About Justin Smulison

Justin Smulison is the business content manager at RIMS and the host of RIMScast, the society's weekly podcast.
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Amid Wildfires, California’s Emergency Warning Systems Take Heat

Overnight, the Mendocino Complex Fire in Northern California expanded far enough to oust the 2017 Thomas Fire as the largest wildfire in the state’s history. Comprising two joined fires, the Mendocino Complex Fire has burned through 443 square miles in the area north of San Francisco. As of Tuesday morning, the fires burned more than 140 structures, including at least 75 homes, and was 30% contained.

But California’s residents and businesses still should be on alert, as the incendiary activity doesn’t end there. An unprecedented 14,000 firefighters are combating between 12 and 16 wildfires in the state, according to the Department of Forestry and Fire Protection. Particular emphasis is in Northern California, where the fires in Mariposa and Shasta counties continue to threaten residents, businesses, and emergency responders. For 26 days, the Ferguson Fire in Mariposa County has burned nearly 90,000 acres and caused two fatalities. The fire is having a huge impact on areas near and around Yosemite National Park, which alerted the public that it had closed all but two entrances and roads.

Redding, a city 150 miles north of Sacramento, is the site of the Carr Fire, which has been ablaze for two weeks. Weather.com reported that the fire has caused seven deaths and the destruction of nearly 1,600 structures, the majority of which are homes.

The city of Redding launched an interactive map that provides residents with images of neighborhoods so they can check the status of their homes. Reports indicate that more than 1,800 structures are still in the path of the fire.

Despite such technological advances, many residents have questioned the effectiveness of the state’s emergency notification system, which they rely on for evacuation notices.

The California Governor’s Office of Emergency Services currently uses an integrated California Public Alert and Warning System (CalPAWS) Plan to warn the public of danger.

Affected residents in several areas have claimed that they did not receive the CalPAWS evacuation order – including the great-grandmother who perished in the Carr fire in July with her two great-grandchildren. On Aug. 4, California Gov. Jerry Brown held a press conference in Shasta County to discuss the damage. But California’s emergency notification systems—and its unreliability in certain areas of the state—were a central focus of the conference.

Gov. Brown said he would consider legislation to improve alert systems, acknowledging local lawmakers’ proposals in an effort to create a statewide system that requires registration from all residents.

“I think we do need the best alert system we can get, and that’s what I would help the Legislature achieve,” Brown said, according to the Sacramento Bee. “There’s a lot of things we can do, and we can always do more …

given the rising threats on the changing of the weather, the climate.”

The Bee reported that a bill with adoption plans for a uniform alert system has been drafted:

The bill, Senate Bill 833, would require counties to automatically sign up residents for a uniform cell phone alert system. It would also fund a standardized system equipped to push out alerts on all forms of media—radio, television, electronic highway billboards and landlines. County emergency managers would be required to undergo annual training on the latest alert technology.

Under such a plan, which would utilize the federal Wireless Emergency Alerts system, they’d have to opt out rather than sign up voluntarily.

Furthermore, the governor said he hopes to overhaul the state’s 911 system, which would de-centralize the calls and notifications to ensure more accurate messaging.

Also on Aug. 4, the White House approved California’s request for a Presidential Major Disaster Declaration to help with the impacts of the wildfire in Shasta County.

“This is part of a trenda new normalthat we’ve got to deal with. We’re dealing with it humanly, financially and governmentally,” Gov. Brown said during a media briefing at the Carr Fire Incident Command Post in Anderson, California. “These kinds of horrible situations bring people together, regardless of the lesser kind of ideologies and partisan considerations.”

The Most Dangerous Month For Drivers Has Begun

Now that August has arrived, warnings are being posted—the United States has entered its deadliest month for drivers, according to the Insurance Institute for Highway Safety (IIHS). IIHS information revealed that 505 fatalities have been reported on Aug. 2 every year between 2012 and 2016—the most recent studied—making it the most fatal day for drivers in that time frame.

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During the same five-year span, July 4 had the second-highest number of traffic fatalities with 495.

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IIHS Senior Vice President for Communications Russ Rader attributed the statistic to the fact that there are more vehicles and road trips in unfamiliar territory, creating higher crash risks, on Aug.

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2 and during the summer in general.

“Traffic deaths are not inevitable. If everyone buckled up and every driver obeyed the laws against speeding and alcohol-impaired driving, the summer death toll would be much lower,” Rader said. “Even though Aug. 2 is a bad day, it’s staggering to recognize that, on average, about 100 people lose their lives on U.S. roads every single day of the year.”

A total of 37,461 people died in motor vehicle crashes in 2016 and the U.S. Department of Transportation’s most recent estimate of the annual economic cost of crashes is $242 billion. Contributing to the death toll are alcohol, speeding, lack of safety belt use and other problematic driver behaviors.

“Each of those deaths could have been prevented,” Rader said. “We could make a lot more progress in reducing crashes and the deaths and injuries that result if we doubled down on the countermeasures that we know work.”

The National Safety Council (NSC) reported that of all the work-related deaths in 2016, nearly 1,600 took place on roadways and about 20% of those involved pedestrian automobiles.

