California’s $58B Wine Industry Hit by Wildfires

The fires ravaging Northern California stand to leave the area’s renowned wine industry with damage that will be felt long after the final flames burn out.

At least four Napa Valley vineyards have been destroyed or significantly damaged, and the toll may be even worse in Sonoma County to the west. Though the majority of grapes have already been picked for the season, the smoke effects on those remaining may mean they have to be thrown out, diminishing this year’s vintage.

The wildfires continue to rage after suddenly and swiftly sweeping through the region starting Sunday night, leaving at least 17 people dead and displacing thousands in an area that’s home to a thriving tourism industry and some of the most valuable vineyards in the U.S. While it’s too early to gauge the extent of damage to California’s wine industry, which contributed almost $58 billion to the state economy last year, the effects are likely to be lasting.

“A significant amount of acreage will likely be out of commission for a while” in the regions, said Phil Lynch, a spokesman for Brown-Forman Corp., which owns Sonoma-Cutrer vineyards and markets Korbel champagne. “If it’s only smoke damage, it’s one season. If it’s fire damage, it’ll be three or four seasons.”

Sonoma-Cutrer, known for its Chardonnays, is located in Sonoma County just a five-minute drive from where some fires blazed, while champagne maker Korbel lies further from the fires. Brown-Forman won’t be able to assess the properties until the flames are under control, Lynch said.

Other vintners were waiting to see the scope of the damage. Napa and Sonoma are home to more than 1,000 wineries, according to Gladys Horiuchi, a spokeswoman for the Wine Institute of California. The areas produce the highest-end grapes in the state, which makes 85 percent of U.S. wines.

“We can’t make an accurate assessment of the damage to vineyards and wineries because people have been evacuated and don’t have access to the properties,” Horiuchi said.

Even if damaged wineries have insurance, the recovery could be long and expensive. The claims process could take several months to a year, depending on the length of the reconstruction, said Rob Gall, a managing director at insurance broker Marsh & McLennan Cos. Business income loss could be significant, he said.

The fires mark the second natural disaster in three years for the area, which was hit by a magnitude 6.0 earthquake in 2014 that caused at least $500 million in economic damage, according to the U.S. Geological Survey. Beyond the destruction to wineries, the latest disaster means lost revenue for all parts of the industry that caters to wine tourists.

“The economic impact could be significant, when you consider lost business at all the wineries, hotels and restaurants,” said Ken Freeman, owner of Freeman Vineyard & Winery in Sonoma County’s Sebastopol, who’s had several groups cancel trips this week. “Nobody wants to appear to be celebrating when there’s so much devastation around.”

The Napa Valley Vintners trade association reported that as of Tuesday afternoon nine members have sustained damage to wineries, outbuildings or vineyards, in addition to the four that were significantly hit or beyond repair.

Paradise Ridge Winery in Santa Rosa and Signorello Estates in Napa were among those consumed by flames. Nicholson Ranch Winery in Sonoma was damaged, but not destroyed. Gundlach Bundschu, California’s oldest continuously family-owned winery, and Scribe Winery, both in Sonoma, were in close proximity to fires, but haven’t burned. E. & J. Gallo Winery’s William Hill, in Napa, sustained cosmetic and landscaping damage at its winery and minimal vineyard damage, the company said in a statement.

Constellation Brands Inc., which owns 32 California wineries including Robert Mondavi, Meiomi and Woodbridge, shuttered its tasting rooms in the area out of concern for the safety of employees and to assess damage. Treasury Wine Estates Ltd.’s holdings, including Acacia Vineyard, Chateau St. Jean, Etude, Beringer and Stags’ Leap, also closed.

“A lot of wineries are not operating,” said Michael Honig, president and chief executive officer of Honig Vineyard & Winery and chairman of Napa Valley Vintners. “Some people don’t have generators and they don’t have power.”

About 73,000 utility customers in Napa and Santa Rosa lacked electricity service as of Tuesday afternoon as a result of the wildfires, PG&E Corp. spokeswoman Ari Vanrenen said in a phone interview.

The hills above the popular Silverado Trail, site of dozens of iconic wineries, have been especially hard hit by the Atlas Peak fire stretching along the eastern side of Napa Valley.

Flames haven’t reached the Napa Valley floor, home to Honig Winery and properties such as Opus One and Robert Mondavi. The valley floor tends to be less dry, with little of the brush and scrub oak that is feeding the fire in the hills above.

