Expatriate Insurance

Expatriate insurance policies are created to insure against financial and other losses which may be incurred by expatriates while living and working in a country other than one’s own.

This insurance should be organised before going to a new country. It usually covers the duration of one’s stay. The insurance can be purchased on a 6 month to annual basis.

One of the most important necessities for expatriates is health insurance.  An international health insurance provider namely Now Health International, carried out a survey which included questions about a range of expat experiences. These included attitudes to health cover. A total of 209 responses were gathered and analysed. Most expats in the survey were living and working in the UAE, China, Hong Kong, Singapore and Thailand. More than a third had been living away from their homeland for ten years or more.

25 per cent of respondents who had no medical insurance believed that such expatriate insurance was unnecessary. They said they were currently healthy. These expats did not believe that they would fall ill. In recent years the costs for medical care in popular expat locations has undergone double-digit inflation.  Therefore expats risk facing large bills if their health fails them.

Of the same group of respondents, 12 percent were under the impression that their new country’s state healthcare system would take care of them. Expatriates should research the new country’s healthcare system, before arriving there.   Many countries are now introducing regulations limiting medical cover for expats to accident and emergency.

Access to medical resources and the level of industrialisation are two key reasons why some nations have better expatriate insurance options than others. Taiwan is one of the highest rated countries for both health care affordability and quality. In its most recent Expat Explorer survey, HSBC found that nearly 70 per cent of assignees in Taiwan spent less on healthcare while on assignment than in their home country. While assignee satisfaction with Taiwanese healthcare affordability and quality is 3 times the global average, inexpensive health care options can also be found in the UK, Thailand, Japan and Saudi Arabia. The U. S. , Ireland, Brazil and New Zealand are the opposite.

Policies are underwritten in one of two ways: moratorium and full medical underwriting.

With moratorium underwriting, health insurance applicants are not required to make any medical declarations. Any new or unexpected medical conditions that occur after the policy has started will be covered according to the policy conditions.

If you sign up for a policy with moratorium underwriting your pre-existing conditions may be covered if you:

HAVE NOT experienced any symptoms related to your pre-existing condition.

DID NOT obtain advice or tests from a health practitioner regarding your condition.

SHALL NOT require treatment or medication for the condition.

If, for two years after the start date of the policy you continue to fulfil all the criteria above, then your condition will be covered again.
If you have had symptoms, advice or treatment for a condition in the (typically) five years before the start of the policy then there is likely to be a complete ban on that condition. This is all subject to the terms and conditions of your policy.

Full medical underwriting is the more usual way of applying for health insurance. It involves a full medical history disclosure. Any cover offered is based on your medical history and will likely exclude pre-existing conditions.

Why choose moratorium underwriting?

If you have no health issues you can take out cover quickly and even fill in all the forms online. For those with health problems in their past, moratorium underwriting may be more beneficial. There are many conditions that ordinarily would not be covered with a full medical disclosure. Providing you stay symptom, advice and treatment free for the specified time, then cataracts, mole and cyst removal and joint replacements are among those things that can be covered.

Moratorium underwriting has been criticised as being unclear for policyholders. People may be unsure what is covered until they make a claim. Delays can also occur when a claim is made as insurers check with doctors about whether a treatment is covered.

Policyholders have a two year window in which they need to remain advice, treatment and symptom free in order to be covered by their policy. If they break these rules they have to start the two year waiting period again. This presents a risk that policyholders could be tempted to delay treatment or seek advice for existing conditions.

More companies are offering the choice of moratorium underwriting though may still only have the full medical option. The following are some companies that offer moratorium policies.

Aviva – MyShield policy
WPA
Simply Private Health Insurance

Wage Insurance

Wage insurance is a form of reimbursement for employees who are forced to change jobs.

Examples of situations that give rise to this situation could be outsourcing.  This involves the contracting out of a business to another party. Sometimes outsourcing encompasses transferring employees and assets from one firm to another. Lower international labour rates can provide a major motivation for deploying staff or offshoring.

The integration of the global economy through free trade and greater technological efficiencies result in that people may not be able to keep their current jobs at their current wages. Individuals may be motivated to retrain and obtain positions that offer them increased salaries. However, this may take many years to materialise.

As early as 1995 the concept of wage insurance was tested in Canada’s Earnings Supplement Project. The ATAA was proposed in the United States in 2001.

AATA (Alternative Trade Adjustment Assistance for Older Workers)
gives workers over the age of 50, who are too old to be trained, a wage subsidy. This is providing they earned less than $50,000 a year in a previous job.  This is when they start a new job within 26 weeks of being laid off. The program gives a wage subsidy of half the difference between the worker’s old and new wages with a maximum of $10, 000. It can last up to two years.

TAA (Trade Adjustment Assistance Program)
They focus on retraining workers but do not offer a wage subsidy or insurance.

THE LIMITS OF WAGE INSURANCE

It does not offer much protection to workers who are steadily or erratically employed in low-salaried jobs. If a worker’s wage was low in the job that was lost, the worker is unlikely to receive much of a supplement from wage insurance. This is because the wage in the new job is likely to be about the same as the wage in the old job.

The policy is intended to cushion the worker’s wage loss on a temporary – not permanent basis. The income payments can reduce temporarily the economic and psychological loss connected with accepting a worse job.

However when the wage supplements end, the worker must still rely on the job market to provide income for dependents.

Terrorism Insurance

Property owners may decide to purchase terrorism insurance to guard against potential financial losses should they be victims of terrorist activity.

Insurance companies in general exclude terrorism from casualty and property insurance. Otherwise they require special endorsements to provide such cover. The predictability of terrorist activity is difficult.  Calculating the potential liability is challenging. For example, the September 11, 2001 attacks resulted in an estimated $31.7 billion loss. Due to these factors, setting a feasible premium therefore is a daunting task for any insurance company.

In the immediate aftermath of September 11 attacks, US insurers were faced with huge amounts of terrorism exposure from portfolios that had terrorism cover. The insurers had limited possibilities of obtaining reinsurance to cover the losses should a future attack occur. An example of how premiums skyrocketed after 9/11, Chicago’s O’Hare airport carried $750 million terrorism insurance at an annual premium of $125, 000. After 9/11 insurers offered $150 million cover at an annual premium of $6.9 million.

