What’s Keeping Insurance CEOs
Awake at Night?
Trends, Challenges & Opportunities
State Insurance Trade Association Conference
Louisville, KY
October 6, 2015
Download at www.iii.org/presentations
Robert P. Hartwig, Ph.D., CPCU, President & Economist
Insurance Information Institute  110 William Street  New York, NY 10038
Tel: 212.346.5520  Cell: 917.453.1885  bobh@iii.org  www.iii.org
Insurance Industry
Financial Performance
2014 Was a Reasonably Good Year
2015: A Repeat of 2014?
2
$55,501
$63,784
$30,972
$33,522
$19,456
$3,043
$28,672
$35,204
$62,496
Net income fell
modestly
(-12.5%) in
2014 vs. 2013
$44,155
$38,501
$30,029
$20,559
$21,865
$30,773
$20,598
$10,870
$3,046
$10,000
$19,316
$20,000
$5,840
$30,000
$14,178
$40,000
$36,819
2005 ROE*= 9.6%
2006 ROE = 12.7%
2007 ROE = 10.9%
2008 ROE = 0.1%
2009 ROE = 5.0%
2010 ROE = 6.6%
2011 ROAS1 = 3.5%
2012 ROAS1 = 5.9%
2013 ROAS1 = 10.2%
2014 ROAS1 = 8.4%
2015:H1 ROAS = 9.2%
$24,404
$ Millions 


$80,000


$70,000


$60,000


$50,000


$65,777
P/C Industry Net Income After Taxes
1991–2015:H1
$0
•ROE figures are GAAP; 1Return on avg. surplus. Excluding Mortgage & Financial Guaranty insurers yields a 8.2% ROAS in 2014,
9.8% ROAS in 2013, 6.2% ROAS in 2012, 4.7% ROAS for 2011, 7.6% for 2010 and 7.4% for 2009.
Sources: A.M. Best, ISO; Insurance Information Institute
15:H1
14
13
12
11
10
09
08
07
06
05
04
03
02
01
99
98
97
96
95
94
93
92
91
00
-$6,970
-$10,000
Profitability Peaks & Troughs in the P/C
Insurance Industry, 1975 – 2015E
ROE
25%
1977:19.0%
History suggests next ROE
peak will be in 2016-2017
1987:17.3%
20%
1997:11.6%
15%
9 Years
2006:12.7%
2013
9.8%
2015E:
8.8%
10%
5%
0%
2014
8.2%
1975: 2.4%
1984: 1.8%
1992: 4.5%
2001: -1.2%
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15E
-5%
*Profitability = P/C insurer ROEs. 2011-14 figures are estimates based on ROAS data. Note: Data for 2008-2014 exclude
mortgage and financial guaranty insurers.
Source: Insurance Information Institute; NAIC, ISO, A.M. Best, Conning
ROE: Property/Casualty Insurance by
Major Event, 1987–2015E
(Percent)
P/C Profitability Is Both by
Cyclicality and Ordinary Volatility
20%
Modestly
higher
CATs
Katrina,
Rita, Wilma
Low
CATs
15%
10%
Sept. 11
5%
0%
Hugo
Lowest CAT
Losses in
15 Years
Andrew
Northridge
4 Hurricanes
Financial
Crisis*
Sandy
Record
Tornado
Losses
-5%
87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15E
* Excludes Mortgage & Financial Guarantee in 2008 – 2014.
Sources: ISO, Fortune; Insurance Information Institute.
5
P/C Insurance Industry
Combined Ratio, 2001–2015:H1*
As Recently as 2001,
Insurers Paid Out
Nearly $1.16 for Every
$1 in Earned
Premiums
Heavy Use of
Reinsurance
Lowered Net
Losses
Relatively
Low CAT
Losses,
Reserve
Releases
120
115.8
110
Best
Combined
Ratio Since
1949 (87.6)
107.5
Higher
CAT
Losses,
Shrinking
Reserve
Releases,
Toll of Soft
Market
Sandy
Impacts
Cyclical
Deterioration
Lower
CAT
Losses
106.3
99.3
98.4
100
Avg. CAT
Losses,
More
Reserve
Releases
101.0
100.8
100.1
Relatively
Low CAT
Losses,
Reserve
Releases
102.4
100.8
97.6
96.7 97.2
95.7
92.6
90
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15:H1
* Excludes Mortgage & Financial Guaranty insurers 2008--2014. Including M&FG, 2008=105.1, 2009=100.7, 2010=102.4, 2011=108.1; 2012:=103.2;
2013: = 96.1; 2014: = 97.0.
Sources: A.M. Best, ISO.
7
RNW All Lines by State, 2004-2013 Average:
Highest 25 States
18.4
20.5
Profitability Benchmark: All P/C
9.5
9.6
9.8
9.8
9.9
10.3
10.5
10.5
10.7
10.7
10.8
10.9
11.1
11.1
11.4
11.7
12.0
12.0
12.1
12.3
13.3
13.4
14.3
US: 7.9%
14.6
24
22
20
18
16
14
12
10
8
6
4
2
0
The most profitable states
over the past decade are
widely distributed
geographically, though none
are in the Gulf region
HI AK VT ME WY ND VA ID NH UT WA SC MA NC OH DC CA OR RI WV CT IA NE SD MT MD
Source: NAIC; Insurance Information Institute.
13
NM FL TX WI KS MN CO PA US AR IL
Source: NAIC; Insurance Information Institute.
-9.3
-6.9
Some of the least
profitable states over the
past decade were hit hard
by catastrophes
1.9
2.5
4.3
5.0
5.2
5.3
5.7
6.1
6.4
6.6
6.8
7.4
7.5
7.7
7.7
7.9
8.0
8.1
8.2
8.2
8.3
8.4
8.6
10
8
6
4
2
0
-2
-4
-6
-8
-10
-12
-14
9.2
RNW All Lines by State, 2004-2013 Average:
Lowest 25 States
IN AZ MO KY TN NV NJ GA NY DE MI AL OK MS LA
14
INVESTMENTS:
THE NEW REALITY
Investment Performance is a Key
Driver of Profitability
Depressed Yields Will Necessarily
Influence Underwriting & Pricing
16
Property/Casualty Insurance Industry
Investment Income: 2000–2015E1
Investment earnings
are still below their
2007 pre-crisis peak
($ Billions)
$60
$54.6
$52.3
$50
$40
$51.2
$49.5
$49.2
$47.1 $47.6
$38.9
$38.7
$48.0 $47.3
$46.2 $46.8
$39.6
$37.1 $36.7
$30
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15E
Due to persistently low interest rates,
investment income fell in 2012, 2013 and 2014.
