QUOTE OF THE DAY:

"Management by objectives works if you first think through your objectives. Ninety percent of the time you haven't."

Peter Drucker

Management Guru

U.S. Property/Casualty Insurance Companies Kick Off 2012 With Profit by BusinessInsurance.com May 17, 2012
Premium growth and lower catastrophe costs helped allow U.S. Property/Casualty insurance companies to begin 2012 with positive net income, according to a report released this week by Moody’s Investors Service Inc. The report, “U.S. P&C Insurers’ 1Q12 Earnings Improve on Lower Cats; Pricing Momentum Continues,” noted that “investment income remains weak and reserve releases continued their moderating trend through the first quarter, prompting companies to turn up the dial on rate increases to meet return targets.” In fact, New York-based Moody’s said that for the Property/Casualty companies it rates, net income for the quarter was “up substantially” by approximately 70% year over year. Moody’s found that rate increases have broadened to include nearly all lines of business. For the companies it rates, net written premiums were up by about 4% year over year as a result of rate increases and exposure growth. “We expect that accident-year loss ratios will improve as premiums are earned and loss costs remain relatively benign,” said Moody’s in the report. Reserve releases support earnings It also noted that the first quarter of the year was relatively quiet in terms of catastrophes, despite the tornado outbreaks that ravaged the South and Midwest in March. In addition, Moody’s found that reserve releases continue to support earnings, “though to a significantly lesser degree than in recent periods.” Moody’s said it expects overall reserve releases to continue to decline, with the caveat that “an area to watch is workers compensation, where some companies have continued to report adverse reserve development in the first quarter of 2012

Why Did My Auto Insurance Increase?

Chris Taylor

:

May 20, 2012

Will unpaid parking tickets or accidents cause your premiums to rise?

Upon receipt of a letter or an invoice that shows that you’ll be paying more for your premiums from now on, it’s natural to ask yourself: why did my Auto insurance increase?

The answer can lie in many places, some within your control, and some that had nothing to do with you.

For example, there are times when an insurer will boost all of their rates, so you will simply have been roped into that hike as a whole. However, there are other things that might have happened since your last payment, and you might be curious as to whether or not they played a role in the higher price tag.

Will a non-driving related license suspension cause your premiums to rise?

Failure to pay off your parking tickets, to the point where your license has been suspended, can make your premiums increase even though it has nothing to do with something that was done behind the wheel. This is because it’s noted on your driving record. Every time you purchase a new car policy or whenever it comes time to be renewed, the insurer will access that information, and you’ll notice that your license has been suspended. Each company has its own rules for determining how much it will affect the amount you pay.

If your license is suspended, you will [lose your safe driver discount, at the very minimum,

It mightt be considered a minor violation, but you will no longer have a perfect record, meaning that discount will more than likely be removed. The actual premium itself might also increase along with it, depending on the company and your state.

When the license suspension is the result of a major offense, such as a DUI, it will bring about much more significant price hikes.

In the case of an auto accident, your insurer will look to its “surcharge schedule”, which is a premium increase that has been predetermined for your policy, should you be involved in an accident. Make sure to take that schedule into account when you’re shopping for a policy or when it comes time for renewal, as it could make a dramatic difference to the premiums should you ever be in a collision. At least you’ll know the answer to the question why did my auto insurance increase?

GREAT OPPORTUNITY FOR AGENTS0

Consumers Are Eager For Life Insurance Coverage

New survey puts the onus on Life insurers to work more proactively with the agency force to provide the tools, marketing and advertising support to better educate consumers about Life insurance.

Insurance Networking News, May 18, 2012

Juliette Fairley

Uninsured individuals do not have insurance coverage because no one had offered to sell them a policy, according to a new survey that explored Life insurance buyers and non-buyers' beliefs, motivations, influences, priorities and preferences.

Deloitte’s “The Voice of the Life Insurance Consumer” study found that 62% of non-buyers had not received an unsolicited offer to buy Life insurance in the past year compared to 44% of buyers. Another 30% said their employer does not offer Life insurance as a benefit while 46% of buyers compared to 66% of those currently uninsured said they had not looked for Life insurance on their own initiative.

“Many Life insurers are not dealing directly with prospects,” Deloitte Research Insurance Leader Sam Friedman told Insurance Networking News. “Instead, insurers distribute their products through agents and financial planners. Part of the challenge facing carriers is how to work more proactively with their agency force to provide the tools, marketing and advertising support to better educate consumers about everything Life insurance can do for them and their families and create more demand for their products and services.”

Older respondents who were current buyers found unsolicited offers to be less influential. About 70% of current buyers 50 years old and older—compared to 12% of those 26 years old and under—said such offers were not at all influential compared. The same age-related trend was evident with the uninsured sample as well.

“Among a variety of other steps, insurers are getting more involved in social media to highlight to a younger generation especially the importance of financial protection,” American Council of Life Insurers Spokesperson Jack Dolan told Insurance Networking News.

The Deloitte study found that the Internet was a vital information source for both buyers and non-buyers. About 32% of current buyers and 27% of non-buyers did a general Web search about Life insurance, while another 21% of buyers and 16% of non-buyers had surfed specific insurer websites. In addition, 8% of buyers and 10% of non-buyers had surfed insurance agency websites.

“The Web, and social media in particular, can play a huge role in helping insurers distribute information to demystify Life policies, educate prospects about all the financial needs Life insurance can fulfill beyond simple death benefits and create awareness about the product’s affordability,” said Rebecca Amoroso, vice chairman and U.S. insurance leader for Deloitte and the survey's executive sponsor.

About 26% of respondents found the application and underwriting process too difficult, according to Deloitte.

“The process could be discouraging many prospects from going through the application process because invasive medical tests may be required, such as blood and urine tests,” Deloitte’s Friedman said. “In many instances, insurers can make the process easier and faster by using predictive analytics, eliminating the need for invasive tests for many prospects and speeding up the sale without compromising the integrity of the underwriting process.”

Although Life insurance isn’t the top financial priority for most, Deloitte notes that consumers desire Life insurance coverage.

About 45% of non-buyer respondents included Life insurance among their top five financial priorities and 21% ranked it in their top three. Life insurance ranked even more prominently among those who already have life insurance. with 70% putting life insurance among their top five priorities and 34% included it in their top three.

“Life insurers can proactively market a positive message either individually or perhaps as part of an industry-wide ad campaign showing how a policy can support a family or business in so many different ways in the short- and long-term,” Friedman said.

Among the non-buyers, 37% of those who had Life insurance in the past said the workplace was a big source of sales. with 43% automatically securing a policy through their employer and 20% buying additional benefits through their group plan. Only 16% had bought coverage on their own through an agent. compared to 13% through a carrier. -- and 5% bought through a group or association.

“Life insurers could work more closely with employers to promote automatic and voluntary life benefit options since many of those surveyed prefer to buy coverage through their places of work,” Deloitte’s Amoroso said.

From Dr. Jack Nordhaus

QUOTE OF THE DAY:

“Convictions are more dangerous enemies of truth than lies.”

Friedrich Nietzsche, philosopher

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Ticket?"Uh-Oh!" Calculator See How Much A Ticket Could Raise Your Auto Rates

Insurance.com

By Michelle Megna

05/14/2012

Our new analysis of auto insurance quotes reveals average insurance increases for common tickets.

Everyone’s had that feeling of dread when you see the flashing lights of a cop car in the rearview mirror. Maybe you slowly rolled past a stop sign. Perhaps you forgot to buckle up, or you didn’t realize you were speeding. In addition to getting a ticket, you’re likely to see a hike in your Auto insurance premiums. But how much?

Insurance.com’s new interactive tool, the “Uh-Oh! Calculator," allows you to compute the average % increase to your Auto insurance rate for 14 common violations.

