February 21, 2024
Biden Seeks to Bolster Port Cybersecurity with Executive Order
President Joe Biden will sign an executive order designed to implement new cybersecurity requirements for the nation’s port owners and operators amid growing concerns that hackers could roil crucial supply chains.
The order will give the US Coast Guard new authority to respond to malicious cyber activity, require maritime vessels and facilities to bolster their cybersecurity, and impose new rules requiring the reporting of cyber incidents at ports.
“The continuity of their operations has a clear and direct impact on the success of our country, our economy and our national security,” Anne Neuberger, deputy national security advisor for Cyber and Emerging Technology, told reporters.
The Coast Guard is expected to begin a rulemaking process establishing minimum maritime cybersecurity requirements, as well as a security directive affecting crane owners and operators.
Administration officials said they were concerned that more than 200 ship-to-shore cranes at US ports are manufactured by China and can be serviced and programmed remotely, creating a security vulnerability. Chinese manufacturer Shanghai Zhenhua Heavy Industries Co. – known as ZPMC – controls large swaths of both the global and US markets for the cranes, which are crucial to loading and unloading cargo ships.
At the same time, a US-based subsidiary of Japanese manufacturing conglomerate Mitsui E&S Co Ltd is planning to increase its domestic crane capacity to the US, with hopes of accessing some of the $20 billion in federal money for port infrastructure authorized across legislation signed during Biden’s presidency.
The announcements come after the Biden administration earlier this month warned that a state-sponsored group of Chinese hackers known as Volt Typhoon has for years been working to access critical maritime, aviation, mass transit, and pipeline operations, in what the US described as an effort of “prepositioning themselves on IT networks” ahead of a possible effort to disrupt critical functions.
While work on the executive order began long before that effort was publicly revealed, administration officials said the possibility of malign Chinese activity did weigh on its development. Aides said they were also alarmed by a ransomware hack on the Japanese port of Nagoya, which last summer halted activities there for days.
February 21, 2024
As Home Insurance Bills Go Up, Owners’ Coverage Is Going Down
Robert Shiver’s bill for his homeowner insurance jumped from $3,800 in 2022 to $8,000 in July. “I remember opening the bill and, honestly, laughing, like, ‘This is not feasible,’” he said.
Mr. Shiver, 40, who lives about 20 miles east of Tampa, Fla., did not pay the bill. Instead, he worked with his insurance agent to shave off parts of his coverage, lowering the estimate for how much the insurer would have to pay to potentially rebuild his house from around $710,000 to about $560,000.
Shrinking the coverage lowered his bill to just under $5,000, a huge relief, he said, since he would again be able to make his monthly mortgage and insurance payment.
In the insurance business, Mr. Shiver might now be considered “underinsured,” meaning that his policy may not be sufficient to cover a rebuild after catastrophic losses. Underinsurance is not a new problem, but it has become far more widespread and severe over the past three years, as rising inflation and climate change have created a highly volatile and unreliable insurance market and raised costs for homeowners — sometimes in unexpected ways.
Insurers’ losses from natural disasters topped $100 billion for the fourth straight year in 2023, and they are passing those costs on to property owners. High inflation has also forced insurers to raise rates to cover claims.
Some homeowners are nickel-and-diming their own coverage by forgoing protection against hurricanes or windstorms; finding ways to lower the replacement values of their properties, as Mr. Shiver did; or raising their deductibles. Others are discovering that their policies won’t fully cover the cost of rebuilding because of steep increases in the cost of materials, once disaster has already struck.
Colorado’s insurance commissioner, Michael Conway, discovered the extent of the underinsurance problem after a wildfire near Boulder destroyed close to a thousand homes in 2021. After getting calls from homeowners distressed that their policies wouldn’t fully cover the cost of rebuilding, the state’s Division of Insurance investigated and found that only 8 percent of policies in the areas affected by the fire pledged to cover rebuilding costs no matter how high they got. It also found that between one-third and two-thirds of all homes affected by the fire had been underinsured for rebuilding costs within a typical range.
To try to fix the problem, Mr. Conway and his team convened meetings late last year with insurance companies, builders and other groups to brainstorm ideas for making things easier for homeowners, but no plans have emerged so far.
