presents Risk Management Professional Tips on Managing Your Superstorm Sandy Claims November 30, 2012 at 1 p.m.
You will receive a recorded copy of this webinar within 24 hours.
Risk Management Professional Tips on Managing Your Superstorm Sandy Claims Mary T. Pipino, CPCU Moderator: President & CEO Donald P. Pipino Company, LTD Boardman, OH Kevin M. Grudzien Gerald Ritter Panelists: Director of Forensic Accounting Principal Quantum Global Advisors LLC. Quantum Global Advisors LLC. Chicago, IL Chicago, IL George R. Stratts Liz Wittenberg President Regional Underwriting Manager AIG, Global Property Division AIG, Professional Liability Division Chicago, IL Chicago, IL
Insurance and Risk Management Understanding the vast array of potential risks that affect developers, retailers and merchants, and how to handle those risks appropriately and most cost effectively is the focus of the Insurance and Risk Management SIG. Mary T. Pipino, CPCU If you are interested in President & CEO participating in this SIG or Donald P. Pipino Company, LTD 330-629-2992 receiving materials on Email: marypipino@dpipino.com issues relevant to Karen Kelly Hill insurance and risk Director, Corporate Communications Donald P. Pipino Company, LTD management please 330-729-7133 contact: Email: khill@dpipino.com
Risk Management Professional Tips on Managing Your Superstorm Sandy Claims 10 Most Costly Storms to Impact the US Mainland Since 1900 Rank Name Year Damage Projected Cost 1 Katrina 2005 $108 billion CATEGORY 3 2 Ike 2008 $29.5 billion CATEGORY 2 of Superstorm 3 Andrew 1992 $26.5 billion CATEGORY 5 Sandy: 4 Wilma 2005 $21 billion CATEGORY 3 5 Ivan CATEGORY 3 2004 $18.8 billion $65 billion 1 – 6 Charley 2004 $15.1 billion CATEGORY 4 7 Rita 2005 $12 billion CATEGORY 3 ranking it as 8 Frances 2004 $9.5 billion CATEGORY 2 the SECOND 9 Allison 2001 $9 billion TROPICAL STORM costliest in history 10 Jeanne 2004 $7.7 billion CATEGORY 3 Source: CNN 1 Moody’s Analytics The Daily “Weathering the Storm” October 31, 2012
Risk Management Professional Tips on Managing Your Superstorm Sandy Claims Impact of Sandy on US Business Facts to consider: • The region in Sandy’s path along the East Coast has a GDP of about $10 billion a day 1 • In addition to property damage, IHS Global Insight and EQECAT estimate lost business to be between $30 billion and $50 billion 2 • Due to Sandy, the US Stock Market was closed for two consecutive days, the first time for such an occurrence since 1888 3 • Virtually all major retailers had at least 10% of their store base in the path of the Sandy 3 • Sandy triggered an estimated 8 million power outages so far in the U.S. with New Jersey and New York City having the largest impact, with outages being reported as far west as Cleveland. For New York City, this was its largest ever weather related power outage 3 1 Moody’s Analytics The Daily “Weathering the Storm” October 31, 2012 2 Forbes “One Week Later, the Cost of Superstorm Sandy” November 5, 2012 3 Planalytics “The Economic Impact of Superstorm Sandy” October 30, 2012
Risk Management Professional Tips on Managing Your Superstorm Sandy Claims Important Claim Tips: Moderator: Mary T. Pipino, CPCU • No one knows your business better than you so President & CEO do not assume insurers know. Donald P. Pipino Company, LTD Boardman, OH • Work with your risk management professionals to thoroughly review your coverages and complete a thorough claim submission that clearly presents your losses, direct and indirect, such as contingent business interruption. • Clearly and concisely state the facts so they are easy for the insurers to understand. • As you gather additional information relevant to your claim, it is important to inform your insurers in a timely manner. • If in doubt about whether a loss is covered, still present the loss to the insurer and they will advise you if it is excluded. If they advise that the loss is excluded, request the specific exclusion language to understand why.
