2022 January IIABL Louisiana Agent Newsletter by Independent Insurance Agents & Brokers of Louisiana

A MONTHLY PUBLICATION OF THE INDEPENDENT INSURANCE AGENTS & BROKERS OF LOUISIANA

LOUISIANAAGENT JANUARY 2022

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The "More Than 3 Years" Rule

Louisiana Department of Insurance Updates

By Ben Albright IIABL VP of Strategic Initiatives

By Ben Albright VP of Strategic Initiatives

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A Call for Change to Insurer Catastrophe Claims Response By Jeff Albright Page 18

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IIABL STAFF JEFF ALBRIGHT Chief Executive Officer jalbright@iiabl.com (225) 236-1366

BENJAMIN ALBRIGHT Vice-President of Strategic Initiatives balbright@iiabl.com (225) 236-1357

KATHLEEN O'REGAN Director of Communications & Events koregan@iiabl.com (225) 236-1360

KAREN KUYLEN Director of Accounting & Finance kkuylen@iiabl.com (225) 236-1353

RHONDA MARTINEZ Director of Insurance Programs rmartinez@iiabl.com (225) 236-1352

JAMIE NEWCHURCH Director of Insurance Programs jnewchurch@iiabl.com (225) 236-1350

LISA YOUNG-CROOKS Director of Member Relations lyoung@iiabl.com (225) 236-1351

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CONTENTS TABLE OF CONTENTS & FEATURED STORIES

02 IIABL STAFF At your service!

13 BREAKDOWN OF RECENT

DIRECTIVES & BULLETINS FROM LDI By Ben Albright, VP of Strategic Initiatives

16 COMMISSIONER REPORTS HURRICANE IDA DATA CALL RESULTS LDI News Release

21 RE-INTRODUCING IMS Independent Market Solutions

22 COVID PROTOCOLS FOR SMALL OFFICE EMPLOYEES By Tim Scott, Fisher & Phillips

IIABL DEFENDS AGENTS FROM LIABILITY

26 IS YOUR AGENCY HEALTHY? By Carey Wallace, Agency Focus

30 HOW INDEPENDENT AGENTS CAN

STAND OUT AS COMPETITION GROWS By Joel Zwicker, Agency Revolution

35 THE ROAD TO RECOVERY Dealing with capacity after a year of hurricanes

38 WHY COMMERCIAL PROPERTY

INSURANCE PRICES ARE HIGHER...

THE "MORE THAN 3 YEARS" RULE"

A CALL FOR CHANGE TO INSURER CATASTROPHE CLAIMS RESPONSE

& What Can Be Done About it

46 CATALYIT CORNER Website ADA Compliance

47 IIABL ANNUAL CONVENTION 48 IIABL EDUCATION UPDATE

18153 E. Petroleum Drive Baton Rouge, LA 70809 Ph: (225) 819-8007 Fax: (225) 819-8027 www.iiabl.com

50 IIABL CHAPTER UPDATE 51 ADVERTISER INDEX 52 INDUSTRY PARTNERS 53 IIABL BOARD OF DIRECTORS

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IIABL DEFENDS AGENTS FROM LIABILITY By Jeff Albright IIABL Chief Executive Officer

In 1999 IIABL passed legislation to provide a one year peremption period for insurance agent professional liability litigation. This statute of limitations has been used many times to defend agents from professional liability claims. A recent Third Circuit Court of Appeals case threatens to change the interpretation of this statute and dramatically expand agent liability.

IIABL has filed an amicus brief with the Louisiana Supreme Court to overturn this hideous decision and protect Louisiana agents.

IIABL has filed an amicus brief with the Louisiana Supreme Court to overturn this hideous decision and protect Louisiana agents. R.S. 9:5606 reads as follows: R.S. 9:5606. Actions for professional insurance agent liability A. No action for damages against any insurance agent, broker, solicitor, or other similar licensee under this state, whether based upon tort, or breach of contract, or otherwise, arising out of an engagement to provide insurance services shall be brought unless filed in a court of competent jurisdiction and proper venue within one year from the date of the alleged act, omission, or neglect, or within one year from the date that the alleged act, omission, or neglect is discovered or should have been discovered. However, even as to actions filed within one year from the date of such discovery, in all events such actions shall be filed at the latest within three years from the date of the alleged act, omission, or neglect.

