<?xml version="1.0" encoding="UTF-8"?><rss version="2.0" xmlns:content="http://purl.org/rss/1.0/modules/content/" xmlns:wfw="http://wellformedweb.org/CommentAPI/" xmlns:dc="http://purl.org/dc/elements/1.1/" xmlns:atom="http://www.w3.org/2005/Atom" xmlns:sy="http://purl.org/rss/1.0/modules/syndication/" xmlns:slash="http://purl.org/rss/1.0/modules/slash/" > <channel> <title>February 8 | Insurance Advocate</title> <atom:link href="https://www.insurance-advocate.com/category/2021/february-8-2021/feed/" rel="self" type="application/rss+xml" /> <link>https://www.insurance-advocate.com</link> <description>Since 1889</description> <lastBuildDate>Mon, 24 May 2021 12:11:07 +0000</lastBuildDate> <language>en-US</language> <sy:updatePeriod> hourly </sy:updatePeriod> <sy:updateFrequency> 1 </sy:updateFrequency> <generator>https://wordpress.org/?v=6.7.1</generator> <item> <title>Feb 8 Cover</title> <link>https://www.insurance-advocate.com/2021/02/24/feb-8-cover/</link> <dc:creator><![CDATA[Insurance Advocate]]></dc:creator> <pubDate>Wed, 24 Feb 2021 12:36:12 +0000</pubDate> <category><![CDATA[2021]]></category> <category><![CDATA[February 8]]></category> <category><![CDATA[Covers]]></category> <guid isPermaLink="false">https://www.insurance-advocate.com/?p=12647</guid> <description><![CDATA[<p><img width="567" height="783" src="https://www.insurance-advocate.com/wp-content/uploads/2021/02/cover.jpg" class="attachment-full size-full wp-post-image" alt="" decoding="async" fetchpriority="high" srcset="https://www.insurance-advocate.com/wp-content/uploads/2021/02/cover.jpg 567w, https://www.insurance-advocate.com/wp-content/uploads/2021/02/cover-217x300.jpg 217w, https://www.insurance-advocate.com/wp-content/uploads/2021/02/cover-500x690.jpg 500w" sizes="(max-width: 567px) 100vw, 567px" /></p>]]></description> <content:encoded><![CDATA[<p><img width="567" height="783" src="https://www.insurance-advocate.com/wp-content/uploads/2021/02/cover.jpg" class="attachment-full size-full wp-post-image" alt="" decoding="async" srcset="https://www.insurance-advocate.com/wp-content/uploads/2021/02/cover.jpg 567w, https://www.insurance-advocate.com/wp-content/uploads/2021/02/cover-217x300.jpg 217w, https://www.insurance-advocate.com/wp-content/uploads/2021/02/cover-500x690.jpg 500w" sizes="(max-width: 567px) 100vw, 567px" /></p><!--themify_builder_content--> <div id="themify_builder_content-12647" data-postid="12647" class="themify_builder_content themify_builder_content-12647 themify_builder tf_clear"> </div> <!--/themify_builder_content-->The post <a href="https://www.insurance-advocate.com/2021/02/24/feb-8-cover/">Feb 8 Cover</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></content:encoded> </item> <item> <title>Is Artificial Intelligence the Answer to Insurance Fraud?</title> <link>https://www.insurance-advocate.com/2021/02/08/is-artificial-intelligence-the-answer-to-insurance-fraud/</link> <dc:creator><![CDATA[Guest Author]]></dc:creator> <pubDate>Mon, 08 Feb 2021 15:23:20 +0000</pubDate> <category><![CDATA[2021]]></category> <category><![CDATA[February 8]]></category> <category><![CDATA[Cover Story]]></category> <guid isPermaLink="false">https://www.insurance-advocate.com/?p=12625</guid> <description><![CDATA[<p>By Nigel Cannings</p> <p>Ongoing investment suggests that the perception amongst insurance professionals is yes. According to a 2021 survey, approximately 31% of insurance CIOs reported that they had already deployed AI and an additional 23% will deploy in the next 12 months. Focusing on Fraud and a recent survey by the Coalition Against Insurance Fraud showed that 21% of respondents are planning on investing in AI for fraud detection over the next 2 years. Yet against this backdrop of adoption, we see that most insurance companies process only 10-15% of the data they hold.</p> The post <a href="https://www.insurance-advocate.com/2021/02/08/is-artificial-intelligence-the-answer-to-insurance-fraud/">Is Artificial Intelligence the Answer to Insurance Fraud?</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description> <content:encoded><![CDATA[<p class="p1"><strong>By Nigel Cannings</strong></p> <p class="p1">Ongoing investment suggests that the perception amongst insurance professionals is yes. According to a 2021 survey, approximately 31% of insurance CIOs reported that they had already deployed AI and an additional 23% will deploy in the next 12 months. Focussing on Fraud and a recent survey by the Coalition Against Insurance Fraud showed that 21% of respondents are planning on investing in AI for fraud detection over the next 2 years. Yet against this backdrop of adoption, we see that most insurance companies process only 10-15% of the data they hold. The majority of the data currently analysed by insurers is structured, highly organized and formatted in a way that makes it easily searchable, housed in relational databases. Circa 10% of data is structured so whilst we can see that Insurers are making a dent on unstructured data there remains valuable insights left hidden in vast volumes of unstructured data. Effective utilisation of this unstructured data can help insurers identify potential fraud, but also shorten the customer journey by validating information more efficiently. One form of unstructured data that remains significantly underutilised is voice.</p> <p class="p1">AI has an enormous remit, but it is Conversational AI, natural language processing (NLP) and automatic speech recognition (ASR) that have the potential to change the game across fraud and the contact center. Call centers are still seen as the soft target for fraud, with agents being faced with a constant barrage of sophisticated social engineering techniques, designed to manipulate and by pass scrutiny.