1
Investment gains consist primarily of interest and stock dividends.
Sources: ISO; Insurance Information Institute.
*2015 figure is estimated based on annualized data through Q2.
U.S. Treasury Security Yields:
A Long Downward Trend, 1990–2015*
9%
Yields on 10-Year U.S. Treasury
Notes have been essentially
below 5% for a full decade.
8%
7%
6%
U.S. Treasury
yields plunged to
historic lows in
2013. Longerterm yields
rebounded then
sank fell again.
5%
4%
3%
2%
1%
Recession
2-Yr Yield
10-Yr Yield
0%
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15
Since roughly 80% of P/C bond/cash investments are in 10-year or shorter durations,
most P/C insurer portfolios will have low-yielding bonds for years to come.
*Monthly, constant maturity, nominal rates, through August 2015.
Sources: Federal Reserve Bank at http://www.federalreserve.gov/releases/h15/data.htm. National Bureau of Economic Research
(recession dates); Insurance Information Institute.
19
CAPITAL/CAPACITY
Capital Accumulation Has
Multiple Impacts
29
$673.9
$674.7
$672.4
14:Q4
15:Q2
$671.6
14:Q3
$624.4
$614.0
$586.9
$583.5
$567.8
$570.7
$550.3
$538.6
$559.1
$544.8
$530.5
$540.7
$511.5
$490.8
14:Q2
14:Q1
13:Q4
13:Q3
13:Q2
12:Q4
12:Q3
12:Q2
12:Q1
11:Q4
11:Q3
11:Q2
11:Q1
10:Q4
10:Q3
10:Q2
10:Q1
09:Q4
Surplus as of 6/30/15 stood at
a near-record high $672.4B
09:Q3
$437.1
$463.0
09:Q2
08:Q4
08:Q3
08:Q2
08:Q1
07:Q4
07:Q3
07:Q2
07:Q1
$400
06:Q4
$450
09:Q1
$455.6
$478.5
$505.0
$515.6
$517.9
$521.8
$496.6
$500
$487.1
$550
$512.8
$600
$559.2
$566.5
$650
13:Q1
$700
$607.7
Drop due to near-record
2011 CAT losses
2007:Q3
Pre-Crisis Peak
$662.0
($ Billions)
$653.4
Policyholder Surplus,
2006:Q4–2015:Q2
The industry now has $1 of surplus for every $0.73 of NPW,
close to the strongest claims-paying status in its history.
2010:Q1 data includes $22.5B of
paid-in capital from a holding
company parent for one insurer’s
investment in a non-insurance
business .
Sources: ISO, A.M .Best.
The P/C insurance industry entered 2015
in very strong financial condition.
30
Alternative Capital
New Investors Continue to Change
the Reinsurance Landscape
First I.I.I. White Paper on Issue Was
Released in March 2015
35
Global Reinsurance Capital (Traditional
and Alternative), 2006 - 2014
Total reinsurance capital reached a
record $570B in 2013, up 68% from
2008.
But alternative capacity has grown 210% since 2008, to $50B. It has more
than doubled in the past three years.
2014 data is as of June 30, 2014.
Source: Aon Benfield Analytics; Insurance Information Institute.
Alternative Capital as a Percentage of
Traditional Global Reinsurance Capital
11.5%
12%
10.2%
10%
8.4%
8%
6%
6.5%
5.7%
5.9%
5.8%
2007
2008
2009
5.4%
4.6%
4%
2%
0%
2006
2010
2011
2012
2013
2014
Alternative Capital’s Share of Global Reinsurance Capital Has More Than
Doubled Since 2010.
2014 data is as of June 30, 2014.
Source: Aon Benfield Analytics; Insurance Information Institute.
Performance by Segment
44
Homeowners Insurance Combined
Ratio: 1990–2015F
Hurricane
Sandy
150
119.4
103.8
101.4
91.7
85.4
96.4
91.7
90
103.1
109.3
121.7
111.4
108.2
109.4
121.7
112.7
118.4
113.6
1
98.2
100
101.0
110
117.7
120
113.0
130
114.5
Hurricane
Ike
140
96.6
160
Record
tornado
activity
92.4
170
87.7
158.4
Hurricane
Andrew
80
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14F 15F
Homeowners Performance in 2011/12 Impacted by Large Cat
Losses. Extreme Regional Variation Can Be Expected Due to
Local Catastrophe Loss Activity
Sources: A.M. Best (1990-2014F);Conning (2015F); Insurance Information Institute.
45
102.4
102.3
102.2
102.3
101.6
102.1
102.0
101.0
101.3
100.2
98.3
95.5
95.1
98.4
101.1
101.0
101.3
104.2
94.3
95
99.5
100
101.3
105
101.7
110
103.5
109.5
115
107.9
Private Passenger Auto Combined
Ratio: 1993–2017F
90
85
80
93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15F 16F 17F
Private Passenger Auto Underwriitng Performance Is Exhibiting
Remarkable Stability
Sources: A.M. Best (1990-2014); Conning (2015F – 2017F); Insurance Information Institute.
46
Collision Coverage: Severity & Frequency
Trends Are Both Higher in 2015*
Annual Change, 2005 through 2015*
Severity
5%
4%
Frequency
4.2%
3.9%
3.1%
2%
1%
0.1%
3.0%
2.8%
2.5%
3%
1.3%
0.9%
0.5%
4.2%
2.3%
1.6%
1.7%
0%
-0.1%
-0.5%
-1.4%
-1%
-2%
-1.8%
-2.4%-2.3%
-3%
-4%
2005
-1.4%
-3.6%
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015*
The Recession, High Fuel Prices Helped Temper Frequency and
Severity, But this Trend Will Likely Be Reversed Based on
Evidence from Past Recoveries
*2015 figure is for the 4 quarters ending with 2015:Q1.
