PRISM & Data Breach Response

The emergence of PRISM has caused a stir in the United States.

What is PRISM?

It is a collaboration between the National Security Agency (NSA), the Federal Bureau of Investigations (FBI) and the biggest tech companies in the country.  The agreement has provided the U.S. Government access to data including audio communication, videos, photos, emails, documents, call logs and text messages since 2007.

Headquarters of the NSA at Fort Meade, Marylan...

Headquarters of the NSA at Fort Meade, Maryland. 

How has PRISM come to light?

On Wednesday June 5th, a classified order was shared and made public.  The order to Verizon Wireless by the Foreign Surveillance Court directed the company to turn over domestic & foreign call data from the past and in the future.  Such data would be gathered by the millions and would provide sender and receiver of calls, duration, time and location.

PRISM came about through leaked PowerPoint slides that described the collaboration between the government and the tech giants.  When questioned, companies such as Google, Facebook, Apple, AOL, Yahoo and Microsoft gave the same canned response, “we do not provide the government with direct access to our servers.”

James Clapper, the Director of National Intelligence made statements suggesting that the collaboration existed and that the government was operating within the legal system.  Here’s what Clapper wrote about PRISM.

The whistle-blower

, 29 year old, Edward Snowden was a member of defense contractor Booz Allen Hamilton.  Snowden claims that a “massive surveillance machine” is in the making and that he leaked the information to  “inform the public as to that which is done in their name and that which is done against them.” Snowden is currently in Hong Kong, China while various US diplomats are calling for the country to extradite him.

As if internet security and privacy were not already a hot topic, it can be an effective transition into offering Data Breach Response Coverage.

The Breach Response product is tailored to healthcare, retail, hospitality and higher education operations.  The product is geared to moderate the results of a breach of data.  These mitigation tools will help minimize brand damage and legal liability by offering the following coverage.

Data Breach Response Features

For claim examples for Data Breach Response, click here.


The End of Distracted Driving?

Campaign From Massachusetts State Police

Campaign From Massachusetts State Police

Insurance companies, law enforcement, employers and parents across the United States have been brainstorming a variety of ways to cut down on the biggest risk on the road; distracted driving.  This exposure can take many shapes and forms, from a woman applying mascara in her rearview, a man taking the form of Neil Peart when “Tom Sawyer” plays, to someone consuming an extra value meal that requires two hands to hold.  These however do not distract drivers nearly as much as the main target; mobile device use.

Although car manufactures have reduced the risk with the integration of Bluetooth Technology, the exposure and danger is still prevalent due to the lack of supporting vehicles and inaccuracy of commands.  So far, 11 states have banned the use of hand-held devices while driving including Connecticut, New Jersey, Nevada and Arkansas.  This law encourages the use of Bluetooth or headphone sets.

The Federal Government is serious about the issue and has granted $550,000 to Connecticut and Massachusetts for landmark research on how to spot and charge prosecutors.  The program grants each state $275,000 for methods of spotting such as looking at motorists on overpasses.

Yes, the government is showing initiative to save lives, but this method is outdated, moronic and will have minimal impact.  That $550,000 would have been much better used to develop a mobile application such as DriveID.  This state of the art mobile application is downloaded and disables the device when a driver tries to access the phone.  The software is so advanced that it unlocks itself and can be used when handed to the passenger.

It is only a matter of time before Insurance Companies catch on and begin to give discounts for drivers who download and utilize the application.  I can see this fitting in very well with the Progressive Insurance SnapShot device.  If the companies and government incentivized the use of this software, we would have safer roads, better use for law enforcement and $550,000 back in the taxpayer’s pockets.

Keep your eye on DriveID and Wall Street in the next few years.

Check out DriveID on Insurance Journal.     


The Texas Boom & Your Agency

Flag of Texas

Flag of Texas (Photo credit: Wikipedia)

Texas State Capitol, Austin TX

Texas State Capitol, Austin TX (Photo credit: Wikipedia)

We are not breaking news when saying that Texas is in a boom.  The state that arguably has the most available area left to develop is making good use of it.  This growth certainly hasn’t happened overnight and certainly won’t stop overnight either.  The question remains, how will this growth effect the Insurance Industry.

The four major metropolitan areas; Austin, Dallas, Houston & San Antonio have sustained leading unemployment rates even with such rapid influx of new residents.  The U.S. Census reported the following statistics for population growth from July 2010 to July 2011.

#1. Dallas, TX – avg. 345.3 new residents/day

#2. Houston, TX – avg. 301.6 new residents/day

#9. Austin, TX – avg. 151 new residents/day

*Courtesy Austin Business Journal

This rapid growth has not prevented new residents from finding jobs.  The major industries; Energy, Technology, Healthcare & Finance have sustained growth over the past ten years to avoid major layoffs while opening new positions.  As unemployment & the economy was the hot-button issue for the 2012 Presidential Election, neither candidate cited the growth and success of the Lone Star State.

Forbes, often known for their “Top 10” lists, ranked the fastest growing cities from 2001 to 2011.

#2. Austin, TX                                    44.9%

#7. Houston, TX                                  31%

#9. San Antonio, TX                            29%

#10. Dallas/Fort Worth, TX                27.9%

Courtesy Forbes Magazine

One would imagine that with such rapid growth, the competition to find a job with decent salary would be beyond difficult.  Strangely enough, the exact opposite is to be said as the four major Metropolitan Areas in Texas all made the top 15 in Lowest Unemployment Rates, according to the Bureau of Labor Statistics.

#3. Austin, TX                    5.5%

#8. San Antonio, TX          6.0%

#12. Houston, TX              6.1%

#14 Dallas                         6.2%

US Average 5/2013          7.5%

*Courtesy Bureau of Labor Statistics

 What does all of this mean for insurance professionals?  First, it shows that business are growing which correlate directly to premium size for all risks rated by number of employees or payroll size.  This means larger policies & more commissions for the agency.

Second, those businesses that are growing may be changing operations or offer a larger variety of products or services.  This means that the agent should be reevaluating the risk, adding whatever endorsements necessary or maybe even reclassification.  That being said, if it is an endorsement that requires additional premium it means more earned commission.

Third, more citizens means more insureds.  More insureds means more policies.  More policies mean more earned commissions

See the trend here?

As insurance agents, we should not let the growth in Texas intimidate, upset or deter us from writing more business.  In such turbulent economic times, we are fortunate enough here in Texas to be expanding at this rate.

That being said, it is important to have the markets available to accommodate all of your current and prospective insurances.  Having a reliable, competitive and motivated MGA & Surplus Lines Broker such as AUI, Inc will give you the confidence & support needed to solicit & write new business.

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