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FROM THE EDITOR
Compiled by staff from news and wire services.
Skin in the Game
The intellect of author Nassim
Nicholas Taleb is so far beyond mine
that we might as well be on different
planets. Nonetheless, scabrous, ink-stained, hubristic journalist that I am,
(Taleb nods grimly), I’d like to credit
him for a couple of concepts, one of
which provides this issue’s theme.
Taleb is the author of the book,
“The Black Swan,” covering events
that few could say they saw coming,
but which could result in massive
losses — insured and uninsured.
Taleb is also the author of “Skin
in the Game,” which I’m currently
reading. The theme of this book,
from what my limited powers can
deduce, is that we should take the
word of non-practitioners with a big
grain of salt.
Myriads of people will offer
opinions, advice even, on a given
topic, but in many cases, they are not
doers: They have nothing at stake to
govern their verbiage; they have no
skin in the game.
Insurers do have skin in the game,
sometimes quite a lot of it, which
is why the opinions of insurance
executives can be so interesting.
Thinking about whether school
teachers should carry guns? Insurers
already cover school districts where
they do, and they can tell you why.
Debating the wisdom of a new oil
pipeline? The underwriters providing
the backstop for the project can cite
statistics to you that will wash away
political conjecture and hype and at
least give you some actual facts.
Call insurers conservative; call
them boring. But the one thing you
can’t call insurers is unengaged. They
are very much engaged and care about
outcomes, because they write checks
with lots of zeros in them.
So then, a nod to Nassim Taleb,
who gave us the theme for this issue.
A nod also to insurers, because as I
think Taleb would have to agree, they
have skin in the game.
TALCOTT RESOLUTION ACQUIRED
The Hartford’s Talcott Resolution,
a run-off line and annuity business,
will now operate as an independent
stand-alone insurance company after
an investor group acquired it.
Talcott Resolution will be
headquartered in Connecticut with
an office in Minnesota. Though The
Hartford is no longer affiliated with
Talcott, it will retain a 9. 7 percent
ownership interest in the new company.
After closing, Talcott Resolution
expects to reinsure up to $9 billion of
its fixed annuity, payout annuity and
structured settlement businesses with a
subsidiary of Global Atlantic Financial
Cornell Capital LLC, Atlas
Merchant Capital LLC, TRB Advisors
LP, Global Atlantic Financial Group,
Pine Brook and J. Safra Group are
behind the investor group.
AUSTRALIA’S RISK MANAGEMENT
Australia faces a risk manager
shortage, particularly in its financial
services sector. Large financial services
companies have started to look at their
rivals, their recruiters, consulting firms
and overseas to fill their ranks with risk
Commonwealth Bank’s chief risk
officer, David Cohen, reportedly told
the nation’s commissioner Kenneth
Hayne that “recruiting is difficult”
because “there is a higher demand
than has been in existence in the last
few years for suitably qualified people,
particularly in operational risk and
compliance risk and financial crime
Insurtech companies are joining in on the
flood insurance game.
The recent search for talent
has brought up the question of
creating a formal qualification in risk
management throughout the country.
Up until now, most banks trained their
risk management teams in house.
The risk management field and its
lack of talent came into focus after
the country’s banking system faced
scandals that breached public trust and
AROUND THE CORNER?
A class action lawsuit was filed
against the world’s third-largest
cryptocurrency in May, once again
sparking the debate on whether or not
such “get rich quick” currencies should
be regulated by the U.S. Securities
and Exchange Commission (SEC).
The lawsuit pits investors in Ripple
tokens, known as XRP, against Ripple
Labs Inc. The investors say that “XRP
purchasers reasonably expected to
derive profits from their ownership of
XRP … however [the] Defendants did
not register XRP with the SEC.”
The suit also acknowledged that
“many of the representations [the]
Defendants made regarding XRP were
designed to drive demand of XRP,
allowing [the] Defendants to obtain
greater returns on their XRP sales.”
The argument against these
investors is that while SEC
regulations may still be up for debate,
research should be done before any
cryptocurrency investment decision-
INSURTECH INVESTING IN FLOOD
Neptune Flood, a data-driven
Insurtech, has breached the waters
of flood insurance, creating a digital
store where consumers can shop, get
quotes and buy flood insurance in
three minutes or less.
It’s another example of how
Insurtech start-ups can disrupt the
market. Neptune’s COO, Stephanie
Lee, said “the insurance industry hasn’t
changed for decades, but customer
The Neptune technology uses
dozens of data points to assess
the risk of flooding at any given
property. It enables the user access to
instant pricing, which, the company
states, saves customers over an hour
of time and up to 25 percent off
flood insurance in comparison to
the government’s National Flood
Insurance Program (NFIP).
NFIP reforms have been on the
agenda for years due to a number of
shortcomings, which include outdated
flood maps and failure to charge
premiums that reflect actual flood risk.
$34 MILLION TO STATE FARM
A Missouri jury awarded more than
$34 million to State Farm policyholders
in a class action trial.
24,000 current and former life
insurance policyholders believed they
were being overcharged for a period
spanning 23 years.
This is not the only case to go
before the court in which insurance
companies are being accused of
overcharging on universal life
insurance; the Missouri case sets up a
precedent for these other class actions.
Stueve Siegel Hanson LLP and
Miller Schriger LLC represented the
policyholders in this case.