Insurance.com's data analysis of more than 490,000 Auto insurance quotes given to drivers reveals that:

• Reckless driving is the most expensive violation among the 14 infractions we surveyed, with an average rate increase of 22%. At the other end of the spectrum, driving without a seat belt triggers a relatively small 3%uptick.

• Insurance rate hikes due to violations are sometimes higher for divorced drivers than for single and married people. For example, if you're divorced and are ticketed for reckless driving, your annual premium may increase an average of 7% more than a single person's, and 4% more than those who are married.

• Condo owners sometimes see higher rate increases for violations than do renters, single-family homeowners and those who live with their parents. In some cases, such as tickets for tailgating, condo owners' average rates go up 10% more than those of renters and people who reside with Mom and Dad, and 4% more than those of homeowners.

How much a ticket will raise your Auto insurance rate

Based on Insurance.com's analysis, here's how much common infractions will impact your rates, on average:

1. Reckless driving: 22%

2. DUI first offense:  19%

3. Driving without a license or permit:  18%

4. Careless driving:  16%

5. Speeding 30 mph over the limit: 1 %

6. Failure to stop:  15%

7. Improper turn:  14%

8. Improper passing:  14%

9. Following too close/tailgating: 13%

10. Speeding 15 to 29 mph over limit: 12%

11. Speeding 1 to 14 mph over limit: 11%

12. Failure to yield: 9%

13. No Auto insurance: 6%

14. Seat belt infractions: 3%

No one's perfect: Save money on Auto insurance, despite your record

If you do get a ticket, don't fret: There are ways to save money on Auto insurance, regardless of your driving record.

To get the most affordable Auto insurance for your particular situation, it pays to shop around, to dig for discounts and to drop unnecessary coverage.

Review your policy each year, and get at least three quotes when doing an auto insurance quotes comparison.

It's also prudent to research bundling your Auto and home policies, as many insurers will offer lower rates if you buy two or more types of coverage.

Ask your insurer if you, or any of the family members on your policy, qualify for low-mileage or good-student discounts. You may also get a lower rate for vehicle-safety features such as Auto alarms or anti-lock brakes.

Another option: You can raise your deductible from $250 to $500 on Collision and Comprehensive coverage, which usually means that you can cut that portion of your premium by up to 30 %.

In addition, it might make financial sense to drop comprehensive and collision coverage if the value of your Auto is less than a $1,000. If you total your Auto, you receive the actual cash value of the Auto. So, for older models that aren't worth that much on the market, it might not make sense to pay premiums for comprehensive and collision coverage.

Methodology

Insurance.com analyzed more than 490,000 auto insurance quotes provided to Insurance.com users from 14 Autoriers between January 2009 and January 2011. We looked at quotes given to drivers with the 14 most common infractions recorded and compared them to quotes given to drivers with no violations. We used a model to estimate the annualized premium expected for certain combinations of personal attributes (residence, state, time with prior Autorier, marital status and age) along with 14 violations. This ranking is not inclusive of all possible driving violations. Rates shown are averages; your own rate will depend on your personal factors. State laws governing traffic violations are subject to change.

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MARKETING OPPORTUNITY!

The Death of Disability Insurance

Despite disabilities’ potential threat to financial vitality, many workers keep Group coverage a low priority.

Insurance Networking News,

May 14, 2012

Justin Stephani

One-third (33 %) of full-time workers surveyed lack long-term disability insurance; more than one-third (38 %) of workers whose employers offered them the option to pay for Group Long-Term Disability insurance declined to buy it, leaving most uninsured.

These statistics surrounding disability insurance and public awareness from Sun Life’s recent report, titled “Will Workers In America Hope To Dodge The Bullet, Remain Blind To the Risks Or Simply Hide?” despite becoming familiar sights this month, remain startling given another fact cited by the report: Medical problems contribute to roughly half of all personal bankruptcies and home foreclosures in the United States.[SCARY?]

A contributing factor to the lack of Disability insurance Might be recent shifts in workplace benefits that give workers the option of whether to purchase group benefits such as disability, Life, Vision and Dental insurance, which more often than not they turn down. According to the report, these choices here have left a significant proportion of the American workforce unprepared.

“We must educate the U.S. workforce to understand the financial risks of long-term disability and learn best practices to mitigate their risks,” said Robert Klein, Jr., VP of voluntary benefits. “If 10 couples gather for a barbecue, we estimate that roughly three of them will have a partner who experiences a disability lasting one year or longer during their professional lifetimes.”

The report attempts to subdivide workers who don’t buy Group Voluntary Long-Term Disability coverage into three categories: The “gambler,” who doesn’t think the risk justifies the cost of premiums (38 % of respondents); the “mole,” who hasn’t considered the issue and remains blind to solutions (38 %); and the “ostrich,” who finds the thought of disability too unpleasant to face (19 %).

Workers younger than 50, minorities, men. and tech workers are more likely to have purchased Long-Term Disability insurance than other respondents.

More than half of respondents (53%) believe that government programs such as Social Security would cover living expenses. However, the report points out that filing can take months, and even then, only 35 % of SSDI claims applications receive approval each year.

Perhaps another misguided approach, the report found that among workers was that disability insurance belongs at the bottom of the list of priorities, behind health, life, vision and dental. The largest group of workers (41 %) named life insurance the most important; one-third named dental insurance their most important coverage aside from health.

The report consists of responses from more than 2,000 workers across the United States and was conducted for Sun Life by Kelton Research.

From Dr. Jack Nordhaus

QUOTE OF THE DAY:

"Many receive advice; only the wise profit from it”.

Publilius Syrus (1^st. century, CE)

A GROWING NICHE MARKET

You're Gay and Married: Do You Get an Auto Insurance Discount?

By Mark Chalon Smith

Posted : 05/11/2012

Summary

We answer some questions about same-sex marriage and insurance in the wake of President Obama's declaration of support for same-sex nuptials.

President Barack Obama can add another historic moment to his presidency: He made headlines this week when he supported same-sex marriages during an interview on ABC News.

Despite the unprecedented moment of having a president endorse same-sex marriage, the issue of whether or not to legalize such marriages is left to individual states.

North Carolina voters this week approved a constitutional amendment defining marriage solely as a union between a man and a woman. North Carolina is the 30^th state to ban same-sex marriages. In six states -- Connecticut, Iowa, Massachusetts, New Hampshire, New York and Vermont -- it is legal for couples of the same sex to marry.

Some auto insurers recognizing same-sex marriages

Although the issue is controversial among voters, insurance companies increasingly are accommodating people in same-sex marriages. Esurance, State Farm and Allstate, for instance, offer reduced car insurance rates to married gay couples in states that recognize same-sex marriage. Esurance also offers the same discount to gay and lesbian couples who are domestic partners or are in civil unions in California, Illinois, Oregon, and Washington.

Recognizing gay and lesbian couples is just good business for insurers, says Thomas Roth, the president and founder of Community Marketing Inc., a San Francisco-based company that helps companies connect with gay and lesbian communities.

"Insurance sales can become a long-term income stream if the agent builds a solid relationship with the client," whether he or she is gay or straight, he says.

Danny Miller, Esurance's senior manager for public relations and communications, says his company's auto insurance discount for a same-sex couple can reach 10%, depending on various factors, including driving and accident history. Married people tend to file fewer claims than single people, so insurers consider married drivers a lower risk.

Auto insurance discounts for some same-sex couples, even if not married

Esurance was one of the first insurers to provide discounts for domestic partners who share a policy, says Eric Madia, Esurance's director of product and actuarial management. That policy began in 2004 in California, he says, months before the state adopted the California Insurance Equality Act. The law, which took effect in 2005, prevents insurers from selling policies that treat registered domestic partners and married spouses differently.

To qualify for a discount, Madia says Esurance might require a copy of the certificate documenting the civil union or domestic partnership.

These are positive trends, says Roth, who also advises insurance companies and their agents to keep abreast of recent laws and understand the needs of gay and lesbian clients.

