Boston – A new probabilistic model designed to help insurers better understand the location of their exposures relative to high risk areas and to estimate potential losses from wildfires is now available from AIR Worldwide Corp., a Boston risk modeling company. The U.S. Wildfire Model is designed to help insurers, reinsurers, and intermediaries manage wildfire risk both for individual policies and entire portfolios of properties in California. Nationally, wildfires have cost the insurance industry more than $5 billion since 1980 with a majority of the losses occurring in California. The 2003 Cedar and Old wildfires in Southern California, for example, cost insurers more than $2 billion. Together, the fires burned more than 750,000 acres, destroyed 3,700 homes and resulted in the deaths of 24 people. In 2006, more than 8.7 million acres have burned in Western states to date, equaling the acreage burned in all of 2005, one of the worst years on record. “The growth in insured losses from wildfires is a result of the same broad demographic trend we’ve observed with respect to other perils—namely, increasing property development in high risk areas,” said Dr. Jayanta Guin, vice president of research and modeling at AIR. “In the case of wildfires, we are witnessing property growth in the buffer zone between wildlands and the urban environment. According to U.S. Fire Administration statistics, nearly 40 percent of new home development in the Western United States is occurring in this wildland-urban interface, putting more insured property at risk every year.” Insured losses from wildfires are influenced by factors such as local fuels, topography, weather, and the vulnerability of affected structures. AIR’s model employs high-resolution fuel (vegetation), topographic, and weather data. The model incorporates 13 burnable fuel types at 30-meter resolution accounting for variations in moisture content, fuel loading, and horizontal continuity. Since fire spread is influenced by topography, AIR has incorporated high-resolution USGS digital elevation data. The model also considers the effect of wind speed and direction, including the Santa Ana winds in Southern California and the Diablo winds in the northern part of the state. The AIR model also estimates the mitigating impact of firebreaks created in the course of fire suppression activities, as well as the exacerbating impact of impaired road access. The flammability of roof and siding materials is the primary determinant of a structures’ vulnerability to fire. The AIR model accounts for a wide range of residential and commercial constructions and takes into account mitigating factors, such as fire resistant roofing and siding materials, to build an estimate of damage and loss. AIR’s probabilistic wildfire model is based on a robust stochastic catalog of potential future events that provides insurers with full probability distributions of loss and the ability to generate loss costs. The model is available now for AIR’s CLASIC/2, CATStation, and CATRADER catastrophe risk management systems to analyze exposures in California. Future releases of the model will expand its coverage to other Western states. Source: AIR Worldwide Corp.

New York - American International Group has appointed 61-year-old Robert Willumstad as its new chairman of its board of directors, effective November 1, 2006. As reported in the popular press, Willumstad resigned from his positions as New York-based Citigroup's president and COO in July 2005 after being passed over for the chief executive's position at the company. Willumstad previously was vice chairman of the Global Consumer Group and led Citigroup's Global Consumer Lending division shortly after the merger of Citicorp and Travelers Group in 1998. Prior to the formation of Citigroup, he was chairman and CEO of Travelers Group Consumer Financial Services. He joined CitiFinancial (then Commercial Credit, a predecessor company) in 1987. Willumstad earlier spent 20 years with Chemical Bank in operations, retail banking and computer systems. Willumstad will replace Frank Zarb, who filled Maurice "Hank" Greenberg's spot when he stepped down in March 2005 amidst a growing accounting scandal. Zarb has served as interim chairman since April 2005. AIG agreed to pay $1.64 billion to settle the allegations against it in February 2006. Willumstad was elected to the AIG Board of Directors in January 2006. He retired in 2005 as president and COO of Citigroup, where he served on its board of directors. He is also a member of the board of directors of S.C. Johnson & Son, Inc., Habitat for Humanity and Adelphi University. "Bob Willumstad is a superb choice to assume the position of AIG Chairman," says Zarb. "I have tremendous respect for his judgment, intellect and expertise in the insurance and financial services industries." Over the past 18 months, AIG's Board of Directors and its senior management have transformed the company in many ways, most particularly in the area of corporate governance, composition of the Board of Directors, transparency, regulatory compliance and the installation of a new management team, headed by president and CEO Martin Sullivan, Zarb added. Also elected to AIG's board was Virginia Rometty, 49, who serves as senior vice president, IBM Global Business Services, managing a network of more than 100,000 consultants and service professionals worldwide. Sources: Business Wire, Forbes