In October 2001, the Insurance Services Office, acting on behalf of insurance companies, filed a request in every state for permission to exclude terrorism cover from all commercial insurance coverage. By early 2002, 45 states permitted insurance companies to exclude terrorism from all their policies except for Worker’s Compensation insurance.  By statute this covers occupational injuries without regard to the peril that caused the injury.

Most insurance companies prefer rather to spread coverage over a wider geographic area. This is the case regarding flood insurance. The World Trade Centre losses were concentrated in one condensed area.  Therefore this important factor determines the availability of terrorism insurance cover.

The Geneva Association (also known as the International Association for the Study of Insurance Economics) compiled a report which stated that a mix of government and private resource could provide a short-term solution to deal with terrorism insurance cover. The government would serve two functions:

Establish rules to act on the capacity shortage;
Be the insurer of last resort.

UNITED STATES

The Terrorism Risk Insurance Program Reauthorization Act of 2007 was signed into law by the President of the United States on 26 December 2007, which extends the Terrorism Risk Insurance Act (TRIA) until 31 December 2014. The law extends the Federal Program. This provides for a system of shared public and private compensation for insured losses caused by acts of terrorism.

During mid-2007, another extension to TRIA was proposed and is known as TRIREA (Terrorism Risk Insurance Revision and Extension Act). TRIREA contained several new provisions including a compulsory made available claim for NCBR coverage (Nuclear, Chemical, Biological and Radiological) and the ending of the distinction between domestic and foreign events.

The full Senate passed S. 2244 in July 2014; The House Financial Services Committee passed H. R. 4871 in June 2014. Each bill would renew TRIA for another seven and 5 years respectively. These bills would modify the current program in different ways.

IRAQ

In Baghdad personal terrorism insurance is available. One company offers such insurance for $90 and if the insured is a victim of terrorism in the next year, it pays the heirs $3, 500.

UNITED KINGDOM

All UK insurers stopped including terrorism cover on their commercial insurance policies with effect from 1 January 1993 (home insurance policies were unaffected). The government and insurance industry hence established Pool Re. Funded by premiums paid by policyholders, the government guarantees the fund although only such support must be repaid from future premiums.

the Internet of Things

IBM has developed an affiliation with The Weather Company.  In doing so the technology corporation hopes to save lives. The aim of this alliance is to incorporate enormous amounts of data from the Internet of Things. Furthermore cloud computing with weather forecasting systems.  This is to  anticipate meteorological circumstances in an efficient manner.

There will be 2.2 billion global forecasting points which can generate more than 10 billion weather forecasts a day. This internet grid will accumulate data from over 100,000 sensors.  Also aircraft, as well as smartphones, buildings and motor vehicles.

From a business, health and safety context, this could be an enormous game changer for the insurance industry. This is because WSI, the B2B division of the Weather Company is hoping that the alliance with the IBM internet cloud will allow its data to also incorporate supply chain economics. In addition  customer patterns.  This will yield important insights into businesses worldwide.

As an example, improved weather prediction analytics will provide more advanced observation of approaching hail storms. People could be warned via the internet about imminent storms before they happen.  Insurance companies pay over $1 billion every year in claims for hail damage. Tests have been done with hundreds of thousands of policyholders. It was discovered that a warning that hail could be hitting their cars in the next half an hour, motivated about 50% to take action to protect their vehicles.

Dealerships can be assisted in preventing large scale damage to their businesses. This would be by moving vehicles under cover or following suggestions that facilities increase heat in anticipation of a deep freeze.

Insurance companies will be able to use this technology to deal with claims more efficiently as well as assisting with disaster relief. Text messages could be sent regarding tornadoes.  In addition information regarding the geographical positions of relief stations for victims of tornado-hit locations. Clients could send digital photos of household damage to insurance brokers. This   would expedite claims procedures.

By the end of 2015, it is anticipated that 1 trillion devices will be connected to the Internet, including many of our cars. By 2019, it is predicted that there will be 5.6 billion smartphones. Our smartphones will become gadgets that connect everyone to everything.

The Internet of Things represents a danger and an opportunity for insurance companies. On the positive side, ingenious insurers will use the potential of the Internet of Things to strengthen their relationships with their clients. They are able to improve pricing, expedite claims processing, decrease fraud and boost risk management. They will attain a better understanding of customers’ needs.  In addition be in a position to develop new, improved insurance products to suit individual clients’ current situations. This included offering location-based products and services. They will need to analyse the right data in real-time.  They should then focus on customer requirements with up to the minute relevant information.

The potential danger to insurers is that by meticulous pinpointing of insurance risks, the end result could be a reduction in premiums charged to policyholders. This would lead to reduced income and as a result the eventual shrinking of the entire insurance industry.

An IBM research survey of 21, 000 consumers in 20 countries revealed the following:

  • Clients are becoming more difficult to please and harder to maintain. They still do not trust the insurance industry.
  • Although there is no substitute for insurance itself, clients can and will switch insurers if their preferred interaction points are not available.
  • There is the commonly held view that the web is all that matters, but consumers prefer personal interaction, as insurance is a product that relies on personal trust.

Insurers have to provide quality service and reach customers with the right interaction mix.

Plastic Waste

Concern is growing over far-flung plastic waste that is destroying marine life, according to the United Nations Environment Assembly. Tourism, fisheries, business and marine life are threatened by plastic contamination.
“The environmental impact of the way we use plastic cannot be ignored” said Achim Steiner, UNEP director.

Over 30% of the natural capital costs are as a result of greenhouse gas emission. This is from raw material extraction and processing. Marine pollution is the largest downstream cost, conservatively quantified at $13 billion annually. Inestimable amounts of plastic waste enter the ocean from poorly managed landfills,  and littering.   Some waste also floats over great distances.  These are carried by ocean currents resulting in polluted shorelines.

Reducing, recycling and redesigning products that use plastics can bring multiple green economy benefits.  It reduces economic damage to marine ecosystems.

There have been many reliable reports of environmental damage due to waste.  The result is mortality or illness when ingested by sea creatures. These creatures include turtles, as well as entanglement of animals such as whales and dolphins.  Further damage is caused to critical habitats such as coral reefs.