</p> <p class="p1">Contact center agents handle scores of calls a day, each one expected by business and customer alike to process queries as quickly as possible, and today agents are working remotely with the added pressures that that brings. These factors combined mean the call centre presents a vulnerability that even inexperienced fraudsters are able to exploit. Unless a caller has been previously flagged for suspicious activity, or is particularly unskilled at the social engineering requisite to scamming, their fraudulent first notification of loss (FNOL) may be processed like any other. This vulnerability is further exposed during times such as these where economic downturn correlates with an uptick in organised and opportunistic fraud. An example of this uptick is the spike in motor vehicle theft since the start of the pandemic. The NYPD reported a 57% increase in thefts of cars, motorcycles and mopeds between March 16th and April 14th 2020. Yes, the requirement to shelter means that vehicles were left more vulnerable but many of those owners were also financially impacted, loans soon turned upside down and negative equity took hold as a consequence of unemployment, a terrible situation and a challenge for insurers to unpick with care.</p> <p class="p1">Contact center agents must strike the balance between serving the needs of their genuine customers and staying alert to fraudulent behaviour. With estimates putting fraudulent claim volume at around 10% then one might expect that an agents attention is best focussed on the 90% of genuine claims? Where this balance is not well understood or implemented it is common for well intentioned anti fraud measures to put obstacles in the way of genuine customers. AI has the power to prevent fraud at its source without impacting genuine customers.</p> <p class="p1">Voice authentication has been used for some time at the front end of contact centers in the form of IVR to more effectively route calls. With the addition of sentiment analysis to automatically and accurately determine emotion and tone in the customer’s voice this triage can be further enhanced, calls are routed faster to the appropriate team, and less time switching between teams means more time helping and pleasing customers.</p> <p class="p1">Insurance fraud across all lines of business in the US is estimated to be $100B per year and with the pandemic creating hard times for all, current data indicates that 2020’s figures could be as much as 21% higher. Reducing these figures is in the interest of everyone, and artificial intelligence (AI) potentially holds at least part of the answer.</p> <p class="p3"><b>How can AI be used to prevent fraud?</b></p> <p class="p5"><b>Speech characteristics </b></p> <p class="p1">Did you know that fraudsters tend to share a common set of speech characteristics? Negation, hedging, latency, and emotion are all frequent features of the fraudster’s interaction. They will pause more often, as they think through their answers, trying to avoid inconsistencies. They will react more emotionally if they believe that they are being caught out. And they will negate their sentences. These things sound relatively easy to detect. But if you’re busy, just trying to do your job, focussing on genuine customer needs, they can easily be missed, even by highly trained staff. With conversational AI, semantic parsing allows the meaning to be extracted from each and every utterance. This isn’t a one sided event either, by understanding both the questions posed by an agent and the responses received false positives are significantly reduced as context is understood. Let’s think about an example from the motor vehicle insurance claim, and the exhibiting of hedging language in a claimants verbal account. Hedging is a form of non-committal language, an individual is withholding. One particularly tricky hedging term is ‘around about’. If a claimant is asked how much their, now missing (reported as stolen) gold chain cost and they respond, “it was around about $3000, but I’ve got the receipt to prove it” then we would be concerned. How much was it exactly? If you have the receipt then why do you not have this figure to hand? Here we flag ‘around about’ as a genuine event of Hedging. Now let’s imagine the claim is for a motor vehicle collision and the claimant was approaching ‘a round about’ when they were hit from behind. Without context we would have flagged a risk that doesn’t exist. Only a truly intelligent voice analytics solution can exploit value, anything else is a risk. Intelligent Voice have spent the last 5 years developing their LexiQal Conversational AI solution, utilising Nvidia’s cutting edge Triton Inference framework to surface only those true indicators of risk.</p> <p class="p5"><b>Pattern recognition </b></p> <p class="p1">Another of the call centre’s unavoidable Achilles heels is the number of people employed. Callers will rarely talk to the same person twice, and this is very much in the fraudster’s favour. This issue is most prevalent across banking, the UK Finance IVR’s report stated that a fraudster will make 26 calls to the contact centre during the execution of a given fraud. When the fraudster is lucky enough to speak to a different person with each call, the chance of any inconsistencies being picked up is dramatically reduced. Intelligent Voice witnessed the power of pattern recognition across a piece of work for a UK Insurer where analysis of the insurers fraud calls against their believed genuine calls showed a marked increase in the use of the phonetic alphabet by fraudsters reporting cash for crash claims. With ASR and NLP, every call is monitored, every irregularity noted, and every behavioural pattern identified.</p> <p class="p5"><b>Automation </b></p> <p class="p1">Medicare fraud losses are estimated at $60B per year in the US, the biggest single source of fraud. In addition to those losses the insurance market devotes an estimated $3 billion in work hours to collating and summarizing medical records in support of claims. Working with a partner Intelligent Voice has developed the ability to automatically generate ICD10 and CPT codes by analysing the voice channel during Telehealth consultations. Not only does this offer efficiency gains but simultaneously shines a light on any over billing through enhanced scrutiny and the ability to audit.