Every week The Friday Five will bring you interesting news and information from around the insurance industry. This week: potential losses if Olympics canceled, growth of insurtech amid pandemic, and a push to end no-fault in Florida.
Olympic-sized loss potential
Excerpted from the Insurance Journal article, If Tokyo Olympics Canceled, Loss for Insurers Would Be ‘Mind-Blowingly’ Big by Noor Zainab Hussain and Carolyn Cohn: Insurers are facing a $2-3 billion loss if the Tokyo Olympics are canceled this year, amounting to the largest ever claim in the global event cancellation market, brokers say. The IOC and Japanese organizers have been adamant that another postponement isn’t an option. So, it appears more likely the Games would have to be canceled, rather than postponed again, if they weren’t able to go ahead in Tokyo this summer.
Insurance tech growing during pandemic
Growth in insurtech has been driven by social distancing measures and quarantines that accompanied the COVID-19 pandemic. Insurers are increasing use of catastrophe models, drones and mobile apps, and they anticipate growth in such technology to continue once the health crisis passes. The industry has embraced catastrophe modeling for predicting the severity of events and for claims handling. Use of the technology was increasing before the pandemic, but it accelerated during quarantines for claims handling, experts say. Read more in Zoe Sagalow’s Roll Call article Pandemic spurs technology growth in insurance industry.
Push to end no-fault in Florida
Excerpted from Jim Turner’s Law.com article, Senators Renew Push to Repeal No-Fault Auto Insurance System: With the bill’s sponsor saying the coverage hasn’t kept up with the times, the latest effort to end Florida’s no-fault auto insurance system chugged through its first Senate committee. The Senate Banking and Insurance Committee backed the proposal (SB 54), which seeks to replace a requirement that motorists carry personal-injury protection coverage, key to the no-fault system, with mandatory bodily injury coverage. But concerns linger over the potential financial impact on low-income drivers and the inclusion of a “bad faith” litigation issue that has tripped similar efforts in the past.
What to watch for this year
In their Property Casualty 360 article, 20 issues to watch in 2021, Kimberly George and Mark Walls present 20 high impact issues relating to workers’ compensation, healthcare, and risk management. These are all important issues for every risk manager and insurance professional to monitor in 2021, including litigation management, cyber risks, challenges to the market and economic recovery.
Also watching climate change in 2021
Excerpted from Homeowners And Insurance Companies Will Grapple With Climate Change In 2021, by Ed Leefeldt and Amy Danise for Forbes.com: While big multinational insurers have been watching worldwide warming trends for more than a decade, U.S. property-casualty insurers have for the most part kept their heads down and relied on the huge $825 billion surplus in their war chests to keep them afloat. But it’s not working—particularly in the western states plagued by dry, fire-causing heat. In 2018, California’s worst year, wildfires cost the state, its residents and its insurers $400 billion, according to Accuweather.