MERGERS/ACQUISITIONS
The board of directors of LUBA Workers’ Comp has approved the acquisition of Florida based FHM Insurance Services. FHM Insurance Company, founded in 1954, provides workers’ compensation coverage through independent agents across seven states, including Florida, where it is domiciled. LUBA Workers’ Comp announced the acquisition on Jan. 6. “This alignment will enable us to offer competitive options across a combined geographical footprint,” said David Bondy, founder and CEO of LUBA Workers’ Comp. “The joining of LUBA Workers’ Comp and FHM Insurance Company means we will be offering nearly a century of combined industry knowledge and expertise to the policyholders and agents we serve.” LUBA Workers’ Comp and FHM Insurance Company will provide workers’ comp coverage in Louisiana, Texas, Mississippi, Arkansas, Oklahoma, Alabama, Tennessee, Florida, Georgia, South Carolina, North Carolina, Virginia, and Kentucky. FHM Insurance Services and FHM Insurance Company will remain domiciled in Florida.
Allstate Corp. has acquired National General Holdings Corp. for $4 billion. The acquisition makes Allstate a top-five carrier in the independent agency sector, according to Allstate chairman, president, and CEO Thomas Wilson. He said the primary reason Allstate pursued the deal was to put the company “squarely in front” of independent agents with good technology and a broad product portfolio. Wilson added, “The acquisition of National General advances our strategy of growing personal lines insurance with an increase of one percentage point in market share. National General’s accident and health business will also further expand Allstate’s circle of protection.” Allstate will conduct a reverse merger of its independent agents business into National General’s network.
AUTO RATES
A temporary break in car insurance rates is coming to an end as many drivers get back on the road. “It’s creeping back up now, and we’re seeing an increase in traffic which results in an increase in the number of accidents and claims being filed,” Louisiana Insurance Commissioner Jim Donelon told KALB Dec. 28. He said many residents already have seen their car insurance rates start returning to pre-pandemic levels. “$215 million was returned in the form of credits and discounts in our state in the past six months. … It has now run out,” Donelon said, adding that residents also can expect an increase in their homeowners insurance due to this year’s very active hurricane season, among other large natural disasters nationwide. “We anticipate probably on average a 10 percent rate increase for homeowners next year but not immediately,” he said.
SIEGE ON THE CAPITOL
Insurance industry officials say U.S. taxpayers will have to pay for damage caused by rioters at the U.S. Capitol, Reuters reported on Jan. 7. Officials say the U.S. Capitol and the surrounding grounds are not covered by a policy. The people involved in the attack broke windows, doors, art, and furniture. The exact cost of the incident remains unknown.
AUTO THEFTS
After years of declines, car thefts are surging in cities and suburbs all over the United States, the New York Times reported in January. As a result of the popularity of key fobs, vehicle thefts dropped more than 50 percent in recent years from a high of 1.7 million vehicle thefts per year in 1991, according to data compiled by the FBI. But from June through December 2020, monthly thefts increased 13 percent on average over the same period in 2019, reported the National Insurance Crime Bureau. Preliminary data suggests thefts will be about nine percent higher in 2020 overall. Police say drivers have left fobs inside the vehicle or left their car running but taken the fob, allowing it to be driven away but not restarted later. In a smaller number of cases, criminals have reprogramed keyless cars. The pandemic has worsened the problem, as delivery drivers have seen their cars stolen while they are making drop-offs.
FLOOD INSURANCE
FEMA has secured $1.153 billion of flood reinsurance for the National Flood Insurance Program (NFIP) for 2021, at a premium of $195.8 million, Reinsurance News reported Jan. 5. FEMA announced in September 2020 that it had returned to the traditional reinsurance market and commenced the procurement of reinsurance for the NFIP for 2021. After securing $1.33 billion of traditional reinsurance from a panel of 27 reinsurers at the start of 2020, FEMA revealed that for 2021 the amount of risk transferred to the traditional reinsurance market stands at $1.153 billion, which represents a decline of more than 13 percent from the previous year. FEMA notes that the 2021 program came at a premium of $195.8 million and features an upsized panel of 32 reinsurers.
SURPRISE BILLING
The $900 billion coronavirus relief package, recently signed by President Donald Trump in December, included a provision banning surprise medical bills, according to news sources. When the surprise medical bill legislation goes into effect in 2022, air ambulances and other out-of-network providers will not be able to send unexpected bills to consumers. Instead, providers and insurers will have 30 days to negotiate how much the insurer will cover, with an independent arbitrator stepping in if they cannot agree.
NATURAL DISASTERS
Citing Munich Re as its source, Reuters reported Jan. 7 that natural catastrophes around the world resulted in $210 billion in damage in 2020, with the United States especially hard hit by hurricanes and wildfires. The damage increased from $166 billion in the previous year. Insured losses rose to $82 billion from $57 billion in 2019, Munich Re said. A record 30 storms occurred in 2020, surpassing 2005’s 28 storms, with five storms affecting Louisiana. Wildfires caused $16 billion in damage last year in the U.S. West. Floods in China were the most costly individual loss at $17 billion, but only two percent of the damage was insured.
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