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AMICUSBRIEF B. The provisions of this Section shall apply to all persons whether or not infirm or under disability of any kind and including minors and interdicts. C. The peremptive period provided in Subsection A of this Section shall not apply in cases of fraud, as defined in Civil Code Article 1953. D. The one-year and three-year periods of limitation provided in Subsection A of this Section are peremptive periods within the meaning of Civil Code Article 3458 and, in accordance with Civil Code Article 3461, may not be renounced, interrupted, or suspended. The seminal court case establishing the standard of care for insurance agents in Louisiana is Isidore Newman Sch. v. J. Everett Eaves, Inc. The Newman case established that the peremptive period in agent malpractice cases commences when the insured has constructive knowledge

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Continued from page 6 (rather than actual knowledge) of the alleged negligence. Constructive knowledge must be analyzed within the legal framework of the agent–insured relationship. “[I]t is not the agent’s responsibility to advise a client that it is underinsured; instead, it is well settled that the necessary coverages are best determined and calculated by the insured, who is charged with the primary responsibility to ‘read the policy.’” Isidore Newman Sch. v. J. Everett Eaves, Inc., “[I]t is the client’s responsibility or duty, not the agent, to determine the amount of coverage needed and advise the agent of those needs, and upon receiving the policy of insurance, the client has a duty to review the policy to make certain his needs are met.” This well established legal precedent established that the one year peremption starts when the agent delivers the policy to the policyholder. If there is a coverage deficiency in the policy, it is the policyholder’s responsibility to determine

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AMICUSBRIEF their coverage needs, read the policy, and advise the agent if additional coverage is required. Delivery of the policy whereby the policyholder should read their policy and SHOULD have known that coverage was deficient has been found by the court as constructive knowledge, even if the policyholder does not have actual knowledge until the time of the claim much later. This provides a significant professional liability defense to insurance agents. In Alfred Theriot v. Dwight Andrus Insurance, the Third Circuit failed to apply this rule of law. Instead of holding that the peremptive period commenced upon the insured’s receipt of the insurance policy, the Court instead erroneously held that the peremptive period did not begin until the insured sustained a loss. Such a ruling constitutes a clear deviation from the well-settled law of this state.Unless the Supreme Court reverses the ruling, insurance agents and brokers in this state may face different peremptive periods depending on the circuit in which an agent malpractice lawsuit is filed. For these reasons, IIABL respectfully submitted an amicus brief to the Supreme Court requesting that the Third Circuit’s ruling should be reversed. Insurance agents and brokers in this state know their legal duties and the legal duties of their insureds, particularly the insured’s obligations to read the insurance policy and ensure the policy meets his or her personal needs. This law has been clear and unequivocal. However, the Third Circuit’s opinion in this case strays from that well-settled law and creates ambiguity regarding the duties owed in an agent–insured relationship.The Court’s opinion not only misapplies the relevant peremptive period, but it also imposes a new continuing duty on insurance agents. Because of this ruling, an agent can no longer presume that his client has reviewed the insurance policies and has deemed the coverages therein satisfactory.The Third Circuit’s ruling now requires agents (rather than insureds) to determine whether the coverages are appropriate, and that duty apparently continues even after the policy has been bound and delivered to the client. The Third Circuit specifically agreed with the plaintiff’s argument that “peremption could not begin running until the last date of [the agent’s] omission.” The Court erroneously held that this “last date” was the date of the plaintiff’s loss because the agent “could have taken steps to procure the

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Continued from page 7 coverage at any time prior to the date the vessel sank.” In other words, the Court held that the agent had a continuing legal duty to ensure adequate insurance coverages even after coverage had been bound. Such a ruling conflicts with the controlling law of Louisiana and sets an impossible professional standard of care for insurance agents. In summary, the Third Circuit’s ruling creates a change not only in application of peremptive periods for agent malpractice claims but also in the duties owed by insurance agents. By analyzing the statutory peremptive period through the lens of “the last date of the agent’s omission,” the Third Circuit erroneously created a continuing duty for agents that does not currently exist in the law. For the reasons addressed above, amicus curiae Independent Insurance Agents & Brokers of Louisiana has respectfully requested that the ruling of the Third Circuit be reversed by the Louisiana Supreme Court.

THE "MORE THAN 3 YEARS" RULE By Ben Albright IIABL VP of Strategic Initiatives

In the wake of 2020 and 2021’s historic one-two punch of high activity hurricane years, many Homeowners carriers are reducing their footprint in the state. As a result, agents are talking more than ever about Louisiana’s “Three Year Rule” which prevents cancellation or non-renewal on policies that are older than three years. IIABL has gotten a number of questions about the statute and how, precisely it is applied, so we thought now might be a good time for a quick refresher. R.S. 22:1265 houses many of the rules surrounding cancellation and non-renewal including its section D: D. No insurer providing property, casualty, or liability insurance shall cancel or fail to renew a homeowner's policy of insurance or to increase the policy deductible that has been in effect and renewed for more than