Risk Management Professional Tips on Managing Your Superstorm Sandy Claims AIG Global Property Division • Opening Comments Panelist: George R. Stratts • Natural Catastrophes - Key Learnings President AIG, Global Property Division • Large Catastrophe Claims – Chicago, IL How Do They Differ? • Tips from the Claims Team • Moving Forward, Preparedness is Key • Industry Effects • Summary Comments
Risk Management Professional Tips on Managing Your Superstorm Sandy Claims Quantum Global Advisors Panelists: Initial Response Gerald Ritter • Mirror carriers’ experts Principal Quantum Global Advisors LLC. • Let the experts determine the extent of Chicago, IL damage • Not all experts are experts Kevin M. Grudzien Director of Forensic Accounting • If emergency response or dry out is Quantum Global Advisors LLC. complete, it’s not too late for IH to certify Chicago, IL efforts • Set up receivable account to capture all costs
Risk Management Professional Tips on Managing Your Superstorm Sandy Claims Quantum Global Advisors Panelists: Deductibles Gerald Ritter • Flood Principal Quantum Global Advisors LLC. • Windstorm/Hurricane Chicago, IL • Waiting Periods/Timed Deductible Kevin M. Grudzien Director of Forensic Accounting Property Damage Coverages Quantum Global Advisors LLC. Chicago, IL • Direct Physical • Law and Ordinance Issues
Risk Management Professional Tips on Managing Your Superstorm Sandy Claims Quantum Global Advisors Panelists: Business Interruption Coverages Gerald Ritter Principal Quantum Global Advisors LLC. • Direct Physical Chicago, IL • Civil Authority Kevin M. Grudzien • Off-Premises Power Director of Forensic Accounting Quantum Global Advisors LLC. • Ingress/Egress Chicago, IL
Risk Management Professional Tips on Managing Your Superstorm Sandy Claims Quantum Global Advisors Panelists: Payment/Advances Gerald Ritter Principal Quantum Global Advisors LLC. • Request advance payments now Chicago, IL • Carriers close payments soon for year-end • Carrier internal systems are overwhelmed Kevin M. Grudzien Director of Forensic Accounting and payments may take longer Quantum Global Advisors LLC. Chicago, IL • Outline “incurred/committed/estimated” costs
Risk Management Professional Tips on Managing Your Superstorm Sandy Claims AIG Professional Liability Division Panelist: What is Cyber Insurance? • Security & Privacy Insurance responds to Liz Wittenberg important third party liability for claims Regional Underwriting Manager AIG, Professional Liability Division • Event Management Insurance responds to Chicago, IL the costs to retain services to assist in managing and mitigating a covered privacy or network security incident • Cyber Extortion Insurance pays to settle network security-related extortion demands made against the insured • Network Business Interruption Insurance responds to an insured’s loss of income and operating expenses when business operations are interrupted or suspended due to a failure of network security
Risk Management Professional Tips on Managing Your Superstorm Sandy Claims AIG Professional Liability Division Panelist: Concerns after a major event such as Superstorm Sandy Liz Wittenberg Regional Underwriting Manager AIG, Professional Liability Division • Hackers are looking to take advantage of Chicago, IL vulnerabilities and exploit weaknesses • Dependency on IT infrastructure and security • Managing access and storage of private information • State and federal privacy regulation
Risk Management Professional Tips on Managing Your Superstorm Sandy Claims AIG Professional Liability Division Panelist: Claims Examples Liz Wittenberg • Retailer sustained a disruption/failure of its credit card Regional Underwriting Manager processing system on a Friday AIG, Professional Liability Division • The disruption prevented processing of credit card Chicago, IL transactions in all of its 900+ retail outlets and its online sales through its website • The system failure also impacted the individual stores’ time management system and the in-store communication systems • The disruption continued through close of business on Sunday - compounding the problem was the fact that this failure occurred over the President’s Day holiday weekend. Due to the system disruption, the stores suffered massive delays in processing payments leading to retailer frustration and customer walk-outs
Risk Management Professional Tips on Managing Your Superstorm Sandy Claims AIG Professional Liability Division Panelist: Claims Examples Liz Wittenberg • AIG worked with the insured to retain a forensic Regional Underwriting Manager accountant to best calculate the lost sales caused AIG, Professional Liability Division by the system disruption/failure – taking into Chicago, IL account two important factors: • failure occurred over a weekend which typically means higher sales and • this weekend was also a holiday period • The forensic accountants calculated approximately $727,000 in loss profits in excess of the policy’s 8-hour waiting period retention. AIG worked with the insured to confirm its calculated damages as well as the forensic accountant analysis and processed full reimbursement to the insured
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