Coalition, the world's first Active Insurance provider designed to prevent digital risk before it strikes, today published its 2024 Cyber Claims Report, which details emerging cyber trends and their impact on Coalition policyholders throughout 2023. The report found that more than half (56%) of all 2023 claims were a result of funds transfer fraud (FTF) or business email compromise (BEC), highlighting the importance of email security as a critical aspect of cyber risk management.

“Threat actors want to get paid, and the email inbox has proven to be an easy place for an attacker to uncover payment information and potentially intervene in payment processes to steal funds,” said Robert Jones, Coalition’s Head of Global Claims. “In 2023, Coalition endeavored to make recovering from a cyber incident as painless as possible for our policyholders: We successfully helped claw back more than $38 million in fraudulent transfers and handled 52% of all reported matters without out-of-pocket payments.”

The report also revealed an increased risk for organizations using boundary devices, such as firewalls and virtual private networks. While these tools can help to reduce cyber risk, using some boundary devices can actually increase the likelihood of a cyber claim if they have known vulnerabilities. For example, Coalition found businesses with internet-exposed Cisco ASA devices were nearly five times more likely to experience a claim in 2023, and businesses with internet-exposed Fortinet devices were twice as likely to experience a claim.

“We also found that policyholders using internet-exposed remote desktop protocol were 2.5 times more likely to experience a claim,” said Shelley Ma, Incident Response Lead at Coalition’s affiliate, Coalition Incident Response. “With new AI tools making it even easier to execute targeted cyber attack campaigns and identify exploitable assets, having an active partner that can help protect your organization from digital risk is crucial.” This new insight comes following Coalition’s Security Labs researchers’ discovery of a 59% increase in unique IP addresses scanning for open remote desktop protocol throughout last year.

Other key findings from the report include:

• Overall claims frequency increased 13% year-over-year (YoY), and overall claims severity increased 10% YoY, resulting in an average loss of $100,000. Claims frequency increased across all revenue bands, with businesses between $25 million and $100 million in revenue seeing the sharpest spike (a 32% YoY increase).
• As ransomware payments hit $1 billion globally, Coalition ransomware severity dropped by 54%. Ransomware severity, frequency, and demands all dropped in 2H 2023, though not enough to offset the surge in 1H.
• Ransomware frequency was up 15% YoY, and severity was up 28%, to an average loss of more than $263,000.
• When policyholders found it reasonable and necessary to pay a ransom, Coalition helped policyholders negotiate demand amounts down by an average of 64%.
• FTF frequency increased by 15% YoY, and severity increased by 24%, to an average loss of more than $278,000.
• BEC frequency increased by 5% YoY, and severity decreased by 15%.

Download the full 2024 Cyber Claims Report from Coalition to learn more: https://info.coalitioninc.com/download-2024-cyber-claims-report.html.

About Coalition

Coalition is the world's first Active Insurance provider designed to help prevent digital risk before it strikes. By combining comprehensive insurance coverage and cybersecurity tools, Coalition helps businesses manage and mitigate potential cyber attacks. Leveraging its relationships with leading global insurers and capacity providers, including Coalition Insurance Company, Coalition offers Active Insurance products to businesses in the U.S., the U.K., Canada, and Australia. Policyholders can receive automated cyber alerts and access expert advice and global third-party risk management tools through Coalition's holistic cyber risk management platform, Coalition Control™.

   

