Agency Tips

Weekly News Roundup: January 27th

From laid off tech workers to global insurance losses, here are the top insurance stories of the last week!



The Insurance industry is ever-changing and keeping up with everything that happens can be difficult. 

With that in mind, here are some of the recent stories from around the insurance world that we found interesting.

1. Laid Off Tech Workers Are About to Get Help—From Allstate


Allstate Corp. is investing in technology such as artificial intelligence and telematics to tap into new clients and markets. CFO Jess Merten has stated that the company plans to upgrade talent throughout the organization by taking advantage of job cuts at tech companies due to the faltering global economy. Allstate is also looking for ways to reduce costs, but will still focus on transformation initiatives like providing insurance quotes with AI and creating user-friendly mobile applications for customers. The company is not planning large job cuts similar to those seen in other industries, but it sold its Northbrook campus last year and remains thoughtful about where its new headquarters should be located going forward.


2. Global Insured Losses From Natural Disasters Topped $130B in 2022 in 5th Costliest Year

In 2022, global economic losses from natural disasters were estimated at $313 billion, with an insurance price tag of $132 billion, according to Aon. This resulted in a global protection gap of 58%, the lowest on record. Hurricane Ian in the United States was the second-costliest natural catastrophe in history, resulting in approximately $50-$55 billion of global insured losses. Additionally, 421 notable natural disaster events were recorded, 39 of which were individual billion-dollar disasters, and the number of human casualties was well below the 21st century average (31,300 fatalities compared to 73,200). The report emphasizes the need for wider adoption of risk mitigation strategies, including better disaster management and warning systems, as the impacts of climate change become increasingly visible.

3. Koch Industries Gets $2.5B in Dividends From Unit That Offloaded Asbestos Liability

Koch Industries, an industrial conglomerate, received nearly $2.5 billion in dividend payments last year from its Georgia-Pacific unit. The company used a corporate bankruptcy maneuver called the Texas two-step to form a subsidiary, Bestwall, that took on the company’s asbestos liability. Bestwall declared bankruptcy, allowing Koch Industries to receive more than $5 billion since 2017, largely through the newly created New Georgia-Pacific, which has continued paying dividends to Koch Industries. The filing of the new subsidiary has been called an improper manipulation of the bankruptcy system by plaintiff attorneys.


4. Climate Tech Startup Aims to Narrow Insurance Protection Gap for Flood Risks

Floodbase is a startup technology company that launched a new global flood-risk data service to help bridge the gap between damage caused by flooding and insurance coverage. The data service combines satellite imagery, water gauge data, machine learning and other sources to track water levels before, during and after floods. This can help insurers create policies that automatically pay out when policyholders experience flooding beyond a defined level. The company has secured a $12 million Series A fundraise, and has already enabled some financial institutions to underwrite parametric flood insurance. The technology may be useful beyond insurance markets, such as linking disaster recovery and debt forgiveness. The company was co-founded by Beth Tellman and Bessie Schwarz after meeting in a Yale School of the Environment master’s program in 2012.


5. Britain Sounds Alarm on Russia-Based Hacking Group

Britain's National Cyber Security Centre (NCSC) has revealed that a Russia-based hacking group, Cold River, is behind an expansive and ongoing information-gathering campaign that has struck government, politics, academia, defense, journalism, and activism. Cold River has targeted three nuclear research laboratories in the United States and has published private emails from a former British spymaster. An Iran-based group, Charming Kitten, has also been using similar tactics to gather information.

Since Russia's invasion of Ukraine, Cold River has escalated its hacking campaign against Kyiv's allies. Western officials say the Russian government is a global leader in hacking and uses cyber espionage against foreign governments and industries. However, Moscow has denied this. Cold River is believed to be linked to the FSB, the successor agency of the Soviet-era KGB. This group is also connected to a state-sponsored hacking company known as Fancy Bear or APT28. Cold River has successfully stolen and distributed sensitive documents from political targets in Europe, Asia, and North America. 

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