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P/C Insurers’ Profits Rose in 2012, But Profitability Lagged Long-term Norm as Sandy Losses and Drop in Invest ment Gains Hit Results
Source: Insurance Information Institute
Despite the impact of Superstorm Sandy and smaller investment gains, private U.S. property/casualty insurers’ net income after taxes grew to $33.5 billion in 2012 from $19.5 billion in 2011, with insurers’ overall profitability as measured by their rate of return on average policyholders’ surplus climbing to 5.9 percent from 3.5 percent. At 5.9 percent, insurers’ overall rate of return lagged their 8.9 percent average rate of return for the 54 years since the start of ISO’s annual data in 1959.
Insurers’ pretax operating income — the sum of net gains or losses on underwriting, net investment income, and miscellaneous other income — rose to $33.3 billion in 2012 from $15.4 billion in 2011.
Improvement in underwriting results drove the increases in insurers’ pretax operating income, net income after taxes, and overall rate of return, with net losses on underwriting dropping to $16.7 billion in 2012 from $36.2 billion in 2011. The combined ratio — a key measure of losses and other underwriting expenses per dollar of premium — improved to 103.2 percent for 2012 from 108.1 percent for 2011, according to ISO, a Verisk Analytics company (Nasdaq:VRSK), and the Property Casualty Insurers Association of America (PCI).
The decline in net losses on underwriting is attributable to premium growth and a drop in net losses and loss adjustment expenses (LLAE). Net written premiums climbed 4.3 percent in 2012 to $457 billion, and net earned premiums grew 3.4 percent to $449.4 billion. Conversely, net LLAE fell 2.8 percent in 2012 to $335 billion. The decline in net losses on underwriting would have been bigger if not for increases in underwriting expenses and dividends to policyholders, which both rose last year.
The improvement in underwriting results was partially offset by a drop in net investment gains, a decline in miscellaneous other income, and higher taxes. Net investment gains — the sum of net investment income and realized capital gains (or losses) on investments — fell $2.3 billion to $53.9 billion in 2012 from $56.2 billion in 2011 as miscellaneous other income dropped $0.2 billion to $2.3 billion from $2.5 billion and insurers’ federal and foreign income taxes rose $3 billion to $6 billion from $3 billion.
International Insurance Fact Book 2013
International Insurance Fact Book 2013
Source: Insurance Information Institute
Welcome to the International Insurance Fact Book
Country Profiles
Create your own book: Download insurance and economic data on some 90 insurance countries in PDF format online.
Or click the + sign next to Country Profiles on the left to access individual country information
World Overview – world data and tables comparing premiums, GDP and population in some by country
World Rankings – rankings of the world’s largest insurance companies
Download the full book
The New Real Estate Mantra: Location Near Public Transportation
The New Real Estate Mantra: Location Near Public Transportation (PDF)
Source: National Association of Realtors, American Public Transportation Association, Center for Neighborhood Technology
Fueled by demographic change and concerns over quality of life, there has been a growing interest in communities with active transportation modes. The recession added another dimension to these discussions by emphasizing the economic impli cations of transportation choices. Housing and transportation, the two economic sectors mostly closely tied to the built environment, were both severely impacted by the economic downturn. There has been a growing effort among planners, real estate professionals, and economists to identify not only the economic benefits of alternative transportation modes in and of themselves, but also the impact that they have on housing prices and value retention. The real estate mantra of “location, location, location” is more important than ever. Moving beyond the traditional arguments that good schools and neighborhood amenities impact housing prices, emerging research has indicated that urban form and transportation options have played a key role in the ability of residential properties to maintain their value since the onset of the recession.
tudies have shown that consumers are willing to pay more for housing located in areas that exemplify new urbanist principles or are “traditional neighborhood developments.” These neighborhoods are walkable, higher density, and have a mix of uses as well as access to jobs and amenities such as transit.
This analysis investigates how well residential properties located in proximity to fixed-guideway transit have maintained their value as compared to residential properties without transit access between 2006 and 2011 in five regions: Boston, Chicago, Minneapolis-St. Paul, Phoenix, and San Francisco. The selection of these places for the study regions provides not only a geographic distribution, but also an illustrative sample of the types of fixed-guideway transit systems in the US. Minneapolis-St. Paul and Phoenix have newer light rail systems, while Boston, Chicago, and San Francisco are mature systems dominated by heavy and commuter rail. Additionally, Boston is also home to one of the earlier BRT lines.
