Happy fall! Today kicks off the official start of the fall season, and it seems that the weather is starting to change too. 

In this week's Big I Buzz, we are looking into the effect catastrophes and COVID-19 have had on real estate, resume red flags to look out for and why deepfakes are considered a threat to the industry. 

Catastrophes and COVID-19 Fallout Proving Challenging for Real Estate Companies

The combination of COVID-19 plus severe weather events has caused major issues for the real estate sector. Real estate companies are having trouble managing their risks between tenants having difficulty paying rent, COVID-19 safety rules, construction and labor costs and hurricanes and wildfires. 

According to Insurance Business Magazine, "One of the biggest challenges real estate companies are facing right now is finding capacity for CAT exposures. Given recent rends, the market is getting more restrictive - carriers are more apt to exclude CAT exposures, or potentially decline to write the whole schedule, which could force the real estate company to split out their CAT-exposed properties." Additionally, COVID-19 has caused difficulties in getting building valuations correct. Read more about how COVID-19 and catastrophes are affecting real estate here. 

Top 6 Resume Red Flags

Independent Agent has released their top 6 resume red flags that employers should look out for when hiring: 

1. Job-hopping - while it's not considered as negative now as it once did in the past due to lay-offs, company closures, COVID, you should give a deeper look into why this happened. Talk with the candidate to see why these positions didn't last, and recognize how they communicate about the past position. Did they have even more jobs than listed on their resume, did they badmouth their boss during the conversation with you or did they give constructive criticism? These questions are important for getting a deeper look at why they switched positions.

2. Gaps between employment - During the hiring process, you'll want to verify that the candidate's experience is relevant to the position they are applying to. If there is a large gap between the last position and what they're applying to now, it may take longer to get them up-to-speed.

3. Typos and spelling errors - Resumes are your first look at the candidate. A resume should have received careful consideration and review prior to your receipt of it. If there are grammar or spelling errors, this is probably an indication of how the candidate will perform in the office. 

4. Career regression or lack of progress - If a candidate has stayed in the same position over the years, or took a step down to a lesser position, they may not have the drive to grow or their is an obstacle holding them back from progressing. 

5. Non-work related filler - if a resume is filling their resume page with content aside from their work experience, this may be a way to draw your attention away from their deficiency in a relevant experience. 

6. One-size-fits-all resume - Verify the resume and cover letter has been customized for the position they're applying to. If it seems generic, this could mean the candidate applied anywhere and everywhere and won't remember who you are when you call.  

Learn more about resume red flags here. 

Deepfakes: An Insurance Industry Threat

Deepfakes use artificial intelligence to alter or synthetically generate videos, that are extremely difficult for humans and even machines to detect. According to NU Property Casualty 360, "Whereas deepfakes have largely manifested as a novelty on social media, deepfakes and similar AI-generated photos and videos can pose a significant threat to industries that make important financial decisions on the contents of photos and videos, such as insurance. The ability to distort reality in ways that are difficult or impossible to detect significantly increases the risk of digital media fraud in insurance claims at a time when many carriers have rapidly adopted self-service as a way to process claims during the COVID-19 pandemic." Any processes driven by the insured in a self-service manner are susceptible to manipulated for fake media such as auto or home claims, establishing existence and condition of assets during underwriting.  There are some suggestions for implementing a layer of defense such as in-line detection, which is the process of using AI-based forensic analysis while reviewing every photo or video prior to processing a claim, and in-line prevention. This means only allowing a user to take the photos/videos in real-time instead of allowing users to upload their own photos/videos. 

Read more about how deepfakes are affecting the industry and what steps can be taken to weed out the fraud and deception here. 

For more news, check out the Action news section of our weekly e-newsletter, Big I Buzz. If you aren’t subscribed, click here to add your email to our emailing list. We hope that everyone has a great rest of their week!

Happy Wednesday! In this week's Big I Buzz, we are discussing rising alcohol sales in Wisconsin, the end to the federal health insurance subsidy and new FEMA guidance. 

Report: COVID-19 Pandemic Driving Alcohol Sales in Wisconsin

According to The Associated Press, a new report from the nonpartisan Wisconsin Policy Forum released findings that show revenue from state excise taxes on alcohol during the year that ended June 30 increased almost 17 percent over the $63.3 million they brought in the year prior. The increase will likely be the largest percentage jump since 1972 if the preliminary data holds.

This 17% jump is huge considering between 2009 and 2020, the increase in alcohol tax revenue exceeded only 2.4 percent in one year. Read more here. 

