport

 

The New York Compensation Insurance Rating Board (NYCIRB) has submitted to the Department of Financial Services on Thursday a loss-cost filing for an overall average loss cost change of +11.5 percent.

The change in loss cost represents the anticipated cost of losses and loss adjustment expenses to be incurred on policies incepting on or after October 1, 2012.

The NYCIRB stated that the proposed change is the result of continued adverse experience of the New York workers’ compensation carriers and is attributable to the following factors:

• While the 2007 reform has been fully implemented with respect to the increase in maximum weekly benefits, sections of the reform which were expected to result in significant savings have been implemented at a slower pace.

• Claim frequency is no longer exhibiting a significant downward trend which, in the past, served as an offset to increasing claim costs.

• Continued rise in both indemnity and medical claim costs.

• Increasing loss adjustment expense primarily due to additional resources necessary for compliance with recent legislative and regulatory changes.

Additionally, based upon information received from the Workers’ Compensation Board (WCB) and the current loss cost proposal, it is currently estimated that the New York State Assessment will decrease 2.7 percent resulting in an average net increase in cost to policyholders of 8.5 percent, according to NYCIRB.

In compliance with 2008 legislation, the New York Department of Financial Services is required to hold a public hearing on the loss-cost filing whenever the filed amount exceeds 7.0 percent. The NYCIRB said it will issue a bulletin with the necessary information once the date, time and location of the hearing are set.

 

Random inspections of U.S. industrial workplaces lower the risk of workers being injured on the job and have no measurable negative effect on the companies inspected, according to a study in the journal Science.

Companies chosen for random inspections by California’s Occupational Safety and Health Administration recorded 9.4 percent fewer worker injuries than those that were not inspected, the study found.

The study, to be published on Friday, also found that the companies inspected were no more likely to cut jobs, lose sales, have their credit ratings cut or go out of business than those that were not inspected.

Over its four-decade history, the federal OSHA has come under fire from both organized labor, which worries that it does not do enough to protect workers, and from big business, which argues that it imposes unnecessary costs.

An attorney representing the U.S. Chamber of Commerce told an April Senate committee hearing into whether OSHA moves too slowly in developing new regulations that employers view the agency as unresponsive to businesses’ suggestions.

“Too often there is a perception that OSHA is determined to pursue a new standard regardless of how it will impact employers or whether it is justified,” said the attorney, David Sarvadi of Keller and Heckman.

That sort of concern sparked the idea for the study, conducted by three professors from the University of California, Harvard Business School and Boston University.

“We went in not really knowing what to expect, because from my perspective the rhetoric on both sides seems in some ways convincing but in some ways extreme,” said Michael Toffel, an associate professor of business administration at Harvard Business School and one of the study’s authors. “It seemed like a real puzzle that people had such strong opinions without a whole lot of evidence.”

LOWER INJURY COSTS

When injuries were reported, the worker compensation claims that resulted from them — which account for both the cost of medical treatment and lost wages — were 26 percent lower in facilities than were inspected than those that were not.

The study is based on a analysis of 409 California single-location businesses in industries, including woodworking and metalworking, that had high injury rates and were inspected by that state’s OSHA body from 1996 through 2006. It compared results at those businesses with 409 similar companies that were not inspected in that time period.

The authors focused on California because at the time the state’s safety agency conducted some inspections based on random selection, rather than just focusing on targets of complaints.

An official at the AFL-CIO labor federation said the findings show that OSHA is effective in promoting safe workplaces.

“What the study tells us is that protecting your workers on the job and keeping them safe is good for workers but is also good for business,” said Peg Seminario, director of safety and health at the AFL-CIO. “What’s too costly is not addressing injuries and illnesses. We can’t afford not to protect people.”

An official at the National Association of Manufacturers said the study failed to consider whether the regulations that OSHA enforces — rather than the inspections — hurt companies or protect workers.