Further concern has grown over micro plastics (particles up to 5mm in diameter) that are being ingested by marine organisms.  A major concern is the increasing use of micro plastics in consumer products such as micro beads in toothpastes, gels and facial cleansers.

Beat the Micro bead App

More and more cosmetics contain micro beads which are a hazard to our environment. The North Sea Foundation and the Plastic Soup Foundation have developed an App which is used to check if a product contains micro beads. You scan the barcode of the product with your smartphone camera. New countries are also continuously added and the new version of this App recognises many more products. To download go to: http://get. www. beatthemicrobead.org

FACTS ABOUT PLASTIC POLLUTION

In the Los Angeles area alone, 10 metric tons of plastic fragments such as grocery bags, straws and soda bottles are carried into the Pacific Ocean every day.

Over the last ten years we have produced more plastic than during the whole of the last century.

50 percent of the plastic we use, we use only once and then dispose of it.

Enough plastic is thrown away each year, to circle the earth four times.

We currently recover only five percent of the plastics we produce.

The average American throws away approximately 185 pounds of plastic each year.

Plastic accounts for around 10 percent of the total waste we generate.

The production of plastic furthermore uses around eight percent of the world’s oil production.

Americans dispose of 35 billion plastic water bottles every year.

Plastic in the ocean breaks down into such small segments that pieces of plastic from a 1 liter bottle could end up on every mile of beach throughout the world.

Annually approximately 500 billion plastic bags are used worldwide. More than one million bags are used every minute.
46 percent of plastic waste float and it can drift for years before eventually concentrating the the ocean gyres.

It takes 500-1000 years for plastic to degrade.

Billions of pounds of plastic can be found in swirling convergences in the oceans hence making up about 40 percent of the world’s ocean surfaces.

The Great Pacific Garbage Patch is located in the North Pacific Gyre off the coast of California and is the largest ocean garbage site in the world. It is twice the size of Texas, with plastic pieces outnumbering sea life six to one.

One million sea birds and 100, 000 marine mammals are killed annually from plastic in our oceans.

Plastic chemicals can be absorbed by the body – 93 percent of Americans age six and older test positive for BPA (a plastic chemical).

A report, entitled Valuing Plastic: the business case for measuring, managing and disclosing plastic use in the consumer goods industry was published on 23rd June 2014.

The research is the first-ever assessment of the environmental costs of plastic in business. It calculates the amount of plastic used by stock exchange listed companies in sixteen consumer goods sections. It assesses levels of corporate disclosure on plastic. Its aim is to help companies understand the risks and opportunities of plastic and build a business case for improving its management.

The Report furthermore recommends that progressive companies can improve management of plastic waste and win customer loyalty by developing closed loop models that thus recover resources and materials. Unilever has made $250, 000 of savings by using 15% less plastic packaging in its Dove Products. Dell has launched the first ever PC made using third party certified closed loop plastic.

Cyber Insurance

Cyber insurance protects against hacking into company accounts. Some companies need as much as $1 billion cyber insurance to protect themselves against cyber attacks. In addition there are firms struggling to secure even a tenth of that amount. Therefore if a data breach occurs within a network, the company which suffered the breach could face hundreds of millions of dollars in extra costs. The maximum amount of cyber insurance coverage currently available is $20 million. This is for a Data Storage company.

Researchers at Kaspersky Labs, a Russian cyber security group, uncovered sophisticated spying software in the hard drives of personal computers used in 30 countries, including Iran, Pakistan, Russia and China.

The latest in a long line of whistleblower Edward Snowden’s National Security Agency revelations may be among the most shocking. The NSA and its British counterpart GCHQ, allegedly compromised the networks of Gemalto.  They then pilfered the encryption keys protecting untold millions, potentially billions of SIM cards. A compromise of SIM cards on this scale would therefore call into question the integrity of the entire global cellular communication system.

Gemalto is a global manufacturer of mobile device SIM cards. According to the Economist, they manufacture more SIM cards than any other organisation in the world. (SIM is an acronym for subscriber identification module. A SIM card is a little integrated circuit that plugs into your mobile device. It contains the unique international subscriber identity (IMSI) along with an encrypted authentication key. Together, this key and that number essentially validate that your phone is, in fact, your phone).

Gemalto produces approximately 2 billion SIM cards every year. To put that in context, there are 7, 125 billion humans in the world; an estimated 7, 19 billion mobile devices. Gemalto’s clients include mobile service providers Sprint, AT&T, Verizon, T-Mobile and some 450 other organisations. The company furthermore does business in 85 countries and also operates a further 40 manufacturing facilities.

Target, the U. S. Retailer, said that the price tag for the data breach that affected up to 110 million of its customers had reached $248 million. A catastrophic hit such as this on a large bank or power utility has prompted the private sector to work in collaboration with the government sector to find ways to thus boost cyber insurance coverage.

Stephen Catlin, the head of Lloyds of London insurer warned that cyber attacks constituted the biggest most systemic risk he had ever seen.  He thus recommended that it should be covered by governments. He stated that insurer’s balance sheets were not large enough.

Cyber risk management is poor at certain companies. In addition the unpredictability of future attacks is accompanied by the lack of data with which to price risks. Insurance companies are finding the costs too high and instead of growing, coverage has however become more limited. Tougher cyber security standards are being required by Insurers. This is in the hope of reducing the costs of breaches. Insurers have furthermore requested retailers to encrypt data and use other ways of storing information in order to get insurance.

The recent breach at Anthem exposed 80 million Social Security numbers. Anthem is the second largest health insurer in the United States. According to well-known sources they had $150 million in cyber insurance.

Aside from civil litigation and other expenses, $40 million would have to be spent. This was to inform clients according to various state laws and remediation compensation. 13.5 million Californians were affected by the company’s data breach. Federal Health officials and state insurance commissions are investigating whether Anthem took sufficient security measures to safeguard its database.

Home Depot recorded $43 million pre-tax expenses related to a recent data breach. This amount was partially offset by a $15 million receivable for costs the company believes are reimbursable. The cyber insurance coverage for pre-tax net expenses was $28 million.  Those expenses included costs to investigate the data breach, provide identity protection services including credit monitoring to impacted customers, increase call centre staffing, legal and other professional services.

