From the other South Park I love, bailout education for the masses…
That pretty much cover it.
(h/t Greg Mankiw)
I suspect insurers cringe everytime they hear one of their big corporate clients hands their data over to some criminal. Hartford Financial Services is thinking differently – they are starting ID theft coverage for small business owners, and I’ll bet it pays off. Small business generally care more about their clients, and while they also have less resources to deploy for protection, we all know that the companies with lots of resources haven’t done very much themselves.
CFOs, generally the top line decision makers on IT issues like security, are debating what to do, now that computer crimes have become a game for professionals. At least the head financial guys at smaller companies are going to get some help along the way.
Citizens in Florida should watch the latest insurers’ rate requests closely, as it is going to affect everyone. At least one large insurer (Allstate Floridian) has already been denied a rate increase – more denials are going to force carriers out the door, reduce competition, and result in higher rates anyway.
Allstate highlights the issue in the fine print:
It’s important to note that Allstate Floridian Insurance Company and Allstate Floridian Indemnity Company are separate and distinct companies from each other and from all other companies in the Allstate group.
Why? Because it gives them protection in case of more catastrophic losses – the option of walking out of the market is better than bankrupting the rest of the company.
I like the outdoors as much as the granola-eating types, but get a bit aggravated when I see folks pounding the tables over it. It is a product of short-term thinking. It takes decades to create climate change, but moments for markets to react. And markets do react.
Lumber, oil and other commodities whose harvesting affect the climate are already hovering around historical highs. Top-end costs drive down demand, and the harvesting shifts gears. But that is usually not enough.
Insurance industry, enter stage left.
There is no doubt that wealthy people tend to have lots of “stuff” (don’t you love how I state the obvious). Insurance companies are now trying to capitalize on that fact by offering specialized policies for the wealthy. What a brilliant idea.
Of course, a bunch of those wealthy folks are building (or already owning) big homes full of “stuff” in coastal areas, and these new offerings come just in time – property and casualty rates are definitely going to rise. And P&C isn’t the only product headed their way – there is also a policy coming out to protect against liability for screwing up the family trust. If hedge funds start heading south, those trustees are going to need it!
If you are a big business that has lots of money to throw at your IT infrastructure for the purpose of stopping online threats, then you can likely pay attention to your core operation without much worry. But if you are a small business trying to scrape by in our connected world, it can be much more of a pain. A recent survey by the Bank of Scotland suggests that small business are beginning to view threats as a serious financial risk.
Next up, an overpriced insurance policy to cover the damages (although it will take you ten years to file and collect on the claim).
I know a lot of stock brokers. The good ones are excellent sales people, but their skill sets usually end there. They generally have rudimentary knowledge of fundamental and/or technical analysis, money management principles, and even basic economics. I don’t know if they forgot all that subject matter right after they passed the Series 7 exam, or they are just plain stupid, but that matters little. If you can sell, you can make commission, and that is what brokers are concerned with.
The retail brokerage culling after the market debacle of 2000-01 has not been fully rejuvenated, and the replacements that are in are being called “advisors.” Unfortunately, most of these folks couldn’t advise their clients way out of a wet paper bag, and the firms they work for know it.