California’s coast is the most valuable wine-producing region in the country, said Stephen Rannekleiv, a beverage analyst at Rabobank International. The lion’s share of grapes in the state are grown in the San Joaquin Valley, where Cabernet Sauvignon grapes go for about $400 a ton. By contrast, the same fruit from Napa Valley usually costs closer to $7,000 a ton, and can sell for as much as $50,000.

Dan Sumner, an agricultural economist at University of California, Davis, said consumers buying wines priced at $60 or more may see higher price tags due to smaller volumes of some vintages.

“They’re going from wines you can’t afford to wines you really, really can’t afford,” he said.

As smoke settles in vineyards, tainted grapes won’t be used in high-end wines, Sumner said, because winemakers won’t compromise their brands. The grapes that are still in the fields are some the highest-priced Cabernet Sauvignons or Merlots, Sumner said.

“These wines have to have character and flavor,” he said. “If you’ve got a reputation for making $100 wines that everyone loves, you’re not going to make that vulnerable by slipping in some tainted grapes. That may mean there’s less of this vintage in the market, in which case consumers would notice.”

If 10 to 15 percent of the crop in the region is destroyed or unusable, the cost to the wine industry for the current vintage alone could be in the neighborhood of $100 million, not including damaged or destroyed structures, Sumner said.

Honig said one down vintage is unlikely to have a significant effect on prices.

“They might just speed up release of the 2018 to accommodate the shortfall from 2017,” he said.

The vast majority of grapes in the region were already harvested before the fires began. The grapes that remain were largely Cabernet Sauvignon, according to Napa Valley Vintners.

The hotels and restaurants that serve the wine industry and its tourism have also been affected. Carneros Resort & Spa is under a mandatory evacuation, according to its website. Meadowood Napa Valley is closed until at least Oct. 15. Calistoga Spa Hot Springs was closed Tuesday due to power outages. Silverado Resort and Spa evacuated guests on Sunday. Its structures are currently intact, according to a statement on its website.

Winds died down on Tuesday, making it easier to combat the flames. Still, the efforts to quench the fires are far from complete, said Jonathan Cox, a spokesman for Cal Fire, the state’s Department of Forestry and Fire Protection.

“This is eventually going to become a recovery effort,” Cox said. “It’s months, if not years, of infrastructure and rebuilding to do especially in these hard-hit cities.”

-With assistance from Mark Chediak and Sonali Basak.

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Posted by Insurance - September 20, 2018 at 7:40 PM

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California’s Wine Industry Taking Stock of Losses After Wildfires

Although still burning, the largest fires that have devastated California wine country are mostly contained, and winemakers, winery owners, and growers began taking stock this week of what they have—and haven’t—lost.

The numbers are numbing: at least 42 dead, nearly 100,000 evacuated, more than 5,700 homes, businesses, and wineries destroyed or damaged, more than 200,000 acres burned in total, and many vineyards singed and torched, according to an Oct. 17 announcement by CalFire, the state department of forestry and fire protection.

If you’re a wine lover, you know the people and places behind these numbers. The wineries include Signorello Estate, Paradise Ridge, Frey Vineyards, White Rock Vineyards, Roy Estate, Mayacamas, Pulido-Walker, Michael Mondavi Family Estate, and more that make the reds and whites you love to drink. As of now, 22 wineries have been damaged in northern California, with effects ranging from lost buildings to burned vines and ruined wine product.

Tom Pagano, a wine expert and account executive at global insurance broker Aon said overall damage could be in the $5 billion to $6 billion range and maybe worse. “It will take at least a couple of months to assess,” he said in a phone interview. “And it may be years before we know the final numbers.” The wine industry generates about $26 billion annually for Napa and Sonoma, according to the most recent reports from vintners’ groups.

Smoke from wildfires in the Sonoma Valley makes its way toward the Napa Valley, in this view from the Carneros wine region, Tuesday, Oct. 10, 2017, in Napa, Calif. Worried California vintners surveyed the damage to their vineyards and wineries Tuesday after wildfires swept through several counties whose famous names have become synonymous with fine food and drink. (AP Photo/Eric Risberg)

Yet despite the horrific human toll and massive damage, early signs indicate that northern California’s wine industry isn’t ruined beyond repair and that much of its 2017 business can be rescued.

