Security risk

Kansas City, Mo. - The National Association of Insurance Commissioners (NAIC) Property and Casualty Insurance (C) Committee's Catastrophe Insurance Working Group will evaluate modeling for multi-state funding of catastrophes such as hurricanes or earthquakes, reports NAIC. The agreement came out of a meeting to discuss catastrophe preparedness and the potential development of a multi-state catastrophe fund.

New York - A group of companies from around the world, including Swiss Re, Allianz, ING, Marsh & McLennan Companies and Munich Re, endorsed a statement for affecting climate change at the levels of policy and industry, particularly in regard to creating sustainable energy systems necessary for achieving economic growth.

New York - Look for accelerated growth this year of the outsourcing trends that predominated in 2006: Expansion of business process outsourcing (BPO), the maturing of the offshore market and more multi-sourcing at the expense of single, one-off “mega-deals.”

New York - As the oversight role of the corporate board in enterprise risk management (ERM) expands, companies feel the need to fill a knowledge gap on effective risk governance practices, according to a major new study released today by The Conference Board Inc."The concept of correlating risk management and strategy in an enterprisewide structure first appeared in the midst of merger frenzy in the late 1980s," says Matteo Tonello, who focuses on corporate governance at The Conference Board, New York, and is the author of the study. "At the time, many executives and strategists acknowledged that the enormous amount of risk undertaken through a series of corporate combinations was often not justified by a sound analysis of long-term prospects. In the 1990s, the debate continued and increasingly drew the attention of the business community, only to be obfuscated by the more exclusive focus on financial risks resulting from the scandals of the Enron era. A few years into the implementation of the Sarbanes-Oxley Act of 2002, corporations are now ready to leverage their experience with mandatory internal control procedures to establish a more comprehensive ERM infrastructure."

San Diego - New York, California, Nevada and Arizona have the highest rates of identity fraud, according to research from San Diego-based ID Analytics Inc. The analytical research—based on actual and attempted frauds rather than consumer victim reports—also shows that the highest metropolitan area rates of identity fraud are in New York, while the states with the lowest rates of identity fraud are Wyoming, Vermont and Montana.

Oakbrook Terrace, Ill. – Buyers of managed information technology (IT) services will focus on security, storage and disaster recovery services in 2007, according to research commissioned by Oakbrook Terrace, Ill.-based Computing Technology Industry Association Inc. (CompTIA) and conducted by Rochester, N.Y.-based Harris Interactive Inc.

Reston, Va. - The National Association for Variable Annuities (NAVA) announced an industry-backed initiative to establish a comprehensive set of standards for simplifying and improving the electronic annuity purchasing process for consumers and insurers.

Washington - "The considerable size and cost of catastrophes present unique challenges to participants in the insurance market. Namely, it makes management of potential liability by any single insurance company nearly impossible. In some cases, even the assets of the entire insurance industry are inadequate to reduce potential liability to commercially acceptable level." This statement comes from "An Analysis of Catastrophic Risk Insurance Proposals," a report published by The Council of Insurance Agents & Brokers, produced by Georgetown Economic Services LLC and financed by the Foundation for Agency Management Excellence (FAME)—all based in Washington. The report analyzes the various legislative proposals have been advanced to deal with the problem of insuring catastrophic risk, from natural disasters to acts of terrorism.

Newark, Calif. – In light of recent dire news about global warming, Risk Management Solutions (RMS) has hired a climate scientist, will pursue initiatives to enhance catastrophe modeling, and will undertake focused case studies to assess the economic implications of climate change for communities and for business. The Newark, Calif. provider of products and services for the management of catastrophe risk announced the first of such initiatives: the appointment of Dr. Celine Herweijer to the position of Principal Scientist, Future Climate. The newly designated role reflects a commitment by the company to explore the evaluation of future climate risk for today's economic, business, and political decisions, says the company. Herweijer is a climate scientist, recognized for her work on modeling drought and the impact of oceans on climate. In her new role, Herweijer will lead RMS work around the wide-ranging implications of future climate risk. Based on accumulating evidence, there is a resounding consensus among scientists that the Earth's climate is changing in response to increases in greenhouse gas emissions from human activities. The global warming trend has accelerated since the 1970s, and 11 of the last 12 years have ranked in the top twelve warmest years since 1850. A warming climate leads to changes in the nature and occurrence of extremes - tropical and temperate windstorms, droughts, heatwaves, and wildfires, as well as floods of all kinds - and for some regions and perils, RMS expects increases in the severity and/or frequency of catastrophic events. RMS climate modelers are already investigating where and how such impacts should be incorporated in catastrophe models that assess current risk, and how to model changes in risk into the future. "For many regions and perils, hazard of the past is different from the hazard of today, which is in turn different from the hazard of the future," said Dr. Robert Muir-Wood, chief research officer at RMS. "Society is still coming to terms with the profound implications of this - in addition to concerns for the safety and welfare of residents of vulnerable communities, future risk and future value is already beginning to impact today's economic and political decisions, from investment in a ski resort, to development in a canal estate in the Caribbean." The examination of future climate risk is an important development that will help us to meet the needs of business and society, said Herweijer. "We have reached the stage where the economics of the consequences of climate change is going to become a principal motivation for taking action." Source: RMS

Pearl River, N.Y. & Atlanta, Ga. - Star Trek's William Shatner will kick off the 2007 ACORD LOMA Insurance Systems Forum at the Walt Disney World Dolphin in Lake Buena Vista, Fla., May 20-22, 2007, according to the two industry associations.