“We’re very concerned about what those homeowners are experiencing with the affordability issues, and we’re absolutely sympathetic to the pressure that they’re feeling to find a way to afford their insurance coverage,” Mr. Conway said.
Julie Coffey did not realize she was underinsured until she ran out of money while trying to rebuild her house near San Francisco after it burned to the ground in August 2020 in one of several large wildfires that swept across parts of California that summer.
It took months before Ms. Coffey even knew what she would get from her insurer. By the time she began rebuilding her house in 2021, inflation was speeding up and building supplies were scarce. Her new home is missing key features she couldn’t afford, like a water softener and fencing.
“Within one month of living here, my sink is showing signs of rust,” Ms. Coffey said. “It’s crazy all the things you need to do to try and get close to where you were without worry or thought.”
Mark Friedlander, a spokesman for the Insurance Information Institute, a trade group, said home insurance premiums had cumulatively risen 32 percent from 2019 to 2023, while rebuilding and replacement costs had gone up 55 percent. Analysts for the group estimated that in 2023, home insurers experienced their biggest underwriting loss — the difference between collected premiums and paid-out claims — since 2011. Behind the loss were huge storms that caused more than $50 billion in damage that insurers had to pay for.
A survey last year by the institute and researchers for Munich Re, a reinsurer, found that 88 percent of U.S. homeowners had property insurance, down from 95 percent in 2019. Only 4 percent had flood insurance, even though 90 percent of the country’s natural disasters involve flooding.
Once insurers raise premiums, many homeowners are discovering that their lenders are willing to explore ways to make their payments more affordable. Banks that collect mortgage payments must ensure that borrowers’ coverage meets requirements set by the government-backed Fannie Mae and Freddie Mac housing agencies, but are open to owners tweaking it within those requirements, said Pete Mills, the chief economist at the Mortgage Bankers Association, the trade group for the mortgage industry.
Amy Bach, the executive director of United Policyholders, a nonprofit advocacy group that helps insurance consumers navigate tricky claims processes, said she found herself recommending a multitude of strategies these days to keep policies affordable.
“For most consumers, what they’re facing now is: What is the least worst option for me, given the pricing?” she said. She advises lowering the coverage on the contents of a house or cutting coverage for outbuildings like garages, sheds, pools or retaining walls.
“We had been saying, ‘Raise your deductible,’ but now, what does that mean?” Ms. Bach said. “My parents’ home on Long Island has a $33,000 wind deductible,” meaning they would have to pay that much out of pocket — a huge share of the cost of a new roof — before getting any help from their insurer.
Not everyone thinks letting borrowers shave off parts of their coverage is a good thing. Brian Marino, an insurance agent in Fort Lauderdale, Fla., said he worried that if homeowners carried only enough coverage to satisfy their lenders, the lenders could recoup what they needed after a disaster while borrowers were left unable to afford a complete rebuild.
“The bank is satisfied,” Mr. Marino said, “but they’re out on the street.”
Mr. Friedlander, the trade group’s spokesman, said bundling home and auto policies and making “deductible adjustments” were common ways to cut insurance costs, adding that the institute recommended working with an agent “to reduce the cost of your policy without reducing the levels of coverage.”
Homeowners aren’t the only ones slashing their coverage under pressure. The Peachtree Group, an Atlanta-based real estate investment company that invests in hotels, rental homes, office spaces and other properties around the country, expects deductibles on some of its properties to increase this year in response to rising insurance costs, said Charles Talbert, the company’s spokesman. That would leave it paying for more rebuilding costs.
Sue Savio, an insurance agent in Honolulu, said underinsurance had recently become widespread on Oahu. “We have many condominiums whose premiums would have doubled or tripled,” Ms. Savio said. But instead of paying those higher premiums, owners got rid of coverage for damage from hurricanes, since such storms don’t frequently hit Hawaii.
Our last hurricane was 32 years ago,” Ms. Savio said.
Those who own their homes or other properties outright have much more leeway to decide whether or not to insure their properties. Some wealthy homeowners are willing to take the risk of being underinsured because they can afford to repair their properties themselves.
“I’ve talked to people that own their home outright and they’re choosing to forgo the wind damage. They’re keeping flood,” said Brian Gray, a managing director at UBS whose wealth management group serves some of Tampa’s wealthiest residents.
One of Mr. Gray’s clients agreed to a deductible of $1 million.
