ECONOMIC DOWNTURN MAKING DRIVERS DRIVE UNINSURED

No Byline. Insurance Journal.  Approximately one in six drivers across the U.S. may be driving uninsured by 2010, according to a recent study from Insurance Research Council (IRC). Although the estimated percentage of uninsured motorists decreased nationally, from 14.9 percent in 2003 to 13.8 percent in 2007, the research group says the recent economic downturn is expected to trigger a sharp rise in the uninsured motorist rate. The study, Uninsured Motorists, 2008 Edition, estimates the percentage of uninsured drivers countrywide and by state for the period 2005 to 2007. The magnitude of the uninsured motorists problem varied widely from state to state. In 2007, the five states with the highest uninsured driver estimates were New Mexico (29 percent), Mississippi (28 percent), Alabama (26 percent), Oklahoma (24 percent), and Florida (23 percent). The five states with the lowest uninsured driver estimates were Massachusetts (1 percent), Maine (4 percent), North Dakota (5 percent), New York (5 percent), and Vermont (6 percent). The report also found a strong correlation between the percent of uninsured motorists and the unemployment rate: An increase in the unemployment rate of one percentage point is associated with an increase in the uninsured motorist rate of more than three-quarters of a percentage point. Based on current unemployment rate projections, the percentage of uninsured motorists is expected to rise from 13.8 in 2007 to 16.1 in 2010. “An increase in the number of uninsured motorists is an unfortunate consequence of the economic downturn and illustrates how virtually everyone is affected by recent economic developments,” said Elizabeth A. Sprinkel, senior vice president of the IRC. “Responsible drivers who purchase insurance end up paying for injuries caused by uninsured drivers.” The IRC estimates the uninsured driver population using a ratio of insurance claims made by individuals who were injured by uninsured drivers to claims made by individuals who were injured by insured drivers. The study contains recent statistics by state on uninsured motorists claim frequency, bodily injury liability claim frequency, and the ratio of uninsured motorists to bodily injury claim frequencies. The IRC study examined data collected from nine insurers, representing approximately 50 percent of the private passenger auto insurance market in the U.S.

Demand For Insurance Professionals Remains Robust – Job Board

Demand For Insurance Professionals Remains Robust – Job Board

Written by NAPSI

Sunday, 11 January 2009

Phoenix, Arizona – There is some good news about employment: Career-minded people remain in high demand for at least one profession–insurance sales.”Insurance and financial services products are always in great demand but especially during tough financial times,” said Connie Schleich -Williams, a regional sales manager for Mutual of Omaha. “When financial circumstances are tough, top priorities for consumers are the financial ’safe havens’ and security that insurance can provide.” According to Schleich -Williams, insurance companies are always on the lookout for qualified professionals to help them sell their products. “Insurance sales is so much more than just a job,” she said. “It’s a rewarding career that can offer unlimited income potential, the freedom to build your own business with the support you need to make it successful and the fulfillment that comes with making a difference in people’s lives every day.” Insurance companies are recruiting both recent college graduates and those looking to change careers. With the right company, said Schleich-Williams, an insurance career can offer you: • A way to help people, make a difference and be rewarded for it. What really sets an insurance career apart is the fulfillment that comes from helping people, businesses and families every single day. Whether you’re giving a family the ability to keep its home after a tragic loss, protecting a person from skyrocketing long-term care costs or helping clients build assets and plan for the retirement of their dreams, you are making a difference. • Unlimited income potential–including commission, bonus, awards and worldwide incentive travel. Be rewarded for your results and earn what you’re worth. The more you sell, the more you earn–no caps, no limits, no ceilings. • Proven sales programs and thorough training designed to get you off to a fast start–no sales experience necessary. • Available financing to help you get started and transition to a commission-based income. Financing programs can provide you an income while you develop your skills and build your insurance knowledge. • Ability to be your own boss and run your own business with outstanding support from management and the home office. • Career path to becoming a financial adviser–with some companies, you can work toward a lucrative and personally rewarding career offering financial planning and fee-based investing.

