Friday, March 28, 2014

Flood Insurance Increases Still In the Cards

The day after Superstorn Sandy struck, corner of Moreland St.
and Midland Ave., Staten Island (Photo: Mark Ruquet) 
By Mark E. Ruquet

Despite the President's signing of House Bill 3370, homeowners in flood zones still face exorbitant premium increase in their coverage, it's just been delayed.

While the law rolls back rates, it also permits increases of up to 18 percent a year, which means many homeowners will eventually be facing premium charges that puts them in the same situation they face today. It is only a delay. So what's the remedy? Get out of your home or mitigate? Easy said than done for many of us.

An article from the Associated Press illustrates that this issue is not limited to those of us living near a coast line. Indeed, these are people sitting inland living in cities where the options to mitigate their flood exposure are few.

Please click here to read "Flood Insurance Costs Still on the Rise Despite New Law."

The reality is, just raising insurance rates is not an answer. We need a national plan to address flood exposure and obviously, risk transfer is not the sole answer.
 

Wednesday, March 19, 2014

Proposals to Build Seawall Could Alter Need to Elevate Homes

By Mark E. Ruquet

Many victims of Superstorm Sandy are facing a dilemma—whether they will raise their home to three feet above flood level or pay exorbitant premium rates for flood insurance. That dilemma may become just a bad memory for homeowners if a community flood-mitigation project meets federal flood prevention standards, said community and government representatives.

At the Wednesday, March 12, meeting of the Midland Beach Civic Association, Tom McDonough from the Siller Foundation addressed the need to elevate homes in flood zones, but many homeowners are not eligible for federal or state funding. He said the foundation is looking for ways to deliver the construction at cost, along with funding assistance for homeowners.

However, association members said during the meeting that elevating homes would not be necessary if a seawall is constructed and certified to meet the flood mitigation standard of the Federal Emergency Management Administration.

Alex Zablocki, the regional lead for the New York Rising Community Reconstruction Program, who was on-hand to discuss the state’s efforts to help Sandy ravaged communities get back on their feet, said the state has $40 million committed to a pilot program to construct a seawall and other flood mitigation measures along the Staten Island’s South Shore. This project has been in the works since 1993. With the U.S. Army Corps of Engineers in the lead, the project is almost at the point where construction could begin by 2016, if not sooner.

Civic Association member Debi Vadola said it is important for residents to have this information as they go about making decisions about what to do with their homes. She said it is equally important that residents push government officials to build the wall to FEMA specifications to ameliorate the eventual high costs homeowners in the flood zones will face in the future.

Zablocki said that an outline of the plan is available at the Army Corps website.

According to the Army Corps web page titled “FACT SHEET — South Shore of Staten Island, NY,” the project covers 13 miles of coast line from Fort Wadsworth to Tottenville extending along lower New York Bay and Raritan Bay. The project, which is still in the study stage, “is to identify possible risk management solutions for hurricane and storm damages in the area, and to determine whether Federal participation is warranted in constructing shore protection measures.” The fact sheet indicates that Congress authorized funding for construction in 2013.

The study is evaluating plans for “a system of levees, seawalls, stone revetments and acquisition and preservation of natural open space storage” from Fort Wadsworth to Oakwood Beach. A second phase of mitigation from Great Kills to Tottenville “is still under assessment.” 

In an e-mail, U.S. Army Corps Project Manager Frank Verga said the Army Corps is preparing a feasibility study in cooperation with state and city officials. He added that more information would become public over the next couple of months.


For those residents who want to make their voices heard and let the press and city officials know we are not happy with the pace of aid coming to those of us devastated by Superstorm Sandy, the Yellow Boots Foundation is sponsoring “Walk a Mile in Our Shoes,” on Saturday, March 29, at 10 a.m. Those who want to show their dissatisfaction are urged to meet at Midland Beach at the Turtle Circle for a peaceful demonstration to remind city and state decision makers that we’re still here and not happy with the slow rate of progress.
     

Sunday, March 9, 2014

So How Did Your Favorite Publicly Traded Insurance Broker Do in 2013

By Mark E. Ruquet

With the first quarter of 2014 fast approaching, I thought I would take a moment to check out the performance of the publicly traded insurance brokers in 2013 in terms of revenue and income. They may not admit it publicly, but they compete between them, and not just in terms of gaining new customers or keeping the old.

In terms of pure revenue dollars, Aon comes out on top for the fourth quarter reporting $3.2 billion in revenue, followed by Marsh & McLennan at $3.12 billion. Willis was third at $919 million closely followed by Arthur J. Gallagher with $890 million. Rounding out the top five publicly traded brokers was Brown & Brown with $343 million.

For the year, MMC edged out Aon by $446 million reporting $12.3 billion. Willis and Arthur J. Gallagher were in the $3 billion club, but Willis came out ahead with $3.66 billion compared to AJG’s $3.2 billion. Brown & Brown also edged into the billion-dollar club reporting revenues of $1.4 billion.

When it came to net income, Aon beat out MMC, producing $360 million in net income for Q4 compared to MMC’s Q4 $303 million. However, for the year, MMC was ahead with $1.36 billion while Aon reported $1.15 billion. If one wants to look at performance, Willis could claim the prize of most improved, rising from Q4 loss of $801 million in Q4 2012 to net income of $74 million. For the year, Willis net income came in at $377 million, much better than 2013 net loss of $433 million.

Willis’ poor showing in 2012 was the result of a net loss of $804 million in the fourth quarter of 2012 resulting from the combination of:

• $492 million related to goodwill impairment in North America
• $200 million related to the write-off of unamortized cash retention awards
• $252 million related to the accrual of 2012 cash bonuses
$113 million tax charge to establish a deferred tax asset valuation allowance

In terms of their insurance and risk segments – the commissions and fees the firm’s earned from insurance brokering – Aon came out ahead reporting Q4 revenues of more than $2 billion and $7.8 billion for 2013. MMC followed $1.6 billion for Q4 and $6.6 billion on the year. Willis claimed third reporting $911 million Q4 and $3.6 billon on the year. AJG held a solid fourth with $593 million Q4 and more than $2 billion on year. Brown & Brown’s efforts for 2013 produced Q4 risk and insurance revenue of $339 million for Q4 and $1.4 billion on the year.

The full year results are as follows: