WGA InsureBlog

Consider the dilemma facing the CEO of BP and the CEOs of other major deep-sea drilling companies in light of the disaster in the Gulf of Mexico as they contemplate possible securities and other liability litigation. Tony Hayward, BP’s CEO, needs to protect BP’s reputation in order to maintain loyalty for its consumer products like its gas station chain as well as maintain morale among its employees.  It does this by, among other things, taking a conciliatory note about the responsibility of BP to pay all types of reimbursements to the public arising out of the accident.  Meanwhile, securities litigation professional plaintiff firms are taking notes that will no doubt conclude that Hayward is not best protecting shareholders by making these concessions to pay all reasonable costs.

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I recently had a chance to catch up with Andrew Agnew, Chairman of Jardine Lloyd Thompson Limited (JLT Group) of London. He has almost 30 years in the insurance industry with experience in all areas of the marine and non-marine market. Our conversation was on the heels of the oil rig explosion Read more…

Last week’s groundings due to the volcanic ash cloud was expensive, and now this week everyone is looking to get paid. Airline passengers are calling on insurance companies to pay their losses, and insurers are pointing them back to the airlines. The airlines were definitely hit the worst by the week-long disruption, the estimated loss by the middle of last week was over $1.7 billion. And the airlines are the least likely to see any insurance indemnification. In order to be paid, material damage has to be present to give rise to a business interruption claim. Some cover for delay and travel abandonment may be available, but it all depends on what coverages were purchased by the policyholder. Read more…

It has been reported that Chile’s recent earthquake could result in up to $8 billion in claims, according to catastrophe modeling company EQECAT Inc. The report released this week says insured losses from the 8.8 quake that struck on Feb. 27 could have insurers paying from $3 billion to $8 billion. The range of potential loss is wide because the estimate is not yet supported by information from the scene of the earthquake, there remains uncertainty as to the extent of infrastructure damage, and business interruption costs depend on the speed at which transportation and utility networks are restored. Read more…

CNA HealthPro Insurance just announced the results of their latest annual survey titled Reducing Risk in a Changing Industry: CNA HealthPro Aging Services Claims Analysis 2004-2008. One interesting aspect of this study is CNA’s ability to break down claims information between the for-profit and the not-for-profit health care sectors. Some of the results make sense but some are quite surprising. So, it is not very surprising that claim frequency overall is lower in the not-for-profit sector. But, why, for example, are patient falls (the greatest source of claims at nursing homes) almost 20% more likely in not-for-profit settings? Are there some risk management techniques that the for-profit sector can teach the not-for-profit sector here? This study certainly confirms some historical trends and highlights the need to sound fundamental risk management strategies.

We are finding more companies at risk of being dragged down by a single source supplier or other entity that is struck by a unforseen diasaster.  Ken Hoggins, WGA’s Property expert, explains why a close examination of all the viable parts of a company’s supply chain is crucial to managing risk; risks that not only your own company faces, but those risks that impact the interconnected chain needed to maintain your production and revenues.