</p> <p class="p5"><b>Collaboration </b></p> <p class="p1">97% of US Insurers contribute data relating to fraudulent claims that is available to all – Voice Biometrics, voice recognition or voiceprint is a form of identification unique to an individual, this is currently one of the most common forms of AI and has long been used to validate customers into a contact center or populate watch lists within an organisation. The ability for insurers to begin collaborating over this rich data source could be transformational but the appropriate data security procedures must be in place.</p> <p class="p3"><b>The future of fraud prevention </b></p> <p class="p1">Employed together, Conversational AI, NLP and ASR have the potential to stop insurance fraud before it has even started. Of course, they can’t stand alone. They can’t be onboarded and abandoned. Every ASR system needs calibrating for different use cases. And even then, the overall engine can’t make decisions (yet). But together, these systems can provide decision-makers with the real-time, actionable, analytics-led insights that are simply not available from any other source right now. And, excitingly, these technologies have further applications.</p> <p class="p3"><b>Beyond fraud – Serving the genuine customer</b></p> <p class="p5"><b>Customer satisfaction</b></p> <p class="p1">Sentiment analysis is now a fairly staple feature of customer analytics but with the evolution of semantic understanding comes the ability to alert agents to emotional features in real time that are deserving of consideration. When responded to these alerts help steer an interaction in a positive direction for both the customer and the organization.</p> <p class="p1">Customer protection</p> <p class="p1">Understanding customer needs better offers the insurer the chance to not only delight their customers through enhanced customer experience but in parallel ensure that needs are identified and met appropriately every time. Intelligent Voice were recently approached by an innovative UK health insurer looking to identify vulnerability at underwriting. Does the insured understand what they need from their policy? Have the appropriate questions been asked by the agent to ensure that effective cover is in place? Not only does this safeguard ensure that should a claim be forthcoming that the insured is properly covered but for the insurer it avoids policy leakage.</p> <p class="p5"><b>Demand mapping</b></p> <p class="p1">Understanding and automatically recording the reason for every call allows organisations to identify failings sooner and structure resourcing to meet changes in demand across their contact center. An early famous example of the value to be gleaned here was the work of Expedia where they identified $100M in costs associated with calls from 20M customers a year, all looking to obtain a copy of their itinerary. A seemingly trivial issue with a huge cost.</p> <p class="p1">Working with a Police Force in the UK, Intelligent Voice have successfully addressed the issue of unlogged demand through the analysis of each and every call into the emergency and non emergency contact centre to surface real time trends across the organisation.</p> <p class="p1"> Despite enormous recent leaps, AI is still in its early days. In most instances, it cannot replace the human element. And in most cases, nor would we want it to. But with conversational analytics, AI has the potential to provide vital information that could not otherwise be accessed. This has potential in a wide variety of fields. But in insurance, it could prevent billions of dollars of losses through fraud, waste and missed opportunity, that has to be worth investigating.</p> <p> </p> <p> </p> <p class="p1"><em><span class="s1">Nigel Cannings is the CTO at Intelligent Voice. He has over 25 years’ experience in both Law and Technology, is the founder of Intelligent Voice Ltd and a pioneer in all things voice. Nigel is also a regular speaker at industry events not limited to NVIDIA, IBM, HPE and AI Financial Summits.</span></em></p> <!--themify_builder_content--> <div id="themify_builder_content-12625" data-postid="12625" class="themify_builder_content themify_builder_content-12625 themify_builder tf_clear"> </div> <!--/themify_builder_content-->The post <a href="https://www.insurance-advocate.com/2021/02/08/is-artificial-intelligence-the-answer-to-insurance-fraud/">Is Artificial Intelligence the Answer to Insurance Fraud?</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></content:encoded> </item> <item> <title>Big ‘I’ Presents Bill Harrison with Woodworth Memorial Award </title> <link>https://www.insurance-advocate.com/2021/02/08/big-i-presents-bill-harrison-with-woodworth-memorial-award/</link> <dc:creator><![CDATA[Insurance Advocate]]></dc:creator> <pubDate>Mon, 08 Feb 2021 08:31:21 +0000</pubDate> <category><![CDATA[2021]]></category> <category><![CDATA[February 8]]></category> <category><![CDATA[In The Associations]]></category> <guid isPermaLink="false">https://www.insurance-advocate.com/?p=12642</guid> <description><![CDATA[<p>The Big “I” presented William “Bill” E. Harrison Jr., chairman of the Big “I” Reinsurance Company, with the Woodworth Memorial Award at the Big “I” virtual Board of Directors meeting on Jan. 28. The Woodworth Memorial Award recognizes individuals who serve the insurance industry and the Big “I” with uncommon dedication. It is the association’s […]</p> The post <a href="https://www.insurance-advocate.com/2021/02/08/big-i-presents-bill-harrison-with-woodworth-memorial-award/">Big ‘I’ Presents Bill Harrison with Woodworth Memorial Award </a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description> <content:encoded><![CDATA[<p class="p1">The Big “I” presented William “Bill” E. Harrison Jr., chairman of the Big “I” Reinsurance Company, with the Woodworth Memorial Award at the Big “I” virtual Board of Directors meeting on Jan. 28.