Despite dire warnings from health officials and risk experts, only a tiny percentage of the nation's insurance carriers have developed formal plans to keep their businesses running in the face of a deadly, long-term influenza pandemic.While 82% of carriers have prepared business continuity plans (BCP) for survival in the wake of natural disasters like hurricanes, tornadoes and floods, only 11% are ready for a pandemic, says Clare DeNicola, president and CEO of IVANS, a Stamford, Conn., company that provides communications services to insurance companies. IVANS surveyed CIOs and directors in May 2006.

ITIL, the IT Infrastructure Library, entered the North American consciousness just in time to help shift the focus from putting technology first to putting business first. It's a change that amounts to a seismic jolt to the culture of insurance company IT departments.The 30-odd volumes of ITIL, which are slated for an update next month, provide a common language for IT staffs and a framework for honing IT processes. For most insurers on these shores, the idea of ITIL gained significant momentum in 2004 and reached critical mass in 2005, IT people say.

There has been no end of bad press for the property and casualty insurance industry this month. Allegations of price gouging, faulty catastrophe models and calls for a congressional probe into post-Katrina hurricane claims flooded the news wires.Most of the negative press pointed a finger at an odd coincidence. First, the year after more than 993,000 homeowners' insurance claims were settled in the two states most affected by Katrina and, according to the Property Casualty Insurers Association, Des Plaines, Ill., the insurance industry paid $51+ billion in overall catastrophe-related claims. Then, the industry experienced a relatively catastrophe-quiet-and profitable-year.

Disposal represents one of the biggest points of failure in computer asset management because companies just don't know how many assets they have, where they are located, who's using them or what specific data resides on them, says Gartner analyst Frances O'Brien."Unless you know that information you're at risk from Day One," O'Brien says.

MODELS UNVEILED FOR NATIONWIDE HEALTH NETWORKPrototypes for a standards-based nationwide health information network (NHIN) were scheduled for presentation at a conference last month in Washington, according to the U.S. Department of Health and Human Services (HHS).

ADOBE EXPANDS ACROBATAdobe Systems Inc., San Jose, Calif., introduced Adobe Acrobat Connect software, a Web conference and collaboration product with "always-on" personal meeting rooms. It is designed to enable workers to connect online instantly with a Web browser and the ubiquitous Flash Player software. Together with Adobe Acrobat 8 software the expanded Acrobat family accelerates the flow of business by allowing people to work together in real-time, according to Adobe. The new, extended Acrobat family brings together the two critical components of knowledge work-documents and people. Acrobat Connect enables users to choose a Web address for their online personal meeting room, with unlimited use for up to 15 participants for one monthly fee.

CANAL SELECTS TRUMBULL FOR SUBROGATION MGT.Canal Insurance Co., Greenville, S.C., entered an agreement with Trumbull Services, Windsor, Conn., to use Trumbull's Subrooutsource, an internally developed, advanced system designed to enhance subrogation recovery activities for all lines of business nationwide. Trumbull, in conjunction with an experienced subrogation team, will manage the entire subrogation process, leveraging the system's abilities to increase recoveries through effective resource allocation, automated workflows and a continuous improvement model.

Passage of the Pension Protection Act in August 2006 has made siloed IT designs obsolete. Life, annuity and long-term care combinations are now acceptable from a tax and regulatory compliance perspective. Recent pension legislation allows combinations of long-term care policies and annuities. As a result, we can expect a frenzy of product introductions in the near future and beyond.What does this new set of possible combination contracts mean to the IT systems of insurance organizations? It means co-existence and configurability are now of paramount importance. That gives rise to the bigger question: Are carriers' software solutions ready to support the new hybrid product world?

Fayetteville, Ark. – The Gramm-Leach-Bliley Act (GLBA) has not created significant synergies between commercial banking, investment banking, merchant banking and insurance activities, according to a finance researcher at the University of Arkansas. It also had little effect on bank profitability and productivity.

Needham, Mass. - Carriers need to step up their technology preparedness to get ready for industry-altering regulatory issues poised to have major impact on the U.S. insurance industry in 2007, according to new research from TowerGroup. These issues include a national catastrophe fund, an extension of the Terrorist Risk Insurance Act, and an optional federal charter.