Source: ISO/PCI Fast Track data; Insurance Information Institute
47
Commercial Lines Combined Ratio,
1990-2016F*
107.9
94.8
94.3
13
14
91.1
95
93.6
99.2
100
98.3
98.9
102.4
104.2
105.4
102.5
102.0
105
103.5
122.3
110.2
111.1
112.3
109.7
104.1
107.6
110.2
109.5
112.5
118.8
115
110.2
120
109.4
Commercial Lines Combined Ratio
125
110
Commercial lines underwriting
performance improved in 2013/14
but higher cats, diminishing prior
year reserves and rising loss cost
trends in some lines could push
combined ratios higher
*2007-2012 figures exclude mortgage and financial guaranty segments.
Source: A.M. Best (1990-2014); Conning (2015-16F) Insurance Information Institute.
16F
15F
12
11
10
09
08
07
06
05
04
03
02
01
00
99
98
97
96
95
94
93
92
91
90
90
48
Workers Compensation Combined
Ratio: 1994–2014P
98.0
101.0
108.0
115.0
115.0
110.6
104.5
103.5
102.7
105.1
112.6
108.6
101.0
98.5
100
100.0
105
97.0
110
102.0
115
107.0
120
121.7
115.3
125
118.2
130
WC results have
improved markedly
since 2011
95
90
85
80
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14P
Workers Comp Results Began to Improve in 2012.
Underwriting Results Deteriorated Markedly from 20072010/11 and Were the Worst They Had Been in a Decade.
Sources: A.M. Best (1994-2009); NCCI (2010-2014P) and are for private carriers only; Insurance Information Institute.
52
Payroll vs. Workers Comp Net Written
Premiums, 1990-2014P
Payroll Base*
$Billions
$7,000
$6,000
7/90-3/91
WC NWP
$Billions
Wage & Salary Disbursements
3/01-11/01
WC NPW
12/07-6/09
$45
WC premium
volume dropped
two years before
the recession began
$40
$5,000
$4,000
$3,000
$50
WC net premiums
written were down
$14B or 29.3% to
$33.8B in 2010 after
peaking at $47.8B
in 2005
$2,000
$35
$30
$25
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Continued Payroll Growth and Rate Gains Suggest WC NWP Will Grow
Again in 2015
*Private employment; Shaded areas indicate recessions. WC premiums for 2014 are from NCCI.
Sources: NBER (recessions); Federal Reserve Bank of St. Louis at http://research.stlouisfed.org/fred2/series/WASCUR ; NCCI; I.I.I.
57
Workers Compensation Premium:
Fourth Consecutive Year of Increase
Net Written Premium
$ Billions
50
46.5
State Funds ($ B)
46.5
44.3
Private Carriers ($ B)
40
47.8
41.8
33.6
34.6 33.8
32.1
30.1
30
28.5
26.9 25.9
10
36.4
28.6
25.0
20
31.0 31.3 29.8 30.5
29.1
39.5
39.3
37.7
35.3 35.7 34.3 35.4
44.2
42.3
34.7
26.3 25.2
25.0 26.1
24.2 23.3
22.3
29.2
37.8 38.6 37.6
33.8
31.1
30.3 29.9
32.3
38.5
35.1 36.9
Pvt. Carrier NWP growth
was +4.3% in 2014, +5.1%
in 2013 and 8.7% in 2012
0
90
91
p Preliminary
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
Calendar Year
Source: NCCI from Annual Statement Data.
Includes state insurance fund data for the following states: AZ, CA, CO, HI, ID, KY, LA, MD, MO, MT, NM, OK, OR, RI, TX, UT.
Each calendar year total for State Funds includes all funds operating as a state fund that year.
13 14P
Recent Attacks on the
Insurance Industry
Why Are Critics Suddenly
More Aggressive?
77
What’s Driving Attacks on the
Insurance Industry?
 Recent Surge in Attacks is Associated with Income Inequality Debate in the
United States
 Attacks not confined to auto insurance (e.g., Workers Comp, Health)
 Not confined to insurance (banks, lending in general, student loans)
 Politics, Economics, Regulation & Demographics Are Principal Drivers
 CFA/CR and others (ProPublica) emboldened in current environment
 Dodd-Frank Act stuffed with income inequality mandates and studies
 FIO now studying auto insurance affordability; Wants to create index.
 Definition of “fairness” is shifting
 CFA Has Been Able to Attack Certain Rating Factors Based on New Perception
of Fairness (which is independent of actual risk)
 Education
Occupation
Marital Status
Gender
 Age
Credit Profile
Location
“Price Optimization”
 All of These Are Vulnerable to Attack in the Current Environment
 Infinite Number of Quotes OnlineCFA Uses to Highlight Perceived Inequities
78
I.I.I. Actions: NCOIL Hearing Testimony
Testified as industry’s
witness at July 17
National Conference of
Insurance Legislators’
hearing on Price
Optimization;
Worked very closely
with PCI, AIA, NAMIC
and independent
companies.
79
I.I.I. Media Advisories
80
Handout for Government Affairs Staff
Attending NAIC Meeting
81
Growth Analysis by State and
Business Segment
Post-Crisis Paradox?
Premium Growth Rates Vary
Tremendously by State
82
Direct Premiums Written: Total P/C
Percent Change by State, 2007-2014
Top 25 States
60
Growth Benchmarks: Total P/C
14.9
14.8
14.7
14.4
14.2
13.8
13.5
AK
KY
VA
LA
CT
MT
17.0
WI
OH
18.0
AR
15.0
18.1
TN
NJ
18.6
MI
15.1
19.2
IN
SC
19.2
MN
15.2
20.7
CO
20
GA
21.6
23.7
VT
WY
24.7
IA
29.4
NE
26.8
30.3
30
US: 13.0%
TX
36.2
SD
40
36.7
50
OK
Pecent change (%)
70
70.7
80
North Dakota was the country’s
growth leader over the past 7
years with premiums written
expanding by 70.7%, fueled by
the state’s energy boom
KS
0
ND
10
Sources: SNL Financial LC.; Insurance Information Institute.