Aon, a leading global professional services firm, announced today that it has completed the acquisition of NFP, a leading middle market property and casualty broker, benefits consultant, wealth manager and retirement plan advisor, from funds affiliated with NFP's main capital sponsor, Madison Dearborn Partners (MDP), and funds affiliated with HPS Investment Partners for an enterprise value of $13.0 billion, including $7.0 billion cash and assumed liabilities¹ as well as $6.0 billion in equity in the form of 19.0 million Aon shares. "It is a historic day for our firm as we welcome NFP to Aon and work together to help clients address increasing volatility across risk and people issues," said Greg Case, CEO of Aon. "With high performing teams and leading content and capability – further enabled by our Aon Business Services operating platform – we will create more value for our clients, while also enhancing long-term shareholder value creation for investors. This acquisition is another example of how we are going further, faster with our 3x3 Plan to accelerate our Aon United strategy and further enhance our relevance to clients." The acquisition of NFP expands Aon's presence in the large and fast-growing middle-market segment, with more than 7,700 colleagues and capabilities across property and casualty brokerage, benefits consulting, wealth management and retirement plan advisory. As an Aon company, NFP will operate as an "independent and connected" platform delivering Risk Capital and Human Capital capabilities from across Aon and will continue to be led by NFP CEO Doug Hammond, reporting into Aon President Eric Andersen. "The idea of being 'independent and connected' is key to how we will collaborate and create more options for clients across our Risk Capital and Human Capital capabilities," said Andersen. "Doug and his team have built an exceptional client-centered business and we are focused on using our Aon Business Services platform to scale delivery of new capabilities to small and middle market clients across Aon and NFP." "With Aon's acquisition of NFP now complete, we are starting an exciting new chapter in our company's history," said Doug Hammond, CEO of NFP. "We look forward to the positive impact that our complementary expertise and capabilities will have on all stakeholders. Aon's diverse resources and global reach enhance our ability to serve the dynamic risk, workforce, wealth management and retirement needs of our clients. We remain focused on both advancing a culture colleagues want to be part of and working together to contribute to our collective growth and success." The faster-than-anticipated close date contributes to expected accretion and free cash flow benefit realization a year earlier than modeled at announcement. Aon will provide further updates on NFP and deal financials, along with the firm's financial results, guidance, and outlook during its previously scheduled earnings call on April 26, 2024.    

WTW, a leading global advisory, broking and solutions company, today announced financial results for the first quarter ended March 31, 2024. “We started 2024 with solid first quarter results that, together with our robust pipeline and continued progress transforming our businesses, position us well to achieve our goals for the year,” said Carl Hess, WTW’s Chief Executive Officer. “Our successful strategic execution and strong demand for our industry-leading solutions drove healthy organic growth, with solid margins and earnings per share. We also maintained our disciplined approach to capital allocation, with $101 million of share repurchases during the quarter. Looking ahead, we are confident in our ability to deliver on our commitments, backed by our focus on strategic growth initiatives and operating efficiency.” Revenue was $2.34 billion for the first quarter of 2024, an increase of 4% as compared to $2.24 billion for the same period in the prior year. Foreign currency did not meaningfully impact the revenue increase for the quarter. On an organic basis, revenue increased 5%. See Supplemental Segment Information on page 8 for additional detail on book-of-business settlements and interest income included in revenue. Net Income for the first quarter of 2024 was $194 million, a decrease of 6% compared to Net Income of $206 million in the prior-year first quarter. Adjusted EBITDA for the first quarter was $568 million, or 24.3% of revenue, an increase of 13%, compared to Adjusted EBITDA of $503 million, or 22.4% of revenue, in the prior-year first quarter. The U.S. GAAP tax rate for the first quarter was 19.9%, and the adjusted income tax rate for the first quarter used in calculating adjusted diluted earnings per share was 22.4%. Outlook Based on current and anticipated market conditions, the Company's full-year targets for 2024, consistent with those targets that have been previously provided, are as follows. Refer to the Supplemental Slides for additional detail.

• Expect to deliver revenue of $9.9 billion or greater and mid-single digit organic revenue growth for the full year 2024
• Expect to deliver adjusted operating margin of 22.5% - 23.5% for the full year 2024
• Expect to deliver adjusted diluted earnings per share of $15.40 - $17.00 for the full year 2024
• Expect approximately $88 million in non-cash pension income for the full year 2024
• Expect a foreign currency headwind on adjusted earnings per share of approximately $0.05 for the full year 2024 at today’s rates
• Expect to deliver approximately $425 million of cumulative run-rate savings from the Transformation program by the end of 2024 with total program costs of $1.125 billion.