</p> <p class="p1">The Woodworth Memorial Award recognizes individuals who serve the insurance industry and the Big “I” with uncommon dedication. It is the association’s highest honor.</p> <p class="p1">“Bill has gone above and beyond in working tirelessly for his local community, state association and national association for more than 25 years in almost every capacity the organization can offer,” says Jon Jensen, Big “I” chairman and president & CEO of Correll Insurance Group in Spartanburg, South Carolina. “We are proud to honor his work with the Woodworth Memorial Award.”</p> <p class="p1">Harrison was raised in the insurance industry, joining his father, Bill Harrison Sr., in the family agency, Coleman Company Insurance Services. After serving as both president and a member of the leadership council, he left in 2007 to start his own agency, TASA Risk Solutions in Antonio, Texas. At the state association level, Harrison has served the Independent Insurance Agents of Texas as the Budget and Finance Committee chairman, Board of Directors chairman and state national director, among other roles. In 1999, he was named Young Agent of the Year.</p> <p class="p1">At the national association level, in addition to his current role as chairman of the Big “I” Reinsurance Company, Harrison has formerly served as chairman of the Finance Committee, chairman of the Professional Liability Committee, and as a member of Agency Administrative Services, Inc., the Trusted Choice® Board of Directors and the Planning Committee. He has also been InsurPac chairman for Texas.</p> <p class="p1">“Bill has dedicated his career to serving the independent agent community through his work with the Big ‘I’ and we are truly thankful for the leadership and enthusiasm he brings to each role he’s filled,” says Bob Rusbuldt, Big “I” president & CEO. “His impact on the association in nearly every facet of our mission to uphold the independent agency system is remarkable.”</p> <p class="p1">Throughout the years, Harrison has served his community through volunteer work for Leadership San Antonio, Rotary International and Mission Road Ministries, as well as board chairman of Palmer Drug Abuse Program, deacon at Trinity Baptist Church and committee chair of the San Antonio Livestock Exposition. He was selected for San Antonio’s Business Journal “40 Under 40” in 1997.</p> <p class="p1">“Thank you so much for the honor and for the recognition,” Harrison said during the award presentation. “If you look back at the recipients of this award in our business, they’re legends, just pure legends, and I’m honored to have known them and to have a chance to work with them and learn from them over the years.”</p> <p class="p1">“This journey has been fun, but it hasn’t been one that I’ve done by myself,” Harrison continued, thanking his support system and mentors including his family, the TASA Risk Solutions team, IIAT staff and Big “I” staff.</p> <!--themify_builder_content--> <div id="themify_builder_content-12642" data-postid="12642" class="themify_builder_content themify_builder_content-12642 themify_builder tf_clear"> </div> <!--/themify_builder_content-->The post <a href="https://www.insurance-advocate.com/2021/02/08/big-i-presents-bill-harrison-with-woodworth-memorial-award/">Big ‘I’ Presents Bill Harrison with Woodworth Memorial Award </a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></content:encoded> </item> <item> <title>Business Tips for Winter Months</title> <link>https://www.insurance-advocate.com/2021/02/08/business-tips-for-winter-months/</link> <dc:creator><![CDATA[Guest Author]]></dc:creator> <pubDate>Mon, 08 Feb 2021 06:28:25 +0000</pubDate> <category><![CDATA[2021]]></category> <category><![CDATA[February 8]]></category> <category><![CDATA[MSO Inc.]]></category> <guid isPermaLink="false">https://www.insurance-advocate.com/?p=12637</guid> <description><![CDATA[<p>By Sue C. Quimby, CPCU, AU, CIC, CPIW, DAE – Assistant Vice President/Media Editor Colder temperatures can present challenges for business owners and their employees. With the COVID pandemic and the switch to more people working remotely, the challenges were increased. Employee and client safety are as important as profits to the conscientious business owner. […]</p> The post <a href="https://www.insurance-advocate.com/2021/02/08/business-tips-for-winter-months/">Business Tips for Winter Months</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description> <content:encoded><![CDATA[<p class="p1"><strong>By Sue C. Quimby, CPCU, AU, CIC, CPIW, DAE – Assistant Vice President/Media Editor</strong></p> <p class="p1">Colder temperatures can present challenges for business owners and their employees. With the COVID pandemic and the switch to more people working remotely, the challenges were increased. Employee and client safety are as important as profits to the conscientious business owner. Threats to business, such as disease outbreaks and storm activity, can occur rapidly.<span class="Apple-converted-space"> </span>Keeping track of changing exposures, and developing appropriate action plans, should be part of every business operation.<span class="Apple-converted-space"> </span>Helping clients recognize and deal with winter weather challenges is another value-added service of the professional insurance agent.</p> <p class="p1">Winter weather claims due to such causes as freezing, snowfall, rain, winds, flooding and mudslides, can be significant.<span class="Apple-converted-space"> </span>In January 2019 alone, weather-related economic losses in the United States exceeded $1 billion, with hundreds of millions of dollars in insured losses (businessinsurance.com).