83
Direct Premiums Written: Total P/C
Percent Change by State, 2007-2014
2.2
1.3
6.0
CA
5
4.7
6.3
9.1
9.2
9.4
8.2
ME
-7.3
-4.3
Growth was negative in 4
states and DC between
2007 and 2014
-5
-1.6
0
-0.8
Sources: SNL Financial LC.; Insurance Information Institute.
DE
WV
HI
DC
AZ
FL
OR
ID
PA
IL
NH
RI
WA
MD
NC
AL
MA
MS
NM
US
UT
NY
MO
-15
-12.9
-10
NV
Pecent change (%)
10
9.4
10.5
11.0
11.7
12.2
12.4
12.9
13.0
13.0
13.1
13.1
15
13.4
Bottom 25 States
84
Net Premium Growth (All P/C Lines):
Annual Change, 1971—2015:H1
(Percent)
1975-78
1984-87
2000-03
Net Written Premiums Fell
0.7% in 2007 (First Decline
Since 1943) by 2.0% in 2008,
and 4.2% in 2009, the First 3Year Decline Since 1930-33.
25%
20%
2015:H1: 4.1%
15%
2014: 4.1%
2013: 4.4%
10%
2012: +4.2%
5%
0%
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15*
-5%
Shaded areas denote “hard market” periods
Sources: A.M. Best (1971-2013), ISO (2014-15).
85
Pricing Trends
Survey Results Suggest
Commercial Pricing Has
Flattened Out but Personal
Lines Are Up
90
Monthly Change in Auto Insurance
Prices, 1991–2015*
10%
8%
Cyclical peaks in PP Auto
tend to occur roughly
every 10 years (early
1990s, early 2000s and
likely the early 2010s)
Pricing peak
occurred in late
2010 at 5.3%, falling
to 2.8% by Mar. 2012
6%
4%
2%
0%
“Hard” markets
tend to occur
during
recessionary
periods
July 2015
reading of 5.4%
is up from 4.2%
a year earlier
-2%
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15
*Percentage change from same month in prior year; through July 2015; seasonally adjusted
Note: Recessions indicated by gray shaded columns.
Sources: US Bureau of Labor Statistics; National Bureau of Economic Research (recession dates); Insurance Information Institutes.
91
Average Commercial Rate Change,
All Lines, (1Q:2004–1Q:2015)
-6%
-11%
-16%
-3.2%
-5.9%
-7.0%
-9.4%
-9.7%
-8.2%
-4.6%
-2.7%
-3.0%
-5.3%
-9.6%
-11.3%
-11.8%
-13.3%
-12.0%
-13.5%
-12.9%
-11.0%
-6.4%
-5.1%
-4.9%
-5.8%
-5.6%
-5.3%
-6.4%
-5.2%
-5.4%
-2.9%
-1%
0.1%
-0.7%
-1.5%
-0.1%
-0.1%
4%
Q2 2011 marked the
last of 30th
consecutive quarter
of price declines
-0.5%
9%
0.9%
2.7%
4.4%
4.3%
3.9%
5.0%
5.2%
4.3%
3.4%
2.1%
1.5%
(Percent)
Pricing as of Q1:2015 had
turned (slightly) negative for
only the 3rd time in 3 years
1Q04
2Q04
3Q04
4Q04
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
KRW Effect
Note: CIAB data cited here are based on a survey. Rate changes earned by individual insurers can and do vary, potentially substantially.
Source: Council of Insurance Agents & Brokers; Insurance Information Institute
92
M&A UPDATE:
A PATH TO GROWTH?
Are Capital Accumulation, Drive
for Growth and Scale Stimulating
M&A Activity?
96
U.S. INSURANCE MERGERS AND ACQUISITIONS,
P/C SECTOR, 1994-2014 (1)
M&A activity
in 2015 will
likely reach its
highest level
since 1998
($ Millions)
$55,825
$12,458
$6,723
$4,397
40
$4,651
$6,419
$9,264
$425
$486
$1,249
60
$3,507
$20,353
$19,118
$8,059
$11,534
$5,100
$10,000
$13,615
80
$30,000
$20,000
120
100
$35,221
$40,032
$30,873
$40,000
140
$0
Number of transactions
Transaction values
$50,000
$16,294
$60,000
M&A activity in
the P/C sector was
up sharply in 2014
but remains well
below pre-crisis or
late 1990s levels.
20
0
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
(1) Includes transactions where a U.S. company was the acquirer and/or the target.
Source: Conning proprietary database.
97
Insured Catastrophe Losses
2013/14 and YTD 2015 Experienced Below
Average CAT Activity After Very High CAT
Losses in 2011/12
Winter Storm Losses Far Above Average in
2014 and 2015
101
U.S. Insured Catastrophe Losses
($ Billions, $ 2014)
$80
$75.7
2012 was the 3rd most
expensive year ever for
insured CAT losses
$70
$10.3
$15.5
$13.1
$36.1
$34.6
$14.9
$11.8
$30.1
$7.7
$10.9
$16.8
$7.8
$34.7
$35.8
$6.3
$11.9
$14.8
$11.3
$13.0
$3.9
$10
$8.2
$20
$5.0
$30
$14.4
$40
$9.1
$50
$27.2
$38.9
$60
$0
89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15*
2013/14 Were Welcome Respites from 2011/12,
among the Costliest Years for Insured Disaster
Losses in US History. Longer-term Trend is for
more—not fewer—Costly Events
$10.3B in insured
CAT losses though
6/30/15, up slightly
from $7.3B in 2014
*Through 6/30/15 in 2015 dollars.
Note: 2001 figure includes $20.3B for 9/11 losses reported through 12/31/01 ($25.9B 2011 dollars). Includes only business and personal property
claims, business interruption and auto claims. Non-prop/BI losses = $12.2B ($15.6B in 2011 dollars.)
Sources: Property Claims Service/ISO; Insurance Information Institute.