"One important way for an agent to deliver solid service is to know and be able to discuss the legal nuances around relationship recognition and regulations in the state" where they operate, he says. "Some states recognize same-gender relationships with marriage, domestic partnerships or civil unions. Others ban recognition of these relationships outright."

Roth continues: "So the agent has to be prepared with the right answers as questions arise. Demonstrating a genuine interest (in clients) by being able to help them maneuver through the evolving laws of their land will establish rapport, trust, long-term business, and, ultimately, referrals."

Health insurance and gay couples

When it comes to Health insurance, gay couples who are not married may be less likely to share health insurance through one partner's employer.

However, employment experts note that many employers have started to offer benefits to domestic partners in recent years. It's a trend, they note, that should grow as small firms start to follow the lead of larger companies that already provide domestic partner benefit plans.

As of May 2008, 9,374 employers offered domestic partner benefits, according to an Employee Benefit Research Institute report. Of that number, 8,653 are private-sector companies, with 270 of the Fortune 500 companies offering domestic partner benefits.

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Insurance Exchange Gives Retail Agents More Market Access
 
by BusinessInsurance.com
 
May 13,2012
    
While brokers and agents have long invested in agency management systems to capture and format insurance application data, and insurers have devised portals with product and service information, integrating this information has been the goal of the insurance exchange movement.

An early manifestation of the exchange model is Dallas-based MarketScout, which launched its exchange in 2000 and now has some 47,000 users.

Licensed agents use the Web-based MarketScout exchange to access insurance companies writing policies for hundreds of industries and coverage types across the United States.

“The reason that we built the exchange was because thousands of retail agents across the country lacked access to a plethora of markets that are organized according to expertise,” said MarketScout CEO Richard Kerr.

In addition to giving retail agents market access, the insurance exchange has evolved in recent years, Mr. Kerr said, noting that exchanges need to offer a wide variety of products and services to attract agents.

“The exchange is going to be tasked with solving problems for the retail agents, such as accounting, automation, training and human resources,” he said. “We really believe that this is the way that retail distribution and product access is morphing into. Exchanges are beginning to provide everything that agents need.”

On a separate front, the Washington-based Council of Insurance Agents & Brokers partnered with Atlanta-based LexisNexis Risk Solutions in 2010  to launch the LexisNexis Insurance Exchange

That same year, Lloyd's of London unveiled its exchange, which offers its brokers and managing agents a standardized way to exchange electronic information. The Message Exchange Ltd., which Lloyd's website said processed 800,000 messages last year, this year is ramping up transmission of endorsements and other insurance-related information.

Mr. Kerr said a growing exchange realm ultimately will benefit brokers and agents by increasing products and services available to them.

“You are going to see different exchanges competing for customers,” he said.

Chris Gagnon, the council's director of strategic technology, agreed. “In our nirvana, all carriers, brokers and agents would get on board,” he said

Clyde Owen, Hartford, Conn.-based general manager of the LexisNexis Insurance Exchange, said a primary goal of the exchange is to give insurance intermediaries information in an easily searchable manner, as opposed to asking them to maintain knowledge of multiple programs, insurers, and markets.

“Our goal is to take information about the industry and share it with people who need to know it, when they need to know it,” Mr. Owen said. “Brokers or producers don't have a Google for the information they need, so they tend to place most business with the few insurers they know best, which is not always in the best interest for insureds.”

According to LexisNexis Risk Solutions, by the end of 2011, about 20,000 submissions had been entered into the system in which more than 300 underwriters participate. In 2012, Roseland, N.J.-based Crump Insurance Services Inc. joined the exchange.

“We recognized that the exchange portal would be a valuable tool for retail agents to easily identify markets for their accounts in one place,” said Michael S. Oliver, senior VP at 5Star Specialty Programs, a Naperville, Ill.-based managing general agent that is part of Crump. “It also enables 5Star to identify those classes and lines of business we have the ability to provide product for, which reduces nonproductive activity for both the retail agency and 5Star.”

Another merit of the exchange is that it is cloud-based and accessible through a Web browser, eliminating the need for a capital outlay of hardware and software for participants, Mr. Owen said, adding that the exchange also encrypts all data.

A future concern is data security. Mr. Owen said that while there's not yet a critical mass of data to aggregate, clear of personally identifiable information and release for analysis, the exchange will release anonymous data in the future.

“As the exchange grows, you are going to get richer data sets to run more analytics,” Mr. Owen said.

Even though this data will be scrubbed, Mr. Gagnon said it could give rise to competitive concerns in certain instances. For example, if a broker or insurer has most of the business in a specific niche line of coverage, a competitor could analyze exchange data in an attempt to discern the “secret sauce” underlying the success, he said.

Nonetheless, Mr. Gagnon said he expects analysis of the placement data to be used largely for the benefit of the industry as a whole.

“Data is the key to our industry,” he said. “Being able to trend and derive models from actual data aggregated from an exchange would change the industry in a profound way.”

‘SCARE ‘EM, THEN SAVE ‘EM’ ARTICLE FOR MARKETING LIFE AND ANNUITIES
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How Much Money Will I Need to Retire Just for Health Care Costs?

May 13

Posted by Julie Campbell

A 65-year old couple who intend  to retire this year will need $240,000 for their medical expenses.

An analysis released by Fidelity to answer the question “how much money will I need to retire just for health care costs?” has shown that a couple who is 65 years old and intends to begin retirement in 2012 will require approximately $240,000 to pay for the medical expenses they will incur over the rest of their lives, if they do not have employer-provided retiree coverage.

This is an increase of 4% over the estimate from last year, which was $230,000.

In 2011, Fidelity’s estimates had declined by 8%  from what they had been the year before. The report for 2010 showed that the same 65-year-old couple who had intended to retire that year would have needed $250,000 in order to cover all of their future medical costs. That year was the first time that Fidelity had seen an annual decrease in the 10 years that it had been making the reports.

For many Americans, medical costs will be the largest expense they will face during their retirement.

It should be noted that the Fidelity projections do not include any of the additional costs that are associated with services such as nursing home care, and they apply to individuals who will have standard Medicare coverage. Of those costs that are a part of the estimates, approximately 45% will be paid out of pocket by these couples, unless additional coverage is purchased in order to make the payments.

Since 2002, when the calculations were first made by Fidelity, the estimate has increased by an annual average of 6 percent (with, of course, the exception of 2011’s decline).

According to the executive vice president of the Benefits Consulting business at Fidelity, Brad Kimler, “Today’s workers must understand that the cost of health care is expected to continue rising significantly in future years.”

Medical inflation is increasing faster than cost of living adjustments and salary increases for the majority of individuals. Unfortunately, this means that when they ask themselves, how much money will I need to retire just for health care costs, the answer will likely only be higher every year.

From Dr. Jack Nordhaus

QUOTE OF THE DAY:

"Life is a long lesson in humility."

James M. Barrie, Playwright

TECHNOLOGY IMPACTS AUTO COVERAGE: I

IMAGINE: NO MORE AUTO INSURANCE PREMIUMS

Two new studies show that the embrace of existing technologies, such as telematics, could soon have a dramatic effect on the insurance industry.

Insurance Networking News

Chris McMahon

May 10, 2012

There’s no question that driving is getting safer. Collision avoidance and other safety features in Automobiles are becoming more sophisticated and ubiquitous, having worked their way down from high-end luxury vehicles to family sedans and subcompacts. [SEE NBXT STORY] Now Automated traffic law enforcement and telematics could further reduce fatalities and insured losses, and the promise of Google’s self-driving car could remove driver error as the primary cause of collisions and injuries.

If these technologies are widely adopted by consumers, or mandated at the local and national levels, the net effect could be a dramatic reduction in traffic accidents, fatalities and insured automobile losses. Consequently, Property/Casualty insurers would see a major reduction in their Auto insurance premiums revenue.