   

Great American Insurance Group is pleased to announce the formation of a dedicated embedded insurance team. Building upon the company’s 20 years of experience offering embedded insurance products, the new team will streamline and simplify the distribution of these offerings. This newly-formed group, led by Chris Banocy, Divisional Senior Vice President, will assist in finding and evaluating new embedded insurance opportunities for Great American Insurance Group’s specialty property and casualty operations. In addition, the team will develop a suite of custom embedded products, including ticket and travel coverages, which are anticipated to be available in 2024. “Technology has changed the way consumers make purchases, whether in traditional sectors like auto sales and retail, or in digital spaces. Our mission is to make the process of obtaining coverage as convenient as possible by bringing insurance to the point of sale,” said Rich Suter, Divisional Group President. “While Great American has vast experience in the embedded channel, the demand for embedded coverages continues to grow at a rapid pace. The formation of a dedicated team allows us to expand our distribution reach and reinforces Great American’s commitment to this channel.” Great American Insurance Group’s embedded solutions team offers a broad range of flexible, customizable specialty commercial and personal lines products for hundreds of niche industries, leading APIs and other embedded technology. For additional information, visit our website, or email Chris Banocy at cbanocy@gaig.com or Darnella Schutzman, Divisional Assistant Vice President, at dschutzman@gaig.com. About Great American Insurance Group Great American Insurance Group’s roots go back to 1872 with the founding of its flagship company, Great American Insurance Company. Based in Cincinnati, Ohio, the operations of Great American Insurance Group are engaged primarily in property and casualty insurance, focusing on specialized commercial products for businesses. Great American Insurance Company has received an “A” (Excellent) or higher rating from the AM Best Company for over 115 years and is currently rated “A+” (Superior). The members of Great American Insurance Group are subsidiaries of American Financial Group, Inc. (AFG), also based in Cincinnati, Ohio. AFG’s common stock is listed and traded on the New York Stock Exchange under the symbol AFG.

Global reinsurer Ariel Re announced a new partnership with Hiscox Re & ILS, the reinsurance and insurance linked securities arm of specialist global insurer Hiscox and the launch of CyberShock, an industry-first cyber catastrophe consortium. The CyberShock consortium is designed to offer up to US $50 million of per-program capacity providing tailored, event-based protection for cyber insurers worldwide, the firms said in a statement. They added it will allow insurers to benefit from improved certainty of coverage for key cyber incidents including service supply chain events, cyber propagation events, hardware supply chain events, software supply chain events, and/or catalytic cyber events. “Cyber catastrophe risk continues to be a major concern for the (re)insurance market, with a lack of scaled, sustainable solutions for systemic risk holding back growth in the market,” said Daniel Carr, head of cyber at Ariel Re. “Ariel Re is an established market for property catastrophe risk and has taken a lead role in the development of Cyber Catastrophe reinsurance products in recent years – increasing our reach in this area made sense.” He added, “We wanted to find another leading reinsurance market to support engagement and involvement across the wider market, and Hiscox Re & ILK was the perfect partner given their long-standing cyber expertise. Matthew Wilken, chief underwriting officer at Hiscox Re & ILS, said, “We are pleased to be partnering the Ariel Re, who share our goal to materially improve the existing market approach to cyber catastrophes. Against a backdrop of both a lack of clarity around cyber event definitions and meaningful capacity in the cyber reinsurance marketplace, we believe the CyberShock consortium can act as a positive catalyst for the market.”      

Citizens Property Insurance Corp. suffered a data breach when a cyber actor hacked a system earlier in the year. It refused to pay any ransom to the attackers, consistent with recent FBI advisories, the company said in an email to Best's News. It continues to work with law enforcement and cybersecurity partners to "ensure the threat remains contained" and has notified nearly 5,000 potentially impacted people, it added. "Citizens has no evidence that any policyholder data systems have been compromised or misused as a result of the cybersecurity incident," the Florida insurer said. However, names or other personal identifiers were exposed, along with Social Security numbers. The “sophisticated cybersecurity incident” started on Jan. 4 and was discovered two days later, Citizens said in a breach notification letter posted by the Officer of the Maine Attorney General. It said four Maine residents were affected. The unauthorized actor accessed part of Citizens’ computer network, the company said. Citizens determined what information was breached in late March, after conducting a forensic investigation with external cybersecurity professionals.