102
102
Loss Events in the US, 1980 – 2014
Overall and Insured Losses
Overall losses totaled $25bn; Insured losses totaled $15.3bn
$ Billions
2015 First Half:
$8.2 Billion Insured Losses
$12.0 Overall Losses
200
150
100
Overall losses
(in 2013 values)*
50
Insured losses
(in 2013 values)*
1980
1982
1984
1986
1988
1990
1992
Source: Property Claim Services, MR NatCatSERVICE.
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
*Losses adjusted
to inflation based
on CPI.
103
Top 10 Largest NFIP Flood Claim
Payout Events
Source: NFIP; Insurance information Institute http://www.iii.org/issue-update/flood-insurance
3.477
5
2.017
1980
1985
2
5.151
5.351
5.569
5.620
5.646
5.645
5.700
The number of NFIP
policies in force has
plunged by 549,000 or
9.6% since 2009, even
as coastal
development surges
and sea levels rise
2.478
2.104
(millions)
4
3
4.962
4.369
6
5.684
5.656
Number of National Flood Insurance Program
Policies in Force at Year-End, 1980-2015*
1
0
1990
1995
2000
2005
2007
2008
2009
2010
2011
2012
2013
2014
2015*
Source: National Flood Insurance Program.
* As of July, 2015
105
Take-Up Rates for Various Types of
Insurance in the U.S.
Take-Up Rate
100%
90%
80%
87%
Take-up rates vary widely
by type of coverage
95%
99%
Home
Workers
Comp
62%
70%
52%
60%
50%
40%
40%
30%
20%
10%
14%
10%
0%
CA
Earthquake
Flood
Renters
Cyber
Terrorism
Pvt.
Passenger
Auto
Sources: CA Earthquake (WSJ, http://www.wsj.com/articles/california-pushes-homeowners-to-insure-against-earthquakes-1440980138 ); Flood and Renters
(I.I.I. June 2015 Pulse Survey); Cyber (Advisen, 2015); Terrorism (Marsh Global Analytics, 2014 Terrorism Risk Insurance Report, April 2014; data for 2013);
Pvt. Passenger Auto (Insurance Research Council, Uninsured Motorists, 2014 Edition, data for 2012); Home and Workers Comp (I.I.I. estimates); Insurance
Information Institute research.
106
Top 16 Most Costly Disasters
in U.S. History—Katrina Still Ranks #1
(Insured Losses, 2014 Dollars, $ Billions)
Storm Sandy in 2012
was the last mega-CAT
to hit the US
$60
$50
$50.2
$40
$30
Includes
Tuscaloosa, AL,
tornado
Includes
Joplin, MO,
tornado
$24.6 $25.3 $26.4
$19.3
$20
$10
$0
$9.4 $11.4
$9.0
$8.1
$7.7
$7.3
$6.9
$4.6 $5.7 $5.8
Irene (2011) Jeanne
(2004)
Frances
(2004)
Rita
Tornadoes/Tornadoes/ Hugo
(2005) T-Storms T-Storms
(1989)
(2011)
(2011)
Ivan
(2004)
Charley
(2004)
Wilma
(2005)
$13.8
Ike
(2008)
Sandy* Northridge9/11 Attack Andrew
(2012)
(1994)
(2001)
(1992)
Katrina
(2005)
12 of the 16 Most Expensive Events in US History
Have Occurred Since 2004
Sources: PCS; Insurance Information Institute inflation adjustments to 2014 dollars using the CPI.
107
Inflation Adjusted U.S. Catastrophe
Losses by Cause of Loss, 1995–20141
Wind/Hail/Flood (3), $21.4
Winter storm
losses were
much above
average in
2014/15 are
will push this
share up
Fires (4), $6.0
Other (5), $0.2
Geological Events, $0.5
Terrorism, $24.5
1.5%
5.4%
0.1%
0.1%
6.2%
Winter Storms, $26.9
6.8%
Insured cat losses
from 1995-2014
totaled $395.6B, an
average of $19.8B
per year or $1.65B
per month
40.7%
Tornado share of
CAT losses is
rising
Events Involving
Tornadoes (2), $154.9
Hurricanes & Tropical Storms,
$161.2
39.2%
Wind losses are by
far cause the most
catastrophe losses,
even if hurricanes/TS
are excluded.
1. Catastrophes are defined as events causing direct insured losses to property of $25 million or more in 2014 dollars.
2. Excludes snow.
3. Does not include NFIP flood losses
4. Includes wildland fires
5. Includes civil disorders, water damage, utility disruptions and non-property losses such as those covered by workers compensation.
Source: ISO’s Property Claim Services Unit.
109
Convective Loss Events in the US
Overall and insured losses, 1980 – 2014
Overall losses
(in 2014 values)*
$ Billions
50
40
30
Insured losses
(in 2014 values)*
The period from 2008-2014 has
been the most expensive on
record for insured losses from
“Convective Events” (severe
thunderstorms, tornado, hail,
lightning and flash flood)
2015 First Half:
$5.1 Billion Insured Losses
$7.0 Overall Losses
20
10
1980
1982
1984
1986
1988
*Losses adjusted to inflation based on CPI
Source: Geo Risks Research, NatCatSERVICE
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
Analysis contains:
severe storm, tornado, hail, flash
flood and lightning
110
Winter Storm and Winter Damage Events in
the US, 1980-2015 (2014 US$)
Three of the four most
costly years ever for
insured losses from
winter storms and
damage occurred in the
1990s, led by the “Storm
of the Century” in 1993.
$ Billions, in 2014 Dollars
4 000
5-year
running
average
3 000
2015 insured winter
storm losses totaled
$2.3B, similar to 2014
and about double the
long-run average
2 000
1 000
1980
1982
1984
1986
1988
1990
Source: Property Claim Services, MR NatCatSERVICE.
1992
1994
1996
1998
2000
2002
2004
2006
*Winter storms include
winter damage, blizzard,
snow storm and cold
wave
2008
2010
2012
2014
**Losses adjusted to
inflation based on
country CPI
112
Number of Federal Major Disaster
Declarations, 1953-2015*
99
81
75
62
36
45
47
59
63
48
52
56
44
32
36
32
38
43
45
11
31
34
24
21
15
23
22
25
27
28
23
38
30
29
17
17
19
11
11
22
20
25
25
12
12
36 federal disasters have
declared so far in 2015*
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15*
7
7
13
17
18
16
16
40
0
42
48
46
46
60
20
69
65
80
The number of federal disaster
declarations set a new record in
2011, with 99, shattering 2010’s
record 81 declarations.