The adoption of these technologies is accelerating. Globally, the Pay As You Drive (PAYD) insurance market now has more than 2 million customers and the market is expanding geometrically, according to Ptolemus Consulting Group, an international strategy consulting firm.

“We expect it to be multiplied by 50 by the end of the decade,” said Frederic Bruneteau, managing director of Ptolemus Consulting Group, an international strategy consulting firm that recently released its “Insurance Telematics Study.” “Telematic-enabled policies will then generate EUR 50 billion in premiums to insurers who have seized the opportunity,” he added. The 400-page Ptolemus study is based on two years of research and more than 80 interviews with insurance and technology providers around the world.

Bruneteau explains that telematics give drivers control over their insurance rates because good driving habits are recognized and rewarded. Conversely, risky drivers would be recognized and pay more, but they also would have the opportunity to lower their rates by driving more safely. [MICROUNDERWRITING]

“If you look at the business case for this, a lot of insurers are saying it’s nice, but why would I sell something that decreases my premium and creates additional costs? What’s the benefit?” Bruneteau said. “I think this is not the case. The key thing about telematics is that it is a tool that the user can control.”

Another positive consequence for insurers is that they attract safer drivers. “It is in your interest to have a customer who will pay a premium and have much lower risk and claims. If you look at the statistics, you have a 15- to 50%  decrease in claims. So that’s the main ingredient in the business case for telematics. It’s not about premiums anymore, it’s about cash flows,” Bruneteau said.

However, it’s not all blue skies for insurers.

Celent also has been researching the confluence of these technologies, and paints a different picture in a recent research paper “A Scenario: The End of Auto Insurance: What Happens When There Are (Almost) No Accidents.”

The Celent white paper describes a possible 10-year scenario in which federal and local governments in the United States encourage the use of three currently available technologies: telematics, collision avoidance, and Automated traffic law enforcement. The implications for Property/Casualty insurers would be enormous.

In that scenario, Auto Liability premiums decline to 20% of total 2012 industry premium during the first five years and to 10% of total 2012 industry premium during the following five years. Currently, Liability premium stands at 25% of total 2012 industry premium.

Over the same periods, Auto Physical Damage drops to 10% and then 3%, from 14% of total 2012 industry premium. Total property/casualty industry premium drops by 9% from 2013 to 2017, and by 26% from 2018 to 2022.

“In terms of causation, accidents go down, insured losses go down, and therefore premiums go down,” said Donald Light, an insurance analyst for Celent. “Decidedly, it’s a good thing; Auto accidents don’t create wealth, prosperity or economic growth, although a lot of people make their living because there are Automobile accidents.”

However, the loss in revenues would mean that there would be less investment directed to the property/casualty business, and by extension the quantity and quality of people in the industry would decline, as would the insurance industry’s influence over legislation and regulation

TECHNOLOGY IMPACTS AUTO COVERAGE: II

GOOGLE DRIVERLESS CARS RECEIVE APPROVAL BUT WILL NEED NEVADA AUTO INSURANCE

May 10, 2012

Will the neighboring California insurance marketplace be next?

After new Google driverless cars passed a number of tests and achieving set requirements in the state, the Nevada Auto insurance industry is now facing a first in the country opportunity to cover the vehicles.

The state is the first in the nation to license this new technology.

After years of development, they have now been able to achieve the following goals, which were set by the Nevada Auto insurance officials. These include:

- A safety plan submission
- A self-driving technology description submission
- A combined 10,000 miles of driving time
- The submission for a hiring and training plan for drivers of these vehicles

Once the Google driverless cars passed the tests, they were provided with special license plates.

The red plates will be unique to this type of vehicle and will mean that they are legal to be self-driven. Equally, though, it is still unlikely that consumers will be seeing the vehicles on dealer lots anytime soon. That said, they don’t appear to be as far into the distant future as they did only a few years – or even a few months – ago.

Americans have come to accept that air travel is a mainstream way of arriving at a destination and that computers are capable of taking over that form of transportation. It is likely that we will also one day be able to hand over the wheel to a computer to drive our cars. Before that happens, though, it will be important for some setbacks to be overcome. Unfortunately, some of them will inevitably be collisions.

The Nevada Auto insurance industry is going to need to decide what happens if a self-driving car collides with another one, or with one driven by a human. The odds are that even if the human was at fault, the technology will still receive some negative press and some public backlash.

It is likely that neighboring states, such as the California insurance marketplace, will also need to start thinking about these eventualities, as the drivers from one state will surely want to cross over into the next.

Even if the technology is years away from reaching consumers’ driveways, this is certainly a wakeup call for the Nevada Auto insurance sector, as they begin to consider what types of policies – and rates – will be necessary for this coverage.

 

NEW HOMEOWNER INSURANCE BASICS

By Maryalene LaPonsie

Here's how to protect the biggest investment you'll likely ever make: Your new house.

You've been searching for the perfect house for months. Finally, you find the one. After your offer is accepted and a small mountain of paperwork is signed, it's yours. What are you going to do next?

If you're smart, before you pack a single box, you will make sure your Homeowners insurance has you covered for whatever life might have in store. Although your mortgage lender probably requires you to carry some level of HO insurance, don't assume that this amount will protect you from financial disaster.

Donald Griffin, vice president of personal lines for the Property Casualty Insurers Association of America (PCIAA), offers these tips.

Tip No. 1: Insure for your home's replacement cost

Here's one of the most common mistakes homeowners make: Confusing a house's market value with its replacement cost. Your HO coverage should cover the cost of rebuilding your house if it’s destroyed. "The best indication [for coverage] is the cost to build a new home," Griffin advises. "With an existing home, look at the replacement cost rather than the market value." This is often less than what you paid for your home; if you're insuring your house for its market value, you may be overinsuring it.

On the other hand, if you bought a foreclosed home, the price you paid might not accurately reflect construction costs to rebuild it.

To determine the replacement cost, most insurance companies use software that allows them to enter your home's features and calculate the cost of replacement. In addition, most policies include coverage for up to 125% of the replacement cost.

Although it might be tempting to use this buffer as a reason to purchase less coverage, the reduced cost might not be worth the risk you take in having inadequate coverage. Griffin says it can be less expensive to rebuild a home than to do extensive remodeling, and many home insurance claims are for only partial damage to a home.

Tip No. 2: Don't skimp on liability insurance

There's the old joke that trial lawyers have never seen a lawsuit they didn't like. That might be an overstatement, but the threat of legal action is a real concern for everyone - especially if you have assets like a house, savings, and investments. If you're sued for an incident covered under your HO insurance (like a slip-and-fall injury on your front steps), Liability insurance covers not only the settlement. but also your legal fees (up to your liability limit).

According to Griffin, many Liability policies will cover you even if an incident happens away from your home. He also recommends buying an Excess Liability or Umbrella policy that offers coverage of $1 million beyond what is already included in your HO and Auto policies. These policies are relatively inexpensive, often costing $200 to $300 per year.

"You don't want to lose your home because you failed to buy an insurance policy," says Griffin.

Tip No. 3: Protect your personal property

When you receive a home insurance quote, be sure to review the coverage amount for your personal property. Most policies include coverage equal to 50 to 75 % of the replacement value of your house.

In addition, you might need a separate endorsement, or rider, for some valuables. For example, coin collections, stamp collections, jewelry, furs, fine art, cameras, and other expensive belongings might be subject to limited coverage under the Personal Property provisions of your plan. When requesting a HO quote, ask whether these items need to be listed under a separate endorsement to ensure they are properly covered.

Tip No. 4: Don't overlook coverage for additional living expenses

If your house is destroyed or otherwise unlivable while repairs are being made, you'll be glad you can tap into your "additional living expenses" (ALE) coverage. This type of coverage won't pay your mortgage, but it will cover the cost of an apartment or hotel. If you’re displaced from your house, you can make a claim for this coverage by submitting paperwork documenting your living expenses.