February 21, 2024
Insureds Need to Be Aware of Potential Insurance Gaps When Using AI: Munich Re
Global reinsurance giant Munich Re has highlighted how AI exposures within traditional insurance policies possess the ability to become a significant unexpected risk to insurers’ portfolios.
This comes as the industry evaluates how to transfer capabilities in insuring traditional machine learning models to generative AI (GenAI) applications.
A recent whitepaper released by the reinsurer explains how AI risks are usually excluded in traditional insurance policies, meaning that the damage that AI models can cause could wind up being covered by traditional insurance policies.
Some examples that Munich Re highlights include, AI-based machinery injuring bystanders, which could be covered by existing general liability policies, as well as AI models that are hacked, which could be covered by existing cyber insurance policies.
An alarming example that the reinsurer also gives is that AI-based cleaning robots could potentially destroy a property, which could wind up being covered by existing property insurance policies.
In addition, AI models that make biased employment decisions could also be covered by existing EPLI policies, Munich Re stated.
Moreover, due to the fact that AI technology is impacting practically all aspects of life, there is a lot of partial coverage from existing insurance policies, which is ultimately making it difficult for both insurer and insured to have full confidence on the extent of the coverage – potentially leading to over- or underinsurance, Munich Re warns.
A worrying factor to highlight, is that the overall lack of conclusiveness on the extent of the coverage could lead to devastating effects for insurers.
In addition, AI exposures within traditional insurance policies could also represent a major unexpected risk to insurers’ portfolios. This could be due to the risks of AI underperforming, not being considered throughout the pricing stages of the insurance.
Munich Re states that when using AI technology, insureds need be aware of potential insurance gaps, that leave them exposed to risks caused by their AI models.
In a report released last year from Moody’s Investors Service, analysts highlighted how the insurance industry’s widened use of data and analytics positions it well for AI productivity gains, as many different companies have been gradually leveraging AI technology for a number of years.
Re/insurance broker Aon also examined how the insurance market’s overall understanding of Gen AI-related risk is still within it’s earlier stages.
The company noted that this developing form of the technology is expected to impact many different lines within the sector, such as Technology Errors and Omissions / Cyber, Professional Liability, Media Liability, Employment Practices Liability, and more.
February 21, 2024
Tech Companies Sign Accord to Combat AI-Generated Election Trickery
Major technology companies signed a pact to voluntarily adopt “reasonable precautions” to prevent artificial intelligence tools from being used to disrupt democratic elections around the world.
Executives from Adobe, Amazon, Google, IBM, Meta, Microsoft, OpenAI and TikTok gathered at the Munich Security Conference to announce a new framework for how they respond to AI-generated deepfakes that deliberately trick voters. Twelve other companies — including Elon Musk’s X — are also signing on to the accord.
“Everybody recognizes that no one tech company, no one government, no one civil society organization is able to deal with the advent of this technology and its possible nefarious use on their own,” said Nick Clegg, president of global affairs for Meta, the parent company of Facebook and Instagram, in an interview ahead of the summit.
The accord is largely symbolic, but targets increasingly realistic AI-generated images, audio and video “that deceptively fake or alter the appearance, voice, or actions of political candidates, election officials, and other key stakeholders in a democratic election, or that provide false information to voters about when, where, and how they can lawfully vote”.
The companies aren’t committing to ban or remove deepfakes. Instead, the accord outlines methods they will use to try to detect and label deceptive AI content when it is created or distributed on their platforms. It notes the companies will share best practices with each other and provide “swift and proportionate responses” when that content starts to spread.
The vagueness of the commitments and lack of any binding requirements likely helped win over a diverse swath of companies, but disappointed advocates were looking for stronger assurances.
“The language isn’t quite as strong as one might have expected,” said Rachel Orey, senior associate director of the Elections Project at the Bipartisan Policy Center. “I think we should give credit where credit is due, and acknowledge that the companies do have a vested interest in their tools not being used to undermine free and fair elections. That said, it is voluntary, and we’ll be keeping an eye on whether they follow through.”
Clegg said each company “quite rightly has its own set of content policies.”
“This is not attempting to try to impose a straitjacket on everybody,” he said. “And in any event, no one in the industry thinks that you can deal with a whole new technological paradigm by sweeping things under the rug and trying to play whack-a-mole and finding everything that you think may mislead someone.”