VISION PROBLEMS, SENIORS PUT DOWN CAR KEYS

With 30 million drivers in the U.S. aged 65 and over, the public counts on older Americans to recognize when they can no longer drive safely and decide that it’s time to stay off the road. A new study finds that a decrease in vision function is a key factor in bringing about this decision. The study also found that women are four times more likely than men to stop or restrict their driving.The Salisbury Eye Evaluation and Driving Study (SEEDS) http://www.iovs.org/cgi/content/full/50/1/107, conducted by researchers affiliated with Johns Hopkins University, looked at changes in vision, cognition and the general health status of more than 1,200 licensed drivers aged 67-87 in Salisbury, Maryland, a community with limited public transportation. The researchers performed comprehensive tests of both vision and cognitive function. The results, recently published in Investigative Ophthalmology & Visual Science (www.iovs.org), reveal that after a year, 1.5 percent of the drivers had given up driving, and another 3.4 percent had restricted their driving. The most common predictors of stopping or decreasing driving were slow visual scanning, psychomotor speed and poor visuo-constructional skills, as well as reduced contrast sensitivity. (These skills are necessary to help drivers be aware of and respond to other cars, road conditions and road signs. Contrast sensitivity is the ability to detect detail in shades of gray; it is necessary for driving in poor weather and low lighting.) “These skills are important for safe and confident driving where objects are moving at rapid speeds in relation to each other, and timely and accurate judgments are required,” the researchers explained. The study, which was in part supported by the National Institute of Aging, also found that women were four times more likely than men to stop or restrict their driving. In addition, drivers who had higher depression scores on the initial test were more likely to have given up or restricted their driving after a year. Previous studies have examined depression as an effect of giving up driving, not as a predictor. “Older drivers are the fastest growing sector of all licensed drivers in the U.S.,” noted researcher Lisa Keay, PhD. “The decision to stop or limit driving to one’s own neighborhood has major implications for personal independence — but it is an important way to maintain the safety of older drivers and those who share the road. “As a society, we would like to think that when a driver recognizes that his or her functions related to vision or cognition are declining, they make that crucial decision. My colleagues and I found it reassuring that in this group, that appeared to be the case.”

No Byline. Insurance Journal. 2009/1/8.

Just don't think this'll become a regular thing. That's all.

Real-Estate Markets Still Plumb for Bottom

Have you seen the cost of other insurance?

By Anton Troianovski / Wall Street Journal

What began as a bad year for real estate turned into one of the worst on record, driven by an unprecedented drop in home prices, a tide of foreclosures and a credit crisis whose magnitude few anticipated.

“I thought it would be a bad year,” said Mark Zandi, chief economist at Moody’s Economy.com. “I didn’t think it was going to be a complete washout.”

And as bad as 2008 was, few are ready to say the worst is over. The troubles in the residential sector are expected to continue, while problems are just beginning for the other side of the real-estate market — office buildings, hotels, shopping malls and other commercial properties — as the recession starts to have an effect.

“The question on everyone’s mind is, ‘How is the government going to try to solve this?’ ” said Kenneth Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley.

On the residential side, many are urging the Obama administration to push for broad programs to limit foreclosures, stimulate demand for homes, and stop the slide in prices. The Treasury Department is considering a plan that would push down rates on home mortgages to 4.5%.

One of the government’s highest-profile efforts so far, Hope for Homeowners, lets banks move borrowers into government-insured loans if lenders agree to write down a portion of the principal. But very little of the $300 billion pledged by the Department of Housing and Urban Development has been put to use so far, in part because investors who hold those loans would incur big losses.

Commercial developers are also hoping for a lifeline from Washington, perhaps guaranteeing chunks of new commercial mortgages.

House prices fell 23% from their July 2006 peak to October 2008, the latest data available, based on the S&P/Case-Shiller Home Price index, which tracks home values in 20 cities. Mr. Zandi expects an additional 10% drop to a bottom late this year.

One in 10 homeowners with a mortgage is either in foreclosure or delinquent on payments, the Mortgage Bankers Association said last month.

Banks have tried loan-modification programs to stem the crisis but with limited success. More than half the mortgage loans that were modified were more than 30 days late six months later, according to a government report last month.

Regions that had been booming were hit especially hard by the bursting of the real-estate bubble. In the Southwest and Florida, homes lie vacant along the winding streets and cul-de-sacs of brand-new subdivisions.

In Phoenix, home values have fallen 41% from their peak in June 2006. “Boomers who we counted on coming down here when they retire can’t sell their homes in Chicago or Michigan or other places, so they’re not coming,” said Betsy Kurasch, a local real-estate agent with ReMax Achievers.

Wall Street is feeling the effects as well as Main Street. Securitization, the packaging of loans into investment products, had allowed new mortgages to be issued at huge volumes and helped to inflate the housing bubble. It essentially disappeared as credit markets seized up amid problems with subprime loans, with some of the biggest financial institutions in the country taking a hit. Residential-mortgage originations fell to $300 billion in the third quarter — a 50% drop from a year earlier, according to Inside Mortgage Finance, a trade publication.

For commercial real estate, the troubles that lie ahead could hurt pension funds and college endowments that moved money into real estate in recent years as the market was booming, as well as real-estate magnates.

The commercial market “is going to be ugly for the next 12 to 24 months,” said Michael Restuccia, chairman of the San Joaquin County (Calif.) Employees’ Retirement Association. “Not just bad, but ugly.”

A preview of the ugliness — as well as opportunities for investors with cash to spend — came last spring, when loans coming due forced New York property titan Harry Macklowe to sell some of his prized office towers.

It’s hard to know how far commercial-property prices have fallen because the lack of credit has made it hard to buy big buildings. In the office market, for instance, only $1 billion of deals on fewer than 50 properties closed across the U.S. in November, according to research firm Real Capital Analytics. That’s a 90% drop from November 2007.