The fault lines running through California’s spiraling homeowners insurance crisis were on display Tuesday at a state hearing, where consumer advocates clashed with industry firms over a plan to allow insurers to use complex computer models to set premiums — a move state officials say will attract insurers to the market. State Insurance Commissioner Ricardo Lara has proposed allowing insurers to employ so-called catastrophe modeling, which uses algorithms that predict the future risk properties face from wildfires, when setting the price of policies. Currently, rates are based on an insurance company’s past losses, which insurers increasingly dismiss as insufficient in light of the widespread acceptance that climate change has thrust California into a more dangerous future by causing more wildfires. The models, which are in use in other states, are a key element of Lara’s strategy to moderate price increases by allowing more accurate calculation of risks while persuading insurers to do business in neighborhoods prone to wildfires. The move comes amid a recent stream of insurers exiting the California market with announcements they are not renewing policies or have stopped writing new ones. Consumer groups worried at the hearing that the draft regulations would not allow enough scrutiny of the models, while several consulting firms that have developed them expressed concern about protecting their intellectual property. “The algorithms and artificial intelligence that private ‘black box’ catastrophe models use will simply be tools for insurance company price gouging unless California mandates real transparency into how they impact prices and imposes real rules of the road regarding their design and use,” said Carmen Balber, executive director of Consumer Watchdog, an L.A. advocacy group that led the campaign for passage of Proposition 103, the 1988 measure that requires homeowners and auto insurers to get state approval for rate hikes. The group, like other consumer advocates who spoke at the hearing, called on Lara to work with the state’s academic and insurance experts to develop a “public model,” in which all the factors that go into the computer simulations are available for everyone to review. Such a model could be used to set rates or benchmark privately developed models. The draft regulations require those who want to review the models to sign nondisclosure agreements, which Consumer Watchdog has alleged will prevent its staff members from discussing the models among themselves. Julia Borman, a director at Verisk, a company that builds computer models used by insurers, expressed concern that the draft proposal put forth by Lara would allow for a review by “countless participants and create the opportunity for an infinite timeline,” while not safeguarding companies from having their models ripped off by others Michael Soller, the state Department of Insurance’s deputy commissioner for communications, said Lara has publicly stated that the draft rules will allow for the development of public catastrophe models, which the department might then use to evaluate the insurers’ proprietary models. The proposal to allow catastrophe models is part of Lara’s larger Sustainable Insurance Strategy announced last fall. Other elements include righting the finances of the state’s Fair Access to Insurance Requirements plan, an insurer of last resort that has been deluged with new policyholders since insurers started pulling back from the market. He also wants to allow insurers to include in premiums the cost of reinsurance, which they purchase to protect themselves from disasters. Catastrophe models are already allowed in California for pricing policies that cover earthquakes and fires caused by quakes. Along with wildfires, under the proposed regulations, the use of the models would also be permitted for insurance covering terrorism, floods and some other types of coverage. Gerald Zimmerman, senior vice president of government and industry relations at Allstate, which stopped selling new homeowners insurance policies in the state in 2022, said that adopting Lara’s strategy would be a game changer. “Allstate will begin writing new homeowner insurance policies in nearly every corner of California,” he said. Other speakers at the three-hour hearing included insurance agents and local officials, as well as homeowners groups, which want to ensure that catastrophe models take into account steps taken by homeowners and government agencies to reduce fire risks, such as by making homes more fire-resistant and reducing brush in a community. Although the draft regulations call for doing so, several speakers complained that such mitigation efforts had not been reflected in recent premium increases. The Insurance Department plans to review Tuesday’s remarks in preparing for the release of a new set of proposed regulations. Lara has the support of Gov. Gavin Newsom, who issued a letter calling for the commissioner to move quickly to resolve the crisis. The regulations do not require legislative approval or the governor’s signature. “We will review all public comments while staying on track to implement all changes this year, so insurance companies start writing more policies in all areas,” Soller said.

The Biden administration on Thursday issued sweeping new rules that crack down on power-plant pollution and could force many of the country’s coal plants to shutter unless they undertake costly upgrades.

The rules, which will almost certainly be challenged in court, mandate strict controls on carbon-dioxide emissions at existing coal plants and newly built natural-gas plants. They set the stage for a significant infrastructure build-out to capture and dispose of CO2 emitted at such plants in order to comply.

The changes come as the industry juggles the first upswing in power demand in two decades and a shifting generation mix. Solar and wind projects are being added to the grid, and utilities say more gas-fired power plants are needed for reliability and to replace coal. Some utilities say they could need aging coal plants to stay online longer than expected.

Existing gas plants, the backbone of the nation’s power supply, aren’t included in the new rules.