Several political leaders from Europe and the U.S. also joined Friday’s announcement. European Commission Vice President Vera Jourova said while such an agreement can’t be comprehensive, “it contains very impactful and positive elements.” She also urged fellow politicians to take responsibility to not use AI tools deceptively and warned that AI-fueled disinformation could bring about “the end of democracy, not only in the EU member states.”
The agreement at the German city’s annual security meeting comes as more than 50 countries are due to hold national elections in 2024. Bangladesh, Taiwan, Pakistan and most recently Indonesia have already done so.
Attempts at AI-generated election interference have already begun, such as when AI robocalls that mimicked U.S. President Joe Biden’s voice tried to discourage people from voting in New Hampshire’s primary election last month.
Just days before Slovakia’s elections in November, AI-generated audio recordings impersonated a candidate discussing plans to raise beer prices and rig the election. Fact-checkers scrambled to identify them as false as they spread across social media.
Politicians also have experimented with the technology, from using AI chatbots to communicate with voters to adding AI-generated images to ads.
The accord calls on platforms to “pay attention to context and in particular to safeguarding educational, documentary, artistic, satirical, and political expression.”
It said the companies will focus on transparency to users about their policies and work to educate the public about how they can avoid falling for AI fakes.
Most companies have previously said they’re putting safeguards on their own generative AI tools that can manipulate images and sound, while also working to identify and label AI-generated content so that social media users know if what they’re seeing is real. But most of those proposed solutions haven’t yet rolled out and the companies have faced pressure to do more.
That pressure is heightened in the U.S., where Congress has yet to pass laws regulating AI in politics, leaving companies to largely govern themselves.
The Federal Communications Commission recently confirmed AI-generated audio clips in robocalls are against the law, but that doesn’t cover audio deepfakes when they circulate on social media or in campaign advertisements.
Many social media companies already have policies in place to deter deceptive posts about electoral processes — AI-generated or not. Meta says it removes misinformation about “the dates, locations, times, and methods for voting, voter registration, or census participation” as well as other false posts meant to interfere with someone’s civic participation.
Jeff Allen, co-founder of the Integrity Institute and a former Facebook data scientist, said the accord seems like a “positive step” but he’d still like to see social media companies taking other actions to combat misinformation, such as building content recommendation systems that don’t prioritize engagement above all else.
Lisa Gilbert, executive vice president of the advocacy group Public Citizen, argued Friday that the accord is “not enough” and AI companies should “hold back technology” such as hyper-realistic text-to-video generators “until there are substantial and adequate safeguards in place to help us avert many potential problems.”
In addition to the companies that helped broker Friday’s agreement, other signatories include chatbot developers Anthropic and Inflection AI; voice-clone startup ElevenLabs; chip designer Arm Holdings; security companies McAfee and TrendMicro; and Stability AI, known for making the image-generator Stable Diffusion.
Notably absent is another popular AI image-generator, Midjourney. The San Francisco-based startup didn’t immediately respond to a request for comment Friday.
The inclusion of X — not mentioned in an earlier announcement about the pending accord — was one of the surprises of Friday’s agreement. Musk sharply curtailed content-moderation teams after taking over the former Twitter and has described himself as a “free speech absolutist.”
In a statement Friday, X CEO Linda Yaccarino said “every citizen and company has a responsibility to safeguard free and fair elections.”
“X is dedicated to playing its part, collaborating with peers to combat AI threats while also protecting free speech and maximizing transparency,” she said.
February 21, 2024
Vesttoo Creditors Reach $15.6M Settlement with Chaucer
A committee of Vesttoo Ltd. creditors reached an agreement with Chaucer Group Ltd. for a $15.6 million settlement for 82.5% of the assets in a unit of the insurtech in one of a number of claims against the failed company.
The settlement was approved by a judge in U.S. Bankruptcy Court for the District of Delaware between the Official Committee of Unsecured Creditors of Vesttoo, appointed in the Vesttoo Chapter 11 cases, and Chaucer Insurance Co. DAC and Chaucer Syndicates Ltd., as managing agent of Lloyd’s Syndicate 1084, a court document shows.
In an early settlement of one of a number of claims disputes against Vesttoo entities by insurers, Chaucer and its affiliate was approved by the Vesttoo creditors committee for $15.6 million, or 82.5% of $18.9 million in funds held by Vesttoo Bay XXIV Ltd., the court document said.
