Top 10 West Insurance Journal Stories of 2022

December 29, 2022 by

GEICO closing offices in California, insurers battling with regulators, lawsuits, settlements, and wildfires were among the most read stories in Insurance Journal’s West region.

Following were among the region’s top 10 articles for the year that interested readers.

This was the most read article of the year, and it chronicled GEICO closing all of its offices in California. The company shut down all of its 38 offices in the state and hundreds of GEICO were laid off.

“We continue to write policies in California, and we remain available through our direct channels for the more than 2.18 million California customers presently insured with us,” GEICO stated in a Sacramento Bee article.

Chevy Chase, Maryland-based GEICO is private subsidiary of Berkshire Hathaway and one of the nation’s biggest auto insurers. GEICO reported a 63% drop in pretax underwriting income in 2021.

Fitch Ratings said in its U.S. Personal Lines Market Update that private passenger auto joined homeowners in unprofitable territory last year, however analysts also said that GEICO and Progressive will overtake State Farm on the personal auto leaderboard in terms of premium volume in 2023.

Top U.S. insurance companies and associations in September warned California is risking a crisis by refusing to approve any rate increases for more than two years, since the start of the coronavirus pandemic.

The companies already were cutting back and said they couldn’t continue operating at a loss while California Insurance Commissioner Ricardo Lara delayed rate cases filed by companies representing three-quarters of the California market.

Allstate, Geico, Kemper, Liberty Mutual and State Farm all reported paying more in claims than they collected in California premiums in the first half of the year, though they were profitable as recently as last year.

A spokesman for Lara retorted that data collected from the insurance companies shows many failed to fully return premiums that they overcharged consumers.

Another story on insurance rates made the top list in West, but that may be because of one of high-profile principals involved.

Tesla CEO Elon Musk said he believed Lara was responsible for high auto insurance rates in the state because the state does not permit consideration of its data from its auto technologies in pricing.

Lara argued that he was simply enforcing the state’s Proposition 103 consumer privacy law that limits access to consumer data.

The tiff began when Musk talked about Tesla Insurance during his fourth quarter earnings call. Tesla offers its own insurance that incorporates technology that measures driving habits. The company says it has data showing the feedback drivers receive through the technology leads to safer driving. The Tesla telematics coverage can be bought in Arizona, Illinois, Ohio and Texas. Tesla also sells insurance in California but it excludes the telematics benefit. Musk mentioned how he’d like California to change that.

Wildfires stories were again among the West region’s most read. Wildfires stories dominated the 2021 list of most read stories.

An article in June on Western wildfires forcing evacuations in Arizona and California on the heels of an early and severe wildfire season in New Mexico was one of the most read of the year.

The story detailed how insurers are increasingly eyeing the growing risks.

Arindam Samanta, director of product management for Verisk Underwriting Solutions, said they were hearing from dozens of insurers.

“Insurers are very much concerned about the wildfire situation,” Samanta said.

The increased interest had also led to increased sales of Verisk’s wildfire modeling and data.

Lawsuit stories often make it onto the list of top stories. Such was the case of a story detailing a lawsuit by the parents of a five-time champion on the game show “Jeopardy!” accusing a Las Vegas-area hospital where he underwent abdominal surgery of causing his death in February 2021.

Brayden Smith, who died at 24, was one of the final “Jeopardy!” contestants to appear with host Alex Trebek before Trebek died in 2020 after battling pancreatic cancer at age 80.

Smith’s parents filed the lawsuit in Nevada state court against St. Rose Dominican Hospital-Siena Campus in Henderson, hospital corporation Dignity Health, and several doctors and nurses. The civil complaint and affidavits from two doctors and a nurse allege negligence and medical malpractice, and seeks unspecified compensatory and punitive damages.

Smith suffered from ulcerative colitis and underwent surgery in January 2021 at St. Rose to remove his colon, according to the court filing. It said he was sent home for recuperation but collapsed three weeks later and was hospitalized again before he died of blood clots in his lungs.