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MORE THAN3 YEARS three years unless based on nonpayment of premium, fraud of the insured, a material change in the risk being insured, two or more claims within a continuous three-year period of time within the five years preceding the current policy renewal date, or if continuation of such policy endangers the solvency of the insurer. This Subsection shall not apply to an insurer that withdraws from the homeowners' insurance market in this state or to policy deductibles increased for all homeowners' policies in this state. For the purposes of this Subsection, an incident shall be deemed a claim only when there is a demand for payment by the insured or the insured's representative under the terms of the policy. A report of a loss or a question relating to coverage shall not independently establish a claim. As used in this Subsection, the phrase "two or more claims within a continuous three-year period of time within the five years preceding the current policy renewal date" shall not include any loss incurred or arising from an "Act of God" incident which is due directly to forces of nature and exclusively without human intervention. The statute applies to ALL insurers writing Homeowners policies in Louisiana, admitted and surplus. Assuming an annual policy term, the insurer has the option to non-renew: after the initial policy term (end of year 1), on the second renewal (end of year 2), on the third renewal (end of year 3), but if they execute the third renewal, they are “married” to the policyholder, and cannot cancel or non-renew except for the specifically listed exceptions.

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Continued from page 10 Because of some confusion around whether the company can cancel on the third renewal, IIABL has decided to rebrand the law’s nickname: we will now be referring to the statute as the “more than 3 years” rule. If you have any questions regarding the statute, please contact Jeff or Ben Albright.

LDI has had a busy start to the year: below is a brief summary of their actions.

1) Commissioner Donelon Places Americas Insurance Co. Into Receivership a) The Commissioner placed Americas Insurance into receivership in January as they could no longer afford to continue operation. b) The Department hopes to mirror the transition plan arranged for State National and Access Home, in which they would find a carrier to assume the policies and offer renewal over the course of a year. The RFP process is ongoing to select a replacement carrier.

2) Commissioner Obtains Injunction to Protect Louisiana Long-Term Care Policyholders a) The Pennsylvania Department of Insurance’s plan for the rehabilitation of insolvent long-term care insurer Senior Health Insurance Company of Pennsylvania involves significant rate hikes and coverage reductions for policyholders, after they proceeded with the decision to strip Guaranty Fund protection for the insolvency.

Breakdown of Recent Directives & Bulletins from the Louisiana Department of Insurance BY BEN ALBRIGHT IIABL VP OF STRATEGIC INITIATIVES

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DIRECTIVESBULLETINS b) Commissioner Donelon is challenging the decision in court, which could take significant time. In the meantime, the Louisiana Department was able to get an injunction to protect Louisiana Policyholders until the litigation can run its course.

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Continued from page 13 provisions in insurance contracts in most cases. Essentially, this guarantees that insureds who are not satisfied with the outcome of an arbitration or appraisal maintain the right to sue in court.

3) Directive 219 – Prohibits Anti-Public Adjuster Clauses

b) The recent revision adds reference to Act 345 of the 2021 regular session which creates a standardized appraisal provision for property policies.

a) Member agents made IIABL aware of a form that certain property carriers added to their policies prohibiting the policyholder from hiring a public adjuster in the property claims process

5) Bulletin 2021-08 (revised) – Hurricane Ida Voluntary Mediation Program

b) IIABL asked the department to weigh in, and they issued Directive 219 which states that insureds have a right under statute to hire a public adjuster, if they choose. The “Anti-Public Adjuster endorsement” is therefore unacceptable under Louisiana law.

4) Directive 173 (revised) – Arbitration/Appraisal Provisions a) This bulletin prohibits “binding” arbitration

a) Provides additional guidance on the mediation process created to help settle Hurricane Ida claims disputes between policyholders and companies without needing to litigate. b) The program is for personal lines property insurance claims of $50,000 or less in disputed damages.

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NEWS RELEASE

Commissioner Donelon Reports Hurricane Ida Data Call Results January 31, 2022 Insurers have paid or reserved $10.5 billion on all types of Hurricane Idarelated claims in Louisiana through the end of 2021, Insurance Commissioner Jim Donelon announced today. This data represents the first measure of damage from Hurricane Ida, which struck the state on August 29, 2021, as a Category 4 storm and affected 25 parishes. Policyholders have filed 434,633 claims of all types from Hurricane Ida as of December 31, with 83% of claims closed. Of those claims, 259,134, or 60%, were closed with payment, garnering $6.5 billion in payments for damage caused by the hurricane. “Louisiana’s resiliency has been thoroughly tested in 2020 and 2021. Paid claims for Hurricane Ida represent a way forward for those most affected by this hurricane,” said Commissioner Donelon. “This $10.5 billion will help Louisiana policyholders rebuild their lives, homes and businesses.”

The information was generated from a data call issued by the Louisiana Department of Insurance (LDI) to all authorized property and casualty insurers, including surplus lines insurers, to submit their claims data on Hurricane Ida. The figures include claims from personal and commercial insurance. Claims and payment data from the National Flood Insurance Program is not included as it is not regulated by LDI. The data call figures released today represent the most comprehensive look to date of insured losses in Louisiana from Hurricane Ida. Data for Hurricane Ida through December 31 can be found at http://www.ldi.la.gov/datacal lresults. The data is also available for breakdown by parish. LDI will continue collecting data from property and casualty insurers to monitor the claims process. The final deadline for data is October 7, 2022.

About the Louisiana Department of Insurance: The Louisiana Department of Insurance works to improve competition in the state’s insurance market while assisting individuals and businesses with the information and resources they need to be informed consumers of insurance. As a regulator, the LDI enforces the laws that provide a fair and stable marketplace and makes certain that insurers comply with the laws in place to protect policyholders. You can contact the LDI by calling 1800-259-5300 or visiting www.ldi.la.gov. If you do not wish to receive news releases in the future, please click unsubscribe.

A Call for Change to Insurer Catastrophe Claims Response By Jeff Albright IIABL CEO

The past two years of historic hurricane activity taxed the insurance industry to the breaking point.The catastrophe claims experience of many Louisiana policyholders has led many people to say that the insurance industry is broken and unable to handle claims appropriately in a major catastrophe. Insurance companies must improve their ability to handle claims after a major hurricane. OK Albright, if you’re so smart, how do we do that?

First, every insurance company should have a detailed written catastrophe response plan that is carefully implemented to ensure that catastrophe claims are handled properly. That sounds too obvious, right? We are aware of several small coastal Homeowner’s insurance companies who did not have cat plans in place and were trying to find independent claims adjusting firms AFTER Hurricane Ida this year. That is inexcusable. Catastrophe plans must be in place before storm season begins.

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CLAIMSRESPONSE In the name of efficiency, price competition, and profitability, insurance companies have slashed their staff and operations to the bone. Most insurers have outsourced their catastrophe response. That is particularly true of the small coastal Homeowner’s insurance companies. Using independent adjusting companies makes sense up to a point, but insurers must maintain sufficient internal claims staff to manage independent claims adjusters and claims after a major hurricane. Communications between insurance companies and agents/policyholders has been a major problem after the hurricanes in the last two years. Insurance companies must have sufficient systems and staff to maintain appropriate communications with agents/policyholders. It is also clear that some insurance companies contract with independent claims adjusting companies without verifying that they have sufficient adjuster capacity to handle a major

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Continued from page 18 major storm. In some cases, the independent claims company has contracted with multiple insurance companies and do not have nearly the capacity necessary to handle those commitments.Insurers must ensure that the independent claims adjusting companies they rely on have the capacity necessary to handle major hurricanes based on their policy count and claims modeling.Insurance companies should contract with independent adjusting companies for exclusive access to adjusters necessary to handle the predicted number of claims. Once an insurer gets adjusters in the field, they must have plans in place to support them. The logistics of supporting field adjusters in an area that has been devastated by a storm is difficult and complex. Area residents frequently occupy all available hotel space in the affected area and restaurants and other services are in short supply. Careful planning is needed to support field adjusters under these difficult circumstances.

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CLAIMSRESPONSE One of the biggest complaints we have heard after the storms in the past two years has been “adjuster churn.” It is not unusual to have several adjusters involved in the settlement of a serious property claim, but numerous policyholders reported 6, 7, 8, 9+ adjusters involved in a single claim. Some amount of adjuster turnover is normal after a major catastrophe, but insurers obviously need to minimize adjuster churn. The real problem is that in many cases every time there is a turnover in adjusters, no records have been submitted to the insurer and the new adjuster must repeat the initial adjustment of the claim. Policyholders are understandably frustrated that the process must start all over again…sometimes several times. Insurance companies must make sure that field adjuster reports are filed timely with the insurer so that the claim can move forward despite a turnover of adjusters. Finally, “back in the good old days” most independent agents had claim draft authority. If insurance companies have trouble getting qualified people in the field to adjust claims, maybe empowering hundreds of qualified insurance agents who already live in the affected area to inspect, evaluate, and make an initial down payment on a covered catastrophe loss would go a long way to satisfy the immediate needs of policyholders. These are just a few observations from the difficult days of the past two years. Clearly insurance companies need to improve their catastrophe claims response.

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Without competitive insurance markets, your agency can’t grow and get to the next level. IIABL knows the more markets your agency can easily access, the better your chances of writing and retaining business, so we have made market access an integral part of your membership. In 2015, IIABL made the investment to be a part of Independent Market Solutions (IMS) and, since that time, we have grown market availability in Louisiana to include participating carriers that offer personal, commercial, and various specialty lines. IMS programs are designed to give agencies of all sizes the opportunity to gain carrier appointments as IMS sub-producers.

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Certain insurance markets also feature the opportunity to “graduate” to a direct appointment once the carrier’s minimum premium threshold and performance standards are met. While working as an IMS sub-producer, agencies are paid competitive commissions, enjoy 100 percent ownership of expirations, and can participate in earned contingencies. Access to IMS is an exclusive IIABL member benefit, and that simply means you can be assured of the most agent-friendly terms available that perpetuate and add to the prosperity of independent agencies. To learn more about IMS and how to sign up to start writing business, click HERE.

Tim Scott Partner Fisher & Phillips

January 28, 2022 The Omicron variant of COVID-19 continues to gain steam in Louisiana and across the country. As more businesses are facing situations with employees testing positive or becoming exposed to those who have tested positive, it is a good idea to make sure that you are following the most recent guidance issued by the CDC to help reduce the unnecessary spread of the disease. Below are the steps non-healthcare businesses should take:

If an Employee Tests Positive for COVID-19: Regardless of vaccination status, the individual should stay home (isolate) for 5 days following positive test and then they may return to work after that, provided that they wear a face covering at all times they are around others for 5 additional days. This applies if individual either has no symptoms or their symptoms are “resolving” after 5 days. Individuals who continue to have a fever on the 5th day should remain isolated at home until the fever subsides.

COVID PROTOCOLS FOR SMALL OFFICE EMPLOYEES

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COVIDPROTOCOLS If an Employee Is Exposed to Someone With COVID-19: If the individual has been boosted or has completed the primary series of Pfizer or Moderna within the last 6 months or completed taken the J&J shot within the last 2 months >>> No quarantine/isolation necessary. Individual should wear a face covering around others for 10 days from exposure. If the individual develops symptoms, they should stay home and take a test. If the test is positive, follow the rules above. If negative, they can return but should wear a face covering for the balance of the 10-day period.

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Continued from page 22 If the individual is unvaccinated or completed the primary series of Pfizer or Moderna more than 6 months ago and has not been boosted or has taken the J&J shot over 2 months ago and has not been boosted >>> The individual should stay home for 5 days. The individual can return to work after 5 days, provided that they wear a face covering when around others for 5 additional days. The individual should test on the 5th day after exposure

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COVIDPROTOCOLS How Should an Employer Handle COVID-19 Related Absences? When the pandemic first began, Congress quickly enacted the Families First Coronavirus Response Act (FFCRA). Part of that law required employers with fewer than 500 employees to provide paid leave for absences relating to COVID-19, including leave due to the closure of schools and daycare facilities. The FFCRA provided a dollar-for-dollar reimbursement process whereby an employer who provided this leave could offset that amount from quarterly federal taxes owed to the Government. The paid leave requirement expired on December 31, 2020. From there, Congress changed the law to make the paid leave optional and continued the tax credit through March 31, 2021.Since that time, there has been no federal law either requiring paid leave or authorizing a tax credit. While some states require paid leave for COVID-19 absences or other medical circumstances, Louisiana does not. Nevertheless, employers have continued to wrestle with absenteeism related to direct COVID-19 cases or exposure situations. Many employers have considered and implemented the following measures to address this continued issue: Plan for workers who must isolate/quarantine to be able to work remotely (including investing in laptops and networks to facilitate such work). Consider creating a separate COVID-19 related bank of “sick” days. In putting such a plan together, however, an employer should be cognizant of how such a policy is drafted to avoid having to pay out any unused COVID-19 leave at separation.

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Continued from page 23 Alternatively, consider increasing the amount of PTO available to workers. In a tight labor market, this can be an attractive selling point when trying to hire qualified candidates. Keep in mind that you can require PTO or vacation to be used each year and not carry over to the following year to keep balances under control.Louisiana continues to require employers to pay out unused vacation or PTO balances at separation. If you have any questions, please feel free to reach out to Tim Scott at Fisher Phillips in New Orleans at tscott@fisherphillips.com or (504) 529-3834.

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By: Carey Wallace Agency Focus

IS YOUR AGENCY HEALTHY? It’s a new year. Time to get your annual checkup, refresh those goals and get to work. You know what I’m talking about. While it looks a bit different for everyone it follows a common theme for most of us. This annual ritual may include dusting off that gym membership, delivery of that new Peloton bike, compiling an ambitious reading list using the countless recommendations of others, finalizing travel plans or being intentional about time spent with family. You may choose to give up all alcohol consumption and adopt a diet or a new

way of eating. There is no evidence of any holiday sweets, and the fridge is filled with salads, lean meats and fresh fruits. What does this process look like when it comes to your agency? Are you as intentional about planning for success in that part of your life? Unfortunately, for many planning for success in their agency can be overlooked. There is a reason we have a common saying encouraging all to work on their business not just in their business. Here are some ways to make sure that your agency is off to a strong and healthy start in the new year.

