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Economic Trends: Important Considerations for Managing Risk in 2016

By Trindl Reeves, Principal, Chief Sales Officer, Commercial Department

clock January 13, 2016 at 10:30 AM

From the Nepal earthquake to the California wildfires destroying over 1,000 homes, 2015 was a year of extremes. Even so, the United States experienced a light loss year, with insured losses due to weather and storms down 36% in comparison to 2014, while, globally, the natural catastrophic losses kept pace with past years. For the insurance market as a whole, rates are continuing to trend downward, which has been the case since 2013.

As we begin 2016, let’s take a look at what’s going on in five specific areas of insurance: Property & Casualty, Executive Risk, Cyber & Data Security, Terrorism and Workers’ Compensation.

Property & Casualty

Overall, 85% of our clients are expected to receive a decrease in premium, with an average rate reduction of 4.1% across all lines of coverage, dependent on claims history. However, there is one exception to this trend: automobile coverage. Modern cars are equipped with technology features that are very expensive to repair, so auto insurance premiums are currently increasing by 5-10% across the board.

Another trend in the Property & Casualty area is social engineering, a sophisticated form of “phishing” where a hacker convinces employees to send money to a criminal source. To be covered for an attack, social engineering needs to be added to a Crime Policy, as it is not automatically included.

2016 Takeaway: Insurance carriers are hungry for business and are willing to drop rates to keep clients with low claims history. Companies can take advantage of this by negotiating renewals early to lock in low rates.

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Topics: Property + Casualty, Cyber & Data Security, Market Trends

Could Social Engineering Fraud Be Happening at Your Business?

By Michael Segreti, Client Service Executive, Executive Liability Division

clock October 12, 2015 at 10:00 AM

It’s a bit of a mouthful and may not sound as familiar as “hacker” or “data breach,” but social engineering fraud is just as insidious and can be just as costly to a business. This growing threat does not discriminate and is affecting businesses of all sizes. If you have employees, then your business faces a potential loss due to social engineering fraud.

Social Engineering Explained

Social engineering fraud is a sophisticated “phishing” attack that attempts to intentionally mislead employees, convincing them to send money or divert a payment to a source that turns out to be a criminal. The contact can attack via phone or letter, but most often invades your system by email.

Unlike a normal phishing attack, social engineering fraudsters take a much more targeted approach. They pretend to be a vendor, client, or even another employee by attempting to make their communications look as official and routine as possible. On the surface, the communication appears entirely legitimate, and if the imposter has rudimentary hacking skills, he can even make these emails seem as if they are part of an existing thread.

The targeted employee, often bombarded by emails, may not think twice about the request and follow through, especially if it’s somewhat in line with standard operating procedures.

5 Steps to Prevent an Attack

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Topics: Property + Casualty, Cyber & Data Security, Market Trends

California Employers at Greater Risk of EPL Claims

By Lauren Booth, XLP Marketing Associate

clock June 8, 2015 at 10:00 AM

Wage and Hour lawsuits are common employment-related disputes, and most often include allegations involving overtime pay and misclassification of employees. The following is a brief update on the Management Liability marketplace, specific to California Employment Practices Liability (EPL) and Wage and Hour trends. 

Advisen, a leader in aggregating a wide variety of information relevant to the business insurance industry, aggregating information relevant to the business insurance industry aggregating information relevant to the business insurance industry published an article in March of this year outlining some staggering statistics for California EPL losses compared with those of other US states. 

  • Wage and Hour claims account for 40% of all California EPL losses compared to an average of 28% for other states (these figures include both Public and Private companies).
  • In many cases, settlement values of EPL claims in California can be up to 4 times the settlement values of other states.
  • The average settlement for California Wage and Hour claims is more than $6M versus $1.5M in other states.
  • The average settlement for California age discrimination is almost $8M versus $2M elsewhere in the United States.

With employment related claims statistically higher in California, it’s important to ensure your company is taking appropriate measures to reduce risk of a claim. Here are a few practices that employers can implement to reduce EPL claims, specifically wage and hour claims.

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Topics: Property + Casualty, Market Trends

2015 Economic Trends: An Optimistic Forecast

By Trindl Reeves, Principal, Chief Sales Officer, Commercial Department

clock January 8, 2015 at 11:01 AM

Between the Ebola epidemic, the disappearance of flight 370, ISSA declaring war on the world and a massive cyber attack on Sony Pictures, 2014 was a pretty scary year. However, when we look at the insurance market, we had the lowest year of insurable losses since 2009. Driven by good losses, the market is transitioning from premium rate increases to a gradual decline in rates. We can expect a lag in the reduction of rates, as it usually takes a couple years to see big changes.

As we begin 2015, let’s take a look at what’s going on in five specific areas of insurance: Property, Casualty/Excess Coverages, Employment Practices Liability, Workers’ Compensation and Data Security.

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Topics: Property + Casualty, Cyber & Data Security, Market Trends

Offering Employee Benefits Post-Health Care Reform

By Shawn Pynes, Principal, Director of Employee Benefits Division

clock October 1, 2014 at 10:00 AM

As health care costs continue to escalate, employers are faced with a strategic challenge: How do they offer employee benefits without costing themselves a fortune?

To plan properly, mid-sized employers need alternative solutions to manage their health care costs, while attracting and retaining talent. In our view, two of the most effective approaches in achieving those objectives are self-funding or a private exchange.

Download our latest white paper on controlling healthcare costs.

The Self-funding Option

For companies with a healthy employee demographic, a growing or stable workforce, and favorable claims experience, self-funding can be an excellent long-term solution to control costs. Self-funding provides potential savings through reduced administrative and regulatory fees, decreased taxes, and improved cash flow. With a self-funded model, the employer assumes direct risk for the payment of claims, rather than contracting with an insurance company to cover claims costs.

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Topics: Employee Benefits, Health Care Reform, Market Trends

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