There are a number of ways to protect your valuable information from hackers:

  • Ensure that your password is complex. Most noteworthy,  do not use the same password or username across various websites. Experienced criminals will use your base password and their sophisticated software to crack your other passwords. Hackers are aware of the fact that most people are lazy.  As soon as they get access to your credentials from one site, they will also try out your credentials at many other sites. A password manager thus provides you with strong, unique passwords for all of your accounts. They are kept  in a secure encrypted vault on your device.
  • Do not recycle user IDs and passwords. Hackers sometimes try stolen IDs and passwords on different sites to gain control of other accounts.

  • Never confirm or provide personal information in response to an email or text. Therefore do not click on links in unexpected messages.
  • If you see charges on your credit card or bank statements that you do not recognise, rather contact the fraud department at your bank or credit card provider immediately to investigate.
  • Check your credit reports – for free – every few months. It is a good way to find out if someone has opened credit in your name. To get your report, visit AnnualCreditReport.com or call 1-877-322-8228.
  • Use two factor authentication. This also provides an extra layer of protection beyond your password. First you enter your username and password as usual, then a code is sent to your mobile app. Only after you enter that code will you be allowed to access your account.
  • In conclusion two factor authentication therefore combines something you know (your password) with something you have (your phone), hence making access by unauthorised users much more difficult.

Snow removal

Thousands of homeowners seek repair damage after New England’s epic winter. In Boston alone successive storms dumped 110 inches of snow which is a record for an entire season. Governors across the six state region have requested federal disaster relief to help state and local governments pay for snow removal and other costs. These requests do not cover home or private property damage.

With such high volumes of Boston area claims, insurance companies need more time to process and finalise payments. Another problem may be finding contractors to do the repairs.   They are in high demand now.

Some property owners are expecting to have to pay for some of the repairs themselves. Since the first winter storm hit Boston at the end of January, the city has removed over 10, 000 truckloads of snow after a record six feet of snow fell in the last 30 days. This broke a previous record of 58.5 inches, set in 1978.

Liberty Mutual could not share the number of claims they received as a result of the winter storms.  Glenn Greenberg, director of media relations at the insurer, said the company assigned dozens of claims adjusters in the field to assist customers.

Many adjusters came in from other parts of the country to help expedite the claims process.  The insurer had several more adjusters ready to come to the region should claims volumes increase. A majority of these claims are water damage from ice dams and collapses.

Boston Public Works Department crews have continued to work around the clock to remove the record amount of snow. According to the Mayor’s Offices the snowiest month long period on record has kept the PWD busy – 244, 064 miles of roadway have been plowed in 136, 652 hours and 70, 051 tons of salt have been used.

Reportedly 6, 000 of the 10, 000 truckloads of snow have been melted to increase capacity at the city’s snow farms. The Tide Street site has been melted to 50 percent capacity.  The Reservation Road site is at 10 percent capacity.

Total economic damages and losses as a result of U. S. winter storms during the month of January were estimated at $500 million.

Winter storms caused an estimated $2.3 billion in insured losses in the U. S. in 2014, up from R1.9 billion in 2013. From 1994 – 2013 winter storms resulted in about $27 million in U. S. insured catastrophe losses. Deland, Gibson Insurance Associates, an independent insurance agency in Wellesley Hills, Massachusetts, said the agency has seen a noticeable uptick in claims.

A lot of the claims are property damage related to ice dams. In addition his agency also received a couple of claims for roof collapses due to snow and ice. While the majority of those claims are roofs and ice dams, there have also been a number of fender bender claims.

The roadways are a lot narrower because of the snows and the snow piles are a lot bigger so its more difficult to see around corners. People are getting into little fender benders as well.
The widths of the roadway have narrowed considerably. There is nowhere to put the snow, so the snow is falling back on the roadways.  This makes the two-lane road a one-lane road. The snowbanks are also hard. You could bounce off of it into oncoming traffic. Also people are not taking enough precaution when they are making right or left turns on the roadway with high snowbanks.

Quite a few claims are claims enquiries on ice dams, where water is leaking into people’s houses. The Arbella Insurance Group is seeing a high volume of three types of claims. The first type and the most significant are ice dams. There are also a number of frozen pipe and water damage claims and then finally, are roof collapses.

Interior or exterior damage caused by an ice dam on your roof is typically covered by standard homeowner’s insurance policies. However, most policies will not cover ice dam or snow removal from your roof or anywhere else on your property.

The best way to deal with ice dams is to physically remove them from your roof. Hire a crew to do this job.

Try to remove snow from the roof, but only if it can be done safely. There is an amazing new type of roof rake called a Roof Razer.
Chisel grooves into the dam to allow the water behind it to drain off.
Fill an old pair of your wife’s panyhose with calcium chloride snow melt and lay it across the dam. It will help to melt the dam and also keep that area of the roof clear. DO NOT USE ROCK SALT. It will stain the roof and siding. It is best for small dams and prevention. In addition it is also a good idea to scrape the snow off the roof first.
Furthermore, there are also ice melting pucks which you can purchase from Home Depot.

Sports Disability Insurance

 

Attention has been focussed on sports disability insurance. This is due to a lawsuit against Lloyds of London by former University of Southern California Trojans receiver Marquise Lee.

Much of the interest is from sports agents who represent high-profile college players. Athletes who stay in school another year and wait for another draft want to protect their worth. Interest from potential clients reaches a climax at the time just before the draft.

Michael Owen, VP of Lockton’s Companies LLP, said there are plenty of insurance agents in the high-profile sports disability insurance market.

The amount of people writing sports insurance has increased. This has driven down rates and commissions.  However,  policies are growing in dollar amounts to cover increasingly high-earning athletes. NFL players on average earn $1.9 million per year, according to a report by Forbes.

Lloyds of London is being sued by Lee because it denied a $4.5 million insurance claim. Lloyds states that Lee misled them about his injury history. The policy was taken out in 2013. This is when Lee decided to remain playing college football for another year.  He opted out of the draft. The premium for this policy was
$94, 600. A business loan was obtained for that purpose. The policy guaranteed Lee the difference between his rookie NFL contract and a $9.6 million baseline. The Jacksonville Jaguars signed up Lee for fours at $5.1 million, making the difference of $4.5 million filed for in his claim.