50
45
45
49
100
There have been 2,239
federal disaster
declarations since
1953. The average
number of declarations
per year is 36 from
1953-2014, though there
haven’t been that few
recorded since 1995.
75
120
The Number of Federal Disaster Declarations Is Generally Rising and Set
New Records in 2010 and 2011 Before Dropping in 2012-2014
*Through October 3, 2015.
Source: Federal Emergency Management Administration; http://www.fema.gov/disasters; Insurance Information Institute.
120
The Strength of the Economy
Will Influence P/C Insurer
Growth Opportunities
Growth Will Expand Insurer Exposure
Base Across Most Lines
125
US Real GDP Growth*
-7%
-0.3%
Q1 2014/15 GDP data
were hit hard by this
year’s “Polar Vortex”
and harsh winter
-8.9%
2000
2001
2002
2003
2004
2005
2006
2007
08:1Q
08:2Q
08:3Q
08:4Q
09:1Q
09:2Q
09:3Q
09:4Q
10:1Q
10:2Q
10:3Q
10:4Q
11:1Q
11:2Q
11:3Q
11:4Q
12:1Q
12:2Q
12:3Q
12:4Q
13:1Q
13:2Q
13:3Q
13:4Q
14:1Q
14:2Q
14:3Q
14:4Q
15:1Q
15:2Q
15:3Q
15:4Q
16:1Q
16:2Q
16:3Q
16:4Q
-9%
-5.3%
-5%
Recession
began in
in June
2009
-3.7%
-3%
-1.8%
-1%
4.6%
4.3%
2.1%
0.6%
3.7%
2.5%
2.7%
2.6%
2.8%
2.7%
2.6%
1%
-0.9%
5.0%
1.4%
2.3%
2.2%
2.6%
2.4%
0.1%
2.5%
1.3%
4.1%
2.0%
1.3%
3.1%
0.4%
2.7%
1.8%
4.5%
3.5%
3%
The Q4:2008 decline was
the steepest since the
Q1:1982 drop of 6.8%
1.3%
5%
1.1%
1.8%
2.5%
3.6%
3.1%
2.7%
1.8%
7%
4.1%
Real GDP Growth (%)
Demand for Insurance Should Increase in 2015 as GDP Growth
Accelerates Modestly and Gradually Benefits the Economy Broadly
*
Estimates/Forecasts from Blue Chip Economic Indicators.
Source: US Department of Commerce, Blue Economic Indicators 9/15; Insurance Information Institute.
126
State Leading Economic Indicators
through November 2015
Growth in
the West is
finally
beginning
to pick up
The economic
outlook for most of
the US is generally
positive, though
flat-to-negative for
10 states, several
of them energy
dependent
Sources: Federal Reserve Bank of Philadelphia at http://www.philadelphiafed.org/index.cfm ;Insurance Information Institute.
127
Real GDP by State Percent Change, 2014*:
Highest 25 States
6.3
Only 7 states experienced growth in
excess of 3% in 2014, which is a
growth rate we would see nationally
in a more typical recovery
5.1
Growth Benchmarks: Real GDP
1.7
1.8
1.8
1.8
1.9
1.9
2.2
2.2
2.3
2.3
1.9
2
2.3
2.7
2.7
2.8
2.8
3.0
3.1
3
2.1
US: 2.2%
3.6
4
4.7
5
5.1
Percent Change (%)
5.2
6
2.5
7
North Dakota was
the economic growth
juggernaut of the US
in 2014—by far
1
0
ND TX WY WV CO OR UT WA OK CA ID FL NY GA NH MA US SC OH MI MN LA MT KS PA TN
*Advance statistics
Sources: U.S. Bureau of Economic Analysis; Insurance Information Institute.
128
Real GDP by State Percent Change, 2014*:
Lowest 25 States
0.0
0.0
0.2
0.4
0.4
0.6
0.6
0.7
0.7
0.6
0.4
0.5
0.8
0.8
0.8
0.9
1.0
1.0
1.2
1.2
1.4
1.2
1.0
Mississippi and
Alaska were the
only states to
shrink in 2014
-0.5
-1.2
-1.0
-1.5
-1.3
1.0
1.0
Percent Change (%)
1.5
1.4
2.0
1.6
Growth rates in 16 states
were still below 1% in
2014
DC NC AZ IL RI DE WI KY NM NV MO AR HI MD NE AL SD VT CT IA IN NJ ME VA MS AK
*Advance statistics
Sources: US Bureau of Economic Analysis; Insurance Information Institute.
129
US Unemployment Rate Forecast
Rising unemployment
eroded payrolls
and WC’s
exposure base.
11%
Unemployment peaked
at 10% in late 2009.
10%
6%
5%
4.5%
4.5%
4.6%
4.8%
4.9%
5.4%
6.1%
6.9%
7%
8.1%
9%
8%
9.3%
9.6%
10.0%
9.7%
9.6%
9.6%
9.6%
8.9%
9.1%
9.1%
8.7%
8.3%
8.2%
8.0%
7.8%
7.7%
7.6%
7.3%
7.0%
6.6%
6.2%
6.1%
5.7%
5.6%
5.4%
5.2%
5.1%
5.0%
4.9%
4.8%
4.7%
2007:Q1 to 2016:Q4F*
Jobless figures
have been revised
downwards for
2015/16
Unemployment forecasts
have been revised modestly
downwards. Optimistic
scenarios put the
unemployment as low as
5.0% by Q4 of 2015.