The ALE standard for most HO  policies is a benefit worth 20% of your home's replacement value. When you get a HO quote, find out if the policy specifies any limitations or exclusions on ALE.

Tip No. 5: Examine what's not covered

Finally, read the exclusions section of your HO policy. Understanding what's not going to be covered is just as important as knowing what is - before you ever have to make a claim.

In the end, Griffin reminds new homeowners that it’s important to choose a financially stable insurance company. Financial strength ratings are available from A.M. Best, for example.

"Remember," he says, "you’re buying a promise from that insurance company that they will be around when you need to make a claim."

What about customer satisfaction? J.D. Power and Associates releases annual customer satisfaction rankings of home insurance companies. state insurance departments generally post their annual "consumer complaint" reports on their Web sites.

QUOTE OF THE DAY

“Truth, like gold, is to be obtained not by its growth, but by washing away from it all that is not gold.”

Leo Tolstoy, novelist and philosopher

GOOD INFORMATION FOR COMMERCIAL LINES CLIENTS AND PROSPECTS

INSURANCE SLIP-AND-FALL SCAMS TARGETING SMALLER RETAILERS

Smaller retailers are often targets of sip-and-fall claims. This type of insurance fraud, in which individuals create their own staged dangerous situation so that they can fake falling down and hurting themselves in order to receive monetary compensation, are on the rise, and small businesses seem to be a main target.

Although this form of accident can occur legitimately, scams are increasingly making insurance news.
Businesses need the coverage to protect themselves financially because an innocent individual might slip and fall, sustaining a serious injury that requires expensive medical treatment. Unfortunately, criminals are taking advantage of the fact that these scenarios are easy to fake, providing them with a quick – if unethical – way to obtain money.

Even worse, the losses caused by insurance fraud cause rates to rise, and prices of goods and services to increase.

The National Insurance Crime Bureau (NCIB) has recently discovered a number of attempts to try to use slip-and-fall litigation threats in order to try to extort money from the owners of small businesses. Scam artists use this method to try to receive cash payments from these innocent shop owners.

The strategy usually involves a scam artist faking an injury in a store and then telling the owner that medical care will be required. After some time, the scammer returns to the business to tell the owner how much the medical expenses cost, and that he will be suing for that amount. At some point, the owner is offered the opportunity to pay cash to have the whole mess go away. Unfortunately, when the shopkeepers pay up, it only encourages more extortion.

Most of these cases are never reported to the police, which makes the problem difficult to measure. The NICB has determined that phony insurance slip-and-fall claims by nearly 12% from 2010 to 2011. California saw the largest number of cases (667), followed by New York (280), and Texas (245).

  QUOTE OF THE DAY:

"Whoever cannot give anything away cannot feel anything either."

State Farm Overhauls Mobile Web Site

By Staff Writer

May 8, 2012 • Reprints
 State Farm has redesigned the mobile experience for users of the carrier’s mobile website, m.statefarm.com. The enhancements were designed to offer consumers improved navigation and more ways to learn about State Farm products, report claims, and manage their insurance, banking, and financial services products.

“With the continued growth of mobile use, it has become increasingly important to provide the best possible experience to consumers across a number of devices,” said Patty Gaumond, vice president of enterprise Internet solutions at State Farm. “The redesigned site allows users to interact with us on their terms, at the access point that is most convenient for them.”

Consumers visiting the State Farm mobile Web site can expect similar functionality with a new look and feel. Some of the enhancements consumers will see as they browse the redesigned pages include:

•A tile-based navigation system that organizes information in a more logical way.
•An enhanced notification system that brings more timely and valuable information to the forefront.
•Quick and easy access to information on connecting with a State Farm agent.
 

HUGE POTENTIAL MARKET FOR MOBILE DEVICES

MOBILE COMMERCE IN THE INSURANCE INDUSTRY IS ABOUT TO TAKE OFF

May 8 

Posted by Alicia Williams Share

Ensquared is prepared for an explosion of smartphone adoption and online shopping.

Leading smartphone and iPhone insurance authority, Ensquared, has announced the results of its latest customer and industry data analysis and has announced that American mobile commerce will truly be taking off within the upcoming two to five years.

As a result, they also say that tablet and cell phone insurance will also skyrocket.

Though the United States is never a world leader in terms of mobile commerce and devices, it is about to take on a leadership role in the smartphone and tablet channels. This, regardless of the fact that the penetration of smartphones rose by 46% within the last 12 months and that there remain approximately 150 million feature or basic cellular phone devices still being used throughout the country.

The 18 to 44 year old demographic is that most likely to own and use a smartphone.

What's promising is that the number of users of these devices around the world is predicted to double within the next few years, as they become a more mainstream way for individuals to communicate, shop, and perform their daily tasks.

As the devices are increasingly designed to cater specifically to an individual’s needs and expectations, it has allowed the price of the devices to remain the same, but for sales to increase. Consumers are quite obviously becoming more dependent on these devices, as they use them quite consistently for talking, texting, emailing, using apps, playing games, taking pictures, recording videos, browsing the web, listening to music, reading books, organizing their days on calendars, and social networking.

With increased value to the consumer comes the ability to resist lowering the prices. At the same time, a growing number of people are purchasing their devices outright, as they bundle them with their wireless plans to achieve greater savings.

Equally, Ensquared has said that as more people purchase these devices, an increasing number of people own these devices, a growing number will also want to buy tablet and smartphone insurance in order to protect them. They are already beginning to realize the real value of the devices and that there is a risk against which they would like to be protected. This is opening up a significant door in the mobile commerce marketplace.

GOOD TO SHARE WITH PERSONAL LINES CLIENTS/PROSPECTS

WHAT A CROCK!  10 LIES PEOPLE BELIEVE ABOUT AUTO INSURANCE  insurance

By Margarette Burnette

Posted : 10/06/2009

When searching for Auto insurance, it pays to know the facts. Don’t rely on your neighbor or co-worker for insurance information. Here are the truths every driver should know.

1. "No-fault insurance means it's not my fault!"

No-fault car insurance varies by state, but usually requires your car insurance company to pay medical expenses and lost wages for injuries due to a car accident, regardless of who is at fault.

"After an accident, no-fault insurance lets all parties get payment for their immediate medical needs while their insurance companies are deciding amongst themselves which company is going to pay for the accident," says Michael Petrarca, an assistant vice president at Amica Mutual Insurance Co. in Lincoln, R.I.

If you caused the wreck, it doesn't mean you're off the hook. The insurance companies will decide who's to blame, and that party would be responsible for repairs and other damages, he says.

2. "The color of my car affects my insurance rate."

Auto insurance companies set rates based on the safety features of a vehicle and how much it costs to repair or replace the vehicle (among other factors about the driver). But the color of the car doesn't factor into the premium, says Petrarca.

"Some makes and models generate more claims than others, and they're rated accordingly, but the color of a vehicle means nothing," he says.

3. "My friend borrowed my car, so he's responsible for damages."

If you give someone permission to drive your car and that person crashes, it will be your insurance – not your friend's policy – that covers the damages, says Rebecca Doran, a senior corporate underwriter with Amica.

"For a Personal Auto policy, the insurance is generally going to follow the car, and not the driver. So if I lend a vehicle to my brother, and he gets in an accident, it would go through my insurance company," she says.

However, if your Auto insurance coverage is maxed out, your friend's policy can be tapped for the remainder of damages, Doran says
.

4. "My Auto insurance company can cancel my policy at any time."

State regulations prohibit insurance companies from dropping you in the middle of your policy term unless the insurer has adequate grounds to do so, says Petrarca. Such grounds may include non-payment or fraud.

However, if you're paying your premiums on time and have a valid driver's license, you have little to worry about, he says.