</p> <p class="p1">They say an ounce of prevention is worth a pound of cure. Attention to building and premises maintenance is especially important during the winter. <span class="Apple-converted-space"> </span>Inspect roofs, windows and gutters, and repair any damage or problem areas.<span class="Apple-converted-space"> </span>Trim overhanging tree branches that could fall under weight of ice and snow and damage the building, or block access. Schedule a regular review of insurance policies to ensure adequate limits and coverages are in place for property, liability and Workers’ Compensation.</p> <p class="p1">Freezing pipes can be a problem, especially when the business is closed. Even if the heat is kept on, a power failure can lead to frozen and cracked pipes, with thousands of dollars in water damage to the building and contents. Special attention needs to be paid to areas such as warehouses and storage facilities that may not be heated.<span class="Apple-converted-space"> </span>Pipes can be wrapped with heat tape and insulation to protect them from extreme temperatures. At minimum, a licensed and qualified plumber should inspect the plumbing for potential cracks and leaks. A generator that keeps the furnace running in a power failure is another way to reduce cold-related losses. Water flow alarms and low temperature warnings can be transmitted to an owner or manager via computer or smartphone apps when the building is closed.</p> <p class="p1">With the dynamic switch to working remotely for many businesses, winter weather travel conditions may not be as much of an obstacle or hazard as they have been in the past. People who can work from home should do so during bad weather, and businesses need to have a clear policy on telecommuting. Plans should encompass power outage as well as phone and internet issues that could cause business. Interruptions.</p> <p class="p1">Staying home is not an option for all businesses or employees. Outdoor workers may be more susceptible to accidents and injury during the winter months. Those who travel long distances, often alone, are vulnerable. Employers must be sure that their employees have the proper equipment, including appropriate clothing and well-maintained vehicles. All business should have a means to communicate in the event of a problem, such as building closure or loss sustained by an employee while traveling.<span class="Apple-converted-space"> </span>A plan should be in place for how to continue operations during extended power outages.</p> <p class="p1">On premises, slip trip and fall hazards are more prevalent when walkways and steps are snow-covered. In addition, shoveling snow presents a risk of sprains and strains, hypothermia or more seriously, heart attacks. Hiring a professional, properly insured snow removal service takes the burden off the business and its employees. Snow falling from the roof is another area of concern. Parking lots present slip and fall challenges.<span class="Apple-converted-space"> </span>Improper plowing can damage buildings, vehicles and other structures, as well as injure animals or people in the plow’s path. Freezing and thawing can cause pot holes, which represent a hazard to vehicles as well as pedestrians.</p> <p class="p1">From dangerous driving conditions to slip and fall accidents, to emerging health and safety issues, winter and its hazards can be devastating to businesses and their employees. Offering advice and solutions on to the business owner is another sign of the true insurance professional.</p> <!--themify_builder_content--> <div id="themify_builder_content-12637" data-postid="12637" class="themify_builder_content themify_builder_content-12637 themify_builder tf_clear"> </div> <!--/themify_builder_content-->The post <a href="https://www.insurance-advocate.com/2021/02/08/business-tips-for-winter-months/">Business Tips for Winter Months</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></content:encoded> </item> <item> <title>Deloitte: More Risks On More Fronts: Credit Risk, ESG and Cybersecurity Top Concerns for Financial Institutions</title> <link>https://www.insurance-advocate.com/2021/02/08/deloitte-more-risks-on-more-fronts-credit-risk-esg-and-cybersecurity-top-concerns-for-financial-institutions/</link> <dc:creator><![CDATA[Insurance Advocate]]></dc:creator> <pubDate>Mon, 08 Feb 2021 04:24:41 +0000</pubDate> <category><![CDATA[2021]]></category> <category><![CDATA[February 8]]></category> <category><![CDATA[risk management]]></category> <guid isPermaLink="false">https://www.insurance-advocate.com/?p=12628</guid> <description><![CDATA[<p>With economies contracting and unemployment rising, credit risk has moved to the top of the risk management agenda, according to Deloitte’s biennial survey on the state of risk management in the financial services industry globally. Twenty percent of the chief risk officers at financial institutions surveyed identified it as the No. 1 risk they see […]</p> The post <a href="https://www.insurance-advocate.com/2021/02/08/deloitte-more-risks-on-more-fronts-credit-risk-esg-and-cybersecurity-top-concerns-for-financial-institutions/">Deloitte: More Risks On More Fronts: Credit Risk, ESG and Cybersecurity Top Concerns for Financial Institutions</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description> <content:encoded><![CDATA[<p class="p1">With economies contracting and unemployment rising, credit risk has moved to the top of the risk management agenda, according to Deloitte’s biennial survey on the state of risk management in the financial services industry globally.</p> <p class="p1"> Twenty percent of the chief risk officers at financial institutions surveyed identified it as the No. 1 risk they see increasing in importance for their business over the next two years, a plurality among 16 different risk categories. That is a sharp increase from 3% in 2018.