Insurance Commissioner Alan McClain Calculates Risk With Smart Tech

Insurance Commissioner Alan McClain Calculates Risk With Smart Tech
Alan McClain, Arkansas Insurance Commissioner
Before becoming Arkansas’ 24th insurance commissioner, Alan McClain served for five years as commissioner of Arkansas Rehabilitation Services.
McClain began in state government in 1992 with the Arkansas Insurance Department after working with Sedgwick Insurance Group. He was CEO of the Arkansas Workers’ Compensation Commission and served on the Arkansas Workforce Development board and the Governor’s Council on Developmental Disabilities.
McClain has a degree from Hendrix College in Conway, and a master’s in public administration from the University of Arkansas at Little Rock. He is a past president of the International Association of Industrial Accident Boards & Commissions and the Council of State Administrators of Vocational Rehabilitation.

What insurance disputes are you seeing from businesses in connection with COVID-19? How are those being resolved?

AID has not seen any disputes yet; however, it is possible that we will in the future. Most business interruption coverage and nearly all business owners policies have coverage exclusions for events such as the COVID-19 pandemic, and/or contain physical loss requirements.

Fortunately, several state agencies are working together to provide COVID-19 relief and recovery to Arkansas businesses, with initiatives such as the Business Interruption Grant Program, the Ready for Business Grant Program, Community Development Block Grant assistance and the state’s Quick Action Loan Program.

What trends are you seeing with health insurance?

We are seeing a great deal of technological innovation in the industry. For instance, insurers are using consumer data from Internet of Things, or IoT, devices to customize products and experiences for individual consumers. Devices, such as smart watches with activity trackers, collect personal behavioral data that may benefit both the consumer and the insurer. The consumer has some autonomy and control, as his or her behavior may affect insurance costs and premiums. Additionally, insurers may use this data to modify individual products, thus improving the consumer’s overall experience. The data may also provide insurers insight for improved risk assessment. Other forms of innovation trends include enhancing efficiencies through digitization and artificial intelligence.

How is climate change going to impact insurance coverage?

The impact of climate change on insurers and consumers is being studied by multiple stakeholders. AID tracks the work done by the Climate Risk & Resilience Working Group, a part of the Property & Casualty Insurance Committee of the National Association of Insurance Commissioners. The goal of this working group is to identify sustainability, resilience and mitigation solutions related to the insurance industry, as well as to investigate and recommend measures to reduce risks of climate change-related catastrophic events. It is difficult to say what the actual effects of climate change on the insurance industry may be, but insurers and regulators are working together to reduce any possible impact.

What types of insurance are you urging homeowners and businesses to consider that they might not have thought of?

AID encourages Arkansans to review their needs regarding flood insurance. Many consumers are not aware that standard homeowners insurance policies exclude flood damage, and that the damage from just 1 inch of water can cost a homeowner more than $20,000. Despite our state’s population size, Arkansas has consistently been among the top states receiving flood insurance payouts from the National Flood Insurance Program. Consumers can explore their flood insurance options by calling their insurance professional.