The suit alleges Smith was never given anticoagulants after surgery and accuses doctors and nurses who treated him of failing to meet medical standards of care.

A story on a 58-story luxury apartment building in San Francisco sinking and tilting about 3 inches per year was well read.

Without a fix, the Millennium Tower in just a few years could reach a 40-inch tilt, which would be the point at which the elevators and plumbing may no longer operate, according Ron Hamburger, the engineer responsible for fixing the troubled building.

Hamburger said that installing 18 steel piles to bedrock is the best way to stop the tilting and possibly reverse some of it.

Millennium Tower opened in 2009 and all 419 apartments quickly sold out. High-profile residents have included former San Francisco 49er Joe Montana, late venture capitalist Tom Perkins and San Francisco Giants outfielder Hunter Pence.

But by 2016, the building had sunk 16 inches into the soft soil and landfill of San Francisco’s financial district. It was also leaning, creating a 2-inch tilt at the base and a 6-inch lean at the top. Residents sued the developer and designers.

A boring story surprisingly made the list of top stories.

The story reported on data on injured workers from the nation’s most mature adult-use cannabis market in Colorado. The data showed no excessive claims resulting from injuries suffered by stoned forklift drivers, high cultivators, or even dispensary workers who were hurt during a robbery.

An analysis of workers’ comp claims from Pinnacol Assurance, Colorado’s largest workers’ compensation insurer, found few things that stood out in claims data from the state’s cannabis industry compared with other industries in the state.

Claims injury trends in the state’s cannabis industry have largely remained consistent since legalization in 2012, according to Pinnacol.

Randy Philabaum, a safety consultant at Pinnacol, was one of those who went looking for things that stood out in the data from reported workplace injuries in cannabis.

“It’s boring, it’s level, it’s standard,” Philabaum said. “It’s a pretty safe, pretty standard type of industry to work in.”

Several stories on the battle between Washington Insurance Commissioner Mike Kreidler and insurers over the use of credit scoring in insurance pricing were among the most read of the year.

A judge in Washington ruled in favor of the insurance industry’s argument against Kreidler’s emergency rule temporarily banning use of credit scoring.

Kreidler’s emergency order prohibited insurers from using a consumer’s credit score to price auto, renters and homeowners coverage.

He’s been working to eliminate credit scores from insurer consideration for some time.

The American Property Casualty Insurance Association, the National Association of Mutual Insurance Cos. and the Northwest Insurance Council argued that Kriedler’s actions exceeded his statutory authority, violate the separation of powers between the executive and legislative branches of government and could be in direct conflict with the existing statutes.

Settlements are also popular stories on Insurance Journal.

Reader interest was in an article on Under Armour agreeing to pay UCLA $67.49 million to resolve a lawsuit filed two years ago.

UCLA filed a lawsuit against Under Armour in August, 2020, in U.S. District Court in Los Angeles for breach of contract, seeking damages in excess of $200 million. The settlement was reached in late May and approved by the University of California’s Board of Regents.

When Under Armour announced it was ending its deal with UCLA, the two sides were four years into a 15-year deal worth $280 million, which was the highest in college athletics.

The company cited force majeure due to the coronavirus pandemic as one of the reasons it was terminating the deal.

UCLA eventually agreed to a new apparel contract with Nike, which began last July. The deal is for six years and is worth $46.45 million.

An article on a new logging insurance program tailored to fit the needs of the logging and log hauling industry in the Northwest was among the year’s most read.

Securing and maintaining insurance for U.S. logging contractors has become increasingly difficult, and an increase in wildfires has made things in the business harder.

Several factors work against loggers seeking insurance: Strict eligibility guidelines, insurers leaving the market, an ongoing driver shortage, legislative issues, nuclear verdicts and wildfires.

So, Axe Insurance Group, a program in Idaho and Montana underwritten and backed through Lloyd’s of London Marketplace, was launched.

The logging insurance program features general liability, commercial auto, equipment and excess liability. It’s tailored to fit the needs of the logging and log hauling industry in the Northwest.

The program was more than a decade in the making.

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