Lee was diagnosed with a medial collateral ligament sprain as well as a bone contusion. Furthermore a posterior sprain and popliteal cyst in his left knee. As a result of the injuries, Lee did not perform well. He missed many games during the remainder of the 2013 football season.

Before his injury Lee had been viewed as a top first-round pick for the 2014 draft. He was only selected in the second round (39th) by the Jacksonville Jaguars in the 2014 draft. According to the lawsuit, this amounted to a multimillion dollar loss in the value of Lee’s rookie NFL contract.

In denying the claim, Lloyds argued that Lee did not disclose certain health information when applying for the sports disability insurance policy. An executive director of Aon’s entertainment group stated that from the start, disability policies require a lot of groundwork. The importance of policy wording is of paramount importance.

The understanding and expectations of the insured must be aligned with the understanding and expectations of the carrier. Not only is good communication amongst all parties key to a satisfactory sports disability insurance policy, but extremely good guesswork is required as to how much the player may be worth in the future.

Locktons reported that they have paid out sizeable sums, such as an $8 million claim in the NFL and a £6 million claim in the Premier Soccer League. Citing client confidentiality, Owen would not give names or details of payouts. Former Georgia Bulldog Todd Gurley and Ifo Ekpre-Olomu, an Oregon Duck cornerback, have reportedly been preparing to file claims after suffering season-ending injuries last year.

The Cost of Potholes

According to a 2014 survey commissioned by Trusted Choice and the Independent Insurance Agents and Brokers of America, poor road conditions have cost consumers and the insurance industry approximately $27 billion over a 5 year period. Furthermore, the survey revealed that between 2009 and 2014, half the car owners suffered damage to their vehicles as a result of potholes.

The arrival of Spring 2017 is just around the corner. Most of the U. S east of the Rocky Mountains will welcome warmer temperatures. There will be grass instead of snow. Many streets will be filled with potholes.

There is the likelihood of potholes whenever there has been precipitation, freezing temperatures and traffic. Severe potholes lead to accidents. This cost of potholes has an impact on insurance rates, because premiums are determined by past claims, accidents and driving violations.

The pothole survey revealed that 31 per cent of car owners who reported pothole damage had to repair their autos as a result. They filed a claim with their insurance company. Approximately 65 per cent of respondents who needed repairs said they (or a third party) paid out of pocket for the vehicle to be repaired.

Every time water gets into a crack and then freezes, the crack expands by about 10 per cent. The repeated freeze-thaw nature of winter and spring guarantees that potholes will form. Potholes cannot be repaired during winter. This is because asphalt plants close for the winter in northern latitudes.  Furthermore hot asphalt cools too quickly to be applied.

In most places, departments of transportation make do with a temporary cold patch that only offers a solution for a few weeks. In Boston, record snowfall and unpleasant weather has crippled the city since mid-January.  Street crews have set up orange cones in the worst of the potholes.  They lack the resources to repair them immediately. In the spring and summer, pothole repair crews are deployed.

There are several methods of pothole repair that are being tested.

  • A silly putty-like material contained in a Kevlar bag is placed in the pothole to ensure temporary safety. The bag is removed when a permanent repair can be done.
  • Indiana’s Street Department is attending to potholes in a two-step process. One crew clears the hole with a propane torch to melt ice in the hole and a high-power leaf blower to clear out water and loose debris. The second crew follows with cold mix asphalt and roller.
  • Michigan contracts with a pothole specialist company for a couple of weeks in late winter to repair streets with a four-part plan. The area is first blown dry. Next, a tacking material is applied. This is followed by the asphalt and loose-stone layer on top. During the fourth step, a steam-roller is used to flatten the fill. This costs extra and is sometimes not used, allowing traffic itself to compress the material.

  • Using infrared technology, a heating unit is lowered onto the street from a truck. The hole is heated to ensure that the surrounding pavement is more likely to bond with the replacement asphalt.

Most of these innovations are in years two, three or more of testing, however, the majority of states and municipalities continue two-season process of temporary fixes in winter and more permanent pothole repairs in the warmer, drier months.

For example, the cost of potholes in Phoenix is going to be $7.1 billion. This will keep the Phoenix street network from falling into disrepair. Ray Dovalina, Phoenix Street transportation director said that he has less than $2 billion in revenue and is therefore trying to find more than $5.1 billion to reduce the cost of potholes.

Phoenix maintains 750 miles of arterial roads or “mile streets” and 3,700 miles of local streets. Without ongoing maintenance, that’s a lot of potential potholes to fill. Those numbers don’t separate out the bridges, wash crossings and sidewalks that need to be maintained.

Dovalina’s goal is to reduce the street life cycle to 30 years. This means that the city wants to be able to rebuild roads every three decades. With current funds, the life cycle is 60 years, which means that the city is forced to spend millions in additional maintenance money to keep streets from falling apart. The new five year transportation budget includes 1,100 new bike lanes and 170 miles of sidewalks, plus 200 new LED traffic lights.

Electric Vehicles

There are many working parts in an internal combustion engine.  The owners of electric vehicles do not have to worry about these parts.

Coverhound insurance released the results of a study which show that owning an electric vehicle is assisted by the lower cost of vehicle insurance.

Most insurance companies regard electric vehicle drivers as more responsible.  They are therefore less likely to be involved in a car accident . A Chevy Volt costs an average of $1,452 per year to insure. Its non-electric counterpart, namely the Cadillac CTS is approximately $2,024 per annum. The most popular electric vehicle in 2016 was the Toyoya Prius C and its annual insurance premium average $1,513 in comparison to $1,801 for a Nissan Altima.

It must be emphasised, however, that not every electric vehicle is cheaper to insure. Therefore depending on which policy you have, switching from a Ford 150 to a Chevy Volt can increase your insurance rate by as much as $200.

Many well known insurers have a problem reacting to new technology, such as electric vehicles, however there are others who are highly flexible.