The creditors committee requests the court approve the Chaucer settlement, the document said.
Efforts to reach Chaucer and Vesttoo were not immediately successful.
In reaching the agreement with Chaucer, the creditors committee believes the Vesttoo Bay XXIV settlement is fair as the parties "arrived at their agreement only after rigorous arm’s-length negotiations, including through a mediated process approved and directed by this court," the document said.
"Although the committee may succeed in opposing any claims for constructive trust with respect to the Vesttoo Bay XXIV cash, there is attendant risk and cost associated with litigating such matters, and no assurance that the court would ultimately find for the committee," the document said.
The alternative to the settlement would be for the committee to litigate "many legal and factual issues in dispute, which include complex financial transactions and may implicate the application of law of foreign jurisdictions," the document said. "This litigation would delay and jeopardize the ability to effectuate and carry out the plan. Accordingly, the committee believes that the Vesttoo Bay XXIV settlement is in the best interests of creditors in these Chapter 11 cases."
Broker Aon plc sees an opportunity to work on recoveries related to the bankruptcy process of Vesttoo over time and is confident about recovering a "meaningful" amount, said its president. "We strategically wanted to draw a line under this issue for our market partners and for ourselves so that we are able to move forward together as partners," President Eric Andersen said in a recent conference call. He said an effort was made to reach an agreement with the affected parties going forward.
In the quarter, Aon recognized actual or anticipated legal settlement expenses in connection with transactions for which capital was arranged by third party Vesttoo, the broker said at the time. The transactions were in the form of letters of credit from third-party banks that are alleged to have been fraudulent.
"Certain actual or anticipated legal settlement expenses totaling $197 million have been recognized in the current period, where certain potentially meaningful amounts may be recoverable in future periods," Aon said.
Underwriting entities of Chaucer parent China Investment Corp. have current Best's Financial Strength Ratings of A (Excellent) and A- (Excellent).
February 20, 2024
Truist to Focus on Banking with $15.5B Insurance Brokerage Business Sale
Truist Financial agreed to sell the remaining stake in its insurance brokerage business to an investor group on Tuesday, in a deal valued at $15.5 billion, as it looks to strengthen its core banking business to cope with potentially tougher capital rules.
The broader banking industry is bracing for tighter banking rules, including the Basel III Endgame proposal, which will likely increase their capital requirements, prompting many major lenders considering sales for secondary businesses.
The sale of Truist Insurance Holdings (TIH) accelerates our ability to meet increasing standards for capital and liquidity in the industry," said CFO Mike Maguire in a call with investors.
The deal, an all-cash transaction, to buy TIH was led by private equity firms Stone Point and CD&R, and includes investments from Mubadala Investment Company and other co-investors.
Citigroup analysts wrote in a note that the sale removes the argument for one of the bear cases for Truist, which was its "relatively weak capital position".
"At a 6.1% proforma capital ratio, TFC would have been playing defense for a long period of time in order to rebuild capital ... which is why we believe this is the right decision in order to allow for deploying capital for organic growth and share buybacks," the brokerage added.
Truist said the sale is expected to significantly improve its relative capital position and increase its CET1 capital ratio, a measure of a bank's core liquid capital, by 230 basis points. It is also expected to raise its tangible book value per share by $7.12, or 33%.
"From a Truist perspective, the sale of TIH significantly improves our relative capital profile and create substantial capacity for growth at a time when our industry is constraining growth due to future capital considerations," CEO Bill Rogers said.
Rogers added the sale also raises Truist's ability to resume share repurchases but said the timing and size will depend on future capital planning, market conditions, clarity around final capital rules and other factors.
February 20, 2024
Insurance Giant Swiss Re Posts 580% Jump in Full-Year Profit
Insurance giant Swiss Re on Friday reported a sharp upswing in full-year profit, benefiting from what it described as an attractive market environment after a “batch of bad years.”
The Zurich-headquartered company posted full-year net profit of $3.2 billion, in line with expectations according to an LSEG-compiled consensus. It marked a nearly 580% increase when compared to the previous year’s $472 million profit.
Swiss Re proposed a 6% increase in its dividend to $6.80 per share for 2023.