Ray Signorello’s eponymous estate on Napa’s Silverado Trail in the Stags Leap District was one of the hardest hit by the fast-moving Atlas Fire. The main winery building and much of the winemaking equipment, the handsome tasting room, and his family residence went down in flames more than a week ago and are now rubble. The hillside and 100-year-old oaks behind it all are black and scorched, although the barrel cellar survived. He says he’ll rebuild, and he has already leased office space for his team in the nearby city of Napa.

Amazingly, the 28-year-old vines on his 42-acre vineyard are fine. “If I’d lost the vineyard,” he said, “I’d be out of business.” Signorello’s grapes had already been picked and pressed, so his 2017 wine was in tanks outside on the crushpad, ready to be put into barrels. Inexplicably, miraculously, he says, the fire went around them, but the winemaker hasn’t yet been able to test the wine in the tanks for heat damage.

Much of the destruction in the region was winery buildings and owner residences. In Sonoma, at Paradise Ridge winery, the building, the tasting room, and events center were completely gutted by fire. Backbone winery in Mendocino burned to the ground along with its library of wines made over the past five years. Homes, barns, and sheds at Napa’s White Rock vineyards are gone, along with hundreds of shattered bottles of wine.

Copyright 2017 Bloomberg.

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Posted by Insurance - September 20, 2018 at 7:40 PM

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GM Settles Alleged Defects Concealment Suit with California County

General Motors has agreed to a $13.9 million settlement with Orange County, Calif., after prosecutors accused the auto giant of concealing serious safety defects to avoid costly recalls and part replacements.

The lawsuit, filed in 2014, accused GM of deceptive business practices and unfair competition. It alleged the automaker marketed its brand as safe and reliable while failing to disclose defects including power steering, air bag and brake problems. As a result of the failures, at least 124 people died and 275 were injured, according to the Orange County Register .

Earlier this month, GM agreed to pay $120 million to resolve claims from 49 states and the District of Columbia over faulty ignition switches. The California Attorney General’s Office received $7 million in the settlement.

In a Friday statement obtained by the Register, the company said: “GM has reached a constructive settlement with Orange County, Calif. to resolve claims filed by the Orange County district attorney regarding the company’s advertising of vehicles that were subject to certain recalls in 2014, including the ignition-switch recall.”

Prosecutors said GM trained its staff to never use the words “defect” or “stall” and routinely chose the “cheapest part supplier without regard for safety.” The lawsuit said the company also discouraged employees from addressing safety issues, according to the newspaper.

Over five months in 2014, GM was forced to recall 17 million vehicles in 33 recalls for various defects, officials said.

“Since 2014, GM has taken important steps to help ensure the safety of its vehicles, including a new organizational structure dedicated to global vehicle safety and a robust Speak Up for Safety program,” the company’s statement added.

The settlement in Orange County was approved by a judge last week.

“We must protect our consumers from businesses that put profits over people by keeping cars on roads safe and avoiding preventable accidents,” District Attorney Tony Rackauckas said in a statement. “We must also encourage all businesses to be fair and live up to safety standards, and must not allow those engaging in unfair practices to punish those businesses that don’t cut corners by compromising safety.”

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Posted by Insurance - September 20, 2018 at 7:40 PM

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$8.75M Suit by Couple Against 2 Oregon Doctors Dismissed

A lawsuit filed by a Bend, Ore. couple that accused two physicians of failing to detect warning signs before the woman went into cardiac arrest has been dismissed.

The Bend Bulletin reported Shelley and Brent Harding sought $8.75 million for allegations that doctors Dana Rhode and Jeffrey Scott did not take the appropriate action in 2014 when Shelley Harding reported experiencing chest pain and extreme exhaustion.

The suit stated the doctors should have referred Shelley Harding to a hospital for an evaluation and observation.

Gordon Welborn, an attorney representing the physicians, said he believes he showed in court that the Hardings’ claims were inaccurate.

The case was dismissed with prejudice, meaning the same lawsuit can’t be filed again. An attorney for the Hardings did not return a comment request.

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Posted by Insurance - September 17, 2018 at 7:40 PM

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Insurtech Mobile-Based Auto Insurer Root Expands into Utah

Root Insurance has expanded its services to drivers in Utah.