The stock market provides clues to how investors are pricing commercial real estate, and the picture isn’t pretty. The Dow Jones Equity All REIT Index, which tracks many public real-estate company stocks, fell 40% in the last three months of 2008.

The poster child so far: Retail landlord General Growth Properties Inc., which received an extension last month on an overdue loan as it struggled to pay down its $27 billion debt load. The share price of the Chicago-based owner of more than 200 U.S. malls plunged to $1.29 from $41.18 over the course of the year.

Investors are especially concerned about sectors of the market most exposed to cutbacks in spending by consumers and corporations: shopping malls, warehouses, office buildings, and most of all, hotels, which are suffering as consumers and businesses cut spending on travel. Companies involved in health-care facilities and senior housing are considered somewhat safer, in part because of the coming wave of retiring baby boomers.

There are questions facing commercial real estate this year: How much further will real-estate stocks fall? Will property owners with debt coming due find ways to refinance? And will the investors who committed billions to commercial property in the past few years be willing and able to make good on those commitments?

“For economists now to make forecasts is a pretty difficult thing,” said Ray Torto, chief global economist at real-estate firm CB Richard Ellis. “All of our models are outside the territory in which they’ve been built.”

HOW OFTEN DO AMERICANS EXHIBIT RISKY BEHAVIOR?

No byline. Consumer Reports. 2009/02/01. Page N/A.

The Consumer Reports National Research Center recently surveyed 1,000 people about a variety of risky behaviors. The survey found that 58 percent never wear a helmet when riding a bicycle, and 27 percent never wear sunscreen when exposed to the sun for an extended period. Seventy percent never protect their hearing when using a gas lawn mower or a leaf blower. The results show that some Americans are not heeding advice from Consumer Reports about the potential harm from these behaviors. The Insurance Institute for Highway Safety reports that 92 percent of the bicyclists killed in 2007 were not wearing a helmet. The institute estimates that wearing a helmet reduces the risk of head injury by 85 percent. The article includes a table showing the results of the Consumer Reports survey and tips about what consumers should do, such as wear hearing protection when using a gas mower or leaf blower, and should not do, such as drive over the speed

Key-Person Life Insurance, and other SMART Business Choices

Small-business owners put their heart, soul and most of their time into a business. Unfortunately, sheer hard work doesn’t always translate into financial security, so additional steps may be necessary.  Here are a few suggestions.

·   Protect a business against the loss of a key employee.

“If you have an employee with valuable management or sales skills, and this person were to die unexpectedly, your business could suffer. That’s why you may want to write a “key-person” life insurance plan on this employee. In its simplest form, key-person coverage pays cash to your company, which is usually the policy beneficiary, when the designated employee dies or becomes disabled. Key-person insurance also can be structured to fund deferred-compensation arrangements or buyout agreements between partners.”

· Avoid “raiding” business coffers to pay for personal expenses. Try to keep six to 12 months’ worth of living expenses in a liquid account.

“Once you have established this ‘emergency fund,’ you’ll be less likely to tap into your business’ income or assets to pay for unexpected personal expenses, such as a new appliance, a costly car repair or a large medical bill.”

·   Create a retirement plan.

“As a business owner, you’re responsible for establishing your own retirement account. Fortunately, you have some attractive choices.”

1. SEP-IRA — Contribute up to 25 percent of one’s compensation — as much as $46,000 — to a SEP-IRA. Contributions are tax deductible and earnings have the potential to grow tax-deferred until withdrawn. This plan offers significant flexibility in making contributions for the business owner and the employees.

“Plus, as an employer, you can generally deduct, as business expenses, any contributions you make on behalf of your plan participants.”

2. SIMPLE IRA — Put in up to $10,500, or $13,000 if aged 50 or older, to a SIMPLE IRA. As is the case with the SEP-IRA, earnings have the potential to grow tax deferred. Employers can match their employees’ contributions dollar for dollar, up to three percent of compensation, but no more than $10,500 (or $13,000 for employees 50 and over). Alternatively, the employer could contribute two percent of each eligible employee’s compensation each year, up to a maximum of $4,600, regardless of whether the employee contributes or not. Contributions to the employees are tax deductible.

3. “Owner-only” 401(k) plan — If there are no employees other than a spouse, one can establish an “owner-only” 401(k) plan. Between salary deferral and profit sharing, owners can contribute up to $46,000, in pre-tax dollars, to an owner-only 401(k), or $51,000 if aged 50 or older. Like a SEP-IRA and SIMPLE IRA, a 401(k) provides the potential to accumulate tax-deferred earnings.

“But if you open a Roth 401(k) your earnings have the potential to grow tax free, provided you’ve had your account at least five years and you don’t start taking withdrawals until you’re at least 59-1/2.” “However, you make Roth 401(k) contributions with after-tax dollars.”