Organizations with fleets should take note, as motor vehicle crashes are the number-one cause of work-related deaths, accounting for 24% of all fatal occupational injuries, according to the NSC. On-the-job crashes cause employers to sustain costs of more than $24,500 per property damage crash and $150,000 per injury crash.

Nationwide’s SmartRide program identified hard braking, fast acceleration and idling in traffic as the top causes of auto accidents. Those incidents, coupled with the fact that August marks the midpoint of summer in America, make this such a dangerous time to be on the road.

Nationwide’s data identifies Fridays in general, between 9 a.m. and 4 p.m., as the most aggressive time of the week for drivers. During this timeframe, drivers’ habits behind the wheel show more instances of hard braking and faster accelerations than any other time of the week. Additionally, Nationwide members reported more accidents in August 2016 (60,976) than any other month over the past four years.

“These critical pieces of data about driving habits have been identified as some of the leading contributors to auto accidents,” said Teresa Scharn, an associate vice president at Nationwide who helped build and manage the insurer’s telematics program. “When drivers are armed with this information, they can make necessary adjustments to their driving behaviors that will help them be safer drivers.”

Total Cost of Risk Drops for Fourth Straight Year, RIMS Finds

The risk management profession is proving its resiliency. Even in the face of major hurricanes, technological influence and the seemingly common threat of international trade wars, 2017 saw the total cost of risk (TCOR) decline for the fourth consecutive year, according to the 2018 RIMS Benchmark Survey, which was jointly published by RIMS and Advisen.

Despite these uncertainties, the TCOR per $1,000 of revenue continued to drop, the survey revealed, ending at $9.75 in 2017. The main drivers were declines in liability costs (8%), by decreases in property, liability, workers compensation, management liability, and professional liability costs, as well as overall risk management administration costs. TCOR is defined in the survey as the cost of insurance, plus the costs of the losses retained and the administrative costs of the risk management department.

The survey encompassed industry data from 590 organizations and contains policy-level information from 10 coverage groups, subdivided into 90 lines of business.

Advisen Co-Founder and Chief Strategy Officer David Bradford said market conditions are favorable for insurance buyers. “A competitive insurance market resulting from a chronic overabundance of risk capital strongly contributed to TCOR decreasing steadily since 2013,” he said. “Not even record catastrophe losses in 2017 could derail the downward trend.”

Key findings from this year’s RIMS Benchmark Survey include:

  • TCOR fell despite record-high natural catastrophe losses such as hurricanes Maria, Irma and Harvey, as well as wildfires and mudslides in California.
  • While TCOR per $1,000 of revenue fell for most industries, four—healthcare, government & nonprofit, information technology and consumer staples—saw rising TCOR in 2017.
  • As predicted in the 2017 survey, the percentage of companies buying cyber insurance continued its increase since 2011, ending at 65% in 2017.
  • In 2017, the percentage of companies buying cyber insurance increased to 65%. This trend has continued upward since 2011. Additionally, the cost of cyber insurance per $1,000 of revenue increased 33% from 2016.
  • The adoption of new technologies such as machine learning and blockchain, political instability in several parts of the world, globalization, terrorism and cyber threats are expected to further shape the risk landscape in 2018 and beyond.

Bradford noted that the traditional insurance pricing cycle may seem broken, but that term is more likely a new normal resulting from a more efficient insurance market. “The factors contributing to this more efficient market are varied and complex, but the upshot is that a hard market like that last seen in 2001-2002, when commercial insurance rates shot up 50 percent, may simply never occur again,” he said. “Prices may rise, but most likely they will be quickly beaten down by fresh capital flowing into the market. That is good news for risk managers.”

“As the tools, resources and technologies that facilitate the exchange of ideas and experiences continue to improve, risk management professionals have become better equipped to strengthen their risk financing programs and apply cutting-edge, cost-cutting strategies,” said RIMS CEO Mary Roth. “The year-over-year data available in the RIMS Benchmark Survey allows professionals to accurately set expectations, and achieve goals while designing competitive but fair insurance programs for their organizations.”

To order a copy of the 2018 RIMS Benchmark Survey, visit www.advisenltd.com/media/reports/rims-benchmark-survey/ or www.RIMS.org/book.

Traveling? It’s No Time To Protest

Traveling for business to a foreign country has its assumed risks.

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Typical details like language barriers and exchange rates can be daunting enough, but businesses should be mindful of the potential effects of a protest or demonstration near their employees’ hotels or destinations.

It is easy to imagine attending a conference in another country where a protest is occurring right in front of your conference center. While many are peaceful, some can become violent and there may be legal issues to consider as well.

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Regardless of whether it is related to your visit, the experience can be confusing and unnerving.

Businesses must consider how to prevent their employees from getting stuck in the wrong place at the wrong time; in addition to the disorientation, there can be severe repercussions for being even seemingly involved in a foreign demonstration. Laws and protocols about protests vary from country to country, and guilt—even by association—can have disastrous consequences.

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To ensure your employees know how to successfully circumvent a demonstration, check out the infographic below by On Call International, which gives advice on how visitors should conduct themselves and stay safe in the event of a protest—particularly a violent one.