Risk & Business

Progressive Insurance has announced that it will license off  it's usage based insurance technology. This will allow other companies to develop insurance products where premium is paid based on usage. The best example of this is car insurance. The little sensor that plugs into the car basically calculates your premium based on monthly usage. Pretty cool, right? This will also work wth trucking fleets or businesses with a large schedule of vehicles. The business owner that has a vehicle out of service for repair, can be assured they will not be paying the same premium rate as the other vehicles that are on the road. This concept could work with equipment policies and inland marine coverages. How this can be adapted to other products remains to be seen. For example, one of the biggest problems with general liability coverage is it's basis for premiums. If you are a contractor and you give your employees bonuses at the end of the year, you will be charged additional premium on you

The Federal Government is looking for capital. The fiscal cliff talks have gotten some in Congress to look in the direction of the P&C insurance industry. What this will mean in the future is not clear but change will occur. The industry is flush with money and the Federal Government is trying to keep itself in the game by controlling the money supply.  There will be a "crossing of paths" down the road and how the insurance industry holds onto its capital to pay future losses, will most likely come under scrutiny or under the tax code.  Stay tuned....  Until next time be careful out there and know your risks. G. Kevin Nemith, business and small business insurance, enterprise risk , specialists serving DE, PA, MD, and NJ. www.cncinsurance.com www.bizinsurancetv.org

From the day it was announced that Delaware Compensation Rating Bureau wants to raise comp rates 40%, my cell phone has been buzzing like crazy. Most of the calls have been from clients worried about the looming increase in work comp costs. Delaware business owners, still struggling from a weakened economy, will most likely hire less and may even lay off to cover the costs. So with the state hearing scheduled for Dec 20th, the new year could open with sticker shock for Delaware business owners and their insurance costs. There is another issue that has to be considered in this situation and that is economic development. If the state implements some of the highest work comp rates in the country, I doubt new businesses will want to start up and grow here. A work comp rate hike of this magnitude could be a blanket over future economic growth over the next few years. I am sure this will be discussed at the hearing and put into the equation for decision making. Stay tuned and as always know

NY Governor Cuomo has issued an emergency regulation that requires insurance companies to adjust claims within 6 days or at least respond to the claim. This is unprecedented in our area since it has been so long since we have had a storm like Sandy. The governmental authority advocating for policy holders is a good thing. The precedent it sets for the future is a bad thing. Insurance policies are contracts. Insurance companies pay claims and adjust claims based on the terms and conditions of the insurance policies. Forcing the adjusting time might be advantageous to the policy holders. Maybe this is the reason for the regulation since so many are still in pain from the storm. How this affects future adjustments in NY will have to be seen. This could be one of those situations where trying to do a good thing causes a lot of bad things down the road. Until next time be careful out there and know your risk. K G.Kevin Nemith, Business Insurance, Small Business insurance, Enterprise Ri