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March 28, 2024
Fruit and Vegetables Farmers Find Difficulty Getting Crop Insurance
March 28, 2024
Port of Baltimore’s Indefinite Closure Deals Blow to City, State Economy
Six people are missing and presumed dead after the Singapore-flagged MV Dali slammed into the bridge in the early morning hours, sending debris into the Patapsco River that continues to block a large portion of the channel that leads into Baltimore’s harbor.
The state of Maryland and the U.S. Department of Transportation announced the closure of the shipping lane to the port until further notice as the investigation, recovery and cleanup get underway.
Economist Anirban Basu said that along with the Johns Hopkins Health System, the Port of Baltimore is one of the main drivers of the city and state economy, and its indefinite closure will impact jobs and revenue across the region.
Baltimore is the largest city in Maryland, with a population of about 576,000. It has more than 2.8 million in its metropolitan area.“I would say the Port of Baltimore is the leading economic driver for the region in Baltimore,” Basu, chairman and CEO of Baltimore-based Sage Policy Group Inc., told FreightWaves. “One could argue that the leading driver is Johns Hopkins. It’s a difficult comparison, because you’re talking about two very different fields of endeavor. But the Baltimore region has been one of the nation’s underperformers in recent years. In the Baltimore region, we have had to clawback the jobs lost early during the pandemic.”
The port is the deepest harbor in Maryland’s Chesapeake Bay, with five public and 12 private terminals. It handled over $80 billion worth of cargo in 2023. It serves more than 50 ocean carriers making nearly 1,800 annual port calls.
The port generated nearly $3.3 billion in total personal income and supports 15,330 direct jobs and 139,180 jobs connected to the port, according to state data.
“If you were to compare the jobs in the Baltimore region in February of 2020 just before the pandemic, to February of 2024, the Baltimore region is down 34,900 jobs, the state of Maryland is down 41,100 jobs, while the nation is up 5.5 million jobs during this period …,” Basu said. “But one thing we could say in Baltimore was that we are anchored by the Port of Baltimore, that whatever has happened with our corporate headquarters, many of them have just disappeared, but the Port of Baltimore was not going anywhere.”According to recent data from Implan, the port’s 15,000-plus direct employees could lose an estimated $275 million in labor income if container operations are down for a month.
Implan is a Huntersville, North Carolina-based economic software and analysis firm.
“Before we even performed the analysis, we knew this event would have a negligible loss to the U.S. gross domestic product,” Candi Clouse, Implan’s vice president of customer success and education services, told FreightWaves. “The logistics and shipping will just shift to another U.S. port temporarily. However, the potential impact to Maryland is something to keep an eye on. Even if the port is only closed for 30 days, Maryland would be at risk for losing $550 million to its gross domestic product and $1 billion loss in total value of goods and services.”Basu said how much the ship channel’s closure disrupts the city and state’s economy depends on how long until the port is fully operational.
The federal Bureau of Transportation Statistics said as of noon Tuesday, three bulk carriers, one vehicle carrier, two general cargo ships, one oil/chemical tanker and three logistics naval vessels were stuck behind the fallen bridge in the port. One vehicle carrier was in the port but outside the bridge, and nine bulk carriers, one vehicle carrier and two general cargo vessels were anchored.
“The short-term effects are very large. … There is a significant amount of cargo being diverted away from the Port of Baltimore to other ports, who are often competitors,” Basu said. “This impact is multimodal, because not only is the ocean carrier community impacted by this, but so too is rail transport, trucking and even air cargo, including cargo operations at Baltimore-Washington International Airport.”
With 31,000 vehicles per day crossing the Francis Scott Key Bridge, it is a major conduit for traffic in the region. Basu pointed to several ways trucking operations at the port and in the area will be affected.
The port is not only adjacent to I-95, it’s in the proximity of I-70, and so it’s a major way for northwest and east-to-west routes,” Basu said. “One would think that the trucking community would be quite meaningfully impacted as would distributors located in the region. Distribution is going to be less efficient, given lengthier travel times, both into the distribution centers and from the distribution centers.”Supply chain visibility platform project44 released a report detailing how an estimated $1 billion per week in goods will be affected by the bridge collapse and indefinite suspension of container activities at the port.