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AGENCYHEALTHY Business Plan If your agency has a business plan – dust it off and read it again. Review the goals that you set for your agency. Take time to reflect on the goals that you set for last year and how you performed as a team. Identify the areas where you excelled and the areas you missed. Use that reflection to set new goals for the coming year. Make sure the goals that you set are SMART goals. (Specific Measurable Attainable Relevant and have a defined Timeframe. Some of the best goals are the ones that are developed together so consider involving your team in the process. A goal that has buy in is much more likely to be obtained.

Review Policies & Agreements Make sure that the written policies match the practice inside your agency. It is easy to make changes as your agency grows and changes – especially over the past two years. Take time to update the policies that are in place to ensure

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Continued from page 26 that they algin with your current practices. In almost every agency adjustment were made to accommodate remote work, flexible hours and time off due to illness and quarantine requirement. Do your written policies reflect these changes? Keeping these policies up to date will protect you and your agency. You should also review your operational policies and update them with any changes. This will help with training and consistency in practice inside your agency. Lastly, take a moment to review the agreements that you have in place with your staff. Have you protected your agency by putting non-compete, non-piracy agreements in place? If not, you need to work with a HR professional to get the appropriate agreements in place.

Corporate Agreements These are the agreements that were developed many, many years ago and often times these agreements have never been revisited again.

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AGENCYHEALTHY Continued from page 27 These documents include by-Laws, Operating Agreements, Shareholder Agreements and are designed to outline how decisions will be made in the organization. Too often these agreements are completely out of date, incomplete, or poorly written which can put the agency in a bad position if they are not reviewed and updated as the agency grows and changes. The average age of agency owners is 56 which means that over half of the agency owners are at or nearing retirement age. It is important to review these documents as you prepare for the sale of the agency or upcoming transition of ownership. For those agencies that have no agreements in place, consider putting an agreement in place that accurately reflects your wishes. Should an unfortunate life event trigger a transition of ownership, you want to be sure that the agreements are up to date and do not include out of date information like an agency price that was set in 1950 or omit key details like how the agency will be valued. A quick review of these documents can save you a great deal of stress and turmoil during an already challenging time.

Get an Agency Checkup

Take the time to get the ultimate agency checkup- a valuation. Your agency may be your largest asset, and if it isn’t – it is certainly among your top 5 largest assets. In your line of work knowing the value of assets is imperative to protecting those assets. But for some reason when it comes to your own agency, we put off knowing the value or worse yet assume the value is a simple multiple of revenue. Knowing your agency’s value is the best investment in your business as it will uncover far more than a value. It will highlight what is driving your agency’s value, areas that you are excelling and areas of risk that need your attention. It will highlight the key benchmarks that you should consider and opportunities for you to maximize your agency’s value over time. For anyone planning to grow their agency, transition ownership in the next 5 years - or both - knowing your agency’s baseline value is essential. Just like your personal health checkup, your agency’s value cannot be determined by one metric - that would be like only taking your temperature to determine your personal health. For more information about planning for your agency visit www.agency-focus.com or schedule a time to talk at https://agencyfocus.com/services/ola/services/introductoryconversation

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HOW INDEPENDENT AGENTS CAN STAND OUT AS COMPETITION GROWS BY JOEL ZWICKER, AGENCY REVOLUTION Newly minted independent agents should be keenly aware of how they position themselves. Two years ago, Nationwide, which is one of the largest carriers in the U.S., released its captive agents, making them all independent agents (IAs). This action was completed in 2020. While Nationwide was one of the first major carriers to make this move, we know now with almost certainty they won’t be the last.

We expect to see more carriers take the same route as Nationwide. This will make the market more competitive — especially the personal lines segment. I believe independent agents will start to see their personal lines market share increase over the next few years. Will we ever see the day where Personal Lines market share rivals that of the more lucrative commercial lines segments? Industry analysis indicates 84.5% of all

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STANDOUT commercial line premiums are written by the independent-agent channel. Perhaps not, but the independent-agent channel will start trending in that direction. Here’s why…

The IA model is good For carriers and agents. Nationwide made this change to reduce costs. Not all of their captive agents loved the idea or the process. But now, almost two years into independence, very few agents are upset about their new-found independence; most of them are excited. That said, the realization of opportunity can sometimes be clouded by significant challenges. Consider the comments Nationwide’s President of P&C Sales & Distribution Amy Shore made in a recent interview: “The two biggest challenges we hear from agents is how hard it is to grow organically and how hard it is to attract and retain talent.”