The firm’s results reflect a dramatic recovery from 2022 when the company faced high inflation, claims from Hurricane Ian in Florida, and losses from the coronavirus pandemic.
Swiss Re CEO Christian Mumenthaler told CNBC’s “Squawk Box Europe” on Friday he was “very happy” with the firm’s 2023 results and said the company had a “very positive” outlook.
Asked whether the insurance and reinsurance industry had been putting up prices too much and thus creating an inflationary problem, Swiss Re’s Mumenthaler replied: “In the end, the role of insurance and reinsurance in particular is to put a fair price to risk and I think we have actually been lagging a little bit in the last few years.” Reinsurance refers to insurance for insurance companies.
Looking ahead, Mumenthaler warned that the price of the climate crisis would soon be at the door of consumers for the first time.
“With climate change, risks have increased a lot and you could see it in our profits, which were not adequate over the last few years. And so this is a reaction, a reassessment of the risk,” he added.
“To a certain extent, what we see here ... is the price for climate change for the first time coming at the door of regular consumers. So far, this was a very abstract problem but here you can see the practical implications, so I don’t think we are above anything we need for shareholders to get their adequate returns,” he said.
February 20, 2024
PetroSure Partners with AmTrust to Deliver Workers’ Comp to the Upstream Onshore Oil and Gas Industry
PetroSure, a highly specialized multi-line coverage program for the onshore oil and gas industry, has partnered with AmTrust Specialty Programs to provide industry-focused workers’ compensation coverage. AmTrust Specialty Programs, a division of AmTrust Financial, Inc., is a leading provider of property and casualty insurance programs across various industries.
“AmTrust Specialty Programs is an ideal partner for PetroSure on this new coverage offering,” said Tyler Hamilton, PetroSure’s Director and Senior Vice President. “Their broad capabilities in the workers’ compensation space, including specialized claims expertise and the ability to offer dividend plans to qualified insureds, will provide considerable advantages to our clients as we continue to expand our program.”
PetroSure offers a full range of oil and gas insurance solutions, including general liability, time element pollution, commercial auto, property, inland marine, umbrella, and now workers’ compensation. The addition of this enhanced coverage translates to a complete offering for the PetroSure program, which delivers energy specific underwriting expertise to a network of carefully chosen retail partners.
“We are pleased to enter into this new program with PetroSure and combine our expertise in workers’ compensation with their robust product offerings focused on the oil and gas industry,” said Dan Hickey, President of AmTrust Specialty Insurance.
PetroSure cites AmTrust’s position as one of the nation’s leading providers of workers’ compensation coverage, competitive capacity, and claims handling excellence as core, foundational elements of the partnership.
The new workers’ compensation program is now available through PetroSure retail brokerage partners.
PetroSure is built for the oil and gas industry and powered by specialists who combine technical expertise with powerful, practical long-term solutions. We work exclusively with oil and gas clients providing cutting-edge technical expertise, serving as skilled consultants who advise on all aspects of the insurance and risk management process, and advocate on our clients’ behalf. The result is one of the industry’s most customized and comprehensive insurance platforms.
February 20, 2024
QBE Cites Higher Rates, Premium Growth as 2023 Profit Doubles
QBE Insurance Group Ltd. cited renewal rate increases and targeted growth as its net profit for 2023 more than doubled.
Net profit after income tax for 2023 rose to $1.36 billion from $587 million a year ago. Gross written premiums rose to $21.75 billion from
$19.99 billion. The combined operating ratio improved to 95.2% from 95.9%.
Premium growth continued with the help of group-wide renewal rate increases of 9.7% and targeted new business growth, QBE said in a statement. The improved combined operating ratio excluded the cost of a $1.9 billion reserve transaction completed in the first half of 2023.
Enstar Group Ltd. earlier agreed to assume $1.9 billion of net loss reserves from QBE. The loss portfolio transaction includes international and North America financial lines, European and North American reinsurance business and several U.S. discontinued programs, Enstar said at the time. It will also provide $900 million of cover in excess of the ceded reserves on business largely underwritten between 2010 and 2018.
“Financial performance improved in the period, and QBE is demonstrating greater consistency and resilience," Chief Executive Officer Andrew Horton said in a statement. "We are pleased with the ongoing progress across our strategic priorities, and expect trading conditions to remain favorable in the year ahead.”