</p> <p class="p1"> In addition, 62% of those senior executives surveyed by Deloitte said that credit risk measurement will be either an extremely or very high priority for their institutions over the next two years. Credit risk management is the practice of mitigating losses by understanding which potential clients may come at too high a risk and above an institution’s pre-identified risk tolerance at any given time. The areas that are tipped by senior executives as being particularly challenging for their institution to measure include collateral valuation, commercial credit, commercial real estate, unsecured credit, leveraged lending and middle-market lending.</p> <p class="p1">“Financial institutions are seeing more risk from more sources than ever before,” said J.H. Caldwell, a partner with Deloitte Risk & Financial Advisory, Deloitte & Touche LLP, and the principal author of the survey. “The COVID-19 pandemic has changed the risk management environment and presents an extraordinary set of new challenges for financial institutions — everything risk-related has been pressure-tested and challenged.” He notes that 66% of banking executives surveyed believed that credit quality deterioration would be one of three macrotrends having an impact over the next two years.</p> <p class="p1">“The rapid economic downturn, coupled with abrupt changes in consumer and business behavior, may mean that systems, programs and models based on pre-COVID-19 data may no longer accurately reflect the post-COVID-19 reality,” said Caldwell. “Institutions will need strong risk management governance while having the agility and willingness to rethink their traditional approaches in a fundamentally altered business environment.”</p> <p class="p1"> The 12th edition of Deloitte’s biennial survey — titled <i>A Moving Target: Refocusing Risk and Resiliency Amidst Continued Uncertainty</i> — gathered the views of chief risk officers or their equivalents at 57 financial institutions globally, including banks, investment managers and insurers. Conducted from March to September 2020, the institutions surveyed have total combined assets of $27.2 trillion; institutions that provide asset management services have a total of $16.1 trillion in assets under management.</p> <p class="p2"><b>Among other findings:</b></p> <p class="p1">· While almost all of those surveyed rated their institutions as extremely or very effective at managing financial risks — with the single exception of credit risk — the figure dropped to 65% for nonfinancial risks, an area that can have wide-ranging financial and reputation impacts. That number stood even lower for specific types and aspects of nonfinancial risk such as conduct and culture (55%), geopolitical (42%), and data quality (26%).</p> <p class="p1">· Only 61% of respondents considered their institutions to be extremely or very effective at managing cybersecurity risk, and 87% said that improving their ability to manage cybersecurity risk will be an extremely or very high priority over the next two years.</p> <p class="p1">· With growing concern over climate risk, environment, social and governance risk concerns were named by 38% of survey respondents as being one of the three risk types — alongside credit and cybersecurity — that will increase the most in importance for their institutions over the next two years. That is more than any other risk type when the top-three risks are combined — yet only 33% of executives considered their institutions to be either extremely or very effective at managing this risk.</p> <p class="p1">· Most institutions recognize that they have more work to do to improve data management, with 69% of those surveyed saying that enhancing the quality, availability, and timeliness of risk data will be an extremely or very high priority for their institution over the next two years. Only 26% believed their institutions are extremely or very effective at managing data quality, and just 8% of respondents considered their institution to be effective at use and management of unstructured data.</p> <p class="p1">· Institutions are under pressure as the target date for cessation of publication of LIBOR rates (end of 2021 for most cases) approaches. According to the report, financial institutions “may have underestimated the work required and would be well advised to prepare for the transition.” Only 24% of those surveyed considered technology/applications updates and development to be extremely or very challenging, while 22% said the same about processes and controls updates and development.</p> <p class="p1">“There are five things that financial institutions of all stripes are trying to get their heads around when it comes to risk management: talent challenges, remote working, data protection, the shift to digital, and systems and program security,” said Caldwell. “Risk leaders will need the flexibility to respond quickly to volatile economic conditions and changing work practices, while continually monitoring which changes are temporary responses to the pandemic and which are destined to become permanent. The challenges have not been this great in recent memory, especially of such uncertain and dynamic magnitude.”</p> <p class="p4"><span class="s5">The report can be found online here: <a href="https://www2.deloitte.com/us/en/insights/industry/financial-services/global-risk-management-survey-financial-services.html/" target="_blank" rel="noopener">https://www2.deloitte.com/us/en/insights/industry/financial-services/global-risk-management-survey-financial-services.html/</a></span></p> <!--themify_builder_content--> <div id="themify_builder_content-12628" data-postid="12628" class="themify_builder_content themify_builder_content-12628 themify_builder tf_clear"> </div> <!