“The authors are not asking the right question,” said Joe Trauger, vice president of human resources at the trade group. “The appropriate question is, ‘Do regulations provide a safer workplace?’ Random inspections happen after the fact, so if any job losses were to happen due to regulations, they would have happened before the inspection took place.”

(Reporting By Scott Malone; editing by John Wallace)

 

 

The Consumer Federation of America (CFA), a Washington, D.C.-based consumer advocacy group, today called on New York regulators to become a national leader in overhauling regulation of force-placed insurance (FPI) for homeowners.

New York Financial Services Department is holding a public hearing on force-placed insurance today, May 17, as well as tomorrow, May 18, and next Monday, May 21. They are held from 10:00 am to 5:00 pm and can be watched live online at the department’s website.

In his testimony before the New York Financial Services Department, CFA Insurance Director J. Robert Hunter urged regulators to put an end to what he described as “insider dealing by insurers and lenders” and “the unjustifiably high home insurance rates charged to some consumers.”

FPI policies are placed by banks on borrowers’ property, if borrowers fail to keep hazard insurance in force, according to Hunter.

This usually occurs because they fall behind on paying the policy premium. Because of the recent tough economic and housing situation, many more policies have become force-placed. One of the biggest insurers in New York now has more than 33,000 FPI policies in effect, he noted.

“Lenders usually use forced insurance as an opportunity to collect vast profits by charging outrageously high rates,” said Hunter, a former Texas insurance commissioner and federal insurance administrator.

“Self-dealing and kickbacks are common. Lenders collect commissions through affiliated agents or brokers. They receive below-cost or free services from insurers, such as loan tracking assistance. Or they use an insurance company as a front to direct the coverage — and the profits — to their affiliated reinsurers.”

‘Reverse Competition’

Hunter told regulators that “reverse competition” is a major problem with the FPI marketplace. He said this phenomenon occurs when insurers compete for lenders’ business by providing financial incentives to the lender, which are then charged to borrowers, increasing the cost of the insurance.

“Reverse competition is a market condition that drives up prices to the consumers, as opposed to normal competition, which usually brings rates down,” Hunter said.

He told regulators that in a review of rate filings in New York, CFA found there is virtually no competition. The major FPI insurance companies, Assurant and QBE, charge the same rates, Hunter noted. He also alleged that while these companies claimed that they would pay out 55 to 60 percent of premiums they received to cover losses, they in fact only paid out 25 to 30 percent.

Hunter: ‘New Yorkers Are Being Charged Far Too Much’

“The exceedingly low payouts for FPI insurance means that New Yorkers are being charged far too much for the coverage,” he said.

Hunter argued that, often, reverse competition abuses fall into the cracks between insurance and banking regulation.

“Just like insurance regulators, state bank regulators have done little to stamp out FPI abuses,” said Hunter. “They often see this as only an insurance issue, which means that it is someone else’s problem. Besides, what could be better for safety and soundness than the huge profits FPI generates?”

By contrast, Hunter said, New York’s Financial Services Department oversees both insurance and banking, which means that the state is well-suited to investigate problems with FPI insurance, which affect both insurance and lending regulation.

 

SaveOurSeafarers, the organization that supports anti-piracy measures and aids the crews who are taken by pirates, has expressed its approval of the air strikes carried out by the naval forces of the European Union on Tuesday.

Alastair Evitt, chairman of the anti-piracy campaign, stated: “We applaud yesterday’s EUNAVFOR airborne operation to destroy pirate equipment on the Somali coastline. This disruptive action against known pirate supply bases on the shore will disrupt Somali pirates’ efforts to launch attacks on merchant ships, dhows and fishing vessels.

“This EUNAVFOR action is an extension of what we have been pressing governments for – tougher and more proactive rules of engagement in respect of the catch and release of suspected pirates.”

