WGA InsureBlog

Reports from researchers at Arizona State and UC Irvine who have investigated earthquakes along the San Andreas fault over the past 700 years suggest that Southern California is overdue for a major shock.

These researchers, as reported by the Insurance Journal, outlined that major quakes take place along the Carrizo Plain which stretches 100 miles northwest of Los Angeles every 45 to 144 years. But, it has been since 1857 that the last major quake ranging from 6.5 to 7.9 on the Richter scale took place at Fort Tejon. The research is contrary to previous studies that suggested the frequency of such large earthquakes to be much lower.

If these academics are correct, they are being mostly ignored by the insurance industry. Availability and cost of Earthquake Insurance continues to improve for most buyers. Capacity is up by about 25% Read more…

DAVID MORALES

Not everyone is familiar with the Massachusetts Division of Health Care Finance and Policy (DHCFP) as Commissioner David Morales readily admits. But, this state agency is trying to drive health care cost control reform as much as anyone in the state. Alongside Massachusetts Attorney General Martha Coakley and private industry studies such as the McKinsey study cited in earlier blogs, DHCFP is exposing the truth about rising health care costs: the biggest driver is that hospitals and doctors are getting paid much more money. Their prices have been escalating in part due to unfair competition according to AG Coakley as well as Insurance Commissioner Joseph Murphy. Read more…

Wellness programs in the workplace are designed to educate and assist employees to live healthier lives. But there is no denying that the overall health of employees can certainly help to reduce medical costs. Did you know that 15% of employees accrue 78% of medical expenses, and that 75% of health care costs are directly related to lifestyle and are preventable? As we enter the next phase of wellness, we find that many human resources professionals looking for new ways to proactively control their medical costs. We hosted a discussion this week with Interactive Health Solution (IHS), a partner firm that provides health awareness and preventive care programs that can help reduce the severity of claims, and ultimately allows the workforce to be more productive.  Read more…

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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There was an article in the New York Times recently focused on one aspect of national reform, the push for more graduates to become primary care physicians. Pete Reilly of WGA’s Healthcare Practice takes a look down the road to the potential impact this will have on insurance rates for healthcare providers and the influence it could have on the increased use of electronic medical records.

Everyone seems to agree that health insurance premiums are too expensive and that the rate of increase is much too high. But who’s to blame for this? You might hear the buzz about the unhealthy state of the American population and our historic high levels of obesity and diabetes and other chronic health conditions. You might even see a little finger pointing at the drug companies for their huge marketing budgets and direct-to-consumer advertising. But by far, most of the blame is levied on the health insurance companies. But there’s a major piece of the healthcare equation that is missing in most of the dialog; that of the healthcare provider.

We saw this nationally with the recent passage of the PPACA (Patient Protection & Affordable Care Act and the Health Care and Education Affordability Reconciliation Act). Quite a bit of the legislation Read more…

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…

As discussions with my clients shift from “if” to “when” will health reform pass, CFOs and HR managers are expectedly anxious and concerned about protocols and penalties associated with the new rules under Obamacare. For Massachusetts companies, many of the plan design and credible plan requirements were resolved way back in 1996 under small group reform or recently under the 2007 Mass Health reform law. In fact, much of what we are seeing in both the House and Senate versions of reform mirror the Mass reform program in many respects. There is however a potential catch-22 involved with the cost of having a compliant plan; that issue is the Senate pay-for “Cadillac” tax. Read more…

Just back from a visit with our London insurers, we thought we’d provide you with a report on the state of the commercial aviation market and what to expect in 2010…

The calendar year 2009 has certainly not been a winner for aviation insurance underwriters, since they expect losses of approximately $2 billion USD and estimate the premiums generated will only total approximately $1.5 billion. The result has been an increase in renewal rates in the range of 20% to 30% for insured/airlines, or more in some cases. Read more…

For months I have worried that the battle over health reform would devolve into a partisan and political battle, pitting ideologies against one another, all the while losing sight of the larger goal. President Obama campaigned on a promise of reducing health care premiums by $2,500 for every family in America. That message appears lost in the bills working their way through Congress. Read more…