It is a well-known fact that Michael Jackson is one of the top money earners of the U.S. and the global music industry, but how easy – or difficult – is it to insure the King of Pop?
By: Ringo Bones
Since the untimely and tragic passing of Michael Jackson back in June 25, 2009, his planned This is It tour seems to have become an insurance company’s nightmare. But given the sums of money involved, will the parties involved in insuring Michael Jackson gain financially in the end? After all, Jackson’s musical talent is well backed by having the ability to earn millions.
Ever since his musical prowess enabled him to earn millions of dollars with relative ease, Michael Jackson has always been designated into the special coverage risk aisle as an insurance coverage client - Not to mention his lifestyle choice. The price of such coverage tends to be high because the broad statistical basis for computing most insurance rates – i.e. statistical analysis that applies to us ordinary folks – does not apply to Michael Jackson’s highly individual risk.
So when the broker who facilitated in insuring Michael Jackson’s This is It tour bends over an underwriter’s box at Lloyd’s of London to discuss an insurance risk tailored to Mr. Jackson’s particular case. It is safe to guarantee that such discussions will be a lengthy one. Although Lloyd’s has for years been famous it’s willingness to underwrite unique risks for which adequate tables of probability are not available. Such as the cancellation of a major event due to the untimely death of an apparently healthy 50 year old man still in the prime of health.
Michael Jackson’s cancelled tour could also become the biggest ticket refund in history add to that the tour promoter AEG Live may have trouble collecting on it’s insurance only complicates matters. Insurers had sold an 18 million US dollar policy through Lloyd’s the famous London-based insurance market that was intended to help AEG Live recoup costs if the concerts the company was staging with Mr. Jackson were cancelled due to accident, according to the insurance company’s actuaries.
The insurance policy also could have provided coverage in case of cancellation due to medical-related issues according to a Lloyd’s insurance actuary. But that part of the coverage was dependent on the results of a physical that Mr. Jackson was scheduled to take. Thus raising the possibility that the coverage might not apply. Although Randy Phillips CEO of AEG Live had witnessed Michael Jackson passing his physical exam with flying colors in preparation for the upcoming tour several weeks before Jackson’s tragic and untimely death.
According to Bermuda-based insurer Validus Holdings Ltd., a group of insurers were covering the This is It 50-date concert series through the Lloyd’s insurance market, including its subsidiary Talbot Holdings Ltd. But Validus said it had less than $3 million at risk. But no matter what the outcome of the insurance pay-outs will be, Michael Jackson’s estate can still manage to cash-in on the cancellation of the This is It tour slated for July 13, 2009. There are even plans to release the video coverage of Michael Jackson’s elaborate rehearsals and full run-through at the Staples Center on DVD. Including the rehearsal footage two days before he died. Thus making it a part of a very good insurance policy from a financial perspective.
Showing posts with label Insurance. Show all posts
Showing posts with label Insurance. Show all posts
Thursday, July 9, 2009
Monday, December 22, 2008
The Global Economic Downturn: Bad For Insurance Companies?
While major insurance companies – like AIG – have recently felt the pinch of the global economic downturn big time, is the current global economic crisis really that bad for all insurance companies?
By: Ringo Bones
Even though times of economic austerity usually spells reduced profits for all sorts business activity, many in the insurance underwriting sector are now hard at work devising various schemes. Schemes not only on how to stay afloat during our on-going global economic downturn, but also ways for their company to “make a killing” despite other financial institutions failing on the left and right.
From the perspective of risk assessors, insurance companies had become very indispensable part of our modern economy. Everyone now knows that every economic unit is subject to risk. Various organizations for economic activities and business organizations may have their goals and raison d’être completely destroyed if protection by insurance doesn’t exist. Paradoxically, insurance is even more important for the small business organization than for larger business organizations - which can meet small losses without difficulty.
Financial stability can also be maintained through credit insurance. A business concern that suffers losses through the insolvency of customers can normally meet these conditions by a reserve for bad debts. However – especially during times of widespread economic crisis - a severe amount of loss due to insolvency of various customers may cause serious financial difficulties. This adverse situation may be minimized by credit insurance.
Even though credit insurance had became indispensable due to the fact that credit is already a vital part of our economy, but during times of widespread economic crisis, the consequence of unexpected losses has been inevitably turned into a model that develops slower than previously intended. I mean an insurance company won’t last very long if the funds it set aside for pay outs must be injected with funds reserved for other things. Like funds set aside to keep up with the latest Basel Accord Compliance rules, cost of running the company, etc.
By no means utterly dire, insurance companies could manage to keep themselves afloat during times of economic crisis if it is skillfully managed. But given that the Bull Market is already for all intents and purposes an extinct species for the foreseeable future, it is highly unlikely that most insurance companies can “make a killing” during times of economic austerity.
By: Ringo Bones
Even though times of economic austerity usually spells reduced profits for all sorts business activity, many in the insurance underwriting sector are now hard at work devising various schemes. Schemes not only on how to stay afloat during our on-going global economic downturn, but also ways for their company to “make a killing” despite other financial institutions failing on the left and right.
From the perspective of risk assessors, insurance companies had become very indispensable part of our modern economy. Everyone now knows that every economic unit is subject to risk. Various organizations for economic activities and business organizations may have their goals and raison d’être completely destroyed if protection by insurance doesn’t exist. Paradoxically, insurance is even more important for the small business organization than for larger business organizations - which can meet small losses without difficulty.
