Summer 2018

Global Business: Rewriting the Rules

By Scott G. Stephenson

It’s been described as a consumer’s Bill of Rights as well as a massive potential minefield for companies doing business in Europe. GDPR, the acronym for General Data Protection Regulation, is making a strong and historic statement on where the European Union believes the walls stand to protect its residents’ data privacy.

When high-definition televisions reached the marketplace, they were considered a luxury. But as costs came down and consumer adoption rose, they became the norm. Now, if you stream a standard-definition video online, you’re likely to rub your eyes and wonder if it’s just a blurry image. Viewers want clearer pictures. And for the insurance industry, high-resolution aerial images from airplanes and drones are opening a new range of possibilities not attainable with lower-res satellite imagery and ground surveys.

In 2014, a field adjuster named Cory Shelton climbed onto the roof of a large home in Texas to conduct a routine insurance claim property inspection. A recent hailstorm had loosened the granules on the roof shingles, removing the traditional rough texture—and leaving a dangerously slick surface.

The word “noncompliance” tends to dredge up the notion of fines and other penalties imposed by government agencies. For fear of noncompliance, regulations are increasingly enforced in the business-to-business setting, with obligations pushed upstream to suppliers. Due to a host of regulatory requirements in the global market, companies must make demands of their supply chains to ensure that materials, products, parts, and processes meet the demands not only of government agencies but also of consumers and investors.

Recently, the media reported that Lloyds Bank had followed the lead of various U.S. issuers such as Citi, J.P. Morgan, Bank of America, and Capital One in blocking its UK credit card customers across all of its brands from purchasing cryptocurrencies on their cards. Their action was quickly followed by other UK credit card issuers, and while no bank publicly explained the rationale behind this step, consumer groups welcomed the approach.

Is peak oil demand just around the corner? The market used to worry about peak oil supply. Now the focus has shifted to peak oil demand as the industry witnesses a structural decline in demand from the developed world and questions the appetite of the emerging world to grow at the insatiable rates experienced over the past 15 years.

In April 2018, the Centers for Medicare and Medicaid Services began replacing all Medicare cards with a new, unique 11-byte Medicare Beneficiary Identifier number. The change is part of CMS’ Social Security Number Removal Initiative as mandated under the Medicare Access and CHIP Reauthorization Act of 2015. This law requires CMS to discontinue all SSN-based Health Insurance Claim Number Medicare identifiers and reissue all Medicare cards with a new MBI by April 2019.

Helping to close the protection gap for vulnerable countries has become a priority for governments and nongovernmental organizations alike. To this end, Chile, Peru, Colombia, and Mexico have recently issued a parametric catastrophe bond to the insurance-linked securities market, obtaining more than a billion dollars in cover.


Scott Stephenson Podcasts

Scott Stephenson

Aerial Insights

Verisk Chairman, President, and CEO Scott Stephenson spoke to A.M. Best about how disasters have unexpected ways of sparking innovation.

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Cyber Exposures Are Business Interruption, Fire Risks


Scott Stransky, assistant vice president, AIR Worldwide, spoke to A.M. Best about how evolving forms of ransomware are triggering business losses as operations halt until systems are restored.

ILS Can Cover Cyber, but on a Parametric Basis


Tom Johansmeyer, assistant vice president and cochief, PCS, spoke to A.M. Best about how investors in insurance-linked securities are looking beyond covering property-catastrophe risk but need more comfort with both new models and new ways to assess perils.

Data, Risk Modeling Have Caught Up with Flood Underwriting


Marc Treacy, managing director, flood insurance, ISO, spoke to A.M. Best about how advances in risk modeling and elevation mapping bring flood underwriting within reach of many insurers.

Energy Market Puts the Squeeze on Underwriters


Elizabeth Casas, managing director, energy and insurance, Verisk, spoke to A.M. Best about how lower oil prices and lots of insurance capacity have insurers finding better ways to underwrite their energy business, including a greater reliance on data and analytics.

Tech Changing Commercial Risk Differently Than Personal


Barbara Ingraham, managing director, excess and surplus, Verisk, spoke to A.M. Best about how commercial insurance is benefiting from technology advances that allow insurers to better address complex risks, including identifying and aggregating smaller liability risks.

Additional Podcasts

Superstorm Sandy’s Impact on Flood Risk Assessment and Mitigation


Five years after Superstorm Sandy caused widespread devastation to the East Coast, Marc Treacy, managing director of flood insurance at ISO, spoke to Insurance Journal about how the storm led to improvements in building codes, risk analysis, and resilience strategies.

Moving to a Privatized Flood Market


Marc Treacy, managing director of flood insurance at ISO, spoke to Insurance Journal about how and why private flood insurance needs to evolve and shares characteristics for private flood insurance to succeed.

Cybersecurity a Constant Consumer Concern


Prashant Pai, vice president of cyber offerings strategy at Verisk, spoke to Insurance Journal about how consumers continue to report concern over online transactions and use of social media but don’t always maintain safeguards to protect themselves.

Cyber Risk Trends and Impact on Claims Handling


Tom Johansmeyer, assistant vice president at PCS, spoke to Insurance Journal about how cyber risks continue to evolve and challenge insurers.

Understanding Medicare Secondary Payor Provisions


Shawn Deane, vice president of product development at ‎ISO Claims Partners, spoke to Insurance Journal about how developing a compliance program to adhere to MSP provisions is key to avoiding exposure to lawsuits and damages related to recovery demands.

Benefits of Modeling Casualty Catastrophes


Robin Wilkinson, vice president and managing director of casualty analytics at AIR, spoke to Insurance Journal about how scenario-based modeling has been used for property risk for some time, but its application in the casualty area is recent.

The Role of Telematics in the Commercial Auto Fleet Space


Zach Schmiesing, director of commercial lines, IoT/Telematics at Verisk, spoke to Insurance Journal about how telematics is just coming into its own in the commercial auto space, although it was adopted early by personal lines insurers.

How Connected Car Data Can Benefit Auto Insurance Life Cycle


Dawn Mortimer, AVP of IoT/Telematics product management at Verisk, spoke to Insurance Journal about how data derived from connected cars on the road today can improve auto insurance from both the insurer and insured perspective.

Adopting a Drone Inspection Program


Cory Shelton, head of UAV technology at Geomni, spoke to Insurance Journal about the pros and cons of using drones for property inspections and discusses what insurers need to consider in evaluating an in-house program versus a third-party drone service provider.

At the Cutting Edge of Insurance Modeling

Jim Weiss, director of analytic solutions at ISO, spoke to about new frontiers of modeling for insurance purposes.

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