07:Q1
07:Q2
07:Q3
07:Q4
08:Q1
08:Q2
08:Q3
08:Q4
09:Q1
09:Q2
09:Q3
09:Q4
10:Q1
10:Q2
10:Q3
10:Q4
11:Q1
11:Q2
11:Q3
11:Q4
12:Q1
12:Q2
12:Q3
12:Q4
13:Q1
13:Q2
13:Q3
13:Q4
14:Q1
14:Q2
14:Q3
14:Q4
15:Q1
15:Q2
15:Q3
15:Q4
16:Q1
16:Q2
16:Q3
16:Q4
4%
*
= actual;
= forecasts
Sources: US Bureau of Labor Statistics; Blue Chip Economic Indicators (9/15 edition); Insurance Information Institute.
134
Unemployment Rates by State, July 2015:
Highest 25 States*
5.3
5.3
5.4
5.4
5.4
5.4
5.6
5.7
5.8
5.8
5.8
5.9
5.9
5.9
6.1
6.2
6.2
6.5
6.5
6.7
6.8
6.4
6.0
6
6.2
Unemployment Rate (%)
6.8
7.5
8
In July, 24 states and the District of
Columbia had over-the-month
unemployment rate decreases, 14
states had increases, and 12 states
had no change.
4
2
0
WV DC NV AK MS NM SC AL CA LA AZ GA NC NJ OR IL MO RI TN AR CT FL NY PA MI US
*Provisional figures for July 2015, seasonally adjusted.
Sources: US Bureau of Labor Statistics; Insurance Information Institute.
135
Unemployment Rates by State, July 2015:
Lowest 25 States*
3
2.7
3.0
3.6
3.6
3.7
3.7
3.8
3.8
4.0
4.1
4.1
4.2
4.0
4
4.3
4.5
4.6
4.6
4.6
4.7
4.7
4.7
5.2
5.2
5.3
5.0
5
4.8
Unemployment Rate (%)
6
In July, 24 states and the District of
Columbia had over-the-month
unemployment rate decreases, 14
states had increases, and 12 states
had no change.
2
1
0
WA KY MD OH VA DE IN MA KS ME WI OK CO TX ID WY MN MT IA SD HI NH UT VT ND NE
*Provisional figures for July 2015, seasonally adjusted.
Sources: US Bureau of Labor Statistics; Insurance Information Institute.
136
Value of New Private Construction:
Residential & Nonresidential, 2003-2015*
Billions of Dollars
New Construction peaks
at $911.8. in 2006
Trough in 2010
at $500.6B,
after plunging
55.1% ($411.2B)
$1,000
$900
$800
2015: Value of new
pvt. construction
hits $787.8B as of
July 2015, up 57.4%
from the 2010 trough
but still 13.6% below
2006 peak
$15.0
$613.7
$700
$600
$407.0
$500
$298.1
$400
$300
$261.8
Non Residential
Residential
$200
$100
$380.8
$238.8
$0
03
04
05
06
07
08
09
10
11
12
13
14
15*
Private Construction Activity Is Moving in a Positive Direction though
Remains Well Below Pre-Crisis Peak; Residential Dominates
*2015 figure is a seasonally adjusted annual rate as of July.
Sources: US Department of Commerce http://www.census.gov/construction/c30/c30index.html ; Insurance Information Institute.
138
Value of Construction Put in Place,
July 2015 vs. July 2014*
Growth (%)
Private: +16.9%
35%
30%
25%
15%
Public sector
construction activity
is finally beginning to
create less drag up
after years of decline
Private sector construction
activity is up in both the
residential and nonresidential
segments
20%
16.9%
13.7%
Public: +6.1%
29.0%
18.2%
15.6%
10%
6.1%
5.7%
5%
0%
Total
Construction
Total Private Residential-Construction
Private
NonResidential-Private
Total Public
Construction
ResidentialPublic
NonResidential-Public
Overall Construction Activity is Up Again After Languishing in Early 2015;
State/Local Sector Government Sector May Be Recovering as Budget
Woes Ease in Some Jurisdictions
*seasonally adjusted
Source: U.S. Census Bureau, http://www.census.gov/construction/c30/c30index.html ; Insurance Information Institute.
139
New Private Housing Starts, 1990-2021F
2.1
1.9
1.7
1.5
1.3
1.1
0.9
0.7
0.5
New home starts
plunged 72% from
2005-2009; A net
annual decline of 1.49
million units, lowest
since records began
in 1959
0.55
0.59
0.61
0.78
0.92
1.10
1.13
1.28
1.41
1.46
1.49
1.52
1.52
1.19
1.01
1.20
1.29
1.46
1.35
1.48
1.47
1.62
1.64
1.57
1.60
1.71
1.85
1.96
2.07
1.80
1.36
0.91
Job growth, low inventories of
existing homes, low mortgage rates
and demographics should continue
to stimulate new home construction
for several more years
(Millions of Units)
0.3
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15F 16F 17F 18F 19F20F 21F
Insurers Are Continue to See Meaningful Exposure Growth in the Wake of the
“Great Recession” Associated with Home Construction: Construction Risk
Exposure, Surety, Commercial Auto; Potent Driver of Workers Comp Exposure
Source: U.S. Department of Commerce; Blue Chip Economic Indicators (9/15); Insurance Information Institute.
143
Profitability & Politics
How Is Profitability Affected by
the President’s Political Party?
162
P/C Insurance Industry ROE by
Presidential Administration, 1950-2014*
16.43%
15.10%
Carter
Reagan II
Obama II
Nixon
Clinton I
G.H.W. Bush
G.W. Bush II
Clinton II
Reagan I
Nixon/Ford
Truman
Eisenhower I
Eisenhower II
G.W. Bush I
Obama I
Johnson
Kennedy/Johnson
9.00%
8.93%
8.65%
OVERALL RECORD:
1950-2014*
Democrats 7.72%
Republicans 7.85%
8.35%
8.33%
7.98%
7.68%
6.98%
6.97%
5.43%
5.03%
4.83%
4.68%
4.43%
Party of President has
marginal bearing on
profitability of P/C
insurance industry
3.55%
0%
2%
4%
6%
*Truman administration ROE of 6.97% based on 3 years only, 1950-52;.