Financial stability can also be maintained through credit insurance. A business concern that suffers losses through the insolvency of customers can normally meet these conditions by a reserve for bad debts. However – especially during times of widespread economic crisis - a severe amount of loss due to insolvency of various customers may cause serious financial difficulties. This adverse situation may be minimized by credit insurance.
Even though credit insurance had became indispensable due to the fact that credit is already a vital part of our economy, but during times of widespread economic crisis, the consequence of unexpected losses has been inevitably turned into a model that develops slower than previously intended. I mean an insurance company won’t last very long if the funds it set aside for pay outs must be injected with funds reserved for other things. Like funds set aside to keep up with the latest Basel Accord Compliance rules, cost of running the company, etc.
By no means utterly dire, insurance companies could manage to keep themselves afloat during times of economic crisis if it is skillfully managed. But given that the Bull Market is already for all intents and purposes an extinct species for the foreseeable future, it is highly unlikely that most insurance companies can “make a killing” during times of economic austerity.
Friday, June 27, 2008
Environmental Coverage: Corporations versus Mother Nature?
Legislated environmental laws not only vary from country to country it is also evolving over time – in favor of the environment. Using this rationale, are existing environmental coverage clauses just a thinly veiled right for companies to pollute?
By: Vanessa Uy
Ever since the term Corporate Social Responsibility became the latest buzzword in the world, corporate leaders keeping their promises to shareholders and the company’s “bottom line” is no longer enough. Corporate leaders must also fulfil their promise to their employees and the community that their business practices are not placing our environment at risk. But when push comes to shove, how many of our so-called corporate leaders choose in favor of the environment instead of just “looking out for number one”? Especially when there are Environmental Coverage already available that not only turn “unforeseen disasters” that they create in the first place out of greed and ignorance – or a bit of both – into manageable situations. If you choose to define manageable situations as “immunity from prosecution” to “profiting from their own apathy”, which explains the popularity of every G8 summit to unruly teenagers.
There are now a number of insurance companies that offer environmental coverage with well-backed claims of underwriting authority for environmental risks. Some of them with reputations solidly backed by Triple-A-rated financial strength, the latest Basel Accord compliance and what have you. The question now is, are products like Cleanup Cost Cap and Pollution Legal Liability Select and their ilk nothing more than a thinly veiled rights for companies to pollute while avoiding the pay out of punitive damages?
The most commonly perceived truth states that this problem is either too complicated to the average layman or can be easily manipulated by the demagoguery of every environmentalist / vote-for-me politician come lately who favors passion over rational thought. Fortunately one can easily “hedge their bets” so to speak by utilizing the aid of one of the latest mathematical tools in assessing whether a corporations “green credentials” are nothing more than misspent PR – namely Quantitative Risk Assessment.
As of late, Quantitative Risk Assessment has been utilized by insurance companies I cited before that offer Cleanup Cost Cap and Pollution Legal Liability Select services as a form of corporate transparency. Stating that their products are not just thinly veiled provisos that allow corporations to pollute and ruin our environment with impunity. Insurance companies that provide environmental coverage always stay abreast with the latest Quantitative Risk Assessment findings especially ones pertaining to the protection of our environment. I just hope when insurance companies custom-tailor an environmental coverage policy to a certain company; it would be equitable to the needs of our environment and to the local economy. The world doesn’t need another corporate injustice like the still unresolved compensation claims of the victims of the 1984 Union Carbide insecticide plant disaster in Bhopal, India.
By: Vanessa Uy
Ever since the term Corporate Social Responsibility became the latest buzzword in the world, corporate leaders keeping their promises to shareholders and the company’s “bottom line” is no longer enough. Corporate leaders must also fulfil their promise to their employees and the community that their business practices are not placing our environment at risk. But when push comes to shove, how many of our so-called corporate leaders choose in favor of the environment instead of just “looking out for number one”? Especially when there are Environmental Coverage already available that not only turn “unforeseen disasters” that they create in the first place out of greed and ignorance – or a bit of both – into manageable situations. If you choose to define manageable situations as “immunity from prosecution” to “profiting from their own apathy”, which explains the popularity of every G8 summit to unruly teenagers.
There are now a number of insurance companies that offer environmental coverage with well-backed claims of underwriting authority for environmental risks. Some of them with reputations solidly backed by Triple-A-rated financial strength, the latest Basel Accord compliance and what have you. The question now is, are products like Cleanup Cost Cap and Pollution Legal Liability Select and their ilk nothing more than a thinly veiled rights for companies to pollute while avoiding the pay out of punitive damages?
The most commonly perceived truth states that this problem is either too complicated to the average layman or can be easily manipulated by the demagoguery of every environmentalist / vote-for-me politician come lately who favors passion over rational thought. Fortunately one can easily “hedge their bets” so to speak by utilizing the aid of one of the latest mathematical tools in assessing whether a corporations “green credentials” are nothing more than misspent PR – namely Quantitative Risk Assessment.