The 6-Month Federal Health Insurance Subsidy for Jobless Americans is Ending. Here's What to Do Next: 

The government's subsidized health insurance coverage for those unemployed during the pandemic through COBRA will end this month. With the end of the Consolidated Omnibus Budget Reconciliation Act, health advocates say it's time for those using COBRA to think about other insurance choices starting in October. 

According to CNBC, "Those who've been relying on the coverage should get a warning from their former employer or insurer that the subsidy period is ending. In that notice, you'll be able to see what your monthly bill will be without the government's help. If you find the new premium unaffordable, which may be the case for some, you'll be entitled to a special 60-day enrollment period on the Affordable Care Act's marketplace. To avoid a gap in coverage, experts recommend you report your upcoming loss of COBRA coverage as soon as possible."

Read more here.

Risk Rating 2.0: FEMA Releases More Guidance Ahead of Implementation

Risk Rating 2.0 is FEMA's new pricing methodology for the National Flood Insurance Program (NFIP) scheduled to be implemented on October 1st. As the implementation nears, FEMA just released the Risk Rating 2.0 edition of the NFIP Flood Insurance Manual to give guidance for administering NFIP policies under the new pricing methodology. According to IA Magazine, "The Big "I" believes that Risk Rating 2.0, if properly implemented, has the potential to improve the NFIP experience for agents and consumers, but emphasizes that the rollout of the program will be critical in determining the success of the effort. As FEMA continues to provide more information regarding Risk Rating 2.0, the Big "I" will continue to provide members with updates." Read more here. 

For more news, check out the Action news section of our weekly e-newsletter, Big I Buzz. If you aren’t subscribed, click here to add your email to our emailing list. We hope that everyone has a great rest of their week!

Happy Wednesday! In this week's Big I Buzz, we are discussing how material and labor prices are affecting property insurance, the new FDA COVID vaccine approval and why small business insureds are showing drooping satisfaction. 

How Material, Labor Price Hikes Are Affecting Property Insurance

The COVID-19 pandemic has created a sharp increase in the price of materials and labor. These increases have in turn increased property claim costs. According to the Vice President of pricing solutions for Verisk's Xactware, "The price of sheathing materials such as plywood and oriented strand board increased by more than 350 percent from July 2020 to July 2021 and other lumber materials increased by more than 100 percent... A labor shortage is driving up costs as well."  Pyle said that guess future prices is a "foggy crystal ball". Previously when COVID-19 appeared to be under control in the US, prices started to level out, however, with the Delta variant's arrival, rates started surging again. Read more here. 

FDA's COVID Vaccine Approval Makes Challenges to Mandates Tougher to Win

This week the FDA approved the Pfizer vaccine. According to Insurance Journal, this change will make it nearly impossible to successfully challenge mandates by employers, legal experts said. 

According to Reuters, "Legal experts said there already was a growing consensus that employers could mandate an emergency vaccine. During the pandemic, both the Equal Employment Opportunity Commission and the Department of Justice issued guidance in support of vaccine mandates, provided exceptions were made for medical conditions and religious beliefs. But emergency vaccine requirements have not gone unchallenged. At least a dozen lawsuits have been filed, mostly by students against colleges, but also by employees fighting allegations of wrongful termination for refusing a shot." This new approval will make it more difficult for those who would like to challenge mandates, nearly impossible. Read more here.

The 5 Reasons for Small-Business Insureds' Drooping Satisfaction

A new survey from J.D. Power has found that customer satisfaction surrounding small-business insurance clients declined seven points this year and 15 points during the past two years. They outlined the top 5 reasons for this: 

5. Interactions leave more to be desired - the satisfaction with insurance interactions fell off by 20 points compared to the year prior. Not only was this decline due to courtesy during calls but also in the timeliness of resolution. 

4. Customers exerting too much effort - throughout the last year, small business insureds exerted three times more effort trying to interact with insurance agents. 

3. Outreach comes too late - According to NU Property Casualty 360, "During 2020, less than 20% of clients reported their carrier proactively reached out to discuss their needs related to COVID-19. This significantly increased in 2021, with 45% reported having proactive contact with their insurer. However, the negative impact it had on customer satisfaction suggests the outreach might have come too late."

2. Mixed messaging - more problems and billing issues were reported in 2021 compared to 2020, among insureds who reported receiving proactive outreach. 

1. Turning to multiple channels for answers - clients who experienced billing or other issues were twice as likely to use four or more communication channels. According to the study, "While they leveraged multiple communication tools, including call centers, the customer satisfaction level didn't vary much between channels with clients that experienced problems. This suggests the industry could do more to recreate a more seamless cross-channel experience. 

