About Caroline McDonald

Caroline McDonald is the senior editor of the Risk Management Monitor and Risk Management magazine.

P&C Composite Rate Up 2% in Fourth Quarter

Rate adjustments for property and casualty insurance in the United States for fourth quarter 2017 were plus 2% compared to plus 1% in the third quarter of 2017, with automobile and transportation seeing the largest increases, MarketScout reported.

Richard Kerr, MarketScout CEO commented that insurers were prepared for their losses. “Underwriters are rarely surprised by aggregate losses because they have so many pricing and modeling tools. Most insurers are assessing rate increases at a moderate pace. Automobile and transportation accounts incurred the largest rate increases at plus 5% over prior year pricing.”

In the reinsurance sector, William Hawkins, director of European insurance research at KBW made a similar observation of P&C Jan. 1, 2018 renewal pricing, stating in a podcast that, “the big four European reinsurers will have achieved 2% rate increases this [renewal] season.” He added that “the message from Monte Carlo, that the 2H 2017 natural catastrophes should draw a line under rate cuts across the board, has been delivered. But we think the upside for property catastrophe has been capped by the ongoing plentiful supply of capital.”

By coverage classification, MarketScount noted that all coverages except D&O, professional liability and auto had rate increases from the third quarter of 2017 to fourth quarter 2017. Property increased the most, from plus 1% to plus 3%.
On average, underwriters assessed rate increases for all industry groups except transportation and public entities. “Keep in mind, rates are calculated on a composite basis and represent exposures from businesses across the U.S. Insureds in catastrophe exposed areas incurred higher rates/premiums,” Kerr said.
MarketScout also noted that large accounts were seeing increases averaging 1%, while others saw 2% increases.

Safe Driving in the Winter ‘Weather Bomb’

The much publicized Weather Bomb, AKA Bomb Cyclone is here in full force. As the storm travels north, much of the northeast is experiencing blinding snowstorms and fierce winds, and states of emergency have been declared in five states. Schools and airports are closed and warnings are in effect for workers to stay home and keep off the roads. Some people must get out and drive, however, and so whether making deliveries, heading to or from work, or running necessary errands, drivers and asked to use heightened caution.

AAA recommends a number of precautions, including this basic tip: Accelerate and decelerate slowly. Applying the gas slowly when accelerating is the best method for regaining traction and avoiding skids, AAA said, cautioning that it takes time to slow down for a stoplight as it takes longer to slow down on icy roads.

From Rear View Safety:
QBE notes that because any hazards are magnified with winter driving conditions, all distractions should be avoided. Check out these tips for safe driving and emergency measures.

QBE’s tips for safe winter driving:

  • Avoid driving while fatigued. It’s important to get the proper amount of rest before taking on winter weather driving to reduce risks.
  • Never run a vehicle in an enclosed area, such as a garage, even if it’s just until it “warms up.”
  • Make certain your tires are in good condition and properly inflated.
  • Keep your gas tank at least half full at all times and full if severe winter weather is possible.
  • If possible, avoid using the car’s parking brake in cold, rainy or snowy weather.
  • Do not use your cruise control when driving on any slippery surface (wet, ice, sand).
  • Always look and steer in the direction you want to go to ensure safe travels and avoid possible hazards.
  • Use your seat belt every time you get into your vehicle.
  • Watch weather reports prior to a long-distance drive or before driving in isolated areas. Delay any trip when bad weather is expected. If you must travel, let others know your route, destination and estimated time of arrival.
  • Have regular vehicle inspections conducted to ensure you vehicle is in peak operating condition.

If you are snowbound:

  • Make sure you have appropriate phone numbers in your cell phone in case emergency phone calls are needed.
  • Stay with your vehicle. The car will provide temporary shelter and make it easier for rescuers to locate you.
  • Tie a brightly colored cloth to the antenna or place a cloth at the top of a rolled up window to signal distress.
  • At night, keep the dome light on if possible. It only uses a small amount of electricity and will make it easier for rescuers to find you.
  • Run the engine and heater just long enough to remove the chill to conserve gasoline.
  • Don’t try to walk in a severe snow storm. It is easy to lose sight of your vehicle and become lost in blowing snow.
  • Don’t over exert yourself if you try to push or dig your vehicle out of the snow.
  • Make sure the exhaust pipe isn’t clogged with snow, ice or mud. A blocked exhaust could cause deadly carbon monoxide gas to leak into the passenger compartment with the engine running.

Latest Amtrak Derailment Could Have Been Prevented

An Amtrak train derailment near Tacoma, Washington on Dec. 18 that killed three passengers and injured about 100 was the result of excessive speed in a steep curve, and could have been prevented with automatic braking technology, according to experts.

Amtrak Train No. 501, on its inaugural run, was traveling 80 miles per hour in an area limited to 30 miles per hour when it derailed on an overpass, sending the train’s 12 coaches and one of its two engines careening onto the highway below.

As previously reported in Risk Management, a similar derailment in Philadelphia on May 12, 2015 that killed eight, was also blamed on excessive speed and could have been avoided if a technology, called “positive train control” (PTC), had been in place.

PTC is designed to eliminate human error by using four components: GPS satellite data, onboard locomotive equipment, the dispatching office and wayside interface units. The system communicates with the train’s onboard computer, allowing it to audibly warn the engineer and display the train’s safe braking distance based on its speed, length, width and weight, as well as the grade and curvature of the track, according to railroad operator Metrolink. If the engineer does not respond to the warning, the onboard computer will activate the brakes and safely stop the train.

In the aftermath of a 2008 collision in Chatsworth, California, when 25 passengers were killed, Congress enacted the Rail Safety Improvement Act of 2008. It required each Class 1 rail carrier and each provider of regularly-scheduled intercity or commuter rail passenger service to implement a PTC system by Dec. 31, 2015. Because of the high costs—implementation is estimated to cost $75 million for commuter trains—and complexity of the system, however, the requirement was extended three years. Railroads are now mandated by federal law to have a system in place by the end of 2018.