Spring training for the 2007 hurricane season begins early….three weeks early, in fact.
The National Hurricane Service announced the first named story of the year, Subtropical Storm Andrea, yesterday. The NHC reported that Andrea, which is about 100 miles off the coast of Georgia, has sustained winds of 45 mph.
Hurricane season for the eastern Atlantic doesn’t officially start until June 1.
The U.S. Supreme Court ruled in April that greenhouse gases are air pollutants. According to experts quoted in an article in Business Insurance, the decision could trigger a legal and regulatory assault on U.S. industrial companies, which will take the fight to their insurance companies for coverage of legal defence costs.
Experts warn the ruling will spur plaintiffs to sue smokestack industries for allegedly contributing to climate change, which in turn could be cited as the source of various torts, from Hurricane Katrina, to wildfires in drought-ravaged areas, to crop damage, and so on and so on.
Experts add that it is unlikely the plaintiffs will ultimately prevail, but that does not eliminate lengthy and costly litigation by defendants to avoid liability. And it does nothing to exonerate companies whose reputation has been damaged by such allegations in the court of public opinion.
British newspapers report that football star David Beckham last month bought an insurance policy that would pay £100 million (nearly $200 million) if he were injured during the final six months of his current contract with Real Madrid. Only a few weeks later and Beckham announced that he would not be renewing his contract with the Spanish club and instead signed with the Los Angeles Galaxy of the U.S. Major League Soccer. The policy still seemed like money well spent to minimize the risk of an injury during his remaining playing days with the club he joined in 2002 from England’s Manchester United.
Now, however, Real Madrid management, president Ramón Calderón and manager Fabio Capello, say that following his plans to relocate to Hollywood, Beckham will never play for Real Madrid again, spending his remaining six months on the bench, trying to avoid injury from slivers, water bottles and boredom.
Money well spent? How do you say “refund” in Spanish?
Maurice “Hank” Greenberg, CEO of C.V. Starr & Co. and formerly CEO of American International Group Inc., last week engaged in a far-reaching video discussion with the Financial Times. You can view the FT video here, along with a link to a transcript of the conversation. Mr. Greenberg discussed a variety of topics, from the business climate in China, to CEO compensation and boardroom disputes, to global warming and insurance cycles.
Of particular interest was his closing prediction that we have not seen the end of cycles in the commercial property/casualty insurance market:
“You know the insurance industry has historically been a cyclical industry, especially the property and casualty industry. And after Katrina, many voices have said that after what’s taken place in Katrina now we’re going to change the future of the insurance industry. No more cycles. It will be a more stable industry.
“I predict that’s nonsense. There’ll continue to be cycles. The insurance industry’s run by people, and people don’t suddenly change that way of thinking and you’ll find cycles beginning all over again.”
The Associated Press reports that casino owner Steve Wynn is suing Lloyd’s of London, alleging “the insurance company [sic] failed to act properly on his demands to pay $54 million in lost value for a Picasso that was damaged when Wynn accidentally poked a hole in the canvas with his elbow.”
Mr. Wynn’s suit arises from his frustration that Lloyd’s has not estimated the damage to the painting and made him an offer.
Lloyd’s says it usually works the other way around: You tell us what you think the claim is worth and we’ll let you know if we agree or disagree. In other words: give us your claim and we’ll poke holes in it.
Meanwhile, as it awaits Mr. Wynn’s claim, Lloyd’s reportedly has already agreed to finance restoration of the work, a 1932 painting titled “La Reve.”
Lloyd’s of London Chairman Lord Peter Levene recently became one the most prominent insurance industry figures to warn about the effects of climate change. But he is hardly alone as numerous insurance and reinsurance companies study the evidence, and analyze what it might mean for insurable losses in particular and the industry in general.
“Weather-related catastrophes are costing the global insurance industry more than ever before,” he said during a recent speech on global warming. According to Lord Levene, the number of natural catastrophes doubled between the 1960s and 1990s, but insured losses—the majority weather-related—increased almost sevenfold.