Don’t Expect Insurance Rates to Rise Until the Economy Improves

In the above interview with Insurance Journal, Alan Jay Kaufman, chairman, president and CEO of wholesale broker Burns & Wilcox, says that he doesn’t expect to see any significant turn towards a hard insurance market — or even any real “firming” — until the economy turns around. (via Insurance Journal)

To Kaufman, the current state of the market is defined by the excess capacity in the industry and the meager growth of the economy.  “The capacity is certainly there to write business,” says Kaufman in the interview. “If the economy does not grow, the rates will not go up. It’s fairly simple.”

Why? “The economy does have a major impact on the insurance market,” he says. “There is less business to insure in professional liability. [And] the professional areas are not expanding; they’re flat.”

The Leaders of Italy’s Disaster-warning Agency Resign

The head of Italy’s disaster-warning committee, Luciano Maiani, has resigned in protest over the sentencing of seven of the organization’s members for underestimating the risks of a deadly 2009 earthquake. The commission’s vice president, Mauro Rosi, and president emeritus, Giuseppe Zamberletti, also resigned.

The April 2009 earthquake rocked the central Italian town of L’Aquila, killing 309 people and leaving thousands homeless. The seven defendants were members of the country’s Major Risks Committee, which met in L’Aquila March 31, 2009 — six days before the 6.3-magnitude quake struck. The seven have been found guilty of manslaughter, accused of providing “inaccurate, incomplete and contradictory” information after small tremors were first felt.

Maiami, one of Italy’s top physicists and a former head of the top partical physics laboratory Cern in Geneva, criticised the verdict as “a big mistake.”

“These are professionals who spoke in good faith and were by no means motivated by personal interests, they had always said that it is not possible to predict an earthquake,” he told the Corriere della Sera newspaper.

“It is impossible to produce serious, professional and disinterested advice under this mad judicial and media pressure. This sort of thing doesn’t happen anywhere else in the world. This is the end of scientists giving consultations to the state.”

The seven defendants were given six-year prison sentences and they, along with the Prime Minister’s office, were ordered to pay 7.8 million euros in damages.

There has been an outcry from both the Italian and international scientific community, who say these individuals shouldn’t be punished if their forecasts don’t come true. The American Association for the Advancement of Science has has called the convictions “unfaire and naive,” while the The Guardian has written that “few scientists will want to take responsibility for similar statements in the future.”

Scientific American takes a different stance, however. Risk perception consultant David Ropeik, in a guest blog post for the publication, feels the Italian scientists were at fault for failing to communicate the risks to the public. It’s tough to disagree with Ropeik.

The meeting that was held six days before the earthquake was called after a swarm of tremors shook the area. Seeing this as no major reason to expect an earthquake, the group gathered for what they called a media operation — basically, a meeting to calm the public’s fears, when what they should have been doing was preparing the public in case a major quake were to follow the tremors. Even worse is the following:

In a leaked telephone call, Guido Bertolaso, then head of the civil protection agency, told a local official that he was calling the meeting as “more of a media operation.” The top civil protection official at the meeting, Bernardo De Bernardinis, said in a television interview that residents faced “no danger” and should sit back with a glass of wine – recommending a Montepulciano.

Six days after that Montepulciano recommendation, 309 people were dead. And though a six-year sentence seems too harsh, someone must be held accountable — not for failing to predict, but for nonchalantly failing to educate and warn the public of what could occur.

The Five Most Treacherous Airports to Land a Plane

Flight, a movie starring Denzel Washington as a pilot who makes a harrowing landing to save a planeload of a passengers, will open nationwide on November 2. While the inspiration for the Robert Zemeckis-directed film was certainly Sully Sullenberger’s famous landing in the Hudson, the movie is fiction and fortunately threatened the lives of no fliers.

But even though the miracle of flight happens thousands of times everyday across the globe, it remains dangerous. Just check out what pilots had to confront one day in Spain.

To former pilot Guy Hirst, who spent 34 years with British Airways, the five scariest airports to land a plane at are Mexico City, Hong Kong, Salzburg, Gibralter and New York’s JFK. Each poses its own challenges — from visibility and wind conditions to air-space restrictions and nearby mountains — but when he thinks about each of these locations, he just seems happy to be retired.

Robert Hartwig Discusses the Insurance Market

Due mostly to much lower catastrophe losses, the property/casualty insurance world was much more profitable in the first six months of 2012 than it was in the first half of 2011. Dr. Robert Hartwig, president of the Insurance Information Institute, stopped by WRIN TV to discuss these results and what affect they might have on commercial insurance pricing in the near future.

Click through to watch the video interview.

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