“The Port of Baltimore handles freight from major automakers including, but not limited to, Nissan, Toyota, General Motors, and Volvo,” the project44 report said. “Expect disruptions to manufacturing in the automobile market until companies can establish dray networks through neighboring ports.”
Rerouting the port’s container cargo to ports in New York and New Jersey, Philadelphia, or Virginia could push up some trucking and rail prices in the short term, according to Tony Thrasher, senior director of product management at SPS Commerce.
“In the short-term, there is an impact on exporting/importing goods and services,” Thrasher said in an email to FreightWaves. “However, once things get cleaned up, and other routes out of the port are determined, operations will resume and the initial downtime will be over. Operations won’t be as efficient, and there will be additional costs to use other ports that are further away. Retailers that have prepared for disasters will navigate this disruption fine.”
Minneapolis-based SPS Commerce provides cloud-based supply chain management software to retailers, suppliers and 3PLs.
“Since we are in March, retailers are not in the crazy holiday rush yet, so I see this impact being short-term and not hurting big retailers,” Thrasher said. “I don’t think consumers will see the impact either. Retailers will have to deal with it, but the delays will not be enough for consumers to feel.”
March 28, 2024
Explosive Atlantic Hurricane Season Predicted for 2024: AccuWeather
Driving factors for a hyperactive hurricane season
Warm water is fuel for tropical systems, and there will be plenty of warm water for fledgling systems to tap into and strengthen. "Sea-surface temperatures are well above historical average across much of the Atlantic basin, especially across the Gulf of Mexico, Caribbean and the Main Development Region [for hurricanes]," DaSilva explained. The Atlantic water temperatures observed in March were around or even warmer than they were in March ahead of the blockbuster 2005 and 2020 hurricane seasons. Not only will this promote frequent development, but it will increase the potential for systems to undergo rapid intensification, a phenomenon that has occurred in recent years with historic hurricanes. In 2020, Hurricane Laura was in the Gulf of Mexico and was making a beeline toward southwestern Louisiana. In just 24 hours, it rapidly intensified from a Category 1 hurricane with winds of 85 mph to a menacing Category 4 storm with winds of 150 mph -- 7 mph shy of Category 5 status. Unusually warm water could also help to spawn tropical systems in November when the Atlantic hurricane season is winding down. The other major factor in AccuWeather's Atlantic hurricane forecast is hitched to the Pacific Ocean. Water near the equator of the eastern Pacific is in the process of quickly flipping from El Niño, when temperatures in this area are higher than historical averages, to La Niña, when temperatures in this zone are lower than long-term normals. This swift transition may have significant implications across the Atlantic Ocean. La Niña results in less disruptive winds, known as wind shear, over most of the Atlantic basin. "It can be helpful to visualize a stack of pancakes," DaSilva explained. When there is a high amount of wind shear, the top of a tropical system can be pushed and tilted away from its base, causing it to become lopsided. If a mature hurricane is in place, it may weaken but will not necessarily dissipate. "A tall, neat stack is what a tropical system wants to be, but wind shear can cause some pancakes to be displaced and the stack could fall over," said DaSilva. The faster the transition to La Niña occurs, the more active the hurricane season is likely to be. La Niña was present during the 2020, 2021 and 2022 Atlantic hurricane seasons, all of which featured near or well above the historical average of 14 named storms. The 2020 season is tied with the historic 2005 season for the highest number of named storms, with 30.How many tropical storms and hurricanes are predicted in 2024?