As of late, Quantitative Risk Assessment has been utilized by insurance companies I cited before that offer Cleanup Cost Cap and Pollution Legal Liability Select services as a form of corporate transparency. Stating that their products are not just thinly veiled provisos that allow corporations to pollute and ruin our environment with impunity. Insurance companies that provide environmental coverage always stay abreast with the latest Quantitative Risk Assessment findings especially ones pertaining to the protection of our environment. I just hope when insurance companies custom-tailor an environmental coverage policy to a certain company; it would be equitable to the needs of our environment and to the local economy. The world doesn’t need another corporate injustice like the still unresolved compensation claims of the victims of the 1984 Union Carbide insecticide plant disaster in Bhopal, India.
Monday, May 5, 2008
The Emergency Landing Brace Position: A Lethal Proposition?
Conspiracy theorists reasoned out that the emergency landing brace position is really designed to kill airline passengers in a crash because its cheaper to pay wrongful death suits than medical injury compensation. Is there a truth to this?
By: Vanessa UY
Our technological ability to fly – make that heavier than air technology – is now well over 100 years old, and yet quite a large portion of our populace still harbor this irrational fear of flying even though statistically air travel is the safest way to go. This is probably the reason why unfounded myths and rumors pertaining to the airline industry have become so prevalent lately. But one of these somewhat controversial myth / rumor being spread around by conspiracy theorists is about the one pertaining to the brace position instructed to be performed by airline passengers in case of an emergency landing.
According to the conspiracy buffs, the brace position is intended to kill airline passengers by breaking their necks easily rather than saving their lives. This is so because it’s cheaper for airline companies to pay out to the wrongful death lawsuits than to pay for the surviving passengers’ medical treatment and rehabilitation which could last the survivors entire natural life. In wrongful death pay outs, the airline companies typically pays 3 to 5 million dollars while for survivors medical treatment and lifetime rehabilitation, it could reach 50 million dollars. The risk assessment in dollar terms alone is very scary, reinforcing the typical conspiracy theorists conjecture about insurance and underwriters companies in collusion with the airline industry. By placing profits first before the safety and lives of their passengers, conspiracy theorists never had a better excuse in thinking so. But is there any truth to this?
A very entertaining science program on the Discovery Channel called Mythbusters routinely dispel and test suspected myths like the one previously mentioned by performing visually extravagant but valid scientific experiments that had gained them a cult following – especially to the younger viewers who desperately needed scientific enlightenment. In one episode, they did an experiment to test the validity of the myth that the brace position is designed to kill airline passengers during an emergency landing. Their high tech sensor loaded (actually they used postal / parcel service shock measuring stickers) crash test dummy named “Buster” was used to substitute a human passenger in an emergency landing situation. Sure enough, Buster demonstrated that the brace position actually reduced the shock or G load to a typical passenger by as much as 20 G s. That’s 20 G s less shock compared to a passenger in a normal sitting position. That’s a very significant difference of an outcome between survival and death.
To evaluate the big picture on why this myth ever came about in the first place, let’s examine first the history of manned aviation. When the Wright Brothers first demonstrated their newfound prowess of manned flight, they spawned a host of barnstormers i.e. early aviation enthusiasts. Even though they are very much popular and widespread, most people back then were still deathly scared by flying. Even witnessing a plane flying 30 feet above their heads is enough to terrify them even though there’s also a large majority who are curious to experience themselves the magic of flight. So when business entrepreneurs started the airline business back then, they have to convince the people how safe their planes are – or at least they cared about the safety of their passengers. And since airline companies are still around till this day, then safety concerns did came hand and hand with profits.
Sadly, there’s this other thing that the conspiracy theorists overlook that was always part and parcel of profit generating enterprises – namely corporate social responsibility and ethical business governance. Even though these concepts only became unique selling points of customers quite recently. It’s only common sense that your customers and clients will only do business with you again if you treat them right. Even private security contractors are subscribing to the corporate social responsibility and ethical business governance fad by using the phrase “at least we’re not killing innocent civilians” as their unique selling point. Maybe conspiracy theorists need to study the history of aviation first. If these conspiracy theorists don’t find history or science as a “sexy subject” anymore, then they should blame the Board of Education, not the airline industry.
By: Vanessa UY
Our technological ability to fly – make that heavier than air technology – is now well over 100 years old, and yet quite a large portion of our populace still harbor this irrational fear of flying even though statistically air travel is the safest way to go. This is probably the reason why unfounded myths and rumors pertaining to the airline industry have become so prevalent lately. But one of these somewhat controversial myth / rumor being spread around by conspiracy theorists is about the one pertaining to the brace position instructed to be performed by airline passengers in case of an emergency landing.
According to the conspiracy buffs, the brace position is intended to kill airline passengers by breaking their necks easily rather than saving their lives. This is so because it’s cheaper for airline companies to pay out to the wrongful death lawsuits than to pay for the surviving passengers’ medical treatment and rehabilitation which could last the survivors entire natural life. In wrongful death pay outs, the airline companies typically pays 3 to 5 million dollars while for survivors medical treatment and lifetime rehabilitation, it could reach 50 million dollars. The risk assessment in dollar terms alone is very scary, reinforcing the typical conspiracy theorists conjecture about insurance and underwriters companies in collusion with the airline industry. By placing profits first before the safety and lives of their passengers, conspiracy theorists never had a better excuse in thinking so. But is there any truth to this?