Source: Insurance Information Institute
8%
10%
12%
14%
16%
18%
P/C insurance Industry ROE by
Presidential Party Affiliation, 1950- 2014
Nixon/Ford
Carter
Kennedy/
Johnson
20%
Truman
25%
Eisenhower
BLUE = Democratic President
RED = Republican President
Reagan/Bush I
Clinton
Bush II
Obama
15%
10%
5%
0%
50
52
54
56
58
60
62
64
66
68
70
72
74
76
78
80
82
84
86
88
90
92
94
96
98
00
02
04
06
08
10
12
14
-5%
.
Source: Insurance Information Institute
CYBER RISK &
CYBER INSURANCE
Cyber Risk is a Rapidly Emerging
Exposure for Businesses Large and
Small in Every Industry
Nonprofits Including Religious
Institutions Are Vulnerable
165
Data Breaches 2005-2015, by Number of
Breaches and Records Exposed
# Data Breaches/Millions of Records Exposed
222.5
800
700
783
220
200
662
656
Millions
614
180
600
160
498
500
117.6
470
127.7
446
419
92.0
400
66.9
120
85.6
400
321
35.7
157
100
80
300
200
140
60
16.2 22.9
19.1
40
17.5
20
100
0
2005
2006
2007
2008
2009
2010
# Data Breaches
2011
2012
2013
2014
*2015
# Records Exposed (Millions)
The total number of data breaches (+27.5%) hit a record high of 783 in
2014, exposing 85.6 million records. Through June 30, this year has
seen 117.6 million records exposed in 400 breaches.*
*Figures as of June 30, 2015, from the Identity Theft Resource Center,
http://www.idtheftcenter.org/images/breach/ITRCBreachReport2015.pdf
Evolving Threats: Cyber Crime and Cyber
Terrorism
State sponsored groups:
 Foreign government sponsored
 Sophisticated and well-funded
Organized cyber criminals:
 Traditional organized crime groups
 Loosely organized global hacker crews
Hacktivists:
 Politically-motivated hackers
 Increasing capabilities
Insiders:
 Easy access to sensitive information
 Difficult to detect
Terrorists:
 Destruction of physical and digital assets
Source: Lewis Brisbois, Practical Strategies to Address Cyber Risk in Your Business, November 2014
171
Marsh: Percentage of U.S. Companies
Purchasing Cyber Insurance Increased in 2014
Take-up rate 2014*
All Industries
Take-up rate 2013
13%
16%
45%
50%
Health Care
Education
Hospitality and Gaming
Services
Financial Institutions
Power and Utilities
Retail/Wholesale
Communications, Media and Tech
Manufacturing
22%
32%
16%
26%
17%
22%
17%
21%
14%
21%
13%
18%
11%
12%
6%
8%
Ever larger numbers of
insureds seek financial
protection via cyber
insurance. The
percentage of U.S.
companies buying cyber
insurance rose to 16
percent in 2014.
*Take-up rate refers to the overall percentage of clients that purchased standalone cyber insurance.
Source: Benchmarking Trends: As Cyber Concerns Broaden, Insurance Purchases Rise, Marsh Risk Management Research Briefing,
March 2015
176
Marsh: Total Limits Purchased, By Industry –
Cyber Liability, All Revenue Size
Average limits purchased for cyber risk rose to $12.8 million for all industries and all
company sizes in 2014. Power and utility companies witnessed the sharpest
percentage increase in average limits, at 59 percent.
($ Millions)
Avg. 2013 Limits
$23.5
Avg. 2014 Limits
$22.0 $22.2
$21.0
$19.7
$13.2
$12.8
$11.1
$14.9
$12.0
$10.5 $9.9
$10.2
$10.5
$9.5
$6.7
$4.2 $4.4
All Industries Comms, Media
& Technology
Education
Financial
Institutions
Health Care
Manufacturing
Power and Retail/Wholesale
Utilities
Services
Source: Benchmarking Trends: As Cyber Concerns Broaden, Insurance Purchases Rise, Marsh Risk Management Research Briefing,
March 2015
177
INDUSTRY DISRUPTORS
Technology, Society and
the Economy Are All
Changing at a Rapid Pace
Thoughts on the Future
183
Media is Obsessed with Driverless Vehicles:
Often Predicting the Demise of Auto Insurance
By 2035, it is estimated
that 25% of new vehicle
sales could be fully
autonomous models
Questions
 Are auto insurers
monitoring these trends?
 How are they reacting?
 Will Google take over the
industry?
 Will the number of auto
insurers shrink?
 How will liability shift?
Source: Boston Consulting Group.
185
On-Demand/Sharing/Peer-to-Peer
Economy Impacts Many Lines of Insurance
 The “On-Demand” Economy is or
will impact many segments of the
economy important to P/C insurers
 Auto (personal and commercial)
 Homeowners/Renters
 Many Liability Coverages
 Professional Liability
 Workers Comp
 Many unanswered insurance
questions
 Insurance solutions are increasingly
available to fill the many insurance
gaps that arise
186
Send in the Drones: Potential Rapid
Adoption in Industry; Media Loves It
 Drones or Unmanned Aerial Vehicle
(UAV) technology is seeing rapid
adoption rate in many industries,
including insurance
 FAA granting Section 333
exemptions for commercial use and
testing of UAS
 At least 5 insurers have received
permission to test
 Wide variety of applications: claims,
pre-event property inspections…
 Insurers partnering with construction
industry to guide R&D and regulation
of UAV use via Property Drone
Consortium: www.propertydrone.org
189
Shifting Legal Liability &
Tort Environment
Will the Tort Pendulum
Swing Against Insurers?
191
The Nation’s Judicial “Hellholes”:
2014/2015
Illinois
Watch List
 Atlantic County, New
Jersey
 Mississippi Delta
 Montana
 Nevada
 Newport News, Virginia
 Philadelphia,
Pennsylvania
West Virginia
Madison County
California
Dishonorable
Mention
New York
City Asbestos
Litigation
 AL Supreme Court
 PA Supreme Court
Volkswagen: Massive tort actions,
fines, penalties certain. Are others
vulnerable? Issue of cheating on
environmental standards and
liability looms large.
Source: American Tort Reform Association; Insurance Information Institute
Florida
196
Insurance Information Institute Online:
www.iii.org
Thank you for your time
and your attention!
Twitter: twitter.com/bob_Hartwig
Download at www.iii.org/presentations
197