Root, which is now operating in Illinois, Oklahoma, Indiana, Ohio and Arizona, asserts that drivers can save up to 52 percent by using Root’s data-driven approach, which bases rates primarily on individual driving behavior.

The firm says by leveraging mobile tools and data analysis to review drivers’ driving behavior and existing personal data, it can set individual rates that are ultimately fairer to drivers.

“Technology is making almost every aspect of our daily lives easier, but the insurance industry is still too far behind the tech curve,” Alex Timm, Root’s co-founder and CEO, said in a statement. “We have access to real-time insights that can more accurately predict risk than ever before, providing good drivers with rates they deserve and helping them avoid paying for bad drivers’ mistakes. This will help good drivers at a time when insurance rates are rising across the nation with no end in sight.”

Root enables customers to download its iOS or Android app and drive for two to three weeks on their smartphones. Customers’ driving behavior is then analyzed through a rating engine, which measures activity, such as acceleration, braking, turns and mileage. Good drivers can then receive a quote and manage their policy entirely through Root’s smartphone app.

Root is headquartered in Columbus, Ohio.

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Posted by Insurance - September 14, 2018 at 7:40 PM

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Woodruff-Sawyer Names Greenfield Producer in San Francisco and Denver Offices

Woodruff-Sawyer has named John Greenfield a producer in the property/casualty practices of the firm’s San Francisco and Denver offices.

Greenfield will be responsible for business development and the design and management of P/C insurance and risk management programs for mid-sized to large U.S.-based companies.

He has more than 20 years of experience in the insurance industry. Prior to joining Woodruff-Sawyer, he was with Edgewood Partners Insurance Center. He began his insurance carrier career at ABD Insurance and Financial Services (now Wells Fargo Insurance Services).

John Greenfield

San Francisco, Calif.-based Woodruff-Sawyer has offices throughout California, and in Oregon, Washington, Colorado, Hawaii and New England.

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Posted by Insurance - September 8, 2018 at 7:40 PM

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Farmers Files Trade Secrets Suit in California Against Auto Club Michigan, Former Employees

Farmers Insurance has filed a lawsuit in California against a pair of former employees and the Automobile Club of Michigan alleging the theft of trade secrets.

The suit alleges violations of the California Trade Secrets Act, unfair competition, breach of fiduciary duty and other charges. It seeks damages to be named at a trial, a temporary restraining order and a preliminary injunction preventing the defendants from using Farmers’ trade secrets.

The suit filed on Monday in Los Angeles County superior court alleges that Venkatesh Kamath, former director of personal lines auto IT for Farmers, left the L.A.-based carrier and took trade secrets with him to Auto Club Michigan. It also accuses Shohreh Abedi, a former chief information officer of Farmers, of recruiting Kamath to get that information to use at Auto Club Michigan.

Both now reportedly hold executive titles with Auto Club Michigan.

Spokespersons for Auto Club Michigan did not immediately return requests for comment for this story. The attorneys that filed the suit on behalf of Farmers wouldn’t comment, nor would Farmers spokespersons.

According to the suit, Farmers in 2015 began undergoing an update of its claims handling and policy servicing systems using Guidewire Software when Kamath gained access to “highly sensitive and confidential information” pertaining to the Guidewire roll out plan and Farmers’ business operations.

Abedi oversaw the initial phases of the Guidewire project for Farmers and then left for Auto Club Michigan, eventually recruiting Kamath, the suit alleges.

Abedi, who is now at the helm of Auto Club’s transition to Guidewire, was involved in selecting Guidewire for the Farmers transition, according to the suit. Abedi was Kamath’s superior and acquaintance, the suit states.

“Farmers is informed and believes, and thereon alleges, that Abedi has persistently recruited Farmers employees and contractors since her departure from (Farmers) and that several Farmers employees and/or contractors have joined the Auto Club as a result of these efforts,” the suit states.

The suit alleges that days before starting a job with Auto Club, Kamath copied more than 6,400 files from his Farmers computer to a storage device.

“While some of the items were personal in nature, a substantial portion of the materials were not, including trade secret information relating to the Guidewire project and Farmers’ core insurance business,” the suit states.

The suit alleges that the copied files “go to the core of the Guidewire project and reveal how Farmers is customizing and utilizing the Guidewire software to fit its particular needs and objectives.”

