Monday, October 10, 2011

Can Computer-Aided Driving Lower One’s Car Insurance Premiums?

Given that the steepness of one’s car insurance premiums is directly proportional to their accident risk, can computer-aided driving result in a more equitable policy?

By: Ringo Bones

Given that there is now a near ubiquity of GPS navigation in the latest car models, the world’s leading automotive manufacturers have now engaged themselves in a toe-in-the-water exercise on the commercial viability of automotive computers that help improve ones driving skills – safety wise. As of late, lane-departure warning devices – computer-based smart devices that use the white lines on the road as a guide - have been tried out in order to improve the road safety aspect of one’s driving skills. They emit an audible warning to the driver whenever he or she deviates from the straight path, given that less-than-sober drivers swerve in and out of their designated lane.

Andrew Yeoman, managing director of Trimble – an in-car mini computer that collects data of one’s driving performance and also provides driving tips – could allow a driver’s insurance premiums to go down by making him or her into a less accident-prone driver. As of the late, the Trimble system had received good reviews by those who tried it out. Unfortunately, as with similar in-car driving aid computers, they don’t work reliably in not-so-well-maintained roadways where the white dividing lines are already faded off. If computer-aided driving becomes commonplace, will in-car computers that drives our cars more safely than us be the next big thing in automotive accessories?

Monday, August 8, 2011

Wellness Insurance Fraud: The Bane of Health Insurance Providers?

With the advent of therapeutic vacations, medical tourism and wellness holidays now payable by established health insurance providers, are these so-called outsourced medical procedures the new target of insurance fraud?

By: Ringo Bones

Recently, health insurance provider ERGO Insurance Group of Düsseldorf, Germany, experienced a rude awakening first hand on how it feels to be fleeced by some of their unscrupulous health insurance policy holders through wellness insurance fraud. During the past few years, a growing number of unscrupulous clients had been defrauding various health insurance providers by bogus medical tourism and wellness vacation bills and claims designed to enrich themselves and their complicit co-conspirators. Could this unscrupulous criminal enterprise over time eventually defraud health insurance providers out of business?

Most health insurance providers in Europe - not just in Germany - became a target of health insurance fraudsters due to their relative lack of due diligence procedures when it comes to processing policyholders' claims whether they are genuine or fraudulent. Phony doctors' bills / falsified documents propped up by local medical practitioners during the policyholders' wellness vacation and medical tourism procedures - which have recently been found out by the ERGO Insurance Group's ongoing investigation in Sri Lanka and other top medical tourism and wellness vacation spots around the world - are fast becoming de rigueur in recent health insurance fraud schemes. Even corrupt high-level local pfficials involved in the regulation of their own medical tourism industry are sometimes involved.

Sadly, 95% or more of the suspected cases of propped-up medical bills turned out to be bona fide cases of insurance fraud. Unfortunately, most court decisions involving health insurance fraud cases in the European Union tend to favor the suspected swindlers, making prosecution of health insurance fraud perpetrators very difficult on European soil. Could this make the wellness vacation insurance and medical tourism fraud cases the new bread-and-butter of local private investigation companies?

Monday, April 11, 2011

Should There Be Cyber War Risk Insurance?

Given that the money-earning side of the world wide web had recently become indispensable to the 7-billion or so people of planet Earth and cyber attacks are on the rise, should the need for a cyber war risk insurance be nigh?

By: Ringo Bones

During the very tail-end of the 20th Century – i.e. the very late 1990s – the very idea that a few billion people earning their very livelihood via the globalized infrastructure of the world wide web seems almost inconceivable, so too are the very concept of cyber attacks that could cripple a major chunk of a sovereign country’s economic lifeblood – not to mention life-savings of a few billion people being siphoned off by cyber terrorists. Given that high profile cyber attacks via directed denial of service or DDOS attacks are on the rise since 2005, should insurance providers be offering cyber war risk insurance schemes?

Ordinary or conventional war risk insurance that has now become de rigueur for major insurance companies is defined as a type of insurance that covers damage due to attacks of war including invasion, insurrection, rebellion and hijacking. Some policies also cover damage resulting from use of weapons of mass destruction. At present, conventional war risk insurance is most commonly used in the shipping and the aviation industries.

Earlier this year, the cyber attack issue had been raised in the 2011 Munich Cyber Security Conference noting the previous high profile attacks of the 21st Century like the 2007 cyber attack on Estonia’s internet infrastructure due to the country’s dispute with Russia over a Soviet era memorial of the Great Patriotic War – though no proof whatsoever was found if the alleged 2007 DDOS attack on Estonia was actively sponsored by the Kremlin. And even though there has seemed to be a lack of urgency – even political will – of tackling cyber attacks, never mind establishing a Geneva Convention or Hague Convention style rules of war governing cyber warfare like designating hospitals and microfinance banking systems’ internet infrastructure non-combatant status during a cyber war.

Even though there are already UN Security Council Resolution provisions in existence that dish out punitive sanctions on states and governments that sponsor terrorism, the UN Security Council has yet to issue one directed at states and governments that actively sponsor cyber terrorist organizations – which could cause problems for insurance companies on how to equitably compensate victims / casualties of cyber attacks. Could a lack of political will of the international community in defining and tackling cyber terrorists and reaching a consensus on the establishment of cyber warfare conventions eventually make cyber war insurance – at present – an economic red herring?