A very entertaining science program on the Discovery Channel called Mythbusters routinely dispel and test suspected myths like the one previously mentioned by performing visually extravagant but valid scientific experiments that had gained them a cult following – especially to the younger viewers who desperately needed scientific enlightenment. In one episode, they did an experiment to test the validity of the myth that the brace position is designed to kill airline passengers during an emergency landing. Their high tech sensor loaded (actually they used postal / parcel service shock measuring stickers) crash test dummy named “Buster” was used to substitute a human passenger in an emergency landing situation. Sure enough, Buster demonstrated that the brace position actually reduced the shock or G load to a typical passenger by as much as 20 G s. That’s 20 G s less shock compared to a passenger in a normal sitting position. That’s a very significant difference of an outcome between survival and death.
To evaluate the big picture on why this myth ever came about in the first place, let’s examine first the history of manned aviation. When the Wright Brothers first demonstrated their newfound prowess of manned flight, they spawned a host of barnstormers i.e. early aviation enthusiasts. Even though they are very much popular and widespread, most people back then were still deathly scared by flying. Even witnessing a plane flying 30 feet above their heads is enough to terrify them even though there’s also a large majority who are curious to experience themselves the magic of flight. So when business entrepreneurs started the airline business back then, they have to convince the people how safe their planes are – or at least they cared about the safety of their passengers. And since airline companies are still around till this day, then safety concerns did came hand and hand with profits.
Sadly, there’s this other thing that the conspiracy theorists overlook that was always part and parcel of profit generating enterprises – namely corporate social responsibility and ethical business governance. Even though these concepts only became unique selling points of customers quite recently. It’s only common sense that your customers and clients will only do business with you again if you treat them right. Even private security contractors are subscribing to the corporate social responsibility and ethical business governance fad by using the phrase “at least we’re not killing innocent civilians” as their unique selling point. Maybe conspiracy theorists need to study the history of aviation first. If these conspiracy theorists don’t find history or science as a “sexy subject” anymore, then they should blame the Board of Education, not the airline industry.
Friday, February 8, 2008
Credit Insurance: A White Knight against Recession?
As Bond Insurers loose their “triple A” credit ratings thanks to the US economic turbulence towards the end of 2007. Can Credit Insurance providers still be counted on as recession looms?
By: Vanessa Uy
In today’s world, credit has become a vital part of our modern economy. If large credit losses occur, profits may be totally lost. Manufacturing and wholesaling firms always have that looming threat that someone to whom they extend credit may become insolvent and will be unable to meet their obligations.
Ordinarily, it is possible to estimate probable losses caused by extending credit and to add this cost to the price of the goods. It is also possible to be very cautious about extending credit. However, one large loss may upset all plans and methods for meeting the losses, and if too restricted credit practice is followed sales and thus profits will be cut even greater than credit losses. Credit insurance was developed, therefore, to protect business against undue credit losses. This insurance does not cover credit transactions between retailers and customers. Credit insurance policies do not place any serious restrictions or limitations on the cause of the debtor’s insolvency and thus contain broad coverage after the title of the goods has passed to the various debtors.
The principal kinds of credit insurance policies are general coverage policies. With the general coverage policy, all customers are included subject to the limitation of the policy. The financial standing of the customers and their credit ratings determines whether he or she is to be covered and for what limit.
The Dun & Bradstreet, Inc., mercantile agency manual is generally relied upon for information concerning customers, although there are other approved agencies. The insurance companies require that the customers have a capital and credit rating in a recognized mercantile agency because of the nature of the fluctuating hazard of credit.
The mercantile agency books show the approximate amount of net worth and the promptness of meeting obligations of the various concerns. The better firms receive high or good credit ratings and are regarded as preferred ratings. Usually the much coveted “triple A” rating badge. Other, less secure enterprises are rated as fair and limited and are considered inferior ratings. Often credit – insurance policies do not cover concerns rated as limited as these firms represent great hazards. Under such circumstances credit afforded to customers in this class is extended at the insured own risk. The liability of the insurance company on any one loss is limited in relation to the credit and financial standing of the customer.
Credit insurance does not cover loss of profits involved in a failure of the customer to pay for the goods. An amount, representing the estimated profits, generally 10 per cent, is deducted from the total of the uncollected accounts for which indemnity is provided. This deduction of a stated percentage from provable losses is known as coinsurance. By payment of an additional premium the coinsurance clause will be eliminated.
Since all concerns normally expect to suffer some credit losses every year, an amount known as the normal loss, is deducted. This is done way before any of the losses be paid by the company. Generally the amount is based upon the total sales of the insured and the ratings on which coverage is required.
So in today’s financial climate that’s fast heading into uncertainty, do credit insurers help manufacturers and wholesalers from going under? Well, if one looks our global financial system from the perspective of “enlightened self interest” the answer is a big fat yes. This is so because manufacturers and wholesalers are the main customers of credit insurance providers. And credit insurance providers are not stupid enough to sacrifice their own “cash cows” just to protect their own interests. But when bad goes to worse especially if your specific credit insurance provider can’t reimburse you because it went bust. Then, this is surely a sign that a full blown economic recession is in progress. Just hope that a full blown economic depression doesn’t come next.
By: Vanessa Uy
In today’s world, credit has become a vital part of our modern economy. If large credit losses occur, profits may be totally lost. Manufacturing and wholesaling firms always have that looming threat that someone to whom they extend credit may become insolvent and will be unable to meet their obligations.