--/themify_builder_content-->The post <a href="https://www.insurance-advocate.com/2021/02/08/deloitte-more-risks-on-more-fronts-credit-risk-esg-and-cybersecurity-top-concerns-for-financial-institutions/">Deloitte: More Risks On More Fronts: Credit Risk, ESG and Cybersecurity Top Concerns for Financial Institutions</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></content:encoded> </item> <item> <title>Litigation Funding Dispute Gets Costly</title> <link>https://www.insurance-advocate.com/2021/02/08/litigation-funding-dispute-gets-costly/</link> <dc:creator><![CDATA[Barry Zalma]]></dc:creator> <pubDate>Mon, 08 Feb 2021 02:22:23 +0000</pubDate> <category><![CDATA[2021]]></category> <category><![CDATA[February 8]]></category> <category><![CDATA[On My Radar]]></category> <guid isPermaLink="false">https://www.insurance-advocate.com/?p=12623</guid> <description><![CDATA[<p>The fight between prominent plaintiffs’ attorney Thomas Girardi and a litigation funder that claims he and his firm haven’t paid back a $15 million loan has been routed to arbitration. However, a significant, potentially public fight remains over whether Mill Valley-based funder Law Finance Group LLC will be able to go after Girardi’s personal assets […]</p> The post <a href="https://www.insurance-advocate.com/2021/02/08/litigation-funding-dispute-gets-costly/">Litigation Funding Dispute Gets Costly</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description> <content:encoded><![CDATA[<p class="p1">The fight between prominent plaintiffs’ attorney Thomas Girardi and a litigation funder that claims he and his firm haven’t paid back a $15 million loan has been routed to arbitration. However, a significant, potentially public fight remains over whether Mill Valley-based funder Law Finance Group LLC will be able to go after Girardi’s personal assets if it wins in arbitration.</p> <p class="p1">Law Finance Group sued Girardi and his firm, Girardi Keese, in Los Angeles Superior Court in January. The funder claims that Girardi and the firm refused to hand over recovered fees from cases the parties allegedly agreed would repay the loans.</p> <p class="p1">Girardi asked last month for the dispute to be routed to arbitration, a move that Law Finance Group did not oppose. Los Angeles Superior Judge Gregory Alarcon granted Girardi’s motion to compel arbitration in the case in early April. However, a hearing remains pending on Alarcon’s calendar for April 24 on Law Finance Group’s writ of attachment, which seeks to secure some of Girardi’s assets to pay out damages should the funder succeed on its underlying claims now in arbitration.</p> <p class="p1">Among the assets listed in Law Finance Group’s filing are a home in Pasadena, the Girardi Keese offices on Wilshire Boulevard in Los Angeles, the firm’s bank account and receivables, and nine other bank accounts.</p> <p class="p1">Leslie Corwin of Eisner, Law Finance Group’s lawyer, said in correspondence to Girardi attached to court filing that the lawsuit was filed in state court explicitly so his client could secure assets.</p> <p class="p1"> Girardi notably scored $333 million settlement on behalf of residents of Hinkley in the toxic tort case that inspired the film “Erin Brockovich.” Girardi’s finances and those of the firm, however, have repeatedlybeen the subject of litigation since his wife joined the cast of the Bravo reality television show in 2015.</p> <p class="p1">The lawsuit alleges that the Girardi Keese firm owes $15 Million. Girardi, it alleges, who regards himself as “one of the nation’s top trail lawyers,” is a partner of the firm Girardi Keese. In order to fund the operations of his law firm Griardi sought financing from Law Finance Group, LLC. As security Girard personally secured all obligations owed by the loan agreement. Girardi, it alleged, agreed to immediately pay the lender all proceeds, including legal fees received, from certain cases described in an exhibit.</p> <p class="p1"> It also alleged that Girardi, a principal at the Borrower law firm – agreed to personally guarantee all obligations owed to Lender.</p> <p class="p1"> The lawsuit claims that the lender discovered that Girardi received proceeds from the cases specified in the loan agreement but failed to pay the lender as promised. In addition, the lender learned that Girardi had given the same security to four more lenders in violation of the contract.</p> <p class="p1">The claims are now being pursued by arbitration. The arbitration award could be turned into a court judgment in California.</p> <p class="p3"><b> New York Proposes a Flawed Method to Interest Whistleblowers in Turning in Insurance Fraud Perps</b></p> <p class="p1">The New York Legislature has proposed the following as a means to help the police defeat insurance fraud:</p> <p class="p1">Add §405-a, Ins L</p> <p class="p1">Provides that any person who provides information to the attorney general, a district attorney or the insurance frauds bureau concerning a fraudulent insurance transaction or with information about a fraudulent insurance transaction that is about to take place may be entitled to an award of forty percent of the action or claim relating to such fraudulent action.</p> <p class="p1">The statute was designed to reward whistleblowers in NY. Anyone who provides info to the state attorney general, district attorney, or insurance frauds bureau would get 40% of any recovery from an insurance fraud crime.</p> <p class="p1">This bill, as written, needs a great deal of rewriting since people convicted of insurance fraud seldom pay anything from actions brought by the state. At best it would allow a share of criminal fines or orders of confiscation. If that is the intent it should say so. If not, it should be modified as a reward paid for by the state or the defrauded insurer.