RISK & INSURANCE® Magazine is designed to provide
accurate and authoritative information in regard to the subject
matter covered. It is published with the understanding that
the publisher is not engaged in providing legal, accounting or
other professional services. If legal advice or other expertise
is required, the services of a competent professional person
should be sought. The publishers have taken all reasonable
steps to verify the accuracy and completeness of information
contained in RISK & INSURANCE. The publishers may not,
however, be held responsible for any inaccuracies or omission
of information in any article appearing in RISK & INSURANCE®.
Entire contents Copyright © 2017, RISK & INSURANCE®
Magazine. All rights reserved. Material in this publication may
not be reproduced in any form without written permission.
Authorization to photocopy items for non-academic use, or
the non-academic use of specific clients, is granted by LRP
Magazine Group, provided that the base fee of US$10.00 per
document, plus US$5.25 per page is paid directly to Copyright
Clearance Center, 222 Rosewood Drive, Danvers, MA 01923,
USA. For those organizations that have been granted a
photocopy license by CCC, a separate system of payment has
been arranged. The fee code for users of the Transactional
Reporting Service is : 1050-9232/17/$10.00 + $5.25.
Offices are located at 747 Dresher Rd., Suite 500, Horsham, PA, 19044, (215)
784-0910. For questions, contact: Editorial Dept., ext. 6285 or fax (215) 784-
0275; Advertising Dept., ext. 6214 or FAX (215) 784-0870; Subscription Dept.,
(800) 386-4176, e-mail firstname.lastname@example.org or fax (215) 784-0317. Reprints,
Kristie Strout, email@example.com; List Rental Sales, Worldata, (561) 398-8200
or (800) 331-8102, ext. 197. Send payments to: LRP Publications,
360 Hiatt Drive, Dept. 150F, Palm Beach Gardens, FL 33418. For
subscription-related written correspondence, send to: Customer Service
Dept., Risk & Insurance, P.O. Box 2133, Skokie, IL 60076.
FROM THE EDITOR
Compiled by staff from news and wire services.
Poor Risk Management
Another concert. Another several
We’ve come a long way since
Woodstock, haven’t we?
As the father of a six-year-old
boy, I am formulating the governing
language in my head.
“Best to avoid sporting events,
movies, clubs and concerts.
Too much risk. Live life quietly,
preferably in the country. Preferably
in another country.”
State after state is failing to do
what it can to keep the populace safe
by refusing to ban armaments better
suited to military action from being
used by citizens against citizens.
The U.S. Senate and House of
Representatives are paralyzed by
“We will pray for you,” leaders in
those houses will say. “But we will not
take action to protect you,” lingers
silently in the subtext.
You know what? You can keep
We see some excellent examples
of risk management in the public
and private sector. This month,
we celebrate the best workers’
compensation programs with our
But the events in Las Vegas
showed us once again the horrible
price of denial by our elected leaders.
I have trouble enough sleeping
at night and my concerns and
responsibilities are relatively modest.
I have no idea how our elected
P&C SURVEY POINTS TO
officials do. I wouldn’t if I were them.
IMPORTANCE OF EFFICIENCY
Willis Towers Watson found that less
than 30 percent of chief actuaries and
chief reserving actuaries from leading
P&C insurers say they are satisfied
with their overall reserving processes.
WTW surveyed a mix of chief
actuaries and chief reserving actuaries
in the U.S., Canada and Bermuda
during 2016. The survey was called
“Current Trends in P&C Reserving
Practices.” Actuaries named key person
risk (relying too much on the skills of
one individual) and limited time to
perform detailed value-added analyses
as top concerns — nearly a quarter of
respondents are dissatisfied with these
components of the reserving process.
Overall, WTW said, the responses
pointed to the importance of efficiency.
Since the last survey, software moved
up on the list of insurers’ investment
priorities. Speedy management topped
the list at 41 percent.
MEXICO EARTHQUAKE LOSS WILL
NOT EXCEED $1.2 BILLION
Risk Management Solutions
(RMS) predicted the 7.1 magnitude
earthquake that rocked central Mexico
will cost no more than U.S. $1.2
billion in insured losses due to low
insurance penetration rates across the
Based on the current building
damage information from Mexican
authorities, RMS estimated economic
losses between $4 billion and $8
billion total. RMS considered available
data on ground motion and property
exposures across the affected region
while preparing its estimate.
The $1.2 billion estimate accounts
Central Mexico faced two earthquakes
back-to-back in mid-September.
for shake-only insured losses to
structures, contents and business
interruption. RMS looked at the effects
of liquefication and landsliding before
revealing the final number.
GREGG CUNNINGHAM TO LEAD
Liberty Mutual Insurance selected
Gregg Cunningham as executive vice
president, National Insurance, and as
general manager, National Insurance
With more than 25 years of
commercial insurance experience,
Cunningham steps into this new
role from The Travelers Insurance
Company, where he was the chief
underwriting officer for middle market
property and where he led the team
responsible for growing the line and
improving its combined ratio.
Cunningham will lead Liberty
Mutual’s property insurance, inland
marine and equipment breakdown
products and services to mid-size and
large commercial customers.
HURRICANE MARIA LOSSES COULD
REACH $85 BILLION
Catastrophe modeling firm AIR
Worldwide estimates industry insured
losses due to Hurricane Maria could
be between $40 billion to $85 billion,
with Puerto Rico facing more than 85
percent of the loss.
The estimates released by AIR
include demand surge, which
encompasses increases in cost of labor
and materials after major catastrophes.
Demand surge, according to AIR,
arises from shortages and potential
constraints in the movement of labor.
Maria, a CAT 5 storm, slammed the
Caribbean region just two weeks after
Hurricane Irma. Downgraded to a
CAT 4, Maria made landfall on Puerto
Rico’s shores, leaving three million
people without electricity, drinking
water or gasoline for generators.
Ninety-five percent of cell phone
towers were destroyed, leaving many
more without communication.
Experts say it will take years for the
U.S. territory to fully recover.
LEADERSHIP TO CHANGE AT
Zurich Insurance Group announced
the retirement of Mike Foley, CEO of
Zurich North America.
Since 2008, Foley led Zurich’s
largest business unit and acted
as the driving force behind the
transformation of the region’s technical
capabilities. Zurich credits Foley with
refining its performance management
processes, building its predictive
analytics capabilities and streamlining
its operating model.
Foley will continue to collaborate
with Zurich through his participation
on several of the company’s U.S.
boards. He plans to focus on rapidly
evolving Insurtech markets.
Kathleen Savio, current president of
North American Alternative Markets,
will assume the role of CEO effective
January 1, 2018.
Savio oversaw profitable growth
across a diverse group of businesses
since 2012. Her background includes
serving with one of the largest crop
insurance providers in the U.S. She is
credited with focusing on customers,
technical excellence, operational
efficiency and impactful employee