Ordinarily, it is possible to estimate probable losses caused by extending credit and to add this cost to the price of the goods. It is also possible to be very cautious about extending credit. However, one large loss may upset all plans and methods for meeting the losses, and if too restricted credit practice is followed sales and thus profits will be cut even greater than credit losses. Credit insurance was developed, therefore, to protect business against undue credit losses. This insurance does not cover credit transactions between retailers and customers. Credit insurance policies do not place any serious restrictions or limitations on the cause of the debtor’s insolvency and thus contain broad coverage after the title of the goods has passed to the various debtors.
The principal kinds of credit insurance policies are general coverage policies. With the general coverage policy, all customers are included subject to the limitation of the policy. The financial standing of the customers and their credit ratings determines whether he or she is to be covered and for what limit.
The Dun & Bradstreet, Inc., mercantile agency manual is generally relied upon for information concerning customers, although there are other approved agencies. The insurance companies require that the customers have a capital and credit rating in a recognized mercantile agency because of the nature of the fluctuating hazard of credit.
The mercantile agency books show the approximate amount of net worth and the promptness of meeting obligations of the various concerns. The better firms receive high or good credit ratings and are regarded as preferred ratings. Usually the much coveted “triple A” rating badge. Other, less secure enterprises are rated as fair and limited and are considered inferior ratings. Often credit – insurance policies do not cover concerns rated as limited as these firms represent great hazards. Under such circumstances credit afforded to customers in this class is extended at the insured own risk. The liability of the insurance company on any one loss is limited in relation to the credit and financial standing of the customer.
Credit insurance does not cover loss of profits involved in a failure of the customer to pay for the goods. An amount, representing the estimated profits, generally 10 per cent, is deducted from the total of the uncollected accounts for which indemnity is provided. This deduction of a stated percentage from provable losses is known as coinsurance. By payment of an additional premium the coinsurance clause will be eliminated.
Since all concerns normally expect to suffer some credit losses every year, an amount known as the normal loss, is deducted. This is done way before any of the losses be paid by the company. Generally the amount is based upon the total sales of the insured and the ratings on which coverage is required.
So in today’s financial climate that’s fast heading into uncertainty, do credit insurers help manufacturers and wholesalers from going under? Well, if one looks our global financial system from the perspective of “enlightened self interest” the answer is a big fat yes. This is so because manufacturers and wholesalers are the main customers of credit insurance providers. And credit insurance providers are not stupid enough to sacrifice their own “cash cows” just to protect their own interests. But when bad goes to worse especially if your specific credit insurance provider can’t reimburse you because it went bust. Then, this is surely a sign that a full blown economic recession is in progress. Just hope that a full blown economic depression doesn’t come next.
Sunday, January 6, 2008
Does Anyone Need Climate Change Insurance?
Should we all go out and purchase “Climate Change Insurance” –like Life and Car Insurance- to protect our beachfront properties of the inevitable if-and-when?
By: Vanessa Uy
Like the establishment of the US Environmental Protection Agency back in 1970, there -as of yet unless you exclude Munich Re's Climate Change Insurance proposal that's still under evaluation - no existing legal precedents that allow –let alone to regulate- the sale of “Climate Change Insurance” policies to the average homeowner. I mean average because how many of us could afford the insurance premiums of Lloyd’s of London style insurance companies that provides coverage to risk whose mathematical evaluation borders on the non-existent? Also, the existing conservative political climate in the United States could easily allow existing insurance companies to classify the negative effects resulting from climate change –like sea level rise and increased frequency of hurricanes- as “Acts of God” which almost all existing insurance companies around the world won’t settle. And finally, is it wise to use the funds generated from “Carbon Offsetting” that’s already slated to bankroll sustainable / green development programs in “poor” countries be used as funds to settle the damages resulting from Climate Change?
Ever since “modern” insurance companies were established, they declared that the first essential factor in insurance is that the element of gambling must not be present. Since then, insurance companies had been eliminating the “element of gambling” by making it possible –through mathematics- to make accurate and scientific calculations of the extent of the hazard, so as to charge a fair premium. This is why it is important to study all the available scientific data to properly gauge the extent of Climate Change –now and in the future. The study can also be used to gauge if the risk must be important enough to warrant insurance. To make such a venture economically viable, the insurance company must have a large number of risks –spread out geographically- so that it will not have a concentration of risks in one area. And finally, the cost of the insurance –i.e. premiums- must be within the reach of a large number of people.
A couple of leading authorities –namely Michael Schlesinger and Natalia Andronova- professors of atmospheric sciences at the University of Illinois at Urbana-Champaign says that low cost climate-change insurance could help ensure a better future. By implementing a “Carbon Tax” of five US cents per gallon of gasoline and gradually increasing the tax over the next 30 years is the optimal solution, the researchers report. “You can think of the tax as a low- cost insurance policy that protects against climate change,” said Michael Schlesinger. The policy premiums –according to Professor Schlesinger- could be used to develop alternative energy technologies. Doing a little now to mitigate long-term climate change would cost much less than doing nothing and making adjustments in the future.
Because mitigation would impose immediate costs, with any long –term benefit unknown, some scientists and policy-makers have argued that nothing should be done until the “uncertainty surrounding the climate issue” is substantially reduced. But Professor Schlesinger says:” By then, however, it may be too late to and we will have foreclosed certain options. Rather, the uncertainty is the very reason we should implement a climate policy in the near term.”