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Continued from page 30 Shore added that Nationwide hopes that by allowing their agents to be independent, the carrier will have more ways to diversify its revenue streams, participate in acquisitions and attract new talent. Nationwide reported having 2,000 captive agents before the shift. The carrier says that 99% of the formerly captive agents continue to sell its products as independents, which Nationwide takes as an endorsement of the new IA model. And here’s additional evidence that this experiment is paying off: Previously captive agents at Nationwide report that once released, they increased new written premiums by over 35%. In the new IA model, agents are now charged with several new responsibilities such as technology adoption, digital presence, customer communication and carrier relationships — just to name a few. However, this gives them the flexibility to operate their business as they see fit, leveraging the technology, human resources

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STANDOUT and carriers that will best help them grow their agency. And on the carrier side, the shift gives Nationwide along with its current and future clients access to policy types, coverages and premiums that it did not previously have. For example, if an agent sets up shop in a community that is prone to fire and Nationwide doesn’t offer policies in that area because of the increased risk, that agent can now work with another carrier and still serve that customer. In the captive agent scenario, the agent would just have to pass and watch that business go to a competitor.

Why stand out as an independent agent? Let’s assume this trend of captive agents being released into the world of independence becomes the norm. In such a world, there are three main reasons these agents and agencies should strive to stand out in a crowd. First, if they want to grow, they must stand out! Why? This situation will create a more competitive independent pool, and consumer expectations are at an all-time high. Most prospects choose an independent agent because of their expertise and relationship. These are the things at which independent agents excel. Second, if an agent hopes to sell their agency for top dollar, that business needs to distinguish itself. Agencies that have proper business plans, technology and marketing plans in place sell for more than agencies that lack these elements. Finally, they need to stand out if they want to leave a legacy for their family. The reality is that many independent agencies are family legacies and many will continue to be. But if they want their family legacy to be there in five, ten or event 15 years down the road, they need to take action to ensure their agency stands out,

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Continued from page 31 is growing, and has the right tools in place.

Don’t let digital drag you down Newly minted independent agents should also be keenly aware of how they position themselves. A digital presence is going to be the first impression customers have to an agent’s brand as well as the route that clients and prospects use to find and connect with an agency. A polished and professional-looking online presence is essential for building clientele. But fortunately, many independent agents need not start from scratch. This is where technology can really make their lives easier. There are marketing solutions available that take care of many of the things that Nationwide used to cover for agents such as automating messages which allows an agent to extend that expertise and relationship at scale. Please remember that at every opportunity you should share your expertise and build the relationship you have as those are the reasons people will choose you as an independent agent. Agents should take advantage of these perks to establish themselves in the marketplace. For example, many carriers and networks offer marketing and advertising co-op funds that IAs

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STANDOUT can leverage. To use these funds, IAs must follow brand compliance guidelines. The payoff is a much easier prospect of creating local, polished ad campaigns that can grow a targeted clientele. Nationwide and other carriers often will negotiate discounts with technology vendors on behalf of IA agencies looking to boost their digital architecture Now that Nationwide has proven the benefits of the IA model, the industry is likely to continue the trend. The value to the carriers comes from the reduction in operational costs and for agents, it represents new opportunities and flexibility — but only if independent agents take advantage of all the digital tools available to them. Leveraging technology to provide service for customers and active communication could be the difference between an agent’s success or stagnation.

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Continued from page 32 Joel Zwicker is the “insurance evangelist” at Agency Revolution and formerly an agent at one of Canada’s largest independent insurance agencies. He now works to provide independent insurance agents the best marketing tools for their unique needs. Contact him at info@agencyrevolution.com. These opinions are the author’s own.

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THE ROAD TO RECOVERY DEALING WITH CAPACITY AFTER A YEAR OF HURRICANES The impact of hurricane activity in the US can be visualized in a similar manner to throwing a rock in a pond. The rippling effects that hurricanes such as Ida have had on surrounding states, has left insurers desperately trying to figure out how to minimize losses in 2022. Bill Gatewood, personal insurance practice leader and senior vice president at Burns and Wilcox, sat down with Insurance Business at WSIA in San Diego to discuss how hurricane activity over 2021 changed the property and casualty (P&C) segment. “Hurricane Ida is the second category four storm in Louisiana within two years and has taken a huge toll on the market,” he said. Over the prior months, insurers were fleeing the market, and, with not many companies sitting on the sidelines waiting to take on that capacity, Gatewood noted that tackling these issues would be no easy task as rates increase further moving into 2022.

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By Surina Nath 12 Jan 2022

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RECOVERYCAPACITY Gatewood said that agents should be talking to clients about what updates should be done and informing them about wind deductibles as the increase will help offset budgets for improvements or repairs. “We don’t have to start from ground zero but there’s a bit of education for clients in Louisiana because although they’ve experienced hurricanes before I don’t think they’ve seen this type of market since Katrina,” he said. “The reinsurance market is also going to play a big role as deals come up in January,” he added. “We have to watch pricing as that will roll down to insurance carriers and other syndicates. The industry has an idea of where it wants to go, it is just not certain about how to get there - but that will become clearer in 2022.”

