INSURER BATTLES EXPECTED IN PA. SALMONELLA CASE

The Pennsylvania-based convenience store chain Sheetz Inc. has settled all but a few customer lawsuits spawned by salmonella-tainted tomatoes sold at its stores two years ago.

But complicated legal battles involving Sheetz, insurance companies and food suppliers must now settle this question: Who pays the multimillion dollar tab?

"We stepped up to the plate and took care of our customers. Now we have to take care of the harm that's been done to us," said Michael Cortez, general counsel for Altoona-based Sheetz.

So far, most of the money paid to Sheetz customers has come from U.S. Fire Insurance Co. The company insured Coronet Foods Inc., of Wheeling, W. Va., which sold the tomatoes to Sheetz.

What remains to be seen is whether U.S. Fire will be reimbursed by Coronet's suppliers and their insurance companies.

Sheetz officials and Coronet's former owner are also seeking damages for the harm done to the businesses, said Sheetz's San Diego-based attorney, Fred Gordon.

"I have uncovered zero evidence to suggest that Sheetz did anything wrong other than being a conduit for tainted tomatoes," Gordon said.

ETHAN ALLEN CAPSIZING IN N.Y. BLAMED ON TOO MANY PASSENGERS

The National Transportation Safety Board has determined that the probable cause of the capsizing of the Ethan Allen on New York's Lake George last October was that it carried 48 persons when it should have carried only 14 passengers.

Contributing to the cause of the fatal accident was the failure to reassess the vessel's stability after it had been modified because there was no clear requirement to do so, NTSB added.

On October 2, 2005, the Ethan Allen, a tour vessel carrying 47 passengers and one crew member capsized in Lake George, New York. As a result of the accident, 20 passengers died.

"This tragic accident highlights the need for clear requirements to verify a vessel's stability after any modifications are made to the vessel," said NTSB Acting Chairman Mark V. Rosenker in releasing the report.

CHUBB CHUGS ALONG IN THE 2ND QUARTER

The Chubb Corporation reported that net income in the second quarter of 2006 was $598 million, or $1.41 per share, compared to $495 million, or $1.23 per share, in the second quarter of 2005.

Operating income, which the company defines as net income excluding after- tax realized investment gains and losses, increased to $571 million from $461 million in the second quarter of 2005. Operating income per share increased 18 percent to $1.35 from $1.14.

The second quarter combined loss and expense ratio improved to 85.2 percent in 2006 from 88.3 percent in 2005. Catastrophe losses for the second quarter of 2006 were $80 million, accounting for 2.7 percentage points of the combined ratio. In the second quarter of 2005, catastrophe losses were $21 million and accounted for 0.7 points of the combined ratio. The expense ratio for the second quarter was 28.5 percent in 2006 and 28.0 percent in 2005.

"Chubb had another outstanding quarter," said John D. Finnegan, chairman, president and CEO. "Each of our three major business units contributed substantially to earnings, and the specialty business reached a milestone in its recovery by achieving a combined ratio below 90 percent."

Second quarter net written premiums for insurance business increased 3 percent to $3.0 billion. Premiums for reinsurance assumed business declined 51 percent, reflecting the impact of the Chubb Re Harbor Point transaction completed in Dec. 2005. Total net written premiums declined 1 percent to $3.1 billion.

P/C investment income after taxes for the second quarter increased 10 percent to $288 million in 2006 from $261 million in 2005.

NEARLY 29% OF EMPLOYEES UNPRODUCTIVE

Nearly 29 percent of company time in America is unproductive, according to the results of a new study by management consulting firm, Proudfoot Consulting. The estimated cost of poor productivity in the U.S. is $598 billion and U.S. companies "lose" the equivalent of 33.5 days per worker, per year, the productivity study found.

Barriers to productivity identified by U.S. executives point to management issues, said Luiz Carvalho, CEO of Proudfoot Consulting.

"There appears to be a lack of alignment within executive and managerial ranks, where strategy is not rolled down into actionable steps," Carvalho said. "Because of this disconnect, more than a quarter of the workforce's time in America is still unproductive, costing the U.S. economy billions of dollars."

An overwhelming 50 percent of U.S. executives, significantly more than the global average of executives surveyed, said the number one barrier to productivity was inefficient management planning of work and organization structure. Forty-three percent surveyed also ranked poor leadership in terms of management demonstrating and leading change as the second greatest barrier to productivity. Yet, more than one quarter of executives surveyed have no targets established for improving productivity in 2006.

Proudfoot Consulting's 2006 Productivity Report surveyed top U.S. executives asking them to rank issues related to management as key barriers to productivity in their organizations. More than 800 executives in 19 countries responded. A copy of the report is available at: www. productivitystudy.com