JULY 2004

CEA Billboard

Reminder to Appear on Southern California Billboards

It’s a fact of life that Southern Californians spend a good part of their lives in their vehicles. Now those traffic-bound commuters will have the chance to learn about the CEA from taking in a series of strategically placed billboards along the region’s freeways.

A network television series, 10.5, and a widely-publicized prediction that an earthquake will strike a part of Southern California by September 5th have focused public attention on earthquake preparedness. The billboards will capitalize on that public interest and deliver CEA’s message to consumers when they are most receptive to learning about steps to get ready for an earthquake. The billboards highlight CEA’s Web site, which provides consumers with information on CEA earthquake insurance, CEA participating insurers, and the practical steps consumers can take to reduce their earthquake risk.

Digital Sign at the Los Angeles Coliseum

The colorful billboards are complemented by the giant electronic sign at the famed Los Angeles Coliseum. The sign overlooks the Harbor 110 Freeway near downtown Los Angeles, one of the most heavily traveled highways in the world. The sign will blink out one message per minute for 18 hours a day, every day – that’s 1,080 messages per day. Other static billboards will rotate throughout the Los Angeles and Inland Empire areas. The billboards are scheduled to run from July 1 until the end of August.

Baja California Quake Jolts Greater San Diego

Californians – and some visiting athletes from the Sunshine State – were given a jarring reminder that every day is earthquake season in California when one of the largest earthquakes in San Diego’s history rocked that region. The Tampa Bay Devil Rays baseball team was in San Diego getting ready for a game when players felt the rumbling of the June 15th earthquake. Manager Lou Piniella, a Tampa native, is used to dealing with hurricanes and was surprised at how the quake struck with no warning – Piniella told the San Diego Tribune, “At least you can prepare for a hurricane, you know its coming,” Pinella said. “You can’t prepare for an earthquake.”

Since last October, the CEA has been educating people about earthquake awareness and preparedness with the tagline “Every Day is Earthquake Season in California."^SM It may seem obvious to those of us whose work involves earthquakes, but unlike storms and other natural disasters – and despite some pretty strong myths to the contrary – there is no season for earthquakes.

The quake officially registered 5.3 on the Richter scale and was centered off the coast of Baja California, some 50 miles west-southwest of San Diego. The shaking was felt as far away as Orange County. Authorities reported no injuries or reports of damage, but some pictures and signs were shaken from walls. The CEA expects some claims to be filed by policyholders in the area.

San Simeon is still on our radar screen: The CEA continues to work with participating insurers and policyholders whose homes experienced damage in the December 22nd San Simeon earthquake. As of June 30th, 450 claims have been filed and 63 policyholders have received payments on those claims totaling more than $1.5 million. Twenty-one claims remain open, and will continue to remain open, until all aspects of the claims have been resolved with the policyholders or repairs have been completed.

Robert Stewart to Join CEA as Operations Manager

The CEA Governing Board approved hiring Robert E. Stewart, a veteran of 30 years in the insurance industry, as Operations Manager. In that capacity he will have significant responsibility for developing CEA rate structures, devising and implementing risk management strategies, and working with insurance agents, consumers, and consumer groups. He will also work with insurance claims and develop policy enhancements. Mr. Stewart has served in a variety of senior leadership positions in the insurance industry, and was most recently Assistant Vice President, Underwriting, for USAA, a CEA participating insurer. Mr. Stewart will report to Chief Financial Officer Tim Richison, who also heads the Authority’s Insurance Operations Department.

CEA Continues to Reach Out to Consumers and Agents

In the first four months of 2004, the CEA doubled the number of insurer events in which it participated. By reaching and educating insurance agents about CEA products and programs, the CEA’s messages can be delivered directly to policyholders.

• A CEA Consumer Services representative joined 400 Farmers Insurance district managers and agents in a Santa Monica forum designed to educate them about the CEA. CEA brochures in English and Spanish were distributed, and there was great interest in CEA’s on-line agent-training course.
• The CEA consumer services team also attended an Insurance Brokers & Agents of the West, speaking with some of the 500 independent brokers and agents who attended about earthquake insurance and mitigation measures.

Agent education is also the focus of a new CEA brochure to help agents help their clients in making critical earthquake-insurance decisions. CEA is working with insurance agents and the United States Geological Survey (USGS), the Federal Emergency Management Agency, and the Southern California Earthquake Center (SCEC) to design the brochure – look for it this winter.

CEA is taking its earthquake mitigation message to The Home Depot’s Home Safety Fairs this summer. The fairs teach property owners how to perform do-it-yourself projects that address all aspects of home safety and emergency preparedness, including preparing for earthquakes. CEA representatives will be on hand to answer consumers’ questions regarding earthquake insurance and mitigation, and provide copies of the CEA-SCEC-USGS collaborative brochure, Putting Down Roots in Earthquake Country .

CEA Expands its Knowledge of Modeled Earthquake Risks

Working with and utilizing in-depth, scientific estimations of the damage and loss earthquakes can cause is key to a number of important components of the CEA’s mission. We work with the professionals who build and implement earthquake models to help us develop premium-rate structures, model earthquake-insurance-policy enhancements, estimate insured earthquake losses, and come up with useful earthquake-education services.

Just a few years ago, it was not thought possible to calculate catastrophe losses with accuracy, but dramatically advancing knowledge and powerful computers now help modelers identify, organize, and quantify the factors that create losses due to events such as tornadoes, earthquakes, hurricanes, floods, and even terrorism. These modeled results, among many other uses in a variety of disciplines, help insurers worldwide – and the CEA – underwrite and rate catastrophe insurance.

The CEA is now engaged in expanding its array of earthquake modeling firms and has contracted with Risk Management Solutions, Inc. (RMS) of Newark, California, to provide modeling services for CEA, joining longtime CEA modeler EQECAT. RMS will perform two specific earthquake-loss analyses per year on the CEA insured portfolio.

Not satisfied to add just a single additional modeler, the CEA is looking to contract with a third globally-recognized modeling firm, AIR.

2004 MEETING SCHEDULES details CEA Governing Board August 26 October 14 December 9 CEA Advisory Panel July 15 CANCELED September 9 November 18

Do You Know? The CEA Web site includes a premium calculator that allows interested consumers an opportunity to calculate the appropriate cost of earthquake insurance for their home, condominium, mobile home, or rental unit? You can check it out at: http://www.EarthquakeAuthority.com/