Hartford, Conn. - Many commercial lines insurers imagine a world of potential success by applying to their businesses the predictive modeling techniques now widely used in personal lines, according to a new survey-based study by Conning Research and Consulting, Hartford, Conn. "It is clear from our survey results that commercial insurers are inspired by the advances in predictive modeling that are revolutionizing the personal lines marketplace," said Stephan Christiansen, Conning's director of research. "Since the commercial lines industry is still in the early stage of exploration of predictive modeling, it is not yet clear whether the early and aggressive pursuit of the right combination of data and tools will lead to a permanent competitive edge." The Conning Research study, "Commercial Lines Predictive Modeling: Searching for the Lift" identifies the environmental contrasts between commercial and personal lines, current activity in commercial lines predictive modeling implementation, potential barriers, and likely outcomes in this search for predictive modeling competitive advantage. "Certainly, predictive modeling has become a key tool in personal lines, but that is not necessarily predictive of a success in all commercial lines," Christiansen said. "Our research shows that insurers and modeling vendors perceive strong opportunities in some segments, weaker opportunities in others. And while there are barriers to successful implementation, our analysis has identified potential solutions for these hurdles." Source: Insurance Newslink

New York and Walldorf, Germany - Health insurance companies may be able to collaborate next year with providers, public health authorities and pharmaceutical companies on a new health network being proposed by Germany-based business software provider SAP and Bermuda-based consulting firm Accenture.The Collaborative Health Network (CHN) network initiative will be based on SAP NetWeaver technology, which links a range of information and data. Designed to streamline the way health insurance companies and other stakeholders access, integrate and share information, the network will help organizations maintain reliable, accurate electronic health records that are accessible quickly by multiple parties, the companies said in a release. It will use an enterprise service-oriented architecture (enterprise SOA) to help reduce IT costs and enable automated collaborative processes among industry participants. The first release of the solution will be available mid-2007, predicts the companies.

Northbrook, Ill. - Allstate's board of directors today announced a changing of the guard that includes a leadership transition strategy that will occur over the next eighteen months. Current chairman and CEO Edward Liddy will step down as CEO at the end of 2006 and will be succeeded by Thomas Wilson, who currently serves as president and COO. Wilson was elected to the Allstate board of directors, and will retain the role and title of president, leaving the position of COO vacant. Liddy, who will be age 62 at his retirement in 2008, will stay on as chairman until at that time. Wilson, 48, joined Northbrook, Il.,-based Allstate in 1995 as vice president of finance and was elected CFO later that year. He was appointed president of Allstate Financial in 1999 and president of Allstate Protection, the company's largest business unit, in 2002. He assumed his current role of president and COO in May 2005. Allstate, which celebrates its 75th anniversary this year, saw its shares go up about 60% since Liddy took over, compared with a gain of about 40% in the Standard & Poor's insurance index. Allstate shares rose 60 cents to $60.72 in Monday afternoon trading on the New York Stock Exchange. In a statement, Liddy referenced Allstate's "deep management bench," and stated that Allstate is in a very strong position, "making this an ideal time for a leadership transition." Sources: PR Newswire, Reuters

Old Greenwich, Conn. - Insurance carriers recognize the need for a business continuity plan, according to a recent survey, but much work still needs to be done in the area of disaster recovery to be completely prepared. Last year's hurricane season, the September 11 terrorist attacks, and the concern over the avian flu have changed the way businesses operate, and the insurance industry is no exception, reports IVANS, the Old Greenwich, Conn., networking solutions provider that conducted the survey.Keeping your business operation up and running after a catastrophic disaster depends heavily on being able to access company data and resources. According to the IVANS survey, which was conducted in May 2006 during the ACORD/LOMA conference in Las Vegas, NV., more than 82% of insurance carriers have business continuity plans in place. However, only 25% include natural disasters; 19%, acts of terrorism; 20%, cyber terrorism; and less than 15% take into account biological/public emergencies.

Philadelphia - CIGNA Group Insurance (CGI) enhanced its disability claims reporting platform to provide customers more robust self-service capabilities via the Internet. Through one site designed to be secure and easy to navigate, employers now have access to a variety of critical operational claims information, such as advice-to-pay reports, individual claims status and new claim notifications, as well as analytical information, such as year-over-year trending data and health care reports (for customers who also have medical coverage with CIGNA HealthCare).The reporting capabilities are available to all new and existing self-insured and fully-insured disability customers who purchase any of Philadelphia-based CGI's short- or long-term disability products. The new platform, which includes a custom ad-hoc report builder is designed to help employers:

London - Eighty percent of major European insurance companies have begun their Solvency II implementation program, and, two-thirds (61%) see it as a means to improve all aspects of their risk management across the whole business, according to London-based Ernst & Young Global Ltd. However, while the benefits are welcomed, there is still much work to be done."The 2006 Solvency II Readiness Survey: Readiness and Beyond," published by Ernst & Young's Global Insurance Center, interviewed senior managers with responsibility for Solvency II in 54 of Europe's largest insurers, spread across 16 countries, with an average asset size of 110 billion Euros.