"While there are reasons companies can cancel insurance policies, they can't necessarily do it at any time," he says.

5. "A more expensive car costs more to insure."

Car insurance companies look at the “loss history” of your vehicle – meaning how many claims they’ve paid on that model—along with how much it might cost to repair or replace your car, not its sales price, when determining how much to charge you for Collision and Comprehensive coverage.

In fact, some mid-priced vehicles may have higher insurance premiums if they have a high loss history and cost more to repair than expensive ones.

"A $30,000 sports car could have costlier claims than a $50,000 SUV, so the sports car could cost more to insure," says Sal Orso, an assistant vice president of casualty underwriting for Chartis Insurance's private client group in New York.

6. "I got a ticket, so my car insurance rates will skyrocket."

A ticket doesn't automatically mean an increase in rates, Doran says. In fact, if the ticket was minor and you have an otherwise clean record, your premium might not increase, she says.

"It depends on the situation, and how many infractions you've had in the recent past. Ask your insurance company if you're unsure," says Doran.

7. "I don't need Comprehensive insurance for theft, because thieves don't steal old cars."

In reality, many criminals are attracted to older, trustworthy, popular vehicles, such as a Honda Accord [I HAVE RECEIVED SEVERAL OFFERS TO BUY MY 'LOW MILEAGE95 HONDA]or Toyota Camry, says Doran. Because of the popularity of these cars, there's a large demand for their parts. When thieves steal the cars, they can strip the parts and sell them, she says.

"On the other hand, if you steal a $70,000 Mercedes, there wouldn't be as much of a demand for the parts," Doran says.

8. "The laptop in my car is covered by my Auto insurance policy."

Personal property, such as a laptop or cell phone, isn't covered under an auto insurance policy, says Petrarca. Those items might be covered by home insurance, but a claim would be subject to your deductible.

9. "I recently paid my insurance premium, so I won't need a new policy for my new car."

Whenever you buy a new car, your insurance company will have to issue a new policy, regardless of when you paid for the previous policy, says Dick Luedke, a spokesperson for State Farm Insurance in Bloomington, Ill.

10. "My Personal Auto insurance covers both my personal and business use of my car."

If you're hauling supplies or otherwise performing business duties in your vehicle, you have to insure your auto for business use, says Luedke.

May 8, 2012

 
  
Quote of the Day:

"Since you get more joy out of giving joy to others, you should put a good deal of thought into the happiness that you are able to give."

Eleanor Roosevelt

EXCELLENT SUMMARY

SOCIAL MEDIA: OWNERS AND AGENTS NEED TO EMBRACE THE LATEST TECHNIQUES TO STAY AHEAD

The owners of insurance agencies, and the agents who work within them, are discovering that in order to survive and keep ahead of the competition, the latest techniques and technologies are required, and this includes the use of social media marketing.

This doesn’t simply mean that a profile should be created on a social networking platform, but that a presence should be established in many places, and that followers should be provided with regular updates and relevant information that they will find interesting enough to use as well as to share.

Getting started with social media marketing for the first time can seem overwhelming.

The trick to overcoming the dizzying amount of information on the subject is to find the platforms that will be used and then build on each of them. There are a few primary areas in which insurance agencies are finding that they can achieve the best results. They include the following.

• Facebook – this is the most important social network to use and should be the starting point for any insurance agent or agency’s social media marketing. It has the largest number of active users among all of the platforms. Setting up an account there is simple and inexpensive – even when paid advertising is used. The choice is given for either reserving the company name for a personal account or creating a business fan page which other users can “like”.

• Twitter – this is an excellent platform that offers a number of different kinds of strategies to be implemented. It is particularly important for searches, so remember to keyword optimize.

• Pinterest – this platform is slightly different than the others and allows users to share the places they like with their friends. It is best used on weekends and at other times when people will be able to use their mobile devices in a relaxed setting, with time to pursue their interests.

• Blogging and Guest Blogging – whether you choose your own platform or you network with another webmaster who allows you to post on their site as a part of a mutually beneficial arrangement, writing regular posts that are of interest and use to your perspective and current clients is a highly effective social media marketing technique that often goes unacknowledged within the insurance industry
.
PROGRESSIVE SUES STATE FARM AND THE HARTFORD FOR PATENT INFRINGEMENT

Alleges patent infringement over auto monitoring and usage-based insurance.

Insurance Networking News, May 6, 2012

Chris McMahon

Progressive Casualty Insurance Company is suing State Farm Mutual Automobile Insurance Company for allegedly infringing on patents related to vehicle monitoring systems and variable insurance rates.
.
The suit describes Progressive’s patents ‘970, ‘598 and ‘358, for inventions related to the determination of insurance ratings based on vehicle monitoring, usage, and driving characteristics and alleges infringement via State Farms’ “Drive Safe & Save” program.

According to the suit, State Farms’ “Drive Safe & Save” program “obtains data regarding driving characteristics, including, for example mileage, speed, rapid acceleration, left turns and right turns, from an insured vehicle,” and “calculates a rating based on the obtained driving characteristics data in accordance with a formula provided by or for State Farm.”

Progressive offers a Pay as You Drive program called Snapshot, which records the time of day and vehicle speed, which is used to determine how many miles the insured drives and how often they make sudden stops.
“State Farm developed ‘Drive Safe & Save’ to provide the opportunity for additional discounts to our customers and reinforce their safe driving habits,” said Dick Luedke, State Farm spokesperson.

The suits were filed in the Northern District of Ohio, Eastern Division. Progressive has filed a similar suit against The Hartford, which has launched a telematics program called FleetAhead.

Progressive and The Hartford had not commented as of press time.

BOATING INSURANCE; 'TIS THE SEASON

Boating season is getting started, so it’s time to prepare your vehicle and review your boat insurance.

Now that the warmer weather is well underway, many watercraft owners are keen to take their vehicles out of storage and begin their use; but it’s important to take the proper steps to prepare it, including reviewing your boat insurance and making sure it’s up to date.

Though your boat may have been in perfect working order the last time you used it, a lot can happen to change that condition when it has spent several months in storage, so it’s important to take a few spring cleaning and maintenance steps to prepare it for safe use and avoid problems this season.

Use the following steps to get your boat ready for the summer and avoid making a boat insurance claim:

• Take out the manufacturer’s manual. If you have a copy, keep it handy. If you don’t, see if there is a copy of it online that can be printed out, or contact the manufacturer to obtain a copy. You’ll need to consult it whenever you replace fluids and parts.

• Prepare the engine for use. This is typically the messiest and most time consuming step. It will generally begin with an oil change if this was not done at the end of the season. It’s not recommended that you run the engine again after acids, water, and other byproducts have been allowed to build up from last season’s use. Changing the oil will prevent excessive wear and corrosion, which can cause costly problems ranging from poor fuel economy to loss of power and engine failure.The oil filter can be changed at the same time as the oil itself. The oil can also be changed in the lower unit of the outboard and in the transmission.

     Flush the cooling system and add a 50/50 coolant to water ratio to replace the antifreeze.
     Replace the batteries and then test the engine thoroughly.

• Go over the vinyl and canvas seats, bimini top, covers, and other fabric parts, looking for dirt, mildew and tears. Clean these elements with a proper product designed for that purpose and repair any holes and tears.

• Clean the hull. By using a mild detergent to wash the hull, you’ll be able to go over the whole thing looking for chips, cracks, blisters, and other problems such as chalky residue. This can allow for repairs to be made. In the case of the chalky residue, oxidation could be the cause and it will need to be evaluated and properly treated in order to bring the gelcoat on the boat to its original condition. The hull can then be waxed according to the maintenance plan on the gelcoat.

• Make sure that your boat insurance is up to date and that it provides you with the proper level of coverage for your vehicle and use this year.