The group's strategy to improve performance in North America remains a key focus, Horton said.
QBE seeks to accelerate its data-centric capabilities and expand through new technologies, such as artificial intelligence, and its QBE Ventures initiative, he said.
QBE saw good market conditions and favorable current year catastrophe experience, partly offset by the impact of short-tail prior-year development.
Growth momentum continued in 2023, excluding crop insurance, QBE said. Growth of 17% was seen in the international segment, while portfolio exits hit growth of 8% in Australia Pacific and 4% in North America.
The net cost of catastrophe claims was $1.09 billion, or 6.6% of net insurance revenue, which was within the group’s allowance and down from 7.0% a year earlier. Catastrophe costs were driven by significant secondary peril activity across all divisions, QBE said.
February 20, 2024
FBI Director Says China Cyberattacks on U.S. Infrastructure Now at Unprecedented Scale
As intelligence chiefs and policymakers gathered for this city’s annual security conference focused on the wars in Ukraine and the Middle East, the director of the Federal Bureau of Investigation urged them not to lose sight of another threat: China.
Christopher Wray on Sunday said Beijing’s efforts to covertly plant offensive malware inside U.S. critical infrastructure networks is now at “a scale greater than we’d seen before,” an issue he has deemed a defining national security threat.
Citing Volt Typhoon, the name given to the Chinese hacking network that was revealed last year to be lying dormant inside U.S. critical infrastructure, Wray said Beijing-backed actors were pre-positioning malware that could be triggered at any moment to disrupt U.S. critical infrastructure.
“It’s the tip of the iceberg…it’s one of many such efforts by the Chinese,” he said on the sidelines of the security conference that has been dominated by questions over Ukraine and the death of Russian opposition leader Alexei Navalny. China, he had earlier told delegates, is increasingly inserting “offensive weapons within our critical infrastructure poised to attack whenever Beijing decides the time is right.”
The FBI chief declined to elaborate on what other critical infrastructure had been targeted, stressing that the Bureau had “a lot of work under way.”
Wray’s comments are the latest in a string of public warnings by senior Biden administration officials to animate their fears about China’s advanced and well-resourced hacking prowess. Western intelligence officials say its scale and sophistication has accelerated over the past decade. Officials have grown particularly alarmed at Beijing’s interest in infiltrating U.S. critical infrastructure networks, planting malware inside U.S. computer systems responsible for everything from safe drinking water to aviation traffic so it could detonate, at a moment’s notice, damaging cyberattacks during a conflict.
The director has been prodding foreign governments in Europe and Asia to increase resources on the threat of Chinese hacking campaigns, particularly protecting critical infrastructure. He described the response as gratifying and a step change from several years ago when some were still skeptical about the Chinese cyber threat.
In California, Wray met with counterparts from the Five Eyes intelligence community—which encompasses the U.S., Australia, New Zealand, Canada and the U.K.—to share respective strategies for cyber defense; he has also traveled to Malaysia and India to discuss China’s hacking campaign with authorities in both countries.
“I am seeing more from Europe,” he said. “We’re laser focused on this as a real threat and we’re working with a lot of partners to try to identify it, anticipate it and disrupt it.”
The Netherlands’ spy agencies said earlier this month that Chinese hackers had used malware to gain access to a Dutch military network last year. The agency, considered to have one of Europe’s top cyber capabilities, said it made the rare disclosure to show the scale of the threat and reduce the stigma of being targeted so allied governments can better pool knowledge.
Beijing routinely denies any accusations of cyberattacks and espionage linked to or backed by the Chinese state and has accused the U.S. of mounting its own cyberattacks. But evidence of a Chinese state-backed program has been building in recent years and the U.S. has charged a string of officers from the People’s Liberation Army cyber units with stealing secrets.
Wray said the U.S. is particularly focused on the threat of pre-positioning, which some European officials have described as the cyber equivalent of pointing a ballistic missile at critical infrastructure.
A report released this month by agencies including the FBI, the Cybersecurity and Infrastructure Agency and the National Security Agency said Volt Typhoon hackers had maintained access in some U.S. networks for five or more years, and while it targeted only U.S. infrastructure directly, the infiltration was likely to have affected “Five Eyes” allies.