Professor Michael Schlesinger’s idea of a taxation-bankrolled Climate Change insurance is somewhat similar to a State Insurance where state funds –i.e. tax revenues- are organized for the insurance of the compensation risk. To me, this is more or less similar to Social Security insurance. Like state funds, a government controlled Climate Change insurance has the advantages of costing much less than that of private organizations because no commissions are paid to brokers or agents and the work is handled by state employees. Also, some state funds may not emphasize the prevention of losses. Finally, if the premiums collected are insufficient to pay losses, the state may have to make up the difference if permitted by law.
Despite of all the rigmarole and red tape surrounding the establishment of a Climate Change insurance, the lack of legal precedents is the greatest obstacle for providing a system to mitigate the damages that might be incurred by the effects of Climate Change / Global Warming / sea-level rise. And by increasing the tax on gasoline incrementally over the years for the next 30 years could cause an- uproar to all of the petrochemical companies around the world. But –to me at least- a binding legislation of a Climate Change insurance based on the established principles of the modern insurance company / industry is probably the best solution where conservationist and the corporate / industrial world can reach a common ground.
By: Vanessa Uy
Like the establishment of the US Environmental Protection Agency back in 1970, there -as of yet unless you exclude Munich Re's Climate Change Insurance proposal that's still under evaluation - no existing legal precedents that allow –let alone to regulate- the sale of “Climate Change Insurance” policies to the average homeowner. I mean average because how many of us could afford the insurance premiums of Lloyd’s of London style insurance companies that provides coverage to risk whose mathematical evaluation borders on the non-existent? Also, the existing conservative political climate in the United States could easily allow existing insurance companies to classify the negative effects resulting from climate change –like sea level rise and increased frequency of hurricanes- as “Acts of God” which almost all existing insurance companies around the world won’t settle. And finally, is it wise to use the funds generated from “Carbon Offsetting” that’s already slated to bankroll sustainable / green development programs in “poor” countries be used as funds to settle the damages resulting from Climate Change?
Ever since “modern” insurance companies were established, they declared that the first essential factor in insurance is that the element of gambling must not be present. Since then, insurance companies had been eliminating the “element of gambling” by making it possible –through mathematics- to make accurate and scientific calculations of the extent of the hazard, so as to charge a fair premium. This is why it is important to study all the available scientific data to properly gauge the extent of Climate Change –now and in the future. The study can also be used to gauge if the risk must be important enough to warrant insurance. To make such a venture economically viable, the insurance company must have a large number of risks –spread out geographically- so that it will not have a concentration of risks in one area. And finally, the cost of the insurance –i.e. premiums- must be within the reach of a large number of people.
A couple of leading authorities –namely Michael Schlesinger and Natalia Andronova- professors of atmospheric sciences at the University of Illinois at Urbana-Champaign says that low cost climate-change insurance could help ensure a better future. By implementing a “Carbon Tax” of five US cents per gallon of gasoline and gradually increasing the tax over the next 30 years is the optimal solution, the researchers report. “You can think of the tax as a low- cost insurance policy that protects against climate change,” said Michael Schlesinger. The policy premiums –according to Professor Schlesinger- could be used to develop alternative energy technologies. Doing a little now to mitigate long-term climate change would cost much less than doing nothing and making adjustments in the future.
Because mitigation would impose immediate costs, with any long –term benefit unknown, some scientists and policy-makers have argued that nothing should be done until the “uncertainty surrounding the climate issue” is substantially reduced. But Professor Schlesinger says:” By then, however, it may be too late to and we will have foreclosed certain options. Rather, the uncertainty is the very reason we should implement a climate policy in the near term.”
Professor Michael Schlesinger’s idea of a taxation-bankrolled Climate Change insurance is somewhat similar to a State Insurance where state funds –i.e. tax revenues- are organized for the insurance of the compensation risk. To me, this is more or less similar to Social Security insurance. Like state funds, a government controlled Climate Change insurance has the advantages of costing much less than that of private organizations because no commissions are paid to brokers or agents and the work is handled by state employees. Also, some state funds may not emphasize the prevention of losses. Finally, if the premiums collected are insufficient to pay losses, the state may have to make up the difference if permitted by law.
Despite of all the rigmarole and red tape surrounding the establishment of a Climate Change insurance, the lack of legal precedents is the greatest obstacle for providing a system to mitigate the damages that might be incurred by the effects of Climate Change / Global Warming / sea-level rise. And by increasing the tax on gasoline incrementally over the years for the next 30 years could cause an- uproar to all of the petrochemical companies around the world. But –to me at least- a binding legislation of a Climate Change insurance based on the established principles of the modern insurance company / industry is probably the best solution where conservationist and the corporate / industrial world can reach a common ground.
Meteorite Strike Insurance: Absolute Necessity or Needless Luxury?
Will insurance companies provide a proviso on their personal risk insurance for a phenomenon that boarder on the “Act of God”?
By: Ringo Bones and Vanessa Uy
Throughout recorded history, only one person has been documented to having been hit by a meteorite from space. Fortunately, she survived. Because of this, opinions have always been divided in the insurance underwriters’ community whether the incident with Mrs. Hewlett Hodges should have been treated as a “freak occurrence.” She was extremely lucky though to have survived by being hit with a 10- pound fragment that pierced her roof and struck her left side. But first let us define which is which.
