Thursday, January 31, 2008
Changes to the initial Act include:
Wednesday, January 30, 2008
Here is a summary of funding since the Oct. 24, 2007, presidential disaster declaration:
- SBA: $78.6 million. The bulk of the disaster assistance funding has come from the U.S. Small Business Administration (SBA) in the form of long-term, low-interest loans to business and home owners for repair or replacement of damaged structures.
- Public Assistance: $44 million has been obligated to reimburse state and local governments for firefighting efforts, debris removal, repair or replacement of public buildings and infrastructure and other wildfire-related losses and expenses. The Federal Management Agency (FEMA) pays 75 percent of those funds, with the remaining 25 percent split between the state of California and local applicants on a 75-25 percent cost-share basis.
- Housing Assistance: $9.5 million in grants has been disbursed to homeowners for home repair or replacement and temporary housing.
- Other Needs Assistance: $3.9 million has been given by the state and FEMA for losses and damage to personal property, vehicle repair or replacement, moving expenses and other disaster-related costs.
- Unemployment Benefits: $1.76 million. California's Employment Development Department has administered $1.53 million in Unemployment Insurance and more than $235,000 in federally funded Disaster Unemployment Assistance for those who lost work due to the fires but who did not qualify for regular unemployment insurance.
- California State Supplemental Grants: $1.9 million in grants has been approved by the California Department of Social Services for those who have received the maximum grant from FEMA.
Tuesday, January 29, 2008
Monday, January 28, 2008
Risk Management Solutions (RMS), a provider of products and services for catastrophe risk management, has released a 10-year retrospective report on the 1998 Ice Storm that devastated the Canadian provinces of Ontario and Québec, as well as portions of the northeastern U.S., in January 1998. Despite the positive advances made in the affected region since that time, a recurrence of the ice storm today would result in total insurance losses of between $1.0 and $3.0 billion — potentially over twice the $1.3 billion cost incurred in 1998, according to RMS (www.rms.com).
From Jan. 4-10, 1998, a series of storms produced large amounts of freezing rain from northern New York State through the St. Lawrence River Valley region, with some locations receiving close to 4 inches. Although freezing rain is not uncommon in these regions during the winter months, the 1998 Ice Storm was unique in its long duration, large geographical extent, and extraordinary freezing rain precipitation totals. Causing considerable damage, widespread power outages, and 45 fatalities, the event is widely acknowledged to be Canada’s costliest natural disaster and the most severe ice storm to hit the region since at least the 1920s.
Potential insured losses from a 2008 recurrence of the storm fall into three categories: direct physical damage to automobile and property, additional living expenses, and refrigerator and freezer contents that may be lost a result of prolonged power outages. Property damage could be expected to be greater than in 1998 due to the increased concentration of buildings in the area.
Although major improvements have been made to the Hydro-Quebec electrical power grid, an ice storm of this magnitude would still cause significant and lengthy power outages. However, since 1998 many homeowners and businesses have purchased generators and non-electrical stoves and heaters to ensure that they would not have to evacuate in the event of a storm and incur additional living expenses or losses to their refrigerator and freezer contents.
If involved in an accident, drivers should:
• Take reasonable steps to protect your vehicle from further damage and move it out of traffic as soon as it is safe. • If someone is injured, call the police or highway patrol. Tell them how many people were hurt and the types of injuries. • Take notes at the accident scene. If possible, take pictures. • Exchange and note the following information: License plate numbers; make and model of each car; driver’s license numbers; insurance identification, including name of insurance company, broker or agent, and policy number; names, addresses and phone numbers of witnesses and names and badge numbers of police officers or other emergency personnel. • If you run into an unattended vehicle or object, try to find the owner. Otherwise, leave a note with your name, phone number and insurance information so that they can contact you. Remember that leaving the scene of an accident, no matter how small, is a crime. • Report the accident to the Department of Motor Vehicles within 10 days if property damage exceeds $500. • Do not discuss the financial limits of your insurance policy.
After an accident, regardless of who is at fault, it is important to immediately call your insurance agent, broker or company to report the incident. You should find out whether you are covered for this loss.
Some key findings in the report include:
Sunday, January 27, 2008
- Striving for Growth: In spite of another year of great earnings, insurers will be challenged to sustain growth in 2008. EY expects margin compression to accelerate over the next 12 months. However, stronger balance sheets and an accumulation of capital will enable insurers to increase share buybacks, boost dividends, enter emerging markets and accelerate merger and acquisition activity. With these prevailing conditions, consolidation is more likely.
- Operational Transformation: The search for growth and profitability is driving companies to focus on better business alignment and expense control. In 2008, insurers will also take a harder look at evaluating outsourcing and offshoring, particularly for back-office functions and customer-facing business processes. In addition, developing a formal strategic cost management program will be a critical facet of operational transformation.
- Catastrophe Solutions: Impending soft market conditions will test each company’s ability to maintain underwriting discipline and achieve reasonable profits. EY believes that insurers should continue to invest in their ability to understand catastrophe risk and improve underwriting performance. This involves an investment in resources, technology and operational procedures. Only those who can find solutions within this fundamental framework will stay the course.
- Financial Events: Over the last five years, insurers have increased their investments in alternative asset classes which has led to greater credit risk exposure. Now is the time to take action and focus on building risk infrastructure and creating more transparency commensurate with the nature of these important investments. Organizations that embrace the people, systems and processes to accurately comprehend and manage the risks of these asset classes may gain a competitive advantage.
- Solvency II (SII): The search for growth and profitability is driving companies to focus on better business alignment and expense control. In 2008, insurers will also take a harder look at evaluating outsourcing and offshoring, particularly for back-office functions and customer-facing business processes. In addition, developing a formal strategic cost management program will be a critical facet of operational transformation.
- International Financial Reporting Standards (IFRS): Regardless of the implementation date being delayed, the time for IFRS is now. Companies need to develop a plan that includes steps to assess the impact of the proposals on their financial statements, educate key employees and constituents, and evaluate the readiness of their organization for implementation.
For further information, visit www.ey.com.
Saturday, January 26, 2008