The Justice Department and FBI took action in December after obtaining court approval to dismantle a botnet, or network of hacked devices, consisting of small office and home office, or SOHO, routers. Mostly from Cisco or Netgear, the routers were vulnerable because they had reached so-called end-of-life status, meaning they were no longer receiving routine security updates from the manufacturers.
Those attacks are now being amplified by artificial intelligence tools, Wray said.
“The word ‘force multiplier’ is not really enough,” he said.
Machine learning translation has helped Chinese security operatives to more plausibly recruit assets, steal secrets and rapidly process more of the information they are collecting, the director said.
“They already have built economic espionage and theft of personal and corporate data as a kind of a bedrock of their economic strategy and are eagerly pursuing AI advancements to try to accelerate that process,” he said.
February 20, 2024
ReSource Pro Strengthens Insurance Carrier Commitment with Key Executive Appointment
ReSource Pro, a trusted operations and transformation partner for insurance organizations, today announced the appointment of Ernie Feirer to the position of senior vice president, carrier practice. Feirer’s hiring is a part of ReSource Pro’s strategy to advance its capabilities for insurance carriers looking to transform their operations and exceed their growth goals.
“Industry veterans with decades of experience are retiring. As they do, it puts tremendous strain on large, mutual, and mid-sized insurance carriers that are actively transforming their operations while making decisions about new technologies like GenAI and predictive intelligence - these decisions require industry experience and knowledge to ensure efficient utilization and adoption,” said Feirer. “ReSource Pro is well equipped to navigate these challenges – we understand the realities that insurance carriers face and can deliver tailored solutions to meet the needs of each client, at a level of quality that many clients have told me is hard to beat. You would be surprised by the amount of ‘re-engineering’ requests that come in from carriers – there is a hunger for real domain expertise in this market.”
With the addition of Feirer, ReSource Pro strengthens its already deep bench of senior executives who specialize in the carrier space, including Senior Partner and ‘Top 50 Insurtech Influencer’ Mark Breading, Managing Director and founder of MIS Insurance Services Kris George, Senior Partner and former CEO of the Nolan Company Steve Discher, Partner Meredith Barnes-Cook, and Director Fatima Dean. With their teams’ extensive knowledge and the company’s suite of strategic, technical, and operational products and services, the carrier practice offers immediate support for organizations actively undergoing transformation initiatives, including the digitization of core processes, optimization of distribution channels, and adoption of workforce solutions that address the ongoing recruitment crisis.
“Over the past 20 years our mission has centered on providing core operations expertise to help our clients drive profitability and optimize their productivity. In recent years we have grown into a knowledge partner for insurance carriers, which puts us in the unique position of being able to provide solutions to their near-term needs, while also acting as a strategic and transformational problem solver for them,” said ReSource Pro CEO Dan Epstein.
Feirer brings more than 40 years of insurance industry experience, including 37 years of experience working at two of the largest data and analytics providers in the insurance industry. He earned a master's degree in computer science and an MBA in marketing from Iona University and holds a Chartered Property Casualty Underwriter (CPCU) designation.
About ReSource Pro
Focused exclusively on the insurance industry, ReSource Pro is a trusted strategic operations partner to insurance organizations seeking to improve performance and profitability. With a global team of more than 8,000 employees, ReSource Pro operates at the critical intersection of people, process, technology, and data to serve more than 1,000 clients across the carrier, retail broker and MGA segments – consistently earning a +95% client retention rate for over a decade. It offers expert advisory services, business process management optimization, and transformative data and technology solutions. It was recognized in 2023 by Inc. 5000 as one of the fastest growing companies in the United States.
February 16, 2024
Allstate Estimates $325M in Incurred January Catastrophe Losses
Allstate Corp. said it incurred an estimated $325 million in catastrophe losses in January, partially offset by favorable claims reserve reestimates.
Two events generated about 80% of the losses. The favorable reestimates lowered the monthly estimated pretax catastrophe losses to $276 million.
Insurers likely incurred hundreds of millions of dollars in losses, maybe more, after two powerful storm systems pounded most of the continental United States Jan. 8-10 and a third system started moving eastward, Aon said earlier.
Allstate’s net income applicable to common shareholders jumped to $1.46 billion from a $303 million net loss a year earlier.
Underwriting entities of Allstate Corp. currently have a Best’s Financial Strength Rating of A+ (Superior) to B (Fair).