When the “rock” is still moving through the vacuum of space, it’s called a meteoroid. When the “rock” is glowing “pyrotechnically” as it enters the earth’s atmosphere, it’s called a meteor. When the said “rock” or “object” hits the earth surface, a house, or other unfortunate soul, it’s called a meteorite. These are the natural ones, while the increasingly commercial utilization of orbital space has created the problem of “space junk” that are the by - products of the launch of communication satellites which is also a possible source of meteorite strike hazard.
Concerns over the possibility of humans being injured or killed when hit by a meteorite strike usually becomes a topic of conversation during the annual meteor shower season that starts in August all through to mid –to- late November. These annual meteor showers occur in streams with established orbits. These meteor showers are named after the constellation from which they appear to radiate. Like the recent Perseid meteor shower that occurs in early August, which the one that occurred this year received heavy press coverage because of the ideal “viewing” conditions appear to radiate in the constellation Perseus. For those who missed it, don’t worry cause this coming late October the Orionid meteor shower will be radiating in the constellation of Orion. Though most of my buddies prefer the Leonid meteor shower because it’s occurrence from mid – to –late November in the constellation Leo are more likely to provide an ideal “viewing” conditions from our regular vantage point. Recent scientific studies have shown that that all recurrent meteor showers are mostly composed of debris left in the wake of comets, past or present.
Currently, Lloyds of London are the only known major insurance company that provides services on meteorite strike insurance policies. But the firm seriously advises anyone planning to purchase their meteorite strike “policies” to “think it over thoroughly” because these are somewhat expensive and meteorite strikes are statistically evaluated to a degree that their occurrence –in an average human lifetime- borders on the nonexistent. In the UK, meteor strikes (as written on their Webpage) are generally defined as an “Act of God.” According to the Website of Car Insurance in the UK (www.car-insurancefacts.co.uk) which defines “Act of God”; as an event not caused directly by an individual that causes damage to your vehicle. An example (albeit an unlikely one) would be a meteorite strike. More often than not, “Acts of God” are uninsurable.
While the “budget” side of the insurance industry doesn’t do business when it comes to insuring our person and property against meteorite strike insurance. There is also the rigmarole that they also fail to classify meteorites that are made by man i.e. spent rocket parts and other by-products of space travel and commerce (communication satellite launches) from those that are natural i.e. left over material from the creation of our solar system. Most of these insurance companies just classify these occurrences / incidents under the “Act of God” clause.
For all intents and purposes, its in the insurance companies of the world’s best interest to provide an insurance proviso on meteorite strikes, especially objects that are a product of the commercial utilization of space like the regular launching of communication satellites used for cellular phone and Internet data traffic. The profits generated by this activity has the mathematical equitability to make the meteorite insurance proviso economically viable to the average prospective client.
By: Ringo Bones and Vanessa Uy
Throughout recorded history, only one person has been documented to having been hit by a meteorite from space. Fortunately, she survived. Because of this, opinions have always been divided in the insurance underwriters’ community whether the incident with Mrs. Hewlett Hodges should have been treated as a “freak occurrence.” She was extremely lucky though to have survived by being hit with a 10- pound fragment that pierced her roof and struck her left side. But first let us define which is which.
When the “rock” is still moving through the vacuum of space, it’s called a meteoroid. When the “rock” is glowing “pyrotechnically” as it enters the earth’s atmosphere, it’s called a meteor. When the said “rock” or “object” hits the earth surface, a house, or other unfortunate soul, it’s called a meteorite. These are the natural ones, while the increasingly commercial utilization of orbital space has created the problem of “space junk” that are the by - products of the launch of communication satellites which is also a possible source of meteorite strike hazard.
Concerns over the possibility of humans being injured or killed when hit by a meteorite strike usually becomes a topic of conversation during the annual meteor shower season that starts in August all through to mid –to- late November. These annual meteor showers occur in streams with established orbits. These meteor showers are named after the constellation from which they appear to radiate. Like the recent Perseid meteor shower that occurs in early August, which the one that occurred this year received heavy press coverage because of the ideal “viewing” conditions appear to radiate in the constellation Perseus. For those who missed it, don’t worry cause this coming late October the Orionid meteor shower will be radiating in the constellation of Orion. Though most of my buddies prefer the Leonid meteor shower because it’s occurrence from mid – to –late November in the constellation Leo are more likely to provide an ideal “viewing” conditions from our regular vantage point. Recent scientific studies have shown that that all recurrent meteor showers are mostly composed of debris left in the wake of comets, past or present.
Currently, Lloyds of London are the only known major insurance company that provides services on meteorite strike insurance policies. But the firm seriously advises anyone planning to purchase their meteorite strike “policies” to “think it over thoroughly” because these are somewhat expensive and meteorite strikes are statistically evaluated to a degree that their occurrence –in an average human lifetime- borders on the nonexistent. In the UK, meteor strikes (as written on their Webpage) are generally defined as an “Act of God.” According to the Website of Car Insurance in the UK (www.car-insurancefacts.co.uk) which defines “Act of God”; as an event not caused directly by an individual that causes damage to your vehicle. An example (albeit an unlikely one) would be a meteorite strike. More often than not, “Acts of God” are uninsurable.