International Federation of Health Plans 2012 Comparative Price Report
International Federation of Health Plans 2012 Comparative Price Report
Source: International Federation of Health Plans
The International Federation of Health Plans, (iFHP) a network of leading health insurance CEO’s from over 25 countries, has released the 2012 Comparative Price Report. This is the fourth annual survey of prices of the cost of specific medical and products and services, compiled from data collected by iFHP member plans.
The study aims to help plans better understand why health care costs are so much higher in some countries than others. The survey data showed that average US prices were once again the highest of those in the countries surveyed for nearly all of the common services and procedures reviewed.
London-based iFHP CEO Tom Sackville said "We hope the release of this updated report on our price survey will be a step forward in creating a more informed knowledge base for all our member countries, allowing them to better assess the impact of unit prices on the cost of health care."
Record 10.5 Billion Trips Taken On U.S. Public Transportation In 2012
Record 10.5 Billion Trips Taken On U.S. Public Transportation In 2012
Source: American Public Transportation Association
The demand for public transportation rose last year as Americans took 10.5 billion trips, the second highest ridership since 1957, and 154 million more trips than the previous year, according to a report released today by the American Public Transportation Association (APTA). This was the seventh year in a row that more than 10 billion trips were taken on public transportation systems nationwide.
“In 2012, U.S. public transportation ridership grew at a record level as Americans took 10.5 billion trips. This is the second highest ridership since 1957, and it shows that there is a growing demand for public transportation,” said APTA President and CEO Michael Melaniphy. “Every mode of public transportation showed an increase in ridership. Public transit ridership grew in all areas of the country – north, south, east, and west — in small, medium and large communities, with at least 16 public transit systems reporting record ridership.”
“Considering the devastating impact of Hurricane Sandy on some of the nation’s largest systems, this record level of ridership is truly significant,” said Melaniphy.
According to APTA, 74 million trips were lost when public transit systems from Washington, D.C. to Boston were shut down due to Hurricane Sandy and the blizzard that followed the next week.
“Two big reasons for the increased national transit ridership are high, volatile gas prices and in certain localities, a recovering economy with more people returning to work,” said Melaniphy. “Public transportation saves people money, and people save even more so when gas prices spike. Also, since nearly 60 percent of trips taken on public transportation are for work commutes, it makes sense that ridership increases in areas where the economy has improved and new jobs have been added.”
New crash tests: Underride guards on most big rigs leave passenger vehicle occupants at risk in certain crashes
Source: Insurance Information Institute
Modern semitrailers for the most part do a good job of keeping passenger vehicles from sliding underneath them, greatly increasing the chances of surviving a crash into the back of a large truck, recent tests by the Insurance Institute for Highway Safety (IIHS) show. But in crashes involving only a small portion of the truck’s rear, most trailers fail to prevent potentially deadly underride.
Most semitrailers are required to have underride guards. These are steel bars that hang from the backs of trailers to prevent the front of a passenger vehicle from moving underneath during a crash. Earlier research showed that the minimum strength and dimensions required for underride guards are inadequate, prompting the Institute to petition the National Highway Traffic Safety Administration (NHTSA) in 2011 for tougher standards. The Institute also asked the agency to consider applying the standards to other types of large trucks such as dump trucks that aren’t required to have any underride guards.
Although NHTSA hasn’t responded yet, trailer manufacturers already are installing guards that are much stronger than the agency requires. These guards generally work well to prevent underride, except in crashes occurring at the outer edges of trailers, the crash tests show.
One likely reason manufacturers are installing guards that are stronger than required is a tougher standard that trailers in Canada have had to meet since 2007. More recently, IIHS crash tests have drawn attention to the issue, and at least one manufacturer has started selling a trailer with an improved underride guard since the tests began.
Field Guide to Fixed Layout for eBooks
Field Guide to Fixed Layout for eBooks
Source: Book Industry Study Group
In the fast moving world of digital content, one hot-button issue is the creation of static, fixed e-book "pages" called fixed layout. The popularity of fixed-layout e-books is growing, but many people are still unsure why and when fixed layout is a good idea. To make matters worse, there is no single standard for creating fixed-layout products and information on creating them is rapidly changing and sometimes hard to find.
To help address these challenges, the Book Industry Study Group (BISG), through its Content Structure Committee’s Fixed Layout for E-Books Working Group, has created a Field Guide to Fixed Layout for E-Books.
The Field Guide is intended to be a brief introduction to fixed layout, including when it’s the most appropriate format to use–and when it’s not. In addition, the Field Guide offers practical guidance on the basics of creating fixed-layout formats, current retailer standards for supporting fixed layout, and issues of accessibility to consider before creating content in fixed-layout format.