“The electricity industry is central to America’s economic growth and competitiveness. These are the folks who keep the lights on and power our country forward,” said Michael Regan, U.S. Environmental Protection Agency administrator. “At the same time, the power sector is also a major contributor to the pollution that drives climate change and threatens public health.”

The EPA administrator said the new rules will cut 1.4 billion metric tons of carbon-dioxide emissions, roughly equivalent to the power sector’s 2022 emissions, and move the U.S. closer to the Biden administration’s goal of making the electricity sector carbon-free by 2035.

Regan said the new rules will amount to $370 billion in climate and public health net benefits over the next two decades. In 2035, the new rules would prevent approximately 1,200 premature deaths and 870 hospital visits, according to Regan. Carbon emissions from power plants make up around a quarter of U.S. greenhouse-gas emissions. Vehicles account for the largest source, about 28%. Separate EPA rules issued Thursday will limit pollution from power-plant wastewater, regulate coal ash, and limit air emissions of mercury and other toxic compounds.

Plants operating past 2039 would need to install carbon-capture units before 2032 to comply with the new climate rules, according to EPA officials. A nationwide slowdown in permitting and constructing energy projects will test the utilities’ ability to deploy carbon capture and storage, which is mostly untried on a large scale.

While the administration said the timelines for the power-plant rules would give companies time to comply, National Rural Electric Cooperative Association Chief Executive Jim Matheson called the rules unachievable.

“It undermines electric reliability and poses grave consequences for an already-stressed electric grid,” said Matheson, whose organization represents many smaller utilities that operate coal plants. Many power executives say that carbon-capture systems are too experimental, unproven and expensive. Environmentalists say that wider use of the technologies will bring costs down and that the rules would help lower emissions in a major industry that has already been shifting to renewables.

Tax credits for carbon capture in the 2022 climate, health and tax law known as the Inflation Reduction Act, combined with the new EPA rule, will spur both innovation and adoption of the technology, according to David Doniger, senior federal strategist at the Natural Resources Defense Council, an environmental group.

“It’s going to cause coal-plant operators who want to keep the plants around to get serious about carbon capture,” Doniger said.

Doniger said utilities raised similar fears in the 1980s about the cost of installing scrubber technology to remove sulfur pollutants that damaged lakes and waterways in the Northeast. The actual cost was less than either industry or the EPA had projected, he said. The new rules will likely stoke the political debate over regulations designed to fight climate change.

The administration has been pushing through rule changes designed to survive election-year politics. Last month the EPA issued its most stringent rules ever for tailpipe emissions for vehicles, though it handed the auto industry a concession by giving it more time to comply than what had originally been proposed.

Issuing the rules now avoids the threat of a potential congressional change, but they are still likely to end up in court.

Coal plants have struggled financially against natural gas and renewables, and the rules essentially schedule their phaseout, said Daniel Cohan, associate professor of civil and environmental engineering at Rice University. Most were built before 1990 and would be at least 50 years old by 2040. Their owners would face enormous costs for ongoing maintenance, in addition to the expense of installing a carbon-capture system.

“It’s going to be only really special cases where it would make sense to install this technology,” Cohan said.

The industry would need to remove CO2 before it goes out of smokestacks, build pipelines to transport it and drill wells that could permanently store the carbon dioxide deep underground in rock formations. Such a build-out faces myriad challenges. Not all parts of the country, for example, have the geology required for storage.

Generators in competitive markets are considered unlikely to make the capital investments that would be needed for older plants, but some utilities or electric co-ops in coal-heavy states might do so and pass the costs on to consumers.

The sector could also turn to options such as the use of hydrogen fuel or small modular nuclear reactors, which remain under development in the U.S. The EPA said it is also including flexibility regarding grid reliability and operations during emergencies.

There are only a few examples globally of carbon-capture projects tied to power plants. In North Dakota, Minnkota Power Cooperative hopes to build a carbon capture and sequestration project at a coal plant. Chief Executive Mac McLennan said the EPA is overestimating the current and future capabilities of the technology and underestimating the time needed to build.

“I have great optimism and confidence that we can figure out how to make technology work to capture CO2 off of a coal plant,” McLennan said. “I have some fundamental concerns just whether and how we affordably and reliably keep the lights on.”

Meanwhile, the coal-mining industry is finding new customers abroad to replace retiring U.S. coal plants. Consol Energy operates three mines in Pennsylvania and one in West Virginia. Chief Executive Jimmy Brock said new export markets took 60% of the 26 million tons of coal that Consol dug last year.