While the “budget” side of the insurance industry doesn’t do business when it comes to insuring our person and property against meteorite strike insurance. There is also the rigmarole that they also fail to classify meteorites that are made by man i.e. spent rocket parts and other by-products of space travel and commerce (communication satellite launches) from those that are natural i.e. left over material from the creation of our solar system. Most of these insurance companies just classify these occurrences / incidents under the “Act of God” clause.
For all intents and purposes, its in the insurance companies of the world’s best interest to provide an insurance proviso on meteorite strikes, especially objects that are a product of the commercial utilization of space like the regular launching of communication satellites used for cellular phone and Internet data traffic. The profits generated by this activity has the mathematical equitability to make the meteorite insurance proviso economically viable to the average prospective client.
Divorce Insurance: Equitability in Marriage?
In today’s post-modern society driven by capitalist consumerism, could a divorce insurance with really good provisos be the answer in keeping “modern love” equitable?
By: Vanessa Uy
Ever since Pope Gelasius declared February 14 as a Red Letter Day in honor of St. Valentine back in year 496, anyone from bards to scientists and even lawyers had lend a hand in gaining insight on this thing we call love. Although gaining insight means different things to different people, in this day and age, gaining insight on love usually means making the damned thing equitable to the parties involved. Love used to be the business between two loving couples, but in our present age, greeting card companies and those “weird people” who claim to be close to God by virtue of celibacy all lay claim to be the sole authority on love and marriage. I think these two camps are what’s been making Valentine’s Day a very interesting holiday for over a millennia.
When capitalist consumerism declared that it knew the price of everything – including devotion and obligation – did it made equitable ground rules? Or are we now so cynical that nothing free has value anymore? How could Calvinism put a price on one’s own devotion and obligation? Only the Anglo-Saxon God knows and He’s not talking. To me, this makes it a situation where only lawyers have free reign on arbitrarily deciding what’s equitable or not. I just hope that more prenuptial agreements be offered in pro bono flavor.
To me, it’s just sad that the thing we call money – whose value is backed up by our increasing materialism - is also the very thing that could get us out of this specific dilemma. In this day and age, divorce insurance with proviso for legal separation and prenuptial agreements really has existing demand. Divorce insurance really has legitimacy because the element of gambling – the first essential factor in insurance – is not present. This is so because countless people get married on a regular basis with the knowledge that over half of it will end in divorce and currently divorce proceedings are always messy affairs by judicial standards. Then, only a couple of things are left to be studied to make divorce insurance an integral part of most insurance companies’ / providers’ retinue. Like the possibility in making accurate and scientific calculations of the extent of the hazard, so as to charge a fair premium. Remember, irreconcilable differences causes stress and stress leads to ill health mental or otherwise. The other is the cost of divorce insurance must be within the reach of a large number of people.
Forgive me for being too cynical – even by “Michael Moore Documentary” standards – but divorce insurance, in my opinion, could really revolutionize how our present generation look at and approach “Romantic Love”. Divorce insurance could end once and for all the blatantly ithyphallic way young couple decide to get married – by whim – with utter disregard to the hardships that they will certainly encounter in marriage. Just something to think about during Valentine’s Day.
By: Vanessa Uy
Ever since Pope Gelasius declared February 14 as a Red Letter Day in honor of St. Valentine back in year 496, anyone from bards to scientists and even lawyers had lend a hand in gaining insight on this thing we call love. Although gaining insight means different things to different people, in this day and age, gaining insight on love usually means making the damned thing equitable to the parties involved. Love used to be the business between two loving couples, but in our present age, greeting card companies and those “weird people” who claim to be close to God by virtue of celibacy all lay claim to be the sole authority on love and marriage. I think these two camps are what’s been making Valentine’s Day a very interesting holiday for over a millennia.
When capitalist consumerism declared that it knew the price of everything – including devotion and obligation – did it made equitable ground rules? Or are we now so cynical that nothing free has value anymore? How could Calvinism put a price on one’s own devotion and obligation? Only the Anglo-Saxon God knows and He’s not talking. To me, this makes it a situation where only lawyers have free reign on arbitrarily deciding what’s equitable or not. I just hope that more prenuptial agreements be offered in pro bono flavor.
To me, it’s just sad that the thing we call money – whose value is backed up by our increasing materialism - is also the very thing that could get us out of this specific dilemma. In this day and age, divorce insurance with proviso for legal separation and prenuptial agreements really has existing demand. Divorce insurance really has legitimacy because the element of gambling – the first essential factor in insurance – is not present. This is so because countless people get married on a regular basis with the knowledge that over half of it will end in divorce and currently divorce proceedings are always messy affairs by judicial standards. Then, only a couple of things are left to be studied to make divorce insurance an integral part of most insurance companies’ / providers’ retinue. Like the possibility in making accurate and scientific calculations of the extent of the hazard, so as to charge a fair premium. Remember, irreconcilable differences causes stress and stress leads to ill health mental or otherwise. The other is the cost of divorce insurance must be within the reach of a large number of people.
Forgive me for being too cynical – even by “Michael Moore Documentary” standards – but divorce insurance, in my opinion, could really revolutionize how our present generation look at and approach “Romantic Love”. Divorce insurance could end once and for all the blatantly ithyphallic way young couple decide to get married – by whim – with utter disregard to the hardships that they will certainly encounter in marriage. Just something to think about during Valentine’s Day.
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