National Report

1 in 8 U.S. drivers was uninsured in 2015, new study says

By Danielle Ling, PropertyCasualty360.com

When an uninsured driver is at fault in an accident, insured drivers, or their insurance companies, are often left to pay for the resulting physical damage and health costs. As in cases with an underinsured driver, these individuals may not have high enough limits on his or her policy to cover all costs of damage caused.

Findings from a new study raise concerns

Despite the fact that drivers in 49 states are required to carry car insurance, a new study found that nearly one in eight U.S. drivers was uninsured in 2015, putting insured drivers at greater risk in the event of an auto accident.

The study, directed by the Insurance Research Council (IRC) and co-sponsored by The Hanover Insurance Group, Inc. found that 13% of all U.S. motorists were uninsured in 2015, up from 12.3% in 2010 after a seven-year decline.

“The results of the survey sound an alarm,” said Daniel Halsey, president, personal lines, at The Hanover. “Uninsured motorists represent a significant risk to insured drivers. With the average cost of an uninsured motorist claim around $20,000, excluding any physical damage to the vehicle, the best approach is to make sure you have the proper insurance in place to protect yourself in the event of an accident.”

To protect themselves against uninsured drivers in the event of an accident, The Hanover suggests customers talk with their independent agents about the following:

• Do I need uninsured/underinsured motorist coverage on my policy? Often, this is a low-cost way to add protection in the event of an accident with an uninsured or underinsured driver.
• How much uninsured/underinsured motorist coverage do I need? Generally, it is a good idea to have the same amount of uninsured and underinsured motorist coverage as bodily injury coverage. Be wary of suggestions to reduce or remove this coverage to reduce the premium on a policy.
• How does uninsured/underinsured motorist coverage work when I have an umbrella policy? Umbrella protection can kick in once auto limits are met. The Hanover offers uninsured/underinsured coverage of up to $2 million on umbrella policies in some states.

State by state

The IRC study found that the numbers of uninsured motorists varied between states, ranging anywhere from 4.5% to 26.7%. Florida, Mississippi, New Mexico, Michigan, and Tennessee were the top five states with uninsured motorists, while North Carolina, Massachusetts, New York, and Maine had the least.

While Massachusetts had one of the lowest rates, it did experience the largest percentage point increase over a 10-year period, researchers noted.

“While some states saw significant drops in their uninsured motorists rates, overall, the rate is increasing nationwide,” said Elizabeth A. Sprinkel, senior vice president of the IRC. “This can mean added risk for all motorists.”

New study urges comprehensive approach is needed to manage cyber risks

By Denny Jacob, PropertyCasualty360.com

In 2018, companies are aware of the number of cyber risks that threaten their business. They know that a cyber attack means damage to their resources and reputation, among other areas of concern. As hackers and cyber criminals continue to grow in sophistication, so too must companies if they are to have any chance in our digital world.

While this sounds fairly simple on paper, how can companies prepare to counter their cyber exposures? Marsh executives John Drzik and Thomas Reagan provided insights at the latest media breakfast briefing to discuss the launch of Marsh and Microsoft’s new Global Cyber Risk Perception Survey.

In conjunction with Microsoft Corp., the two organizations surveyed more than 1,300 senior executives about the cyber landscape. While concern for cyber is high, many respondents are failing to act. Here’s how companies should think about their cyber preparedness going forward, based on the Marsh study.

First, recognize your cyber threats

As cyber risk becomes a top priority for many companies, how they respond will increasingly matter. But first, they must recognize their cyber threats.

Nearly two-thirds of respondents to the Marsh survey said their organizations will increase spending on cyber risk management practices, including risk mitigation and risk transfer. While smarter technology will help, human error still accounts for a significant number of cyber breaches. As a result, more than half of respondents implemented enhanced phishing awareness training for employees.

Sixty-eight percent of respondents said they use cloud computing and services, and that number is not likely to decline in our digital world. Many cloud providers may manage not only data security, but also network controls, identity and access controls, and patching.

You can’t plan for what you can’t measure

Throughout the event, Drzik emphasized a basic conundrum companies face when they deal with cyber risks: You can’t plan for what you can’t measure.

While many companies have cyber insurance or plan to purchase coverage, 44% of respondents “don’t know” whether cyber insurance meets their organization’s needs. Models exist that allow organizations to assess the likelihood they will be attacked, and their potential losses. However, few firms currently take advantage of them.

Fewer than half of respondents said their organization estimates financial losses from a cyber event, and only 11% quantify their estimates in economic terms.

Cyber risk management requires a packaged approach

Traditionally, cyber risk management has been perceived as a problem for the IT department. Now, technology often is used at every level of a company. As such, ownership of risk needs to vary and executives must get more involved.

“Cyber is a technical risk but it impacts the balance sheets,” says Reagan, the U.S. cyber practice leader for Marsh.

The benefit of a more comprehensive approach to cyber risk management is that it goes beyond prevention and also includes risk assessment, mitigation and cyber resilience. Ideally, boards should view cyber risk management as part of their overall perspective on enterprise risk management. Concern isn’t translating into action, however, and a lack of communication and coordination persists throughout many companies.

To hope that all cyber risks can be prevented in the future is folly — the number of cyber criminals will continue to grow, and they’ll be more sophisticated in their attacks than the last. But this doesn’t mean companies can’t prepare. Identification, preparation and a top-down approach will allow companies to be confident in an ever-evolving cyber landscape.