Zurich put into motion a worldwide drive which put emphasis on the advancement of products and services which would help consumers deal with climate-related risks. The conversion to electric vehicles is part of the solution .The ultimate goal is low carbon emissions. Zurich’s electric car insurance cover includes:

  • 20% discount off an electric car’s insurance premium;
  • 24 hour roadside assistance;
  • In the event of your car running out of charge, you will get free towing to the nearest public charge point or to your home charge point, whichever is the nearest;
  • Assistance will be given should your car have a mechanical failure. You will be towed to the nearest specialist electric car repairer at no charge;
  • Should your electric car -charge access card be stolen, it will be replaced free of charge.

Important questions regarding electric vehicle insurance:

Is the battery fully owned or leased?

Inform your insurance company and clarify how it affects your premium. For instance, Renault lease batteries to the owners of their electric vehicles and the question raised by Direct Line was that would this not make insuring your EV more problematic.

Enquire about cable liability.

Does your insurance policy cover the possibility of somebody claiming liability should they trip over the cable and hurt themselves? The cables are usually short and using an extension is not recommended for safety reasons.

Nissan Motor Co., Ltd., Japan’s second-largest automotive company is headquartered in Yokohama, Japan. It is part of the Renault-Nissan Alliance. Nissan delivers a range of more than 60 models under Nissan, Infiniti and Datsun brands. In 2010, Nissan introduced the Nissan LEAF and continues to lead in zero-emission mobility. The Leaf, the first mass-market, pure electric vehicle launched globally, is now the best selling electric vehicle in history with more than a 50 per cent share of the zero-emission vehicle segment.

The Renault-Nissan alliance have sold 200,000 electric vehicles worldwide to date. They say that they control 58 per cent of the segment. The CEO of the alliance, Carlos Ghosn claims that there are, in his opinion, four reasons why car buyers are making the switch to electric vehicles.

It is convenient as electric car charging stations can be installed anywhere that already has electricity. Owners can make a “recharge” without making a trip. These recharge points include the drivers’ homes and workplaces.

The average cost of driving a Nissan Leaf is 3.5 cents per mile, compared to 11.9 cents per mile for a compact gasoline car or 8.6 cents for a hybrid. Insurance companies furthermore view EV drivers as low risk.

Mr. Ghosn is to have said that the “cul-de-sac” effect is helping the market share grow.   A person who takes home an EV attracts the attention of curious neighbours thus perhaps getting them interested in making a similar purchase.
Ghosn claims that the Nissan and Renault EVs have the highest customer satisfaction rates of any vehicle that either company has ever produced to date.

Benefits are better realised with battery electric cars as opposed to the use of fuel cells as promoted by Japanese car makers such as Honda and Toyota.

A hydrogen fuelling station costs on average $2.5 million to build compared to an electric car – charging station with installation costs of $2,000.

Insurance and technology

The insurance industry has always been slow to grasp the different facets of technology. The reason lies in the fact that the industry is reliant on historical data. They are therefore understandably averse to risk.

The insurance industry is thus being put under pressure by technology. Customers want to pay an individualised insurance premium which reflects the actual risk taken by the insurance company.

The cyber security market is growing at an alarming rate. There is also pressure to incorporate and manage the risk more effectively. Traditional insurers are however reluctant to make plausible offers to vulnerable clients.

Huge amounts of data are provided by technology. In addition, insurers spend vast amounts of money on claim processing as well as fraud detection. New algorithms are able to predict risk. They allow for vast automation in the underwriting process. Furthermore, contracts can be managed more efficiently. Examples are wearables for healthcare and GPS trackers for cars.

Only about a fifth of insurers claim that they want to fully automate the process. Nearly 80% of insurers say they are struggling or just getting started with automation.

Between eight and fifteen factors are taken into account when an underwriter issues a policy. This may be a motor, home or life policy. As many as 60 answers may be required from a life insurance applicant. A sophisticated automated system could supply vast amounts of data.

Policy writers are wary of underwriting risk based on technology which supplies no justification for pricing.  Furthermore, staffing will be reduced with increased use of underwriting automation. Risk assessment algorithms will become more reliable. Executives will have increasing confidence in them. Low-level underwriting will become cheaper and more consistent.

Cyber Attack

A few days before Thanksgiving 2013, someone installed malware in Target’s security and payment network. It was devised to take possession of all information by means of a cyber attack related to every credit card used at the company’s 1,797 U. S. stores.

The hackers gained control of a Target server. As Christmas gifts were scanned and packaged, the moment the cashier asked for a swipe of the customer’s credit card, the malware was activated. The cyber attack had begun.  the credit card number was captured and stored for the hackers.

It is considered the largest credit card breach and cyber attack in  U. S. history since the breach discovered in 2007 involving retailer T. J. Maxx and roughly 45 million card users.

Six months earlier, FireEye, the computer security firm, had begun installing a $1.6 million cyber attack detection tool for Target. The CIA and the Pentagon are some of FireEye’s clients. Security specialists in Bangalore were supposed to monitor Target’s computers 24 hours a day. Anything suspicious noticed by the Bangalore security centre was supposed to be reported to the security operations centre in Minneapolis.

Only after the hackers had planned an escape route for the safe-keeping of the data, did FireEye spot the breach and send a cyber attack alert. It was too late. Details of the credit cards had been moved to various locations in the U. S. to cover tracks and then finally to Russia. Target stood by as 40 million credit card numbers and 70 million addresses, phone numbers and email addresses poured out of Target’s mainframe.

According to media reports, credit and debit card accounts stolen are being sold on underground black markets for anywhere from $20 to more than $100 per card, reports KrebsOnSecurity, a security news website.

Target announced in January 2015 that it was closing all 133 of its stores in Canada. This resulted in the retrenchment of more than 17, 000 workers. Earlier in March this year another 1,700 workers were laid off at its headquarters and 1,400 open positions were slashed.

Documents show that hacking victims could get as much as $10,000 each. The proposed settlement requires that the Target Corporation put into force certain security policies within 10 days of the settlement becoming effective. These include:

  • The appointment of a chief information security officer.
  • Have in its possession a written information security program, which specifies potential security risks. Furthermore, the company must develop metrics to measure the security of its systems.
  • The company must educate workers about the importance of safeguarding personal identifying information.