Boston - Markets in Financial Instruments Directive (MiFID), a European Union (EU) directive going into effect by November 2007, may affect the conduct of business and approach to operational risk of insurers that operate within the EU and who either provide or procure outsourced services.The directive will require that U.S. financial institutions—including insurers--operating within the EU that outsource an operational function to:

New York - New York Life Insurance Co. named Mark Sanders CTO and senior vice president of its Corporate Information department, reporting to COO and senior vice president Eileen Slevin. He joins New York Life from New York-based BKF Asset Management Inc., where he served as CTO.Sanders is responsible for New York Life's information technology vision, strategy and planning, overseeing the Enterprise Architecture and Engineering division in the Corporate Information department. In addition to serving as the CTO for BKF Asset Management prior to joining New York Life, he served as chairman and CEO of BevAccess, a combination online procurement site for licensed retail buyers, and trade media group for the alcohol beverage industry. Sanders was also a senior director for Merrill Lynch, and held leadership positions at Salomon Brothers Inc., J.P. Morgan, Sun Microsystems and Grumman Aerospace.

Portland, Maine - Companies across the disability insurance industry face similar challenges managing their claims processes largely due to rapid advancements in technology, according to results of a study of group and individual disability carriers' claims technology. The study--sponsored by Portland, Maine-based ClaimVantage Inc. and conducted by JHA, a disability reinsurance, consulting and research firm also located in Portland, Maine--revealved that 46% of the respondents indicated lower productivity levels and dissatisfaction with their current claims management technology.Some of the major issues identified in the study involve claims payment solutions, customized or over-engineered systems and image-enabled systems. Seventy percent of the respondents have semi-automated payment capabilities, while the remaining are fully automated on legacy systems with up to 20 years of in-house development built-in.

Northbrook, Ill.-based The Allstate Corp., sponsored a disaster preparedness resource called the Catastrophe Readiness Clearinghouse and its Web site, (www.catastrophereadinessclearinghouse.com).The Clearinghouse, which is housed and managed by Centereach, N.Y.-based Middle Country Public Library, is a collection of disaster preparedness data and support available to anyone who visits the library. It includes a complete disaster preparedness information-portal Web site that is available to people everywhere.

Springfield, Mass. - Massachusetts Mutual Life Insurance Co. (MassMutual), based in Springfield, garnered the top spot in DALBAR Inc.'s latest WebMonitor rankings of the best Web sites in the life insurance and annuity industry.FieldNet, the Web site for financial professionals produced by MassMutual, received an "Excellent" designation for the 9th straight quarter and earned 1st place for six of those quarters.

Silver Spring, Md. - Companies have a long way to go when it comes to determining their organizations' technology strategy to meet compliance requirements, according to a survey conducted in June of 741 end users from number of vertical industries, including banking, finance, healthcare and insurance. Partly because of media "over-emphasis" on Sarbanes-Oxley and HIPAA, end users have a "disturbingly narrow view" of compliance as a broader issue and what it means for their organizations, says AIIM, a Silver Spring, Md., enterprise content management association and author of the report.In its analysis, AIIM indicates that survey respondents have an intuitive feel that "something" is wrong within their organizations relative to managing electronic information, but are having a difficult time mounting a systematic and disciplined approach to meet the challenge.

New York - American International Group, Inc. (AIG) today named Anastasia Kelly executive vice president, general counsel, and senior regulatory and compliance officer.

Chicago - Aon Consulting, the human capital consulting organization of Chicago-based Aon Corp., report that Anne Kemp and Kathleen Skapik have joined the electronic discovery business unit. This unit is part of the IT Risk Consulting group, a division of the company's Financial Advisory and Litigation Consulting Services practice.

Portland, Maine – Results of a study measuring insurance industry challenges as well as how technology can assist disability carriers in successfully managing claims operations indicate that carriers are dissatisfied with their current claims management technology.

Hartford, Conn. - Property/casualty carriers in the U.S. can expect another year of overall industry underwriting profit in 2006, matching the results of 2004, according to the latest Conning Research and Consulting Inc. forecast report for the P&C industry, which provides a first look at results through 2008.

Fort Collins, Colo.- Colorado State University’s hurricane forecasters now predict this year's hurricane activity "will be slightly below the long-term," according to a revised forecast issued Friday.

Chicago - With the goal of helping patients improve their surgical outcomes, Blue Cross and Blue Shield of Illinois says it has become the first health insurance company in the country to offer the EmmiHealth program, "Informed Decision Making for Bariatric Surgery," to its members considering bariatric surgery. Developed by Chicago-based Emmi Solutions, LLC, EmmiHealth is a multimedia, Web-based program that provides people with clear, concise information about their medical condition, the risks and benefits of treatment, alternatives to surgery and what to expect before and after their procedure - information that collectively leads to better expectations about their care and better outcomes.