Monthly Archives: December 2011

Immediate Vault

Status Updates Help Burglars Pick Their Prey

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Back in September, UK home security firm Friedland issued a report with startling statistics regarding social media and its relation to home burglaries. The company found that an overwhelming 78% of ex-burglars interviewed said that they strongly believed social media platforms like Facebook, Twitter and Foursquare are being used by thieves when targeting properties, with nearly 74% stating that, in their opinion, Google Street View was also playing a role in today’s home thefts.

And the holidays are a prime time for burglaries, with nearly 400,000 occurring in the months of November and December, with family homes targeted most frequently. According to information from Mercury Insurance:

“Social media is definitely a factor in many of today’s burglaries. Instead of watching for mail to accumulate outside your residence, burglars can case your home by simply scanning your Twitter feed and monitoring your Facebook status for any signs you’re away,” said Joanna Moore, Mercury Insurance chief claims officer. “And it’s only getting easier with new features like Facebook Places, which allows users to divulge their exact location by simply checking in.”

The company recommends using social media to your advantage by updating your sites to give the impression you are home, therefore deterring any potential outside interest in your property.

The video below shows what happened when supposed “friends” took advantage of one Facebook user’s status update.

Insurance Modernization and Improvement

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The Federal Insurance Office hosted a conference this morning to discuss modernizing and improving the insurance regulations system. The conference brought together state insurance regulators, federal government officials, consumer organizations, representatives of the insurance industry and insurance experts to exchange ideas on potential areas for insurance regulatory reform.

Here are the opening comments from Deputy Secretary Neal Wolin:

FIO has begun carrying out the responsibilities laid out for it in the Dodd-Frank Act.  As you all know, the office is responsible for, among other things:

  • Monitoring the insurance industry, identifying gaps in regulation, and participating in the Financial Stability Oversight Council (“the Council”) – all to help ensure stability in the insurance industry and the broader financial system
  • Developing and coordinating federal policy on prudential aspects of international insurance matters
  • Evaluating the accessibility and affordability of insurance products for low- and middle-income Americans
  • Advising the Secretary of the Treasury on insurance issues

To be clear: regulating the insurance industry is not one of FIO’s responsibilities.  Nothing in the Dodd-Frank Act alters the fact that insurance is fundamentally regulated by the states.
State regulators are important partners in our work.  As FIO moves forward, we understand that maintaining a strong relationship with the states will be critical for fulfilling the responsibilities Congress assigned to the new office.

In recent months, FIO has made important progress.  Through its work with the Council, FIO has already lent its expertise to Dodd-Frank Act studies and rulemakings that are central to financial regulatory reform.

Both in this work, and in its advisory role helping the Council monitor risks to U.S. financial stability, FIO works closely with two other Council members who provide perspectives on insurance:  Former Kentucky Insurance Commissioner Roy Woodall, who serves as the Council’s independent insurance expert, and the Director of Missouri’s Department of Insurance John Huff, who was selected by state insurance regulators.
FIO’s advisory body, the Federal Advisory Committee on Insurance, has also been established. Last month, FIO announced the appointment of 15 insurance experts, approximately half of whom are state insurance regulators, to serve as its first members.

On the international side, FIO recently became a full member of the International Association of Insurance Supervisors (IAIS), which is currently working to designate globally significant insurers and develop a framework for supervising of internationally active insurance groups.  FIO will continue to work closely with state regulators as it develops and advances a U.S. perspective on these and other international insurance regulatory matters.

Finally, as you all know, FIO will report to Congress in January on how to improve and modernize the United States’ system of insurance regulation.  We want the views of a wide range of stakeholders to inform our work.

To that end, we are reaching out in a variety of ways.  In October, we put out a request for public comments in the Federal Register.  The comment period closes on December 16, and we encourage all interested parties to submit their thoughts on the issues we’ll cover in the report.

The January/February issue of Risk Management will include an article on the timely topic of insurance modernization. Make sure to check it out online or in print February 1st. And check back here for more updates on the conference currently taking place.