Farmers is alleging that Abedi and the Auto Club intentionally recruited Kamath to obtain know-how and customization in implementing the Guidewire technology, and to obtain Farmers’ confidential trade secrets and proprietary information relating to its Guidewire project.

“Farmers is further informed and believes, and thereon alleges, that Kamath secured employment from the Auto Club based upon the representation (and Abedi’s knowledge) that he had access to Fanners’ IT files and confidential information relating to the Guidewire PolicyCenter project and other confidential, proprietary information, and that such information could be utilized to benefit the Auto Club, a competitor of Farmers,” the suit states.

The suit is Famers Insurance Exchange and Farmers Group Inc. V. Venkatesh Kamath; Shohreh Abedi; The Auto Club Group; Automobile Club of Michigan Dba AAA Michigan.

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Posted by Insurance - September 5, 2018 at 7:40 PM

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Google’s Waymo in California Shifting Robotic Cars into Next Gear

Google’s self-driving car spin-off is accelerating efforts to convince the public that its technology is almost ready to safely transport people without any human assistance at all.

Waymo, hatched from a Google project started eight years ago, showed off its progress this week during a rare peek at a closely guarded testing facility located 120 miles southeast of San Francisco. That’s where its robots complete their equivalent of driver’s education.

The tour included giving more than three dozen reporters rides in Chrysler Pacifica minivans traveling through faux neighborhoods and expressways that Waymo has built on a former Air Force base located in the Californian Central Valley city of Atwater.

The minivans smoothly cruised the roads, driver’s seat empty and passengers in the back, at speeds of up to 35 mph. By contrast, the Waymo-powered minivans that have been driving volunteer riders in the Phoenix area still use safety drivers to take over control if something goes wrong.

This Sunday, Oct. 29, 2017, photo provided by Waymo shows a Chrysler Pacifica minivan equipped with Waymo’s self-driving car technology, being tested with the company’s employees as a biker and a pedestrian at Waymo’s facility in Atwater, Calif. (Julia Wang/Waymo via AP)

But Waymo’s real goal is to get to the point where people in cars are nothing but passengers.

Waymo CEO John Krafcik told reporters that the company will be making some cars and freight trucks totally driverless fairly soon, though he didn’t provide a specific timetable. “We are really close,” he said. “We are going to do it when we feel like we are ready.”

Since Google began working on self-driving cars in 2009, dozens of established automakers such as General Motors and Ford Motors have entered the race, along with other big technology companies, including Apple and ride-hailing service Uber. The competition is so fierce and the stakes so high that Waymo is currently suing Uber , alleging that one of its former managers stole its trade secrets and took them with him when he joined Uber in 2016 as part of an elaborate scheme. The trial in that high-profile case is scheduled to begin in early December.

Waymo is hoping to infuse its technology into ride-hailing services such as its current partner, Lyft, and big-rig trucking companies. It also intends to license its automated system to automakers such as Fiat Chrysler Automobile, which is already using it in 100 Pacifica minivans.

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Posted by Insurance - September 5, 2018 at 7:40 PM

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Hub Acquires Shares of Rural Alaska Insurance Agency

Hub International Ltd. has acquired the shares of Rural Alaska Insurance Agency Inc.

Terms of the deal were not disclosed.

John Kohler, Jr., president of Rural Alaska, will join Hub Northwest and report to Steve Wagner, executive vice president of Hub Northwest

Fairbanks, Alaska-based Rural Alaska specializes in property/casualty insurance.

Chicago, Ill.-based Hub provides property/casualty, life and health, employee benefits, investment and risk management products and services.

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Posted by Insurance - September 2, 2018 at 7:41 PM

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Lockton Mountain West Names Rider to Property/Casualty Team

Robin R. Rider has been named a client services executive in Lockton’s Mountain West office.

She will serve the Denver, Colo. and Las Vegas, Nev. offices as a member of the property/casualty team.

She has been working with clients in the property/casualty space since starting her career nearly 20 years ago. Rider has a background in complex real estate construction, gaming/hospitality and public entities.

Robin Rider

Prior to joining Lockton, she spent more than decade at Willis Tower Watson working with large real estate, hospitality and construction clients.

Kansas City, Mo.-based Lockton is a privately held, independent insurance broker.

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Posted by Insurance - September 2, 2018 at 7:40 PM

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