AccuWeather meteorologists are forecasting 20-25 named storms across the Atlantic basin in 2024, including 8-12 hurricanes, four to seven major hurricanes and four to six direct U.S. impacts. This is all above the 30-year historical average of 14 named storms, seven hurricanes, three major hurricanes and four direct U.S. impacts. With so many factors that could bolster development, there is the potential that there could be even more than 25 named storms in 2024. "There is a 10-15% chance of 30 or more named storms this year," DaSilva said. In addition to the number of storms and hurricanes, AccuWeather is predicting an Accumulated Cyclone Energy (ACE) of 175-225, above the historical average of 123. ACE measures the intensity and longevity of tropical systems throughout the year, making it a reliable way to quantify the true strength of a hurricane season. A powerful, long-lived hurricane will generate a large amount of ACE, while a short-lived tropical storm will only generate a small amount of ACE.What areas of the US have the highest hurricane risk in 2024?
"The Texas coast, Florida Panhandle, South Florida and the Carolinas are at a higher-than-average risk of direct impacts this season," DaSilva said. While these four areas are at an elevated risk for a direct strike from a tropical system, residents near other coastal locations should remain vigilant. "All residents and interests along the U.S. coast, including Puerto Rico and the Virgin Islands, should have a hurricane plan in place and always be fully prepared for a direct impact.," DaSilva added. One tool meteorologists use to create long-range forecasts is analyzing analog years, or past years when the weather patterns were similar to current conditions. An analog year for this season is 2016 -- a year when Hurricane Matthew barreled over Hispaniola and eastern Cuba before taking a swipe at Florida's Atlantic coast. The Category 5 hurricane was the most powerful storm of that season, which took place during La Niña, similar to what is predicted to happen this year.What happens if there are more than 21 storms and we run out of names?
With AccuWeather experts predicting 20-25 named storms, meteorologists could run out of names to use for tropical storms and hurricanes. Although the alphabet has 26 letters, Q, U, X, Y and Z are skipped, leaving 21 names. So what happens when we run out? The Greek alphabet was used in the past to name storms, starting with Alpha, but that rule was changed by the World Meteorological Organization (WMO) in 2021. "The use of the Greek alphabet was not expected to be frequent enough to warrant any change in the existing naming procedure," the WMO said on its website. "However, after the record-breaking 2020 season, the WMO Regional Association IV Hurricane Committee annual session in 2021 decided to end the use of the Greek alphabet and instead established two lists of supplemental tropical cyclone names, one for the Atlantic, one for the Pacific." The supplemental list of names is also in alphabetical order, starting with the name Adria. If there are at least 22 named storms in the Atlantic this season, 2024 will be the first time the supplemental list is used.March 28, 2024
Lloyd’s Reports Outstanding 2023 Results
- Gross written premium of £52.1bn (2022: £46.7bn)
- Underwriting profit of £5.9bn (2022: £2.6bn)
- Combined ratio of 84.0% (2022: 91.9%)
- Profit before tax of £10.7bn (2022: £(0.8)bn loss)
- Attritional loss ratio of 48.3% (2022: 48.4%)
- Net investment return of £5.3bn (2022: £(3.1)bn loss)
- Total capital, reserves and subordinated loan notes of £45.3bn (2022: £40.2bn)
- Central solvency ratio of 503% (2022: 412%)
March 28, 2024
Lawyers Gear Up for Swift Start in Legal Fight Over Baltimore Bridge
The Singaporean owner of the cargo ship that took down the bridge is expected to invoke a law dating back to the 19th century that limits the liability of ships’ owners, according to Lawrence Brennan, a law professor at Fordham University in New York. The law is similar to one used by the Titanic’s owners after that “unsinkable” liner hit an iceberg.
This Limitation of Liability Act law caps the liability of the cargo ship’s owners—and their several insurers—at the value of the goods the ship was carrying and the value of the ship itself.
A representative of the ship’s owner, Grace Ocean, didn’t respond to a request for comment.
The fight, maritime lawyers say, could run as long as a decade. “It will be one of the most contentious marine insurance cases in recent decades,” said Brennan, the law professor and a retired captain in the U.S. Navy.
While the lawyers fight, most claims will likely get paid by the insurers, including money for the bridge’s reconstruction. Then they will duke it out among themselves. Other claims might take longer, including those by the families of the people killed in the crash.