“I think we need to invest in those technologies,” Brock said, referring to carbon capture. “If they don’t, we’ll continue to send our coal overseas.”

   

McKinsey & Co is under criminal investigation in the United States over allegations that the consulting firm played a key role in fueling the opioid epidemic, with federal prosecutors homing in on its work advising OxyContin maker Purdue Pharma and other drugmakers, three people familiar with the matter said. The consulting firm and the U.S. Justice Department declined to comment. The probe is focused on whether McKinsey engaged in a criminal conspiracy when advising Purdue and other pharmaceutical manufacturers on marketing strategies to boost sales of prescription painkillers that led to widespread addiction and fatal overdoses, two of the people said. The Justice Department is also investigating whether McKinsey conspired to commit healthcare fraud when its consulting work for companies selling opioids allegedly resulted in fraudulent claims being made to government programs such as Medicare, they said. Prosecutors are also looking at whether McKinsey obstructed justice, an inquiry related to McKinsey's disclosure that it had fired two partners who communicated about deleting documents related to their opioids work, the people said. The probe, opened several years ago before the onset of the global pandemic, involves Justice Department officials spanning offices in Washington, Massachusetts and Virginia, they said. Both sides are in discussions to resolve the probe, one of the people said. Investigations are not evidence of wrongdoing and officials conducting the inquiry could ultimately pursue criminal charges, seek civil sanctions or close the probe without taking any action. The Wall Street Journal previously reported the Justice Department investigation. The Justice Department probe underscores how McKinsey's past work advising drugmakers on opioids continues to follow the near-century-old consulting firm. It carries higher stakes than other government investigations McKinsey has resolved because of the potential for criminal charges against the company or executives, and steep financial penalties that the Justice Department often demands in exchange for resolving its white-collar probes. McKinsey earlier reached separate agreements totaling nearly $1 billion to settle widespread opioid lawsuits and other related legal actions brought by all 50 states, Washington, D.C., U.S. territories, various local governments, school districts, Native American tribes and health insurers. McKinsey in 2019 said it would no longer advise clients on any opioid-related businesses. None of the settlements have contained admissions of liability or wrongdoing, McKinsey has said. "We understand and accept the scrutiny around our past client service to opioid manufacturers. This work, while lawful, fell short of the high standards we set for ourselves," McKinsey said in a 2022 statement following the release of a congressional committee report scrutinizing its consulting work. Purdue did not immediately respond to a request for comment. The drugmaker pleaded guilty in 2020 to criminal charges over its handling of opioid painkillers. Purdue filed for bankruptcy in 2019 and later negotiated a settlement valued at about $10 billion to settle thousands of lawsuits alleging it contributed to the opioid epidemic. The Supreme Court halted that settlement and is soon expected to rule on a Biden administration challenge to the deal. Prosecutors are far from making any charging decisions in their criminal investigation of McKinsey, in part because they are sifting through voluminous documents as part of their inquiry and engaging in discussions with the consulting firm's lawyers, one of the people said.      

Net neutrality, a set of policies designed to prevent internet-service providers from playing favorites among the websites they carry, is coming back.

In a vote Thursday, the Federal Communications Commission is poised to classify internet service as a public utility. The definition is part of a new framework the FCC will use to regulate broadband networks.

For years, internet-service providers have sparred with regulators and activists over the rules for offering internet access to consumers and businesses. Net-neutrality provisions introduced during the Obama administration were scrapped during the Trump presidency. The shifting rules haven’t radically changed how the internet is delivered to consumers or how much they pay for it.

With the FCC’s vote, internet-service providers are likely to challenge net-neutrality rules in court, meaning it could be months before they go into effect.

What does net neutrality entail?

Net-neutrality rules typically bar internet-service providers from assigning priority to certain web traffic or creating so-called fast lanes for certain websites. They also restrict providers from throttling, or slowing down, traffic to websites that don’t pay up.

Proponents say that the guardrails are critical to ensuring internet users have equal access to digital content and that deep-pocketed websites aren’t given priority over smaller ones. Without rules, advocates say that companies such as Comcast could charge content owners such as Netflix to pay extra, akin to a toll, to have its videos delivered smoothly to viewers.