CHALLENGE -- AND OPPORTUNITY -- FOR AGENTS

SENIORS LACK LIFE INSURANCE
 
With age comes wisdom supposedly. However, even as more Americans are living longer they are not financially prepared for their retirement years and also lack Life insurance.

According to the Centers for Disease Control (CDC), the average American’s life expectancy has increased to 75.7 years for men and 80.6 years for women. Of those age 65 and coupled, there is a better-than-even chance one partner will live to age 94, and one-of-10 couples will have a partner that lives to 100 or more.

Unfortunately, a new study finds that while Americans are living longer, almost half are concerned that they are not financially prepared to live into their 70s, 80s and 90s.

Can’t afford to live…

The “Longevity & Preparedness Study,” conducted by Northwestern Mutual, asked people how financially prepared they feel to live to age 75, 85 and 95 and revealed that only slightly more than half (56%) feel financially prepared to live to the age of 75. Fewer than half (46%) feel financially prepared to live to age 85; and only about one-third (36%) feel prepared to live to age 95.

“These findings underscore that there is room to further educate clients—not only with respect to increasing longevity, but also more broadly about the value of long-term planning,” said Greg Oberland, Northwestern Mutual EVP. “So we, as an industry, must emphasize that the plan is as important as the goals. And that plan is like a roadmap that helps clients stay on course.”

According to the research:

• Women on average live five years longer than men and feel less financially prepared to live longer lives.

• Men regardless of age are significantly more likely than women to feel financially prepared to live to age 75 (65 percent vs. 48 percent), 85 (55 percent vs. 37 percent), and 95 (43 percent vs. 30 percent).

• Younger Americans (25-59) feel less prepared than older Americans (60 ) to live to 75 (47 percent vs. 79 percent), 85 (37 percent vs. 66 percent), and 95 (29 percent vs. 52 percent)

“No matter what age you’ll live to, it’s important to protect the dollars you’ll eventually depend on to provide an income in your retirement years,” Oberland said.

 

Can’t afford to die…

The findings of the “The Insurance Barometer Study,” an annual study conducted by the Life and Health Insurance Foundation for Education (LIFE) << http://www.lifehappens.org/ >> and the Life Insurance and Market Research Association (LIMRA) << http://www.limra.com/ >> to better understand the public's opinions, attitudes and behaviors regarding life and health insurance are separate but consistent with the “Longevity & Preparedness Study.”

The study found that almost one-third of respondents believe they need more Life insurance; that number includes 20% of current policyholders and about half with no coverage.

The two excuses most cited for not purchasing adequate amounts of Life insurance are that it is too expensive (83%), and that they have other financial priorities (85%).

Respondents asked to estimate the annual costs of a 20-year level-term life policy for a 30-year-old and wildly overshot wildly guessing the cost at $400. Younger adults, those most likely to qualify for preferred pricing, overestimated the actual cost of $150 by a factor of seven.

“Our research has suggested for years that consumers believed they couldn’t afford lLfe insurance, yet they had no idea how much it actually cost,” said Robert Kerzner, president and CEO of LIMRA, LOMA and LL Global to INN. “This is the first study that clearly quantifies the wide gap in consumers’ understanding on the affordability of life insurance.”

The cost of basic Term Life insurance has fallen by about 50% during the past 10 years, offers Marvin Feldman, CLU, ChFC, RFC, president and CEO of the LIFE Foundation.

“We know these misconceptions are hindering people from taking steps to get the coverage they need. In essence, life insurance is falling down the priority list,” Feldman said.

According to the study, many are more concerned with paying their mortgage or rent (31%), or losing money on investments (26%) than with buying life insurance. Interestingly, saving for retirement continued to be the top financial concern (50%).

As the U.S. economy recovers, insurers have an opportunity to help consumers rethink their investment and retirement strategies to ensure they have enough money set aside to maintain the life they’re accustom to and to fund new plans, Feldman observes.

“We want companies and producers to better understand the consumer attitudes and perceptions that are contributing to the gap in coverage that exists today so that they can better respond and help us educate the public about the importance of financial protection and taking personal financial responsibility,” Feldman said.

Technology can play an important role in those educational efforts by creating direct access to quality information and pricing.

“We need to engage younger generations —who live online—more creatively, using the platforms and technology they use in their day-to-day lives, to convey this information so that they know that they can afford the life insurance their family needs,” Kerzner said. " Althoughy we have seen some insurers begin to advertise the price of their products in their marketing materials, and others place quoting tools more prominently on their Web sites toeducate consumers better , all insurers should take a look at how they can make it easier for consumers to access this vital information and better understand the real cost of Life insurance."

 

Quote of the Day:

The most difficult instrument to play in the orchestra is second fiddle.”

— Leonard Bernstein

GOOD NEWS!

P&C MARKET FLAT TO UP SLIGHTLY

Data from MarketScout shows April composite rate up 3% from last year.

Insurance Networking News,
 
May 7, 2012

Chris McMahon

Compared to a year ago, the composite rate for Commercial Property/Casualty and Professional Lines coverage increased 3% in April 2012, according to new research from MarketScout, an insurance distribution and underwriting company. At 4%, Workers Compensation and property coverage rates increased the most, matching the March 2012 rate. Business Owner Policy, General Liability, and D&O rates increased slightly from March to April.

 “Each industry and coverage class we monitor includes placements with both admitted and non-admitted insurers,” said Richard Kerr, CEO of MarketScout. “Recently, we have noticed admitted and non-admitted insurers are pricing similarly.

“Historically, there has been a considerable difference in the underwriting approaches among the various types of insurers. The recent similar pricing strategies could ultimately lead to more business for the non-admitted insurers, as admitted insurers begin to restrict their risk appetite and simply decline to write tougher accounts,” he added.

Pricing surveys for the analysis of market conditions were conducted by the National Alliance for Insurance Education and Research. The surveys help corroborate MarketScout's findings, which are mathematically driven by new and renewal placements.

MAKES SENSE: CREATIVE MARKETING, HUGE POTENTIAL + CONVENIENCE

READY TO PUT HEALTH INSURANCE ON YOUR COSTCO SHOPPING LIST?

By Mark Chalon Smith

Posted : 04/26/2012

Costco sells everything from toilet tissue in bulk to diamond engagement rings to caskets, and now individual Health insurance plans are being added to the inventory.

[Aetna is partnering with Costco -- known for selling 1 billion rolls of toilet tissue a year, enough to wrap around the world 1,200 times, according to CNBC -- to offer Health insurance for individuals.

The Costco Personal Health Insurance program features five Aetna health plans with major medical benefits and dental coverage. The program is available in:
• Arizona
• Connecticut
• Georgia
• Illinois
• Michigan
• Nevada
• Pennsylvania
• Texas
• Virginia

It will be offered in more states later this year, says Barbara DeMaio, head of individual business for Aetna.
Costco-Aetna's affordable health insurance is a click away

DeMaio says you won't be able to sign-up for Costco Personal Health Insurance in the warehouses -- you'll have to go online for that. (More information on the plans can be found at www.costcopersonalhealth.com. However, Costco's in-store employees do have brochures providing details.

Costco-Aetna plans will cost less than Aetna's standard individual health plans, says DeMaio. It's difficult to specify how much customers can save because individual plans differ and each person has his or her own medical needs, she says. However, DeMaio did say that most financial transactions for the plan are done online, which helps cut costs for Aetna and Costco. In turn, they pass the savings on to members.

Those who enroll will qualify for lower co-pays when they buy medications at Costco pharmacies, DeMaio says. Other benefits include "a personal health advocate to guide participants to better lifestyle choices," and wellness programs that focus on key trouble areas, like smoking and obesity, she says.

"We're looking to offer doctor and hospital services while providing simple steps for healthier lives," DeMaio says. "We want to reach the customers right where they are and give them choices. We see it as a way to build long relationships with Costco members."

This isn't Costco's first move into the insurance marketplace. Members can already purchase Homeowners and Aar insurance through its partnership with Ameriprise.