 

Women to Watch

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The risk management and insurance industry was, and still is, a male-dominated field. This is a fact. But what’s also true is that more and more executive-level positions within the industry are being filled by women. They moved from secretary to the risk manager, to CFOs of major corporations, directors of risk management for Fortune 500 companies and heads of insurance recovery for major law firms.

They’re making moves.

In Risk Management‘s January/February 2011 issue, I highlighted some of the female pioneers within the risk management and insurance industry, letting them share their story of how they squashed sterotypes and landed leading roles in the field. I profiled successful women such as:

  • Kathie Maley, Vice President, Risk  Management, Special Risk Services, IMA Financial Group
  • Stacey Nielsen, Senior Risk Analyst, Dollar Tree Stores
  • Tamika Puckett, Risk Manager, Public Schools of Alexandria City, Virginia
  • Trish Henry, Executive Vice President and Deputy General Counsel, ACE
  • Lori Seidenberg, Vice President of Enterprise Risk Management, Centerline Capital Group
  • Dorien Smithson, Executive Vice President of Strategic Outcomes Practices, Willis

    University of California Chief Risk Officer Grace Crickette.

And we get a glimpse of the achivements of even more women in Business Insurance‘s annual “Women to Watch.” In it, the publication recognizes women doing outstanding work in insurance, risk and benefits management, and related fields. One of the 25 honorees, Grace Crickette, spoke at last month’s RIMS ERM Conference in San Diego. As the chief risk officer for the University of California, she also serves on the RIMS ERM Committee. In her interview with Business Insurance, she gives some great advice to future (and even current) generations of risk managers:

I had a great boss, who’s since passed away, and one day he said to me, “Grace, your desk is a dangerous place to do your job.” And I said, “Well, Bill, what do you mean by that?” And he said, “You’re not going to make the best decisions on implementing policies and procedures and programs if you don’t get out in the field and really understand the business.” So I think that would be one bit of advice: Don’t spend too much time at your desk. There’s not a lot of risk at your desk; and if you want to be of value to the organization and really progress in the organization, you really need to get out and really understand the business in a holistic way. The other one is also then to learn the language or the taxonomy of the other people you’re working with. I think in risk management, you can tend to become insular and just focus from an educational or professional standpoint on being with other risk managers and studying just risk management.

Great advice for any profession.

Dr. Doom: “With Italy Too Big to Fail, Too Big to Save … The Endgame for the Eurozone has Begun”

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As the eurozone troubles continue to mount, there is a growing consensus that “muddling” through won’t be enough. Critics say that more immediate and drastic action must be taken, namely by Germany and France, before the negative watch warning for the ratings of France and the regional bailout fund, the European Financial Stability Fund, potentially becomes something that matters.

One man, however, doesn’t think the disparate governments that can make a difference will.

And it’s a guy who knows a little about forecasted meltdowns.

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According to the New York Times, in 2006, Nouriel Roubini, an NYU economist who has been nicknamed Dr. Doom, “laid out a bleak sequence of events: homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt. These developments, he went on, could cripple or destroy hedge funds, investment banks and other major financial institutions like Fannie Mae and Freddie Mac.”

As the tale goes, the IMF audience he spoke to were skeptical to say the least. Some likely thought he was a funny little man.

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Others thought he was nuts.

Unfortunately, he was correct.

Now, he is predicting a major European recession, one large enough to spread worldwide.

Roubini predicts Europe’s leaders “will reach something of a compromise, but it won’t be sufficient” to solve the problem of too much government debt.

They will agree that “fiscal austerity and reforms will be necessary,” but those changes will only depress growth, leading to lower tax revenues and a deepening debt crisis. Eventually, investors in European bonds “will see they are insolvent,” he said.

“With Italy too big to fail, too big to save, and now at the point of no return, the endgame for the eurozone has begun,” Roubini said in a recent written assessment.

Hopefully, Doom won’t strike twice.

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