Hotel & Motel Management - December 8, 2008 - (Page 28) 28 Hotel Operations INSURANCE H&MM December 8 , 2008 | HotelMotel.com www.HotelMotel.com/digital_edition BY CHRIS CROWELL, ASSOCIATE EDITOR Economic conditions affect premiums, claims After two years of falling premiums, property insurance is expected to go back up in 2009, in part due to the current down economy. Richard Clark, managing director of Arthur J. Gallagher, said premiums could rise 10 percent to 15 percent in Q1 of 2009. “The insurance market, by its nature, goes in cycles,” Clark said. “The events that create this vary, but the results are the same, when you have an event like 9/11 or Katrina, those tend to result in rapid changes. … So [the current economic] events come on top of carriers having falling premiums and profits, instead of zero investment earnings they have negative earnings.” Clark stressed that all predictions of future premiums are subject to change depending on future developments. Insurance carriers could get financially downgraded when yearend earnings are announced, or a major insurance carrier could go down—both having negative effects on the industry. “Generally it’s because of credit issues and capital issues of insurers themselves,” said Frederick Masters, shareholder and head of the real estate group in Philadelphia for Buchanan Ingersoll & Rooney PC. “They’ve lost a great deal in connection with investments they’ve made with credit swaps and various other type of risk investments that they’ve made. They’ve lost a great deal of capital insuring [collateralized debt obligations] because they’ve come due. There have been a lot of defaults and that’s kind of what happened to [American International Group]. They wrote policies of insurance on credit obligations, made investments on hedge funds and real estate that lost money … they can look to the premiums and go to make up in the loss in capital.” Aside from the direct financial issues of hotel insurance in a down economy, there are other latent problems. According to Philip Glick, SVP at ECBM Insurance Brokers and Consultants, there is a rise in workers’ compensation claims, and “slip and trips” during tough times. “The hotel business is impacted negatively, so that means you’ll be laying off employees,” Glick said. “When you lay people off, workers’ comp claims increase dramatically.” As layoffs come, employees work more overtime and have to do more jobs, which leads to more injuries and, as a result, more liability claims. The first workers laid off often are maintenance workers, which then leads to “an uptick in liability claims” from guests, according to Glick. check IN The Seaside Sunset Slumber package at La Playa Beach & Golf Resort in Naples, Fla., includes a oneon-one sleep consultation, a seaweed body wrap, a seaside sleep cocoon, a hydrotherapy treatment, therapeutic eye masks and a relaxation CD. The Swim with the Fishes package at the Renaissance Boston Waterfront Hotel includes overnight accommodations, a pub crawl guide to the best bars in Boston, “hangover special” steak and eggs breakfast for two at a local restaurant, choice of two pint beers or two nightcap cocktails, a DVD of “The Departed” and an optional four-hour fishing expedition. Kimpton’s Hotel Palomar Arlington (Va.) at Waterview has an eco-conscious package inspired by “The Giving Tree” by Shel Silverstein. Guests will be sent in the mail a young sapling of their choosing. St Julien Hotel & Spa in Boulder, Colo., offers a new Green Event Planning Menu. The hotel adapted several of their propertywide environmental initiatives to create an a la carte menu of environmentally friendly event and catering options, including sustainable menus using locally grown and organic food and offsetting carbon emissions through the purchase of Renewable Energy Certificates. The Hershey Lodge, in Hershey, Pa., is offering families several ways to have fun, including a kid’s jump rope fitness class where kids make their own jump rope and compete in a contest, craft of the day, family bingo and a “dive-in” movie by the pool. Compiled by Chris Crowell, ccrowell@questex.com Quotable Insurance solutions for the hotel industry With premiums most likely on the rise, hotel owners have a few options to keep costs down and streamline their operations. Richard Clark, managing director of Arthur J. Gallagher, first recommends taking more risk and higher deductibles, but mainly recommends talking with an insurance adviser, looking at your situation and trying to control claims. “It is going to be important in property insurance that they put together a story to tell to the insurance carrier as to why they are a good risk, … if they had recent renovation, good construction, whatever positives they have. They need to make sure that story gets told.” Philip Glick, SVP at ECBM Stelnick Insurance Brokers and Consultants, CIGNA recommends renewing or extending your current deal to avoid the rising rates. Also, have a back-up insurer in mind in case your current insurer goes out of business in these uncertain times. “One trend we’re seeing is don’t put all your coverages with any one carrier,” Clark said. “The trend before was getting as much as