Sunday, April 3, 2011

Nuclear Energy Insurance: Economic Red Herring?

Ever since the earthquake and tsunami damaged Fukushima nuclear power plant in Japan started dominating the headlines, could nuclear energy insurance be proven nothing more than an economic red herring?

By: Ringo Bones

Throughout its 50-plus year history, the nuclear fission power industry seems to have been run by folks accepting the truism of the relativity of truth and the supposed vanity of truth-tellers. A case in point was the series of press conferences done by the administrative staff of the quake and tsunami stricken Fukushima power plant in Japan supposedly posing absolutely no danger to the nearby residents. Neither did they provide the full extent of the hazards posed by a possible reactor meltdown immediately after the devastating March 11, 2011 earthquake and tsunami that struck the north-west portion of Japan; Thus fuelling yet again the general public’s cynicism over the safety of nuclear fission power generation since the Three Mile Island and Chernobyl nuclear power plant accidents. But could this eventually make nuclear energy insurance an economic red herring?

In America, the nuclear fission power industry was always seen as an economic red herring by most concerned American taxpayers because the American nuclear fission power industry’s very existence is largely due to the exorbitant government subsidies via taxpayer money in which the true extent of the American nuclear fission power industry seems to defy ordinary economic valuation benchmarks. With nuclear fission power plant accidents no longer a matter of “if” but “when” they occur, can existing nuclear energy insurance clauses really provide not only an economically viable means of settlements but also of equitable financial compensation?

Unfortunately, an overwhelming number of fire risk insurance policies – which houses and buildings situated close to nuclear fission power plants generally have – more often than not, have a nuclear accident exclusion clause. Ever since the post World War II development and commercialization of nuclear fission electric power generation industry and the possibility of loses due to nuclear reaction, various policies – including fire insurance – have been amended so that the insurance companies will not be responsible for the loss resulting from nuclear reaction, nuclear radiation or radioactive contamination or to any act or condition incident to any of the foregoing. Special coverage to meet these hazards is only available on the rarest of cases.

The post World War II industrial scale development of nuclear materials means that overexposure to radiation may cause bodily injury or death or cause the radioactive contamination of property, which could last up to several million years if radioisotopes of long half-lives – like neptunium-239 – are part of the radioactive contamination. Since these hazards involve tremendous potential losses, various insurance companies have joined to form pools since the start of the nuclear fission power generation industry to afford coverage for these perils of direct damages and also liability of others.

A special feature of the nuclear energy liability policy makes the insurance company liable for the insured’s property located away from the insured facility provided the insured would have been liable for the damage as though the property belonged to others. Maybe the compensation of insured property and residents living close to the Fukushima nuclear power plant will provide a precedent to gauge the economic viability of nuclear energy insurance in practice.

Monday, February 21, 2011

Life Partner Insurance, Anyone?

Even though full legal status of same-sex couples has yet to be universally accepted, is life partner insurance or insurance for same-sex couples already reached commercial viability?

By: Ringo Bones

Unfortunately, diversity in sexual orientation has yet to gain universal acceptance the world over as some “unenlightened” regions still engage in foot-dragging when it comes to full legal recognition of same-sex couples. But some insurance companies – like Insurance 360 for example – are already offering term life insurance for same-sex couples at very reasonable rates squarely aimed at regions were same-sex couples legally recognized.

As stated in their official website at, rates as low as US$18 per month are advertised which seems only to rove that if one major insurance company is already dipping their toes on providing term life insurance for same-sex couples at very attractive rates, then other insurance companies probably already have their versions already on offer or in the works. But given that the legal status of same-sex couples still vary from state to state in the US and from region to region elsewhere in the world, is life partner insurance or term life insurance for gay / same-sex couples even economically viable at present?

Even though the legal status of same-sex couples is still in limbo in some parts of the world, in areas and regions where it has gained full legal status thanks to the more enlightened citizenry’s political will it makes real economic sense. Not only because places that recognize gay or same-sex marriage have a strong and prosperous economy the resident’s in such regions had also benefited fro the prevailing economic prosperity. Thus making life partner insurance offered in such places a very lucrative business proposition.

According to insurance actuaries, term life insurance is the least expensive way of providing financial security for your partner and family in case of untimely or premature death. Unlike most health insurance companies, many life insurance companies already allow same-sex partners to acquire life insurance with their life partner as their beneficiary. Most life partner insurance policies already in existence are simple and provide rates that are guaranteed for 10, 15, 20, or even 30 years. So does this mean that life partner insurance might soon become de rigueur in a typical insurance company’s portfolio?

Due to plain ignorance or just a lack of political will by the local powers-that-be, there are still some parts of the world that still don’t recognize and some are even vehemently opposed in the legal recognition of gay or same-sex couples. But since the younger generation are becoming more politically-correct in tackling such issues, it would probably be only a matter of time that same-sex couples and life partner insurance will become just another ubiquitous aspect of our social fabric.