Opponents of net neutrality say the rules are unnecessary and allege that the FCC is using the policy to expand its regulatory remit.

The topic crept into pop culture around 2006, when the late Sen. Ted Stevens (R., Alaska) described the internet as “a series of tubes.” His metaphor was mocked as simplistic by “The Daily Show” and other media—but also captured the public imagination.

How could these rules affect consumers and their options for internet service?

That depends on whom you ask. The foundation for the commission’s new internet rules—Title II of the Communications Act—allows the regulator to intervene if it determines a company is charging unreasonable rates. The order being voted on Thursday explicitly avoids rate regulation.

Internet providers aren’t convinced it is the last word. They fear the new order will open the door for future FCC rules that regulate prices. Some states have capped what internet service providers such as Verizon Communications and AT&T could charge low-income households.

The FCC’s rules don’t prohibit providers from throttling internet service for consumers who are enrolled in plans with data allotments. The throttling would be allowed as long as the internet-service provider is transparent about its rules and the action occurs without cherry-picking certain applications or websites.

Internet providers’ practices became a flashpoint in 2018 when Verizon throttled the Santa Clara County Fire Department’s wireless internet service during a wildfire emergency. Verizon has called the throttling “a customer support mistake.” Proponents have used the episode as a reason why net neutrality rules should exist.

Haven’t we heard this before?

Yes. In 2015, the FCC, under Obama-appointed Chairman Tom Wheeler, classified internet service as a utility and imposed net-neutrality rules. Republicans called the rules a regulatory overreach. In 2017, the FCC, then under Trump-appointed Chairman Ajit Pai, rolled them back.

It has been seven years without federal net-neutrality rules, and consumers haven’t seen much change in how they experience the web. Net-neutrality opponents, including the two Republican FCC commissioners, argue that is because the rules weren’t needed in the first place.

California was among the first states to step in and implement its own net-neutrality rules. Some providers treated the state rules as a kind of de facto national standard.

Why bring the rules back?

FCC Chairwoman Jessica Rosenworcel has said that she believes in net neutrality and that stronger regulatory authority over internet infrastructure would allow the agency to safeguard private-sector networks against cybersecurity threats.

The new rules would affect a range of companies that provide internet service, including cable companies, mobile carriers and satellite-internet providers. Those companies say the FCC’s push could bring about more regulation, including at the state level, because the order doesn’t pre-empt states from making their own rules.

Providers must file public disclosures with the FCC if they fast-lane or throttle any type of traffic. Those disclosure requirements discourage internet providers from playing favorites with internet traffic.

 

   

Global commercial insurance rates increased by 1% in the first quarter of 2024 (down from a 2% increase in Q4 2023), according to the Global Insurance Market Index released today by Marsh, the world’s leading insurance broker and risk advisor and a business of Marsh McLennan. Rates continued to be relatively consistent, with most regions experiencing small decreases in Q1. This was largely driven by a strengthening of the trend for decreases in financial and professional and cyber lines and increasing competition among insurers in the global property market. On average, rates declined in the UK, Asia, Pacific, Canada and in India, Middle East & Africa regions by 2%. Rates increased in the US and Europe by 3%, and in Latin America and the Caribbean by 5%. Other findings included:

• Global property insurance rates were up 3%, on average, in the first quarter of 2024, compared to a 6% increase in the previous quarter. In the US, companies with concentrations of assets in catastrophe zones such as the Gulf of Mexico, Atlantic coast, and California have begun to see lower increases or even decreases in rates, compared to higher increases in recent years.
• Casualty insurance rates increased on average by 3%, the same as the previous five quarters, largely due to concerns about the size of jury awards in the US.
• For the seventh consecutive quarter, the overall average pricing for financial and professional lines fell. Driven by rate reductions and increased competition for business – particularly in the US, UK, Pacific, and Canada – average rates decreased by 7% in the first quarter, compared to 6% decline in the previous quarter.
• Globally, cyber insurance rates decreased by 6%, compared to a 3% decrease in the prior quarter. Insurers are increasingly focused on the strength of organizations’ cybersecurity controls, typically looking for year-over-year improvements in cyber resilience.