you could. … Don’t chop up so much so you have no leverage, but you may want to diversify in case one goes down the tubes.” One insurance strategy is to have a voluntary limited-benefits health plan for hourly employees, which can reduce workers’ compensation claims and is looked at favorably by workers compensation underwriters, according to Glick. Jeff Stelnik, GM with Cigna Voluntary, said a limited-benefits health plan for lower-level employees also improves turnover and saves personnel expense. A plan like this would cost most single employees $10 a week. “To replace an individual that makes $10 an hour it can cost $3,000,” Stelnik said. “We’re seeing a lot of hotels put in place insurance benefits because there’s a return to the employer—it helps recruitment and reduces absenteeism.” “ In and of itself [the rising premiums] are not bad, but problem is it comes at a time when hoteliers are hurting.” RICHARD CLARK, managing director of Arthur J. Gallagher For more info Company Circle No. Arthur J. Gallagher . . . . . . . . 270 Buchanan Ingersoll & Rooney PC . . . . . . . . . . . . . . 271 Cigna Voluntary . . . . . . . . . . 272 ECBM Insurance Brokers and Consultants . . . . . . . . . . . . . 273 Holmes Murphy & Associates. . 274 Wells Fargo Insurance Services. . . . . . . . . . . . . . . . 275 http://www.HotelMotel.com http://www.HotelMotel.com/digital_edition
Table of Contents Feed for the Digital Edition of Hotel & Motel Management - December 8, 2008 Hotel & Motel Management - December 8, 2008 Contents Best Western Sets Spending Strategy Courtyard Turns 25, Unveils New Lobby New Division of MGM Goes Beyond Gaming Perspective Legal FAQ Marketing Matters Family Business On Finance AAHOA Update Satisfaction Trends HotelWorld Update Consultant’s Corner Trends & Stats IH/M&RS Editors’ Choice Award Winners Insurance Ad/Editorial Index Marketplace Classifieds Checking Out Hotel & Motel Management - December 8, 2008 Hotel & Motel Management - December 8, 2008 - Hotel & Motel Management - December 8, 2008 (Page 1) Hotel & Motel Management - December 8, 2008 - Hotel & Motel Management - December 8, 2008 (Page 2) Hotel & Motel Management - December 8, 2008 - Contents (Page 3) Hotel & Motel Management - December 8, 2008 - New Division of MGM Goes Beyond Gaming (Page 4) Hotel & Motel Management - December 8, 2008 - New Division of MGM Goes Beyond Gaming (Page 5) Hotel & Motel Management - December 8, 2008 - Perspective (Page 6) Hotel & Motel Management - December 8, 2008 - Perspective (Page 7) Hotel & Motel Management - December 8, 2008 - Marketing Matters (Page 8) Hotel & Motel Management - December 8, 2008 - Marketing Matters (Page 9) Hotel & Motel Management - December 8, 2008 - Family Business (Page 10) Hotel & Motel Management - December 8, 2008 - Family Business (Page 11) Hotel & Motel Management - December 8, 2008 - On Finance (Page 12) Hotel & Motel Management - December 8, 2008 - On Finance (Page 13) Hotel & Motel Management - December 8, 2008 - AAHOA Update (Page 14) Hotel & Motel Management - December 8, 2008 - AAHOA Update (Page 15) Hotel & Motel Management - December 8, 2008 - Satisfaction Trends (Page 16) Hotel & Motel Management - December 8, 2008 - HotelWorld Update (Page 17) Hotel & Motel Management - December 8, 2008 - Consultant’s Corner (Page 18) Hotel & Motel Management - December 8, 2008 - Consultant’s Corner (Page 19) Hotel & Motel Management - December 8, 2008 - Consultant’s Corner (Page 20) Hotel & Motel Management - December 8, 2008 - Consultant’s Corner (Page 21) Hotel & Motel Management - December 8, 2008 - Trends & Stats (Page 22) Hotel & Motel Management - December 8, 2008 - Trends & Stats (Page 23) Hotel & Motel Management - December 8, 2008 - Trends & Stats (Page 24) Hotel & Motel Management - December 8, 2008 - Trends & Stats (Page 25) Hotel & Motel Management - December 8, 2008 - IH/M&RS Editors’ Choice Award Winners (Page 26) Hotel & Motel Management - December 8, 2008 - IH/M&RS Editors’ Choice Award Winners (Page 27) Hotel & Motel Management - December 8, 2008 - Insurance (Page 28) Hotel & Motel Management - December 8, 2008 - Insurance (Page 29) Hotel & Motel Management - December 8, 2008 - Insurance (Page 30) Hotel & Motel Management - December 8, 2008 - Insurance (Page 31) Hotel & Motel Management - December 8, 2008 - Insurance (Page 32) Hotel & Motel Management - December 8, 2008 - Insurance (Page 33) Hotel & Motel Management - December 8, 2008 - Ad/Editorial Index (Page 34) Hotel & Motel Management - December 8, 2008 - Marketplace (Page 35) Hotel & Motel Management - December 8, 2008 - Classifieds (Page 36) Hotel & Motel Management - December 8, 2008 - Classifieds (Page 37) Hotel & Motel Management - December 8, 2008 - Classifieds (Page 38) Hotel & Motel Management - December 8, 2008 - Classifieds (Page 39) Hotel & Motel Management - December 8, 2008 - Classifieds (Page 40) Hotel & Motel Management - December 8, 2008 - Classifieds (Page 41) Hotel & Motel Management - December 8, 2008 - Checking Out (Page 42) Hotel & Motel Management - December 8, 2008 - Checking Out (Page 43) Hotel & Motel Management - December 8, 2008 - Checking Out (Page 44)
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