In order for hacking victims to be paid they have to have experienced at least one of the following:

  • Unauthorised, unreimbursed charges on their credit or debit card.
  • Spent their own time attending to charges.
  • Paid fees to hire somebody to correct a report.
  • Paid higher interest rates or fees on accounts.
  • Spent funds buying credit reports.
  • Paid to replace identification, Social Security number or phone number.

More than 90 lawsuits have been filed against Target by customers and banks for negligence and compensatory damage. With the approval of a federal court, Target will deposit a settlement amount into an interest bearing escrow account. With the approval of a federal court, according to the 97 page settlement.

A recent survey by the Ponemon Institute revealed the average cost of cybercrime for U. S. retail stores more than doubled from 2013 to an annual average of $8.6 million per company in 2014. The annual average cost per company of successful cyber attacks increased by $20.8 million in financial services. An amount of $14.5 million in the technology sector.  In addition $12.7 million in communications industries.

This survey lists known cyber attacks on private U. S. companies since the beginning of 2014. By its very nature, a list of this sort is incomplete. The scope of many attacks is not fully known. For example, in July, the U. S. Computer Emergency Readiness Team issued an advisory that more than 1,000 U. S. businesses have been affected by the Backoff malware, which targets point-of-sale (PoS) systems used by most retail industries. (Backoff scrapes memory from running processes on targeted devices, and has therefore been planted on retailers’ PoS systems by criminals desiring to pilfer consumer credit data.

The list includes only cyber attacks that have been made known to the public. Most companies encounter multiple cyber attacks every day, many unknown to the public and many unknown to the companies themselves.

Autonomous vehicles

It is no longer a question of if but when autonomous vehicles (AVs) will hit the road. Vehicles with varying levels of self-driving capability will become available to consumers soon. These range from single-lane highway driving to autonomous valet parking to traffic jam autopilot.

Aggressive players in virtually every segment of the automotive value chain have unveiled, or are conducting pilot programs of, partially or fully autonomous vehicles or enabling technologies in locations around the world. Audi, for example, presented its highly autonomous A7 model. It has highway driving capability.  The car had driven itself from Las Vegas to the show from San Francisco – a distance of 550 miles.

BMW has tested its autonomous Series 2 model on closed tracks and city streets. Daimler is testing fully autonomous vehicles in the U. S. and Germany. Tesla and GM plan to roll out models capable of hands-free highway driving. Nissan has already tested its Autonomous Drive technology.  It enables highly autonomous functionality, on public roads in Japan.

Volvo and various Swedish government bodies in 2014 launched the “Drive Me” initiative, in which 100 self-driving cars navigate public roadways in everyday conditions in and around the city of Gothenberg. The project’s first test cars are already on the road. The prototypes of Google’s AVs have been widely publicised.

Meanwhile, Wageningen University, in the Netherlands, plans to introduce a driverless taxi later this year. The vehicle will operate between campus locations. Milton Keynes, a planned community in the UK, is developing self-driving “public transport pods”, for rollout in 2017.  500 people tried out self-driving buggies that lined the paths of the gardens in the city’s Jurong Lake District.

 The city will begin testing AV jitneys that will convey people for short distances at low speeds in another part of town. The object of the test is to observe how AVs perform in real traffic conditions on public roads.

Suppliers are preparing for the AV future as well. Bosch, Continental, Delphi Automotive, Mobileye, Valeo, Velodyne and Nvidia, to name a few. They are among the suppliers that are in the advanced stages of testing the positioning, guidance and processing technology needed to make AVs a commercial reality.

Consumers perceive how AVs could make driving safer. They could exert downward pressure on their insurance, repair and maintenance cost. Respondents said that they’d buy a partially autonomous vehicle in the next five years.  They cited lower insurance premiums. In addition increased safety and hands-free highway driving would be the leading reason for doing so.

Most accidents are caused by human error.  If this factor can be minimised by taking control of the moving vehicle away from the driver, the accident rate should tumble. Data from the Institute for Highway Safety (IIHS) already show a reduction in property damage liability.   In addition collision claims for cars equipped with forward collision warning systems, especially those with automatic braking. The exact percentage varied depending on the car manufacturer.

Some aspects of insurance will be impacted as autonomous cars become the norm. There will still be a need for liability coverage. Over time the coverage could change, as suggested by the 2014 RAND study on autonomous vehicles. This will occur as manufacturers and suppliers and possibly even municipalities are called upon to take responsibility for what went wrong.

Insurance is state-regulated. Each jurisdiction has its own set of rules and regulations for auto insurance (and so far for self-driving cars). Basically, there are two types of liability systems. In some states liability is based on the no-fault concept, where insurers pay the injured party regardless of fault, and in others it is based on the tort system.

Will the auto insurance system change to be more uniform with the arrival of self-driving vehicles and will the federal government play a larger role?

Initially, many of the traditional underwriting criteria such as the number of and kind of accidents an applicant has had, the miles he or she expects to drive and where the car is garaged will still apply. However, the make, model and style of car may assume a greater importance. The implication of where a car is garaged and driven might be different if there are areas set aside, such as dedicated lanes, for automated driving.

During the transition to wholly autonomous driving, insurers may try to rely more on telematics devices, known as “black boxes” that monitor driver activity. Some drivers may object to them based on concerns about privacy. Usage-based insurance policies which depend on data about the driver’s behaviour submitted by an electronic device in the driver’s car, have attracted a smaller than expected percentage of the driving population, possibly because people do not want to be monitored.

Bitcoin

Bitcoin is an online payment invented in 2008.  It was released as an open-source software in 2009. The system is peer-to-peer. Users can transact directly without needing an intermediary.  People find this currency attractive as no bank can control it.

Bitcoin. The ledger uses its own unit of account also called bitcoin. The system works without a central repository or single administrator. This has led the US Treasury to categorise it as a decentralised virtual currency. This is often called the first cryptocurrency.

Bitcoins are created as a reward for payment processing work.  Users offer their computing power to verify and record payments into the public ledger. This activity is called mining. There can only ever be 21 million bitcoins. The smallest denomination is called a Satoshi.  Besides mining,  they can be obtained in exchange for different currencies, products and services.