</p> <p class="p1"> The intent is a good idea but ZIFL wonders, even if enacted, it will have an effect, and it needs clarification. First it is written in the disjunctive. Providing information should not be rewarded unless there is an arrest and conviction. Second, if they defeat a fraudulent claim, where is the money coming from to pay 40% of the false claim that is defeated. With such weak language ZIFL can see fraud perpetrators taking advantage of it by having a co-conspirator report a potential fraud, then withdrawing the claim, and the whistleblower gets 40% of the claim that was never made.</p> <p class="p1">We are shocked that anyone with a high school education would propose this statute and post it on Twitter as @FraudNY.</p> <!--themify_builder_content--> <div id="themify_builder_content-12623" data-postid="12623" class="themify_builder_content themify_builder_content-12623 themify_builder tf_clear"> </div> <!--/themify_builder_content-->The post <a href="https://www.insurance-advocate.com/2021/02/08/litigation-funding-dispute-gets-costly/">Litigation Funding Dispute Gets Costly</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></content:encoded> </item> <item> <title>Bank’s Standing In Foreclosure Actions Just Got Easier</title> <link>https://www.insurance-advocate.com/2021/02/08/banks-standing-in-foreclosure-actions-just-got-easier/</link> <dc:creator><![CDATA[Lawrence Rogak]]></dc:creator> <pubDate>Mon, 08 Feb 2021 01:12:17 +0000</pubDate> <category><![CDATA[2021]]></category> <category><![CDATA[February 8]]></category> <category><![CDATA[Courtside]]></category> <guid isPermaLink="false">https://www.insurance-advocate.com/?p=12621</guid> <description><![CDATA[<p>Attorneys who defend foreclosure actions often employ a defense called “produce the note.” Because mortgage notes often change hands (i.e., are sold) between the time the mortgage is taken out and the time of foreclosure, the foreclosing bank sometimes doesn’t have the actual note — and this may defeat the foreclosure action. But New York’s […]</p> The post <a href="https://www.insurance-advocate.com/2021/02/08/banks-standing-in-foreclosure-actions-just-got-easier/">Bank’s Standing In Foreclosure Actions Just Got Easier</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description> <content:encoded><![CDATA[<p class="p1">Attorneys who defend foreclosure actions often employ a defense called “produce the note.” Because mortgage notes often change hands (i.e., are sold) between the time the mortgage is taken out and the time of foreclosure, the foreclosing bank sometimes doesn’t have the actual note — and this may defeat the foreclosure action.</p> <p class="p1">But New York’s Court of Appeals just made the bank’s job a little easier in today’s decision in J.P. Morgan Chase Bank v Caliguri, 2020 NYSlipOp 07660. Here, the Court held that the bank satisfied its burden of proving standing to sue, “through evidence that it possessed the note when it commenced this action, including a copy of the original note endorsed in blank, and other supporting material, including an affidavit of possession based on an employee’s review of plaintiff’s business records.”</p> <p class="p1">Noting that “there is no ‘checklist’ of required proof to establish standing,” the Court ruled that “there is no per se rule requiring the court to grant a request for inspection of the original note prior to awarding summary judgment to a plaintiff in a mortgage foreclosure action.” As a result, summary judgment was granted to the bank.</p> <p class="p3"><b>Comment</b></p> <p class="p1">This will not help banks who cannot produce even a copy of the note, but a photocopy and an affidavit of possession will make their case. A plaintiff suing to foreclose on a mortgage or to sue on a promissory note has the affirmative obligation to plead (and prove, if put at issue) that it is the holder of the note forming the basis of the suit.</p> <p class="p1">NY UCC 3-301 makes it clear that the holder of the note is entitled to enforce it, and so courts must determine whether the plaintiff is in “possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession.” A purchaser of a note becomes the holder through negotiation (NY UCC 3-202). If the instrument is payable to order it is negotiated by delivery with any necessary indorsement; if payable to bearer it is negotiated by delivery. Therefore, the issue of what documentation is necessary to establish a plaintiff’s right to demand payment on a negotiable instrument is properly understood as a question of whether the note in question has been negotiated<span class="Apple-converted-space"> </span>such that the plaintiff becomes the holder (see 80 NY Jur 2d Negotiable Instruments § 269 [2d ed 2013] [“The mere possession of a promissory note endorsed in blank, just like a check, provides presumptive ownership of that note by the current holder; such is the foundation of negotiable instruments law. Assuming that execution of a negotiable instrument if put in issue has been proved, its possession and production at the trial of the action to enforce it is sufficient prima facie proof of the plaintiff’s ownership. This is the rule applicable to an instrument payable to bearer or indorsed in blank”].</p> <p class="p1">Therefore the question of standing in a foreclosure case is different than standing in other cases, where a plaintiff must either be a party to a contract or a person who has sustained an injury for which a legal remedy is prescribed. Mortgage notes are negotiable instruments, and standing is conferred by becoming a “holder in due course” per the UCC.</p> <!--themify_builder_content--> <div id="themify_builder_content-12621" data-postid="12621" class="themify_builder_content themify_builder_content-12621 themify_builder tf_clear"> </div> <!--/themify_builder_content-->The post <a href="https://www.insurance-advocate.com/2021/02/08/banks-standing-in-foreclosure-actions-just-got-easier/">Bank’s Standing In Foreclosure Actions Just Got Easier</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></content:encoded> </item> </channel> </rss>