Commenting on the report, Pat Donnelly, President, Marsh Specialty and Global Placement, Marsh, said: “A continued moderation in insurance rates, and an increased appetite among insurers particularly for well-managed risks, will be welcomed by clients that continue to face major global economic and geopolitical uncertainty. “In a rapidly changing risk landscape, organizations will be under pressure to improve their risk management capabilities and make themselves more resilient to global shocks. We are working closely with our clients to ensure they have the right tools to navigate these challenges successfully and benefit from the continued improvement in market conditions.”  

U.S. companies would no longer be able to bar employees from taking jobs with competitors under a rule approved by a federal agency Tuesday, though the rule is sure to be challenged in court. The Federal Trade Commission voted Tuesday 3-2 to ban measures known as noncompete agreements, which bar workers from jumping to or starting competing companies for a prescribed period of time. According to the FTC, 30 million people — roughly one in five workers — are now subject to such restrictions. The Biden administration has taken aim at noncompete measures, which are commonly associated with high-level executives at technology and financial companies but in recent years have also ensnared lower-paid workers, such as security guards and sandwich-shop employees. A 2021 study by the Federal Reserve Bank of Minneapolis found that more than one in 10 workers who earn $20 or less an hour are covered by noncompete agreements. When it proposed the ban in January 2023, FTC officials asserted that noncompete agreements harm workers by reducing their ability to switch jobs for higher pay, a step that often provides most workers with their biggest pay increases. By reducing overall churn in the job market, the agency argued, the measures also disadvantage workers who aren’t covered by them because fewer jobs become available as fewer people leave their positions. They can also hurt the economy overall by limiting the ability of other businesses to hire needed employees, the FTC said. The rule, which doesn’t apply to workers at non-profits, is to take effect in four months unless it is blocked by legal challenges. “Noncompete clauses keep wages low, suppress new ideas and rob the American economy of dynamism,” FTC Chair Lina Khan said. “We heard from employees who, because of noncompetes, were stuck in abusive workplaces.” Some doctors, she added, have been prevented from practicing medicine after leaving practices. Business groups have criticized the measure as casting too wide a net by blocking nearly all noncompetes. They argue that highly paid executives are often able to win greater pay in return for accepting a noncompete. “It’ll represent a sea change,” said Amanda Sonneborn, a partner at King & Spalding in Chicago who represents employers that use noncompetes. “They don’t want somebody to go to a competitor and take their customer list or take their information about their business strategy to that competitor.” But Alexander Hertzel-Fernandez, a professor at Columbia University who is a former Biden administration Labor Department official, argued that lower-income workers don’t have the ability to negotiate over such provisions. “When they get their job offer,” he said, “it’s really a take-it-or-leave-it-as-a-whole,” he said. The U.S. Chamber of Commerce said Tuesday that it will file a lawsuit to block the rule. It accused the FTC of overstepping its authority. “Noncompete agreements are either upheld or dismissed under well-established state laws governing their use,” said Suzanne Clark, the chamber’s CEO. “Yet today, three unelected commissioners have unilaterally decided they have the authority to declare what’s a legitimate business decision and what’s not by moving to ban noncompete agreements in all sectors of the economy.” Two Republican appointees to the FTC, Melissa Holyoak and Andrew Ferguson, voted against the proposal. They asserted that the agency was exceeding its authority by approving such a sweeping rule. Noncompete agreements are banned in three states, including California, and some opponents of noncompetes argue that California’s ban has been a key contributor to that state’s innovative tech economy. John Lettieri, CEO of the Economic Innovation Group, a tech-backed think tank, argues that the ability of early innovators to leave one company and start a competitor was key to the development of the semiconductor industry. “The birth of so many important foundational companies could not have happened, at least not in the same way or on the same timeline and definitely not in the same place, had it not been for the ability of entrepreneurs to spin out, start their own companies, or go to a better company,” Lettieri said. The White House has been stepping up its efforts to protect workers as the presidential campaign heats up. On Tuesday, the Labor Department issued a rule that would guarantee overtime pay for more lower-paid workers. The rule would increase the required minimum salary level to exempt an employee from overtime pay, from about $35,600 currently to nearly $43,900 effective July 1 and $58,700 by Jan. 1, 2025. Companies will be required to pay overtime for workers below those thresholds who work more than 40 hours a week. “This rule will restore the promise to workers that if you work more than 40 hours in a week, you should be paid more for that time,” said Acting Labor Secretary Julie Su.