Other big sources of claims include the loss of revenue for the port, for the vessels now stuck inside it, and for businesses affected by the resulting supply-chain snarl-ups. The bridge part of this web of claims may be the simplest to resolve. The structure cost some $60 million to build in 1977, which is around $300 million today when adjusted for inflation.The bridge is covered by the state of Maryland’s insurance. The policy, covering property damage and business interruption for bridges and tunnels, pays up to $350 million, documents show.
That ship, the Dali, has coverage through a specialized property and indemnity insurer, the Britannia P&I club. It said it is “working closely with the ship manager and relevant authorities to establish the facts and to help ensure that this situation is dealt with quickly and professionally.”Britannia is one of a dozen protection and indemnity, or P&I, clubs, which between them insure around 90% of the world’s oceangoing tonnage. Each club, owned by shipowners, operates independently. But the clubs pool resources to buy reinsurance, allowing them to pass on much of the risk they underwrite. That reinsurance covers up to $3.1 billion per ship, according to ratings firm AM Best.
This generous reinsurance safety net is led by French insurer Axa, according to people familiar with the matter, but involves in total around 80 insurers from across the globe. That means, despite a likely eye-popping overall claim, the payout is “unlikely to be significant for individual reinsurers since it will be spread across so many,” said Brandan Holmes, an official at ratings firm Moody’s.
Not all claims springing from the incident will be covered by the ship’s insurance agreements.
The state, with its insurers in support, will likely be among many claimants that sue the Singaporean owner of the giant cargo ship that struck the bridge, seeking to recover their losses. The bridge collapse is a significant blow for a marine insurance market already hit by the costs of the recent Red Sea attacks. Increased rates and new restrictions on coverage are expected to follow.“This probably will be one of the biggest marine losses in history,” John Neal, chief executive of the Lloyd’s of London insurance marketplace, said Thursday. “It clearly will have an impact on cover and premium.”
The insured losses could total between $2 billion and $4 billion, surpassing the Costa Concordia catastrophe, ratings firm Morningstar DBRS said.
The bridge collapse will likely affect the operations of scores of importers, exporters and other companies that use the port. Many will likely find the event isn’t covered by their business-interruption insurance, according to Robert Merkin, a law professor at the University of Reading.
“Only some policies will cover this—it depends on the wording,” Merkin said. Business-interruption insurance is designed primarily to cover damage to the company’s own premises, although some policies have extensions that might cover external events, such as the bridge collapse, he added.
March 27, 2024
Marine Insurance Industry Bracing for Huge Claims from the Baltimore Bridge Disaster
March 27, 2024
Marine Mutual Britannia Confirms Insurance Role in Baltimore Bridge Ship Collision
P&I Clubs."
Jakobsen said the P&I segment is dominated by the members of the International Group of P&I Clubs, which collectively insure approximately 90% of the world’s ocean-going tonnage. As part of the International Group’s pooling arrangements, member clubs mutually reinsure each other by sharing claims above $10
million.
Additionally, the group buys general excess-of-loss reinsurance cover up to $3.1 billion in the open market, Jakobsen said.
"While the total cost of the bridge collapse and associated claims will not be clear for some time, it is likely to run into the billions of dollars — well above the $100 million attachment point for the GXL contract," she said. "The insurance issues due to the collapse of the bridge will take a long time to determine and may involve several lines such as property, cargo, liability, trade credit and contingent business interruption. The claim will likely involve several insurers, reinsurers, subrogation, and legal issues and will serve to add to the
increasing challenges in reinsurance availability.”