For more news, check out the Action news section of our weekly e-newsletter, Big I Buzz. If you aren’t subscribed, click here to add your email to our emailing list. We hope that everyone has a great rest of their week!

Happy Wednesday! This week's Big I Buzz features IIAW's Annual Business Meeting on August 26, 2021, insurtechs with multibillion dollar valuations and how the potential government spending of $1.2T on infrastructure would impact the insurance industry.

IIAW's Annual Business Meeting - August 26, 2021

Join us for an overview of the Association's past fiscal year as presented by members of the IIAW Executive Committee at 10 a.m. on Thursday, August 26th 2021. This meeting is reserved for IIAW members only. Go here to register to attend.

7 Insurtechs with Multibillion-Dollar Valuations

A number of insurtech startups are coming to market through blank-check companies. Here are valuations of several that have announced special purpose acquisition company (SPAC) plans.



Read more here. 

Construction Constrained: Market Dynamics Under U.S. Infrastructure Plan

Insurance for the construction sector is already in a tough position. Supply is shrinking, but demand is rising as the economy advances in the late-COVID environment. Insurance capacity for residential homebuilders risk and excess liability are constrained following some large surety losses, and prices are rising in line with almost all other classes of business insurance. If the current bipartisan White House proposal to spend $1.2 trillion on U.S. infrastructure goes ahead — or even a bill for substantially less — the dynamics of the market will have to change dramatically if we’re to get all these projects covered.

Carriers that have historically been dominant are still present, but they’ve scaled down the availability of their capacity, the Terms & Conditions they apply, or both. Various Lloyd’s syndicates have also participated in many major U.S. construction risks, but the market’s new “performance management” regime means it’s reasonable to presume appetite will be shrinking there too.

With no sign yet of these changes being reversed, finding adequate cover for a trillion dollars worth of projects will not be easy. That said, the market environment may be at least somewhat different when the projects actually come on line, which for most will take a few years at least. By then, some of the traditional players may be willing to release more capacity to construction, and new players may have joined their ranks.

Read the full article here.

For more news, check out the Action news section of our weekly e-newsletter, Big I Buzz. If you aren’t subscribed, click  here  to add your email to our emailing list. We hope that everyone has a great rest of their week!

Happy Wednesday! This week we are discussing states with the highest flood insurance costs, coverage for future pandemics and Biden's executive order taking aim at noncompete agreements.

States With the Highest Flood Insurance Costs

Research from Valuepenguin.com reported the states with the highest flood insurance costs which are predominantly located in the Northeast and Midwest. The report also found that the national average cost of flood insurance is $734 annually. 

The top 10 states with the highest flood insurance costs are: 

• Vermont - $1512

• Connecticut - $1471

• Rhode Island - $1418

• Pennsylvania - $1305

• Massachusetts - $1294

• West Virginia - $1273

• New York - $1152

• Ohio - $1151

• Maine - $1119

Wisconsin narrowly missed the top 10, ranking #18 on the list. However, Wisconsin ranked #49 for one of the least insured states with a 0.7% ratio of active flood insurance. 

See the full report from Valuepenguin here: https://www.valuepenguin.com/average-cost-flood-insurance#high

 Is this the only way to cover future pandemics? 

High-profile members of the global P&C reinsurance industry are calling on government help in absorbing extreme losses from pandemic events, especially when it comes to business interruption. There has been increased contention around BI coverage after the mandatory closure of non-essential businesses. According to Insurance Business Mag, "Commercial insurance policies and traditional BI policies typically do not offer coverage for BI or supply chain disruption due to a pandemic such as COVID-19. Generally, BI insurance will only trigger if there is a direct physical loss to property - unless there is unique language written into the insurance contract that deems otherwise."

With evidence worldwide showing successful public-private partnerships to handle other potentially systemic exposures, like terrorism or flood, it's leaving some to wonder what the solutions could look like from a pandemic perspective that could address gaps in insurance policies like business interruption. Read more about the members who are interested in government-supported programs here. 

Biden Executive Order Takes Aim at Noncompete Agreements

A new executive order from Biden would "narrow the use of noncompete agreements to include only necessary instances of a dissolution of a partnership or the sale of a business. The legislation would also place the enforcement responsibility on the FTC and the Department of Labor, as well as create a private right of action. Notably, the legislation would require employers to make their employees aware of the limitations." Noncompete agreements are receiving scrutiny across the aisles and a number of states have enacted measures that restrict their use. Read more about the executive order here.

For more news, check out the Action news section of our weekly e-newsletter, Big I Buzz. If you aren’t subscribed, click  here to add your email to our emailing list. We hope that everyone has a great rest of their week!