Above the Fold

A (Sort of) New Way to Address Rising Insurance Costs

Just as digital social solutions are filling the massive gaps in human interaction, captive insurance is helping to buffer skyrocketing insurance costs for some businesses affected by the pandemic. “Captive insurers” are generally defined as insurance companies wholly owned and controlled by their insureds, typically within a specific industry or group of businesses such as drugmakers, ride-sharing companies, retailers or restaurants. Captives write coverages for the owners and pay out claims when businesses encounter specific hardships that may be either outside the normal scope of mainstream insurers, like terrorist attacks or pandemics, or may help save costs if traditional insurance companies are simply too expensive. Ride-share companies like Uber and Lyft went captive when their premiums rose excessively. U.S.-based insurance broker Marsh said the number of new captive insurers it helped to form had tripled between January and July compared with a year earlier.

According to credit-rating company A.M. Best, the world’s first captive was formed in Bermuda in the 1960s as the insurance market experienced rising premiums and decreasing coverage. Experts say the rise in captives should help disperse risk as the industry reorders itself to accommodate unforeseen risks like the massive onslaught of business-interruption claims. The number of domestic captive insurance companies has more than doubled over the last 12 years to more than 3,133, according to A.M. Best. 

Three Things 

1. Welcome to Your New Virtual Workspace, No Sanitizer Needed – Several Fortune 500 companies are turning to the quickly-maturing world of virtual reality to re-engage employees, reduce Zoom fatigue and boost camaraderie. According to the Wall Street Journal, developers and design teams are creating virtual 3D meeting places, workspaces and even incorporating new products for workers to interact with using VR headsets.
2. Twitter to Help Those of Us With Twitchy Thumbs – Twitter’s popular platform is built on speed. Quick, truncated messages and response have been the hallmark of the service since inception. Ironically, the company announced it will be rolling out a new “read before retweeting” prompt to all users that encourages people to read through an entire article for content and validity before firing it off in a retweet. The likely goal is to limit knee-jerk reactions that can trigger viral misinformation.
3. Amazon Wants You to Let Drones Patrol the INSIDE of Your Home – Amazon-owned Ring just announced a new Always Home Cam that autonomously flies itself around your home, using 3D imaging technology to map out (and avoid) walls, furnishings, dogs, etc. The drone can be activated manually or programmed to take off on its own if your Ring system detects a potential disturbance. Don’t worry, the drone can emit an audible noise to let you know it’s taking aerial video of your home. The device is expected to retail for $249 in 2021. 

Did You Know?

Oh, October! 

Back in the early days of the Roman calendar, October was the eighth month, and was given a logical latin name starting with “octo” meaning “eight.” Forty years later, Roman King Numa Pompilius, added the months Ianuarius and Februarius, bumping October to the 10th month — but the name stuck. 

When it comes to stocks, some investors believe in the October effect, which foretells a bearish month. Unlike some other adages, this one is considered to be primarily a psychological expectation as most statistics go against the theory. Volatility is known to increase in the month compared to summer months.