He also pointed out that “much of the world’s automotive fuel arrives by sea. If oil tanker routes through the Indian Ocean and Gulf of Aden were disrupted by piracy, it would completely paralyze many of the world’s biggest economies in a matter of days. People don’t realize that over 90 per cent of world trade is dependent on seafarers and ships, with 40 per cent passing through the affected area.”

Evitt stressed that Somali piracy is “a real and present threat to each and every one of us. More than 225 seafarers are currently held hostage by Somali pirates. Unpalatable as it may seem, the current system of strong, decisive naval activity, and the negotiation and payment of ransoms, is the only way to secure the lives and liberty of our seafarers.”

Source: SaveOurSeafarers

California is the top dog in State Farm’s annual list of dog bite claims, and the state’s reported 527 dog bite claims and more than $20 million paid out in 2011 by the Bloomington, Ill.-based carrier represents an increase of more than 30 percent from last  year.

This year’s figure represents an increase in bite claims. In 2010 State Farm reported 401 dog bite claims in California, according to company spokesman Eddie Martinez, who didn’t have a good explanation for the increase.

“That represents a 31 percent increase in claims,” he said, adding, “no we don’t have the cause of claim increases.”

If you take the number of claims paid out and divide that by the total amount paid, that amounts to an average of $38,000 per claim in California.

However, Martinez cautioned, “the fact remains that each one of these claims are handled on their merits.”

He said the claims they see run the gamut from people who were bitten and received only a minor skin abrasion to those were severely mauled.

The total number of claims rose nationally as did the payouts, but only slightly, according to the report from State Farm.

The 2010 national figure of 3,671 dog bite claims represented $96.6 million in payouts, and an average cost per claim of $26,000. In 2011 there were 3,750 claims and roughly $109 million paid for an average cost per claim of $29,000.

The Insurance Information Network estimates that in 2011 insurers nationally paid $479 million in dog bite claims, although the American Humane Society places that figure at $1 billion.

According to the American Humane Society roughly 4.7 million dog bites occur each year in the U.S. Many of the fatal attacks come from male dogs (92 percent), most of which were not neutered. The group also states that seven-in-10 bites occur to the extremities and two thirds of bites occur on or near the victim’s property.

All claims paid by State Farm were under homeowners’ liability coverage, according to Martinez, who notes the carrier lays claim to having the most homeowners’ policies in the Golden State.

“We’re No. 1 in homeowners insurance in California,” Martinez said.

Below is State Farm’s top 10 states list:

Top 10 States for State Farm Dog Bite Claims in 2011

Carter Henson uses an overhead crane to position a bucket containing one yard of cement over a metal form that, when removed, will create a new safe room.

With the release of a lever, the cement pours from the bucket and fills the form. It takes four buckets.

Wearing knee-high rubber boots, Henson steps onto the concrete roof of the shelter and slides steel bars into its walls. The last pieces of steel are for the roof.

“This fireproof concrete box will be anchored in someone’s garage or backyard in a foot of concrete,” Henson said. “The walls are 6 inches of concrete reinforced with 550 feet of one-half-inch steel rebar. It’ll weigh 37,000 pounds when it’s done.

“We are making them as fast as we can, working six days a week.”

Henson, with Henson Septic Tanks of rural Neosho, has one thing to say about how the May 22 tornado that struck Joplin has affected his business: “It’s changed everything.”

In the past year, Henson has sold more than 200 in-ground and above-ground safe rooms. They range in price from $2,650 to $4,200 installed.

A survey of the 15 or so businesses — up from five just two years ago — that are selling safe rooms in the Joplin market indicates that well more than 1,000 safe rooms have been installed in local houses, churches and other structures since May 22.

The demand is so great that businesses, such as Henson’s, have expanded and added employees.

Enos Davis, with Twister Safe of rural Neosho, has seen demand for his all-steel shelters quadruple.

“We have expanded our work force from four to 20 people,” he said. “Since the tornado in Joplin, we have sold about 500 Twister Safes in this area. They’re primarily for existing homes, but we get a lot of new construction too.