Trend alert: health insurers and retailers could start new joint ventures

Devon Herrick, a senior fellow and health economist for the National Center for Policy Analysis, a conservative think tank in Dallas, says Aetna may charge a lower premium for Costco shoppers because they comprise a low-risk demographic.

"I think the Costco customer is probably a fairly easy segment of the population to underwrite," Herrick says. "They're probably fairly affluent and, I'd imagine, in overall good physical shape, which is attractive to a medical insurer."

He also thinks the Aetna-Costco partnership is a good idea, if only because it provides more opportunities for the consumer, especially as key provisions of the Patient Protection and Affordable Care Act are scheduled to take effect in 2014. The act mandates that individuals, with some exceptions -- such as those with religious objections, those who receive a hardship waiver or Indian tribe members -- must buy health insurance plans or pay a penalty of $95 in 2014, $350 in 2015 and $750 in 2016. [BRILLIANT!}

"It might be that Aetna and Costco will benefit a year and a half from now," says Herrick. "Also, there's really nothing to prevent other retailers from doing the same thing. It is, and will be, a competitive landscape for health insurance. Really, though, any time insurers go out of their way to reach consumers and make it easier (to have medical support), you have to see it as a good thing."

Quote of the Day:

“Courage is being scared to death—but saddling up anyway.”

 John Wayne

SOCIAL MEDIA WORKS!

 Insurers Find Social Media Lacks ROI. So What?

By Laura Mazzuca Toops

Propertycasualty360.Com

May 4, 2012 •

For the past several years, marketing experts have been telling everyone with a business how important it is to become more engaged in social media, that increased brand recognition will lead to increased sales. Now comes a study of insurers using social media suggesting that only half of this belief is true.

In the second annual study of asset managers and insurers conducted by Kasina, findings indicate that although 87% use LinkedIn, Facebook and Twitter to engage with advisors, policyholders and investors, ’very few” are seeing increased sales from their efforts. (This is based on preliminary information; the actual study is not yet available.)

About 85 % of respondents said they have seen increased brand awareness on social media platforms, 67% have seen increased engagement with clients and prospects, and 58% say social media has led to increased eb site traffic.

However, as far as bottom-line profits? Not so much, even though more insurers are using social media.

In last year’s study, Vanguard, Fidelity, TIAA-CREF, i-Shares, and The Hartford came out among the top social media champs. This year’s findings suggest that compliance concerns, which were the major roadblocks to social media initiatives in prior years, are no longer keeping most firms from participating. However, fewer than half of the firms surveyed have dedicated social media budgets.

So what, if anything, does this mean for insurance? It took long enough to convince the industry to use social media. Will these findings cause a major rethink?

Nope, says Rick Gilman, executive director of the Personal Lines Growth Alliance and our “Agency Technology” columnist:

"It doesn’t really surprise me for a few reasons. First, gauging a true ROI of social media is like trying to figure out how many sales come from golf outings and community activities. Yes, if you meet someone in that environment and they buy from you, then that’s a ‘tick’ in the plus column, but if it was strictly a numbers game, then social media and other more traditional ‘social’ activities wouldn’t occur.

Second, I believe there is a rush to judge (social media) much the same way we rushed to judge the value and return on Web sites 15 years ago. I would bet there are similar studies from back then that said insurers don’t see any uptake in having a web site.

 The truly important takeaway from the Kasina study isn’t the lack of ROI, but the overwhelming success of 85% percent of users seeing an increase in brand awareness on social media platforms, said Rick Morgan, senior vice president at Aatrijk. “It is and will continue to be difficult to monetize and determine ROI on social initiatives, but then again, that is true with many forms of PR/marketing,” he said. “One would have to assume that in increases in awareness, engagement and traffic that new business would follow and the ‘stickiness’ of existing business would improve.”

More importantly, if you’re not part of the social media party now, eventually you will be seriously left in the dust later, he said. “The real benefit might be that if you do not ‘show up’ in social sites, for many, you don’t exist. If the new Connected Consumer...can’t find you on Facebook, Twitter, Linkedin, Google+, Pinterest, or YouTube, you simply don’t exist.”

It’s not just a matter of throwing money at the issue, but rather a need to think through the process holistically, Morgan added. “Companies don’t need Facebook or Twitter strategies. They need comprehensive business strategies where the new technology provides additional tools to realize overall goals. It is more than a marketing tactic; it should involve and can have an impact on communication, support, claims, product development, risk management, etc.

 So short answer? Don’t stop blogging, tweeting or Facebooking. Because even if it doesn’t pay right now, it will eventually.

Quote of the Day:

“The desire for safety stands against every great and noble enterprise.”

Tacitus
Roman historian

MORE CONSUMERS SHOPPING AUTO COVERAGE ONLINE

U.S. Drivers Turn To the Internet To Find Coverage

 

May 2, 2012

Report shows that more consumers favor switching carriers over purchasing new policies

J.D. Power and Associates, a global marketing information service, has released a new report that shows a sharp decline in the number of people purchasing Auto insurance in the U.S. The report shows that the number of car owners who are purchasing new insurance policies is diminishing. However, these drivers are switching insurance carriers at a higher rate. The report draws upon data collected by J.D. Power through a recent survey of U.S. Auto insurance consumers.

Many drivers seek out insurance coverage online

According to the report, a large portion of consumers have stopped shopping around for Auto insurance coverage. Of these, 43% claim to have switched carriers last year, up from the 40% seen in 2010. Nearly one in three of consumers who shopped around for insurance did so online. Approximately 40% of these people noted that they were more likely to purchase Auto insurance coverage online,e rather than through other means. The report does not reference the reasons behind the trend.

Report highlights spending and customer satisfaction

The trend seems to defy efforts from major Auto insurance companies, who have launched aggressive and costly marketing campaigns in an attempt to attract new business. The J.D. Power report suggests that the overall spending on advertising from the country’s largest Auto insurers jumped by 12% in 2011. Many consumers have responded well to the marketing efforts from these companies, but many more have remained unaffected. Satisfaction might be a factor, according to the report

MARKETING CHALLENGE/OPPORTUNITY FOR AGENTS Most Workeras Lack Disability Insurance  by The New York Times  May 01,2012

Two-thirds of Americans who work in the private sector lack Disability insurance, even though most workers say missing work for three months or more because of sickness or injury would cause “financial hardship,” a new survey finds. The survey was conducted for the Consumer Federation of America, a nonprofit coalition of consumer groups that supports expansion of employer-provided Disability insurance, and Unum, which sells disability and other types of employer-provided insurance. The Opinion Research Corporation polled nearly 1,200 adult workers by telephone in late March and early April. The survey’s margin of sampling error is plus or minus three percentage points. Stephen Brobeck, the federation’s executive director, said consumers would be well served if all employers offered workers the chance to buy Disability insurance, as a way to provide a financial safety net for working Americans. Disability insurance “complements and supplements” other programs, like workers’ compensation and Social Security disability insurance, which are insufficient by themselves, he said. “Workers need better protection,” he said during a conference call with reporters about the survey. Workers Compensation coverage is important, he said, but it’s available only for workers who become ill or injured on the job — and most illnesses or injuries causing work loss occur outside the workplace. And Social Security disability benefits are typically minimal — about $1,100 a month on average. Disability insurance, meanwhile, pays for lost income caused by injury or illness suffered away from work. (Short-term Disability insurance generally covers periods of about three months up to a year, while long-term disability insurance covers more extended absences, according to Unum’s Web site). Depending on the details of the disability plan, payments can begin as soon as one week after the employee stops working and cover about 60% of his or her wages or salary. According to statistics from the Council of Disability Awareness cited by the report, 90% of all disability claims are for common illnesses and health conditions, rather than from injuries. According to the Society of Actuaries, once someone is disabled for 90 days, the average length of disability is two years.