With an estimated $3.5 billion worth of Bitcoins in circulation 82,000 merchants now accept this currency.  Eight million users have set up wallets.   These are accounts where they store and manage the currency. The number is growing.

Bitcoins are a way of using and moving money without a bank account or credit card. The currency fluctuates in value against other currencies. Recently, a Bitcoin was worth about $1144 in U. S. dollars.

Users can purchase this currency, store them in a virtual wallet linked to their smartphone.  They can then scan their account information at participating establishments to pay for merchandise.

Insurers that consider the possibilities of protecting Bitcoin users have other lingering concerns. For one thing, Bitcoin has some volatility. Therefore you can’t have the same approach to storing it as you would a commodity. Volatility in price is one of the things carriers are concerned about. An upward move in price can be beneficial to an owner. However trying to understand exactly how a Bitcoin is created and what causes its price movements is a very complex problem for insurers.

Bitcoins held by an individual or business are protected. This is in much the same way a safe deposit box at a bank secures valuable. Once stored in a virtual wallet, the currency can only be moved or accessed through the use of two “keys” – or codes. One held by the Bitcoin owner and the other held publicly. A person could lose the thumb drive that has the private key on it, then they are no longer able to unlock the Bitcoin wallet.

Investment in Bitcoins has been relatively robust. The growth in investment so far in the short life of the currency has been stronger than the growth of internet-related investment during a similar period in its startup.

Venture capital companies have invested more than $670 million worth of Bitcoins into security-related enterprises. Insurers have viewed Bitcoin use as a cyber security risk. There is a distinction between insuring Bitcoin value and covering the management of a Bitcoin company. The price of the currency cannot be insured but the company could be covered like any other Directors and Officers insurance.

Bitcoin theft insurance is available, however it is pricey and there are only a few policies . However over time more people will get involved.   Thus there will be more consistency in the security of the underwriting.

An interesting aspect of Bitcoin is the anonymity of users.  While every Bitcoin transaction is digitally recorded, parties to the transactions are identified only by account numbers, not names. The anonymity seems to be part of Bitcoin appeal for many users.

Any transaction that is done via email leaves an electronic “track” that can be followed back to the user, so the anonymity is hardly complete.

The vast majority of people in the world do not have bank accounts or credit cards, but many of them do have smart phones.

Bitcoins could become a simple and reliable currency for millions of people. Bitcoin is the cutting edge of where monetary systems may be going, although this would not happen overnight.

If Bitcoin is going to survive as a digital currency, it is going to have to convince investors that their holdings are safe. There has been a huge problem lately as two exchanges recently shut down due to hacker attacks.  This attracted unwanted headlines and added fuel to detractors who believe crypto currencies are untrustworthy stores of wealth.

Falcon Global Capital, a San Diego firm launched a fund this month that will offer investors access to insurance should their bitcoins suddenly disappear, as they have for other unfortunate believers operating in the MX GOX or Flexcoin exchanges.

Healthcare firms

 Healthcare firms are paying $6 billion per annum due to a rise in cyber attacks.   Doctors and hospitals are being attacked.  Organised criminals want medical records. They originally targeted retailers and financial firms.

91 percent of the healthcare organisations surveyed had one data breach during the past two years.  39 Percent experienced two to five breaches and 40 percent had more than five. Organised criminal gangs from Eastern Europe, Russia, China and Iran are trying to steal valuable information about medical insurance clients.

Criminal attacks against healthcare firms have more than doubled in the past five years  The average data breach is costing a hospital $2.1 million This is according to a study from the Ponemon Institute, a security research and consulting firm. Nearly 90 percent of healthcare providers were hit by breaches in the past two years. Half of them criminal in nature.

Intrusions have increased health awareness. An example is one exposing millions of consumers at healthcare firms Anthem Inc and hospital operator community Health Systems Inc.   Most of their peers are still unprepared for sophisticated data attacks. A Ponemon study survey found that nearly two thirds of healthcare providers and their business affiliates do not offer any protection services for patients whose information is stolen.

Medical identity theft victims spend an average of $13,500 to restore their credit. Furthermore to reimburse their healthcare provider for fraudulent claims.  In addition they have to correct inaccuracies in their health records.

Apparently  healthcare firms are being hunted and hacked by the elite financial criminal syndicates.  They had been targeting large financial institutions until they realised healthcare databases are more valuable .

Medical records, which often contain social security numbers, insurance IDs, addresses and medical bill details, sell for as much as 20 times the price of a stolen credit card number. Medical identity theft could actually kill you. For example, if an imposter uses your medical identity to have surgery done, their personal information such as blood type or allergies to medications could wind up in your medical file. You might never know that your file had been contaminated this way.

Thieves can use that information to take out a loan or open up a line of credit in the victim’s name.  Also for medical identity theft, where the victim’s insurance ID is used by an impostor seeking free medical care.

About half of healthcare organisations surveyed by Ponemon Institute said they do not have sufficient technology to prevent or quickly detect a breach, or the personnel with the necessary technical expertise.

Last year, health records on 88.4 million people were breached as a result of theft or hacking.  That is about twice as many as in 2010, according to a database kept by the Department of Health and Human Services.  The departent requires organisations to report breaches involving more than 500 patients.

The numbers this year are already in excess of last year.   Hackers accessed almost 80 million records from Anthem and 11 million from the health insurer Premera Blue Cross.

Data is resold on private forums that specialise in selling stolen credit cards or social security numbers.  On the dark web, users identities are hidden and transactions are in Bitcoins. Thieves sell thousands of records containing information on people who have been diagnosed with HIV or have liver damage from alcohol use.

1. Experienced hackers will use your base password to crack your other passwords. They know you are lazy and in fact are depending on it. A password manager provides you with strong, unique passwords for all of your accounts and keeps them in a secure encrypted vault on your own device.

2. Do not recycle user IDs and passwords.

3. Do not confirm or provide personal information in response to an email or text and do not click on links in unexpected messages.

4. Review credit card as well as bank statements often to see if there are charges that you do not recognise.

5. Check your credit reports every few months to find out if someone has opened credit in your name.

6. Use two factor authentication. This is an extra layer of protection beyond your password. First you enter your username and password as usual, then a code is sent to your phone via text, voice call or mobile app. Only after you enter that code will you be allowed to access your account.