“We got caught up last December, but we’re four months behind on delivery right now.”

At Twister Safe and other providers of storm shelters, the phones light up when severe weather looks possible.

Said Davis: “Any time it thunders, we get a lot of phone calls.”

A Twister Safe costs about $4,000 installed.

“If you want one, you had better get on someone’s list right now,” said Shelly Terry, with A Quality Excavating, of Joplin. “We could be putting in two shelters a day if we had them available. It’s supply and demand. Be prepared to wait six to 10 weeks.”

Terry works with two suppliers of in-ground and above-ground shelters.

Not all storm shelters are made of concrete and steel. Some are made with Kevlar, the material that is used to make bulletproof vests.

Dave Durham, with Closet Works, of Carl Junction, said he has sold nearly 20 of the Kevlar shelters made by DuPont. They start in price at $5,800 installed. Kevlar rooms were used in all seven of the “Extreme Makeover” homes built in October in Joplin.

Durham has been selling the rooms for five years. Before May 22, he had sold only four rooms. He has five customers now who are waiting on delivery.

“Two-thirds are for existing properties. The others are new construction,” he said.

Charlie Wilson, with Wilson’s Vault and Ready Mix, north of Webb City, also casts concrete storm shelters.

“Before the tornado, it was pretty slow,” he said. “The downturn was hurting us. Now, the demand for ready-mix and storm shelters is up. I’d say we have done three shelters a week for the last 52 weeks.

“Those are the ones we have sold here locally for existing homes and backyards. We’re hauling them all over the country.”

A new concept in storm shelters could benefit the owners of mobile homes, which are more vulnerable to damage from high wind when compared with a home of conventional construction.

The SafePorch shelters are designed to look like a porch with steps. They can hold four to six people.

“It’s a good concept that’s designed for mobile homes,” said Mark Pile, with SafePorch in Northwest Arkansas. “It’s right at their doorstep. You don’t have to run across a yard to get to it.”

The company offers one model. It costs $3,895 delivered and installed. The concept was pioneered by a Florida company that has expanded into the Midwest.

Karen Olsen, with Missouri Storm Shelters in Joplin and Springfield, said her company has seen a 50 percent increase in business since May 22.

“We want to caution people when they buy a storm shelter: Not all are created equally,” she said. “You have to watch what you are buying, be it steel or concrete.”

Shelters from her company start at $3,195 installed.

 

Allstate’s Florida says it wants to add dozens of new agencies along with support staff jobs across the state, mostly in north and central Florida.

Allstate said its 2012 agency strategy should create approximately 100 new jobs in Florida.

“We expect to appoint at least a couple dozen new agencies,” said Bob Jackson, regional sales manager for Allstate’s Florida operations. “But it’s not so much about a specific number as it is about finding the right candidates who can best serve current and future Allstate customers in their local communities.”

Allstate announced a similar initiative last April with a goal to hire 50 new agents. The company came close to its goal last year— about 80 percent, according to a spokesperson, and now the company hopes to further build on that record.

Preferred candidates must have a minimum of $75,000 in liquid capital. The company said this money is not a franchise fee and does not go to Allstate but is instead used to pay for operating costs associated with opening a new business including hiring staff and marketing to new customers.

“We offer product and process education, as well as business and marketing consulting to all of our agencies free of charge,” Jackson said. “Agencies also benefit from the company’s national and local marketing campaigns. Our goal is to give them the tools to help them grow their business and serve their local communities.”

When the time comes to retire or leave the business, agency owners can resell their book of business to other Allstate approved candidates.

“This really is a unique proposition,” Jackson says. “And for someone who is entrepreneurial-minded and has a passion for serving customers, there can be a tremendous upside.”

Interested candidates can call  1-877-711-1006 or visit: http://insuranceagent.floridajobs.com/

Or they can check out the Allstate Florida Facebook page: http://www.facebook.com/pages/Allstate-Florida/180730855298768?ref=ts