The Long-Term Care Challenge: Developing a Plan Can Lead to Greater Confidence
The Long-Term Care Challenge: Developing a Plan Can Lead to Greater Confidence (PDF)
Source: Insured Retirement Institute
With an aging society, the need for long-term care will grow. According to the Census Bureau, the number of individuals age 85 and older is projected to increase by 52% over the next 20 years. Census data also show that individuals age 80 and older are most at need for long-term care. In 2010, 71% had a disability, 56% had a severe disability, and 30% only needed some assistance with daily living. Another study shows among individuals age 65 in 2005, 69% will experience a need for some type of long-term care during the balance of their lives with the average duration of needed care reaching three years. IRI data shows that most Americans find these figures intimidating. Only 24% of Baby Boomers and 28% of Generation Xers (Gen-Xers) are extremely or very confident they will have enough money to cover their own long-term care expenses.
In addition to planning for their own long-term care needs, many American families are struggling to cope with the long-term care needs and expenses of their parents. IRI has found that confidence levels are even lower regarding the ability to meet the long-term care costs of parents. Among Boomers, IRI found that only 14% are extremely or very confident they will have enough money for the long-term care expenses of their parents and only 21% of Gen-Xers have that confidence.
The long-term care issue is not all doom and gloom. As with most aspects of life, these costs can be managed with proper planning. In fact, IRI has found that confidence levels increase when working with an advisor to develop a plan to meet the costs of long-term care. Among Boomers, for example, IRI found that confidence levels in having enough money for longterm care costs increased about 58% for those who work with an advisor. This report will present data on the costs involved with long-term care. It will examine confidence levels among Boomers and Gen-Xers, noting the particular concerns for women regarding long-term care. The report concludes with an overview of various government programs and financial products to help individuals cover the costs of long-term care.
Terrorism Risk: A Continuing Threat – 2012
Terrorism Risk: A Continuing Threat – 2012
Source: Insurance Information Institute
This report, by Robert Hartwig, president of the Insurance Information Institute, and Claire Wilkinson, analyzes the evolving nature of international terrorism. For property/casualty insurers and reinsurers, the impact of the terrorist attack of September 11, 2001, was substantial, producing insured losses of about $32.5 billion, or $40.0 billion in 2011 dollars. Following the attack, insurers moved to exclude coverage. Only when the Terrorism Risk Insurance Act (TRIA) was enacted by Congress in November 2002 did coverage for terrorist attacks resume. Since its initial enactment in 2002 the terrorism risk insurance program has been revised and extended twice. The report, replete with charts, includes sections on: how insurers treat terrorism risk today; estimating potential terrorism losses; the cyber terrorism threat; the structure and coverage of the terrorism risk insurance program; aviation insurance for terrorism risks; and liability factors. The report concludes that over a decade later, 9/11 remains the worst terrorist act in terms of fatalities and insured property losses. A number of converging factors point to the fact that, while the risk is changing, terrorism is an evolving and ongoing threat for the foreseeable future. Failure to focus on and prepare for this threat will come at an enormous cost to the millions of individuals and businesses who rely on insurance contracts to offset the overall economic impact of a terrorist attack. For property/casualty insurers, the increasing share of losses that they would have to fund in the event of a major terrorist attack on U.S. soil suggests that now is the time to take stock of their terrorism exposures.
NICB Reports 20 Percent Rise in Mid-Year 2012 Questionable Claims
NICB Reports 20 Percent Rise in Mid-Year 2012 Questionable Claims
The National Insurance Crime Bureau today released its first half 2012 questionable claims (QC) referral reason analysis. The report examines six referral reason categories of claims—property, casualty, commercial, workers’ compensation, vehicle and miscellaneous—for the first half of 2010, 2011 and 2012.Questionable claims are claims that NICB member insurance companies refer to NICB for closer review and investigation based on one or more indicators of possible fraud. A single claim may contain up to seven referral reasons.During the first half of 2010, a total of 46,766 QCs were referred. That number increased to 48,887 in the first half of 2011 and to 58,523 in the first half of 2012. There was a 20 percent increase in QCs during the first half of 2012 compared with 2011, and a 25 percent increase when compared with the first half of 2010.Suspicious theft/loss (non-vehicle) generated the largest increase in volume for a single referral reason in property QCs (5,255) and contributed to the property category’s 40 percent rise in QCs compared to the first half of 2011. The miscellaneous QC category posted the smallest increase—10 percent—compared with the first half of 2011.
