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INSURANCE DIGEST --JANUARY 2009
Each month the Insurance Information Institute highlights studies and reports that are of key interest to the insurance industry.
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A FIRM FOUNDATION: HOW INSURANCE SUPPORTS THE ECONOMY
Insurance Information Institute, 110 William Street, New York, NY;http://www.iii.org January, 2009
The Insurance Information has released an updated version of its “A Firm Foundation: How Insurance Supports the Economy” brochure. This colorful pamphlet features highlights from the A Firm Foundation Web site (http://www.iii.org/economics ). Charts show insurers’ contribution to the national and state economies, the role of insurers as investors, how the insurance industry helps defray the economic cost of disasters and other ways the insurance industry plays a vital role in the economy. For a complementary copy of the brochure email daphneg@iii.org or call 212 236 5500. A PDF of the brochure can be downloaded from the A Firm Foundation Web site at http://www.iii.org/economics/pdf/.
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MUNICH RE ANNUAL NATURAL CATASTROPHES REVIEW
Munich Re, Munich Germany, December 29, 2008 http://www.munichre.com
Munich Re reports that global insurance losses from atural disasters increased by approximately 50 percent in 2008. The higher losses were attributed primarily to hurricanes Ike and Gustav in the Caribbean, with climate change cited as an increasingly important factor. Insured losses for 2008 totaled $45 billion, compared with nearly $30 billion in 2007. Munich Re said that total economic losses increased to approximately $200 billion, compared with $82 billion last year. The devastating earthquake in China’s Sichuan province in May caused overall losses of $85 billion, making the quake the world’s most costly disaster, but insured losses totaled only $300 million. Munich Re said that the long term trend of high losses from natural disasters related to weather continued last year. (Note: A press release and charts highlighting the findings are posted on the Web at http://www.munichre.com (see press releases).
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ALLSTATE HOLIDAY TEEN DRIVING HOTSPOTS STUDY
Allstate, Northbrook, IL. http://www.allstate.com. December 24, 2008
Jacksonville, Fla. is the deadliest city for teen drivers on New Year's Eve and New Year's Day according to a study by Allstate. The study was based on federal data for the 2000 to 2007 holiday seasons. Columbus, Ohio is the second deadliest city for teen drivers during the holiday season, followed by Richmond, Virginia, Birmingham, Alabama, and Orlando, Florida. The full analysis is posted on the Web at http://media.allstate.com/categories/7-news- releases/releases/4483-allstate-holiday-teen-driving
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NAIC REPORT ON PROFITABILITY BY LINE BY STATE IN 2007 NAIC
National Association of Insurance Commissioners, Kansas City, MO http://www.naic.org December 2008
The National Association of Insurance Commissioners (NAIC) has released its Report on Profitability by Line by State in 2007. The report estimates profitability in property/casualty insurance by state and by line of insurance. The report combines by line and by state calendar-year data from certain exhibits of the annual statement to develop estimates of profits on earned premium and the return on net worth by line and by state. The report also shows the various components of estimated profits, including premiums earned; losses incurred; loss adjustment expense; general expenses; selling expenses; state taxes, licenses and fees; dividends to policyholders; changes in premium deficiency reserves; underwriting profits; investment income and federal income taxes. Long-term historical averages are also provided. A hardcopy of the complete report can be ordered from the NAIC Store www.naic.org/store_home.htm). An electronic version can be purchased and downloaded in PDF file format from NAIC InsPubs at
https://external-apps.naic.org/insPubs/index.jsp .
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REPORT NAMES ‘JUDICIAL HELLHOLES’
American Tort Reform Association, Washington, DC http://www.atra.org
The American Tort Reform Foundation (ATRA) has released its annual Judicial Hellholes report, naming the entire state of West Virginia as being the nation's "most unfair civil court jurisdiction" followed by South Florida.; Cook County, Illinois; Atlantic County, New Jersey; Montgomery and Macon counties in Alabama.; Los Angeles County, California; and Clark County, Nevada. The full report is posted on the Web at http://www.atra.org/
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2008 TRENDS IN SECURITIES CLASS ACTIONS
NERA Economic Consulting, 200 Clarendon Street, Boston, MA 02116. http://www.nera.com. December, 2008
Securities class action litigation surged to a six-year high in 2008 amid the ongoing credit crisis and turmoil in the financial sector, according to a new report by NERA Economic Consulting. As of 14 December 2008, 255 cases were filed of which 43 percent, or 110, were related to the credit crisis. While filings have steadily increased from 2006 through 2008, NERA (a divisionof Marsh) reports that median settlement values have remained relatively stable. The 2008 median settlement resolved for $7.5 million, below the 2007 median of $9.4 million, but above the 2006 median settlement of $7 million. Findings are posted at http://www.nera.com/publication.asp?p_ID=3674
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INSURANCE IN EMERGING MARKETS: OVERVIEW AND PROSPECTS FOR ISLAMIC INSURANCE
Swiss Re, Zurich, Switzerland http://www.swissre.com December, 2008
Swiss Re’s new sigma study explores the latest developments in the insurance sector of the emerging market economies, with a special focus on the growing market for takaful, a form of Islamic insurance. Between 2004 and 2007, the average annual growth rate for takaful was estimated at 25 percent (adjusted for inflation). Although takaful premiums totaled approximately $1.7 billon in 2007, the study projects that global takaful market could reach $7 billion by 2015, as the 1.5 billion Muslims around the world represent a growing client segment for the insurance sector. The study examines five markets in detail: Bahrain, Indonesia, Malaysia, Saudi Arabia and the United Arab Emirates. The two takaful markets with the largest growth potential are Saudi Arabia and Malaysia.A link to the study is posted on the Web at
http://www.swissre.com/resources/d901cb004a24e38e9426d71e1eec54e8-sigma3_2008_e.pdf
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