Louisiana Department of Insurance
MONTHLY REPORT
Volume 11, Issue 11
November 2011


Members
Commissioner Jim Donelon
Theodore "Ted" Haik, Jr., Chair
Jeff Albright, Vice Chair

Raymond J. Aleman, Sr.
Lee Ann Alexander
Paul Buffone
Sheriff Greg Champagne
Representative Page Cortez
Manuel DePascual
Nick Gautreaux
Michael Guy
Lance "Wes" Hataway
Representative Chuck Kleckley
LTC John A. LeBlanc
Senator Eric LaFleur
Ann Metrailer
Robert Moorman
Senator Dan "Blade" Morrish

Representative Chris Roy, Jr.
Stephen Schrempp
Earl Taylor
Rina Thomas


Staff
Terrell B. Moss, Director

David Evans,
Supervisor/Research Analyst

Katie Walsh, Administrative Assist./Research Analyst

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LPCIC Meeting

The Louisiana Property and Casualty Insurance Commission (LPCIC) held a meeting last month at the Department of Insurance.

Dr. Christine Berry, Associate Professor Risk Management and Insurance, ULM College of Business Administration, gave a presentation on the condition of small business risk management in Louisiana and presented findings on risk assessment surveys of 240 small businesses throughout the state. Topics covered on the survey were demographics, types of insurance and loss history of these businesses. The results concluded that there is a need for education and assistance to small businesses, especially those with risks, such as natural disasters, crime and employee injuries.

Based on data collected from the surveys, the ten major concerns identified and presented to the Commission members were:

  • Many smaller businesses lack basic property insurance
  • Larger businesses may have duplicate insurance
  • Knowledge about insurance is lacking
  • Business interruption insurance is unaffordable or unavailable
  • Some businesses with employees lack workers’ compensation
  • Newer businesses are less likely to have most types of insurance
  • The amount of insurance and planning is positively related to the level of formal education
  • South Louisiana businesses have more property coverage issues than north Louisiana businesses
  • There is an alarming void of business continuity/ disaster recovery planning
  • Many have access to only a narrow array of insurance options and their insurance is not “shopped”

Mr. Jeff Albright, LPCIC vice-chair and CEO, Independent Insurance Agents/Brokers of Louisiana (IIABL) recapped the 2011 IIABL Property Insurance Summit. The agenda included an analysis of RMS’ most recent hurricane catastrophe model (Model 11) and the impact that catastrophe losses and models have on various sectors of the insurance market, including financial rating companies, modelers, reinsurers, regulators and property insurers.

The components of Model 11 predicted to have the highest impact are surge modeling and inland filling modeling, which indicate higher losses further inland.

The drastic prediction could affect the availability and affordability of property insurance policies. Mr. Albright and Commissioner Donelon both expressed concern for the current catastrophe models and stressed the urgency and importance of having a more balanced, reasoned approach in using a model.

Could Aggressive Driving be Linked to Driver Personality?

A recent study, “Aggressive Driving: A Consumption Experience” conducted by a Temple University Fox School of Business professor indicates a person’s personality can affect their driving. Data was collected from two separate studies. One study, administered to 134 men and women, charted the influence of personality, attitudes and values while the second study, of 298 people, expanded upon the first by additionally measuring risk attraction, impulsivity, driving as a hedonistic activity and perceptions about time pressures.

The studies concluded:

  • People who perceive their car as a reflection of their self-identity are more likely to behave aggressively on the road and break the law.
  • People with compulsive tendencies are more likely to drive aggressively with disregard for potential consequences.
  • Increased materialism, or the importance of one’s possessions, is linked to increased aggressive driving tendencies.
  • Young people who are in the early stages of forming their self-identity might feel the need to show off their car and driving skills more than others. They may also be overconfident and underestimate the risks involved in reckless driving.
  • Those who admit to aggressive driving also admit to engaging in more incidents of breaking the law.
  • A sense of being under time and pressure leads to more aggressive driving.

The study findings “suggest that the perception of the car as an extension of the self leads to more aggressive behavior on the road rather than increased driving cautiousness,” the authors wrote, adding that “individuals may view cars and the road space they occupy as their territory and will seek to maintain control over it and defend it as necessary.”1

Aggressive driving causes one third of all accidents involving injuries and two thirds of all fatal accidents in the United States.  Recent statistics indicate that aggressive driving is responsible for 53 percent of driver fatalities in Louisiana.

Source 1: www.insurancejournal.com, October 18, 2011.

Turkey Day Safety: Did You Know…

According to State Farm Insurance claims data, Louisiana is in the top 10 states for grease and cooking-related claims on Thanksgiving Day (2005-2010). Probably not so surprising is the fact that more cooking fires and injuries are reported on Thanksgiving Day than on any other day of the year. What is quite alarming is that cooking related claims more than double on Thanksgiving Day compared to any other day in November. 

The National Fire Protection Association says deep fryer fires result in more than $15 million in property damage each year and hot oil splatter can cause serious burns to an adult or life threatening injuries to a child.

Most turkey fryer fires and injuries are preventable. Don’t be a turkey! Follow these tips to stay safe this Thanksgiving:

  • More than one-third of fires involving a fryer start in a garage or patio. Cook outdoors at a safe distance from any buildings or trees and keep the fryer off any wooden structures, such as a deck or patio.
  • Avoid a hot oil spill over by first filling the pot with cold oil and then lower the thawed turkey into the pot to determine how much oil should be either added or removed.
  • Shut off the fuel source or flame when adding the turkey to the hot oil to prevent a dangerous flare-up if oil does spill over the rim.
  • Make sure your turkey is properly thawed before lowering it slowly into the pot.
  • Never leave a hot turkey fryer unattended.
  • Do not use ice or water to cool down oil or extinguish an oil fire.
  • Keep an extinguisher approved for cooking or grease fire nearby.1

Source 1: www.statefarm.com , November 15, 2011.

Have a Happy and Safe Thanksgiving Holiday!!