Residual Market Property Plans: From Markets of Last Resort to Markets of First Choice – 2012
Residual Market Property Plans: From Markets of Last Resort to Markets of First Choice – 2012
Source: Insurance Information Institute
This report by Robert Hartwig, president of the Insurance Information Institute, and Claire Wilkinson analyzes the changes taking place within the residual property market, which consists of a myriad of different programs in place across the United States to provide insurance to high-risk policyholders who may have difficulty obtaining coverage from the standard market. So called residual, shared or involuntary market programs make basic insurance coverage more readily available. The report notes the still-burgeoning growth of the market, which now has a massive total exposure to loss that is approaching $900 billion. Despite attempts by certain states to reduce the size of their plans the fact of the matter is that this market of last resort remains the market of first choice for many vulnerable, high-risk coastal properties. The report focuses on the plans in Alabama, Florida, Louisiana, Massachusetts, Mississippi, New York, North and South Carolina, and Texas.
NICB Names 10 Most-Stolen Vehicles for 2011
NICB Names 10 Most-Stolen Vehicles for 2011Source: National Insurance Crime Bureau
The National Insurance Crime Bureau (NICB) today released Hot Wheels − its list of the 10 most-stolen vehicles in the United States. The report examines vehicle theft data submitted by law enforcement to the National Crime Information Center (NCIC) and determines the vehicle make, model and model year most reported stolen in 2011.
For 2011, the most-stolen vehicles* in the nation were:
1. 1994 Honda Accord
2. 1998 Honda Civic
3. 2006 Ford Pickup (Full Size)
4. 1991 Toyota Camry
5. 2000 Dodge Caravan
6. 1994 Acura Integra
7. 1999 Chevrolet Pickup (Full Size)
8. 2004 Dodge Pickup (Full Size)
9. 2002 Ford Explorer
10. 1994 Nissan Sentra
Top 10 back-to-school trends for 2012
Top 10 back-to-school trends for 2012
Source: National Retail Federation
The tardy bell will be ringing sooner than we know it. Parents, kids and retailers have one thing on their minds: back-to-school shopping. According to the National Retail Federation, combined K-12 and college spending will reach a record $83.8 billion. That’s quite a few colored pencils and new backpacks.
See also: NRF Back to School Headquarters
Hurricane Andrew and Insurance: The Enduring Impact of an Historic Storm
Hurricane Andrew and Insurance: The Enduring Impact of an Historic Storm
Source: Insurance Information Institute
Hurricane Andrew struck Florida on August 24, 1992, and the tumult it created for the property insurance market in the state has not ceased in the 20 years since, according to an analysis by the Insurance Information Institute (.I.I.). The I.I.I. white paper outlines six key insurance market changes attributed to the costliest Florida disaster. Insurance claims payouts for Andrew totaled $15.5 billion at the time ($25 billion in 2011 dollars), and it remains the second costliest U.S. natural disaster, after Hurricane Katrina, which hit in 2005. Hurricane Andrew forced individuals, insurers, legislators, insurance regulators and state governments to come to grips with the necessity of preparing both financially and physically for unprecedented natural disaster.
The Economic Impact of the Budget Control Act of 2011 on DOD & non-DOD Agencies
The Economic Impact of the Budget Control Act of 2011 on DOD & non-DOD Agencies (PDF)
Source: Aerospace Industries Association
From press release:
A new economic impact analysis concludes that 2.14 million American jobs could be lost if the Budget Control Act’s sequestration mandate takes effect on January 2, 2013. That is the date that budget cuts of $1.2 trillion start throughout government unless Congress and the administration agree on a solution.
Dr. Stephen S. Fuller, Dwight Schar Faculty Chair and University Professor and Director for Regional Analysis at George Mason University, in conjunction with Chmura Economics and Analytics, conducted the study on behalf of the Aerospace Industries Association.
“The results are bleak but clear-cut,” said Fuller. “The unemployment rate will climb above 9 percent, pushing the economy toward recession and reducing projected growth in 2013 by two-thirds. An already weak economy will be undercut as the paychecks of thousands of workers across the economy will be affected from teachers, nurses, construction workers to key federal employees such as border patrol and FBI agents, food inspectors and others.”
The analysis concludes that the automatic spending cuts mandated in the Budget Control Act of 2011 affecting defense and non-defense discretionary spending in just the first year of implementation will reduce the nation’s GDP by $215 billion; decrease personal earnings of the workforce by $109.4 billion and cost the U.S. economy 2.14 million jobs.