March 27, 2024
SEC Ramps Up Massive-Hack Probe With Focus on Tech, Telecom Companies
March 27, 2024
Progressive Insurance Begins Dropping Homeowners Policies in Florida
DROPPED BY PROGRESSIVE
"Dear Policyholder, your policy will expire at 12:01 on July 1st , 2024, for the following reasons. After careful consideration we are unable to offer you a renewal policy due to a reduction in our hurricane exposure. Please contact your agent to find replacement coverage," the letter read. Last fall Progressive confirmed to ABC Action News that they will not renew policies in Florida beginning in May of 2024 to "rebalance our exposure" they told us in a statement. "I was shocked, I was stunned," Kasdan said. "There may be a time where as much as we love Florida we may not be able to stay here."DIFFICULT FINDING A NEW INSURANCE COMPANY
As a retiree on social security, his fears don't stop there. He said finding information on potential new companies is not easy. He emailed ABC Action News for help. "These are no-name carriers, companies you have never heard of. Or they have been around 2 to 7 years and in some cases, they seem to be off-shoots of bankrupt carrier or carriers who left the state," Kasdan said. "I'm afraid we spend a lot of money to buy coverage and all we have is a promise of coverage that might not be any good if we need it." He sent a list of things he'd like to see on a centralized website, urging the state to put together a one-stop shop online tool to help consumers shopping for new coverage. "I really wish the state would be proactive," he said. "Put up a website with metrics of all the carrier's doing business in the state: How long have you done business? How many homeowners do they insure? What is the percentage of claims being paid? How long did it take you to pay them?"SOME INFORMATION IS NOT MADE PUBLIC
ABC Action News spoke with the Chief Financial Officer Jimmy Patronis' office who offered a long list of resources available to consumers, but data this detailed and broken down by company is not available for the public a spokesperson said, citing much of the information is trade secrets, propriety to the insurance companies to keep the property insurance market competitive. "The idea that customer satisfaction ratings are a trade secret sounds like baloney," Kasdan said. "The information on how these new carriers handle claims and how happy or unhappy the customers are shouldn't be a secret. That is what people need to be able to decide which company they want to do business with." Mark Friedlander with the Insurance Information Institute said there is no one-stop shop for consumers looking for a new insurance company. "It's not to hide information from consumers, it's to hide information from competitors. It's very common," Friedlander said. "The consumers insurance agent needs to be the advocate in this process." Friedlander recommended consumers use third-party sites that independently rate insurance companies. He provided a list for consumers to start.March 27, 2024
Tennessee Grows Captive Count in 2023
March 27, 2024
AI Makes Voice Cloning Scams More Convincing
Who Are the Targets?
Identity criminals are not interested in attacking individuals unless they have a high net worth or they are an employee with access to business information or systems. Cybercriminals prefer to launch attacks they can automate and can be used against large groups of individuals – like automated phishing attacks. Voice cloning scams are the exact opposite of an automated attack on a large scale. That’s why businesses are more likely to be targeted, along with people with a high profile and obvious financial resources. Identity criminals increasingly find their targets using AI programs to search the internet for information about people and businesses, including audio or video posts on social media or the web, as well as for details that can be used to make compelling calls to victims.What is the Scam?
Scammers use AI tools to clone the voices of individuals they target on social media or the web to make calls to family, friends or co-workers. AI tools require as little as three seconds of a voice to create a realistic (enough) clone. Criminals can also spoof a phone number so it looks like a known caller. Using AI tools, criminals add sounds like laughter, fear and other emotions into the cloned voice, as well as sound effects like a subway station, an airport or a car crash. The technology is so advanced that scammers can also add accents and age ranges.What they Want
Just like in traditional “Grandparent” or “Business Email Compromise (BEC)” scams, cybercriminals use a variety of tactics to create a sense of panic or urgency – like claiming a loved one is in danger, or an important vendor must be paid NOW! The criminals hope to scare people into sending money or sharing business or personal information that can be used in another identity crime.How to Avoid Voice Cloning Scams
- Hang up and don’t panic. Bad actors count on your fear or sense of duty to get you to take an action you otherwise would not. If you have any doubt about who is calling you and what they are asking you to do, hang up, collect your thoughts, and contact the person who supposedly called you and verify the situation. If you cannot reach them, connect with them through other family, friends or co-workers (if the call is business-related).
- Be vigilant on all phone calls, even if you recognize the voice. Listen for odd statements, questions, or requests, especially for money or personal or business information. If you think something might not be right, ask questions that only the real person would know.
- Avoid personalized voicemail messages. They can give bad actors easy access to your voice. Instead, use automated tools offered on mobile devices and office phone systems.
March 26, 2024