Residual Market Property Plans: From Markets of Last Resort to Markets of First Choice – 2012
Residual Market Property Plans: From Markets of Last Resort to Markets of First Choice – 2012
Source: Insurance Information Institute
This report by Robert Hartwig, president of the Insurance Information Institute, and Claire Wilkinson analyzes the changes taking place within the residual property market, which consists of a myriad of different programs in place across the United States to provide insurance to high-risk policyholders who may have difficulty obtaining coverage from the standard market. So called residual, shared or involuntary market programs make basic insurance coverage more readily available. The report notes the still-burgeoning growth of the market, which now has a massive total exposure to loss that is approaching $900 billion. Despite attempts by certain states to reduce the size of their plans the fact of the matter is that this market of last resort remains the market of first choice for many vulnerable, high-risk coastal properties. The report focuses on the plans in Alabama, Florida, Louisiana, Massachusetts, Mississippi, New York, North and South Carolina, and Texas.
NRF Report Finds No Retailer Immune To Organized Retail Crime
NRF Report Finds No Retailer Immune To Organized Retail Crime
Source: National Retail Federation
Growing in severity, number and type, retailers are reporting organized retail crime (ORC) has become more troublesome than ever before. Of the 125 retail companies surveyed for NRF’s eighth annual Organized Retail Crime Survey, a record-setting (96.0%) say their company has been the victim of organized retail crime in the past year, up from 94.5 percent last year, and another 87.7 percent say ORC activity in the United States has grown over the past three years.
“What this tells us is that as retailers and law enforcement become more aware of and more proactive in pursuing organized retail crime gangs, criminals have become more desperate and brazen in their efforts, stopping at nothing to get their hands on large quantities of merchandise,” said NRF Vice President of Loss Prevention, Rich Mellor. “Selling this stolen merchandise is a growing criminal enterprise and retailers must remain vigilant as this is an issue that involves everyone’s cooperation when it comes to protecting retailer’s assets, including their valued store associates and customers.”
The silver lining: more companies this year believe law enforcement is aware of and understands the severity and complexity of the issue (40.0% vs. 32.3% in 2011). More than half (54.4%) say top management at their company is aware of the problems associated with organized retail crime.
Celebrate safely – ABI publishes guide on organising street parties and other events
Celebrate safely – ABI publishes guide on organising street parties and other events
Source: Association of British Insurers
With over 3,500 applications made so far to local authorities alone for street parties to celebrate the Queen’s Diamond Jubilee, this year looks set to be a bumper year for celebrations. To help party organisers ensure that events run smoothly, whether on public or private land or in your own home, the ABI has produced a guide.
‘Celebrate – An ABI guide to planning an event’ sets out what party organisers need to know, including:
- Things to consider about your venue, such as is it safe for the number of people you expect, are outdoor activities involved, such as bouncy castles, and what fire aid will be available.
- If planning a street party, steps you need to take, including contacting your local council.
- Any requirements for public liability insurance and how this cover can help party organisers protect against things that could go wrong.
Public Transportation Protects Americans From Gas Price Volatility
Improving transportation options saves consumers money, increases affordability, reduces exposure to price volatility and is good for the economy. In fact, investments in public transit provide a large direct financial return to consumers: increased public expenditures are more than repaid, on average, in transportation cost savings. The predictability of these savings becomes even more important during periods of price volatility. Families cannot plan household budgets when faced with high volatility—they need stable alternatives. This paper highlights the role that public transit plays in protecting Americans from price volatility, as well as strategies that can buffer Americans from future gas price shocks.
2012 “Travel Like a Local” Summer Travel Survey
2012 “Travel Like a Local” Summer Travel Survey (PDF)Source: American Public Transportation Association
From press release:
As flip flops and shorts replace suits and ties, you know summer is here. And while many flock to beaches and cabins in the woods, 104 million people are planning a trip to the city. That is one third of Americans who will be hitting the streets of a city near you. Of those who plan to visit a city, nearly 60 percent (57 percent) or 62 million people nationwide plan to use local public transportation on their vacation this summer, according to the American Public Transportation Association’s (APTA) 2012 “Travel like a Local” Summer Travel Survey.
The survey, conducted in mid-May, shows that cost and convenience are two strong factors that will motivate city visitors to use public transportation. Among those travelers who will be using public transportation during their city trips, 71 percent said using public transportation relieves them from the worry of finding parking for their vehicle, while 68 percent believe that it is less expensive than taxis and rental cars. Sixty-seven percent will use public transportation to save money on parking and 52 percent responded they can save money on gas for their vehicle.
Travel experts at AAA note that this year Americans will be staying closer to home and the APTA survey reveals that heading to a city this summer will be a prime destination. The survey also notes the top ten city destinations.