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Continued from page 35 For brokers and agents, taking a proactive approach to educating clients on the nature of the insurance marketplace will provide them the information they need to make the best financial decisions. Climate change is not slowing down, and more frequent and severe hurricanes are anticipated by all - sitting around and waiting to see what happens is not the strategy to take. “A lot of conversations have been about what has been done following Ida and what we are going to do moving forward,” said Gatewood. “This is not a temporary cycle. Action is required.”

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RECOVERYCAPACITY “We’re also going to see increases in wind deductibles,” he said. “They were at the 2-3% level, but now they’re going up to 5% across the board.” The rise in deductibles will help provide some stability to the market but more burden will be placed on homeowners. To avoid customers spending excessively on insurance and repairs, mitigating property risks is key.

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Continued from page 36 Brokers and agents do not need to be in a position where they have multiple wholesale relationships - rather the way the industry will deal with capacity issues will be through meaningful, long-term partnerships. “When you reserve the capacity for your biggest and best partners, that is where the time spent building those relationships will pay off,” he added.

Brokers must have a holistic risk management approach and, to do so, they must focus on building strong relationships with both clients and wholesalers.

After a bond is created with wholesalers, the next step for brokers and agents is building relationships with clients to best assess risk profiles.

“The best thing a retail agent and broker can do in a state like Louisiana, where there’s so much E&S business is having one or two wholesale partners,” Gatewood explained. “Everyone is looking to have deeper relationships with less people.”

In Louisiana, homeowners have been around the block and do a good job when it comes to posthurricane repairs, but the major step for them to take is making sure their homes’ infrastructure is updated and well maintained.

By: Derek Talbott, Bob Meyer, & Matt Booker Westchester, A Chubb Company

Introduction

Why Commercial Property Insurance Prices are Higher... & What Can Be Done About It

As property insurance rates continue rising significantly across the country, commercial property owners and risk managers are asking questions of insurance brokers to understand the reasons why and what they can do to help moderate the challenging market conditions. This report was developed to elucidate the complex circumstances causing the pricing pressures and what all parties can do to address these challenges.

impacts on property insurance underwriting and pricing. Chubb’s property insurance rates, for example, were up 12 percent year-over-year in Q3 2021. We also cite the difficulties inherent in accurately and comprehensively valuing the replacement cost of a commercial structure for insurance purposes, a process that is critical to ensuring that insureds are paid accurately and quickly in the event of losses.

Three factors simultaneously in play at the present time are affecting the underwriting and pricing of commercial property exposures: climate changerelated natural disasters producing more frequent and severe insured water, rainfall and flood losses; a historic supply chain crisis triggering higher costs for construction materials like lumber, steel and gypsum; and high inflation,(1) reaching nearly 7 percent in December 2021 from the prior year’s period, representing the biggest one-year increase in inflation in the past 40 years.(2)

Most importantly, we point out the collision of these factors with the trend of undervaluing the true cost of asset replacement for property insurance purposes. Asset replacement undervaluation affects underwriting modeling outputs, leading to less informed insurance decisions and inadequate rates. More accurate valuations would generate improved modeling, enhanced risk management of assets and business continuity, and more precise pricing of property risks, among other benefits.

In this report, we elaborate on these factors and their respective and combined

Unpredictable Weather Events In November 2021, leaders

from across the world traveled to Glasgow, Scotland, to attend the 2021 United Nations Climate Change Conference, commonly referred to as COP26. The timing was propitious: the summit occurred during a two-week period when accumulated atmospheric greenhouse gas reached record concentrations, with far-reaching implications for present and future generations.(3) From January through September 2021, rising global temperatures appeared to have contributed to 18 weatherrelated disasters with losses exceeding $1 billion each in the United States, a record high, according to NOAA National Centers for Environmental Information. The average number of billion-dollar disasters per year between 1980 and 2020 was 7. Among the 18 events exceeding $1 billion in losses over the ninemonth period in 2021 were 9 severe storms, 4 tropical cyclones, and one drought, wildfire, and winter storm each. The NOAA report was issued on October 8, meaning more than three and one-half months are yet to elapse before yearend final figures are tallied.(4)

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COMMERCIALPROPERTY In the first half of 2021, an estimated $42 billion in insured property losses was recorded by the insurance industry—a 10-year high, reports suggest. (5) The report cautioned that second-half property loss figures typically are higher than losses in the first half of the year, as these months historically are most prone to catastrophe losses. At press time, third quarter 2021 insured property losses were estimated by Guy Carpenter at an above-average $48.5 billion, affirming Swiss Re’s projections in a big way, greatly exceeding the first-half loss figures.(6) Three unusual catastrophic weather events in 2021 stand out. In mid-February, Winter Storm Uri, an extratropical cyclone, resulted in the delivery of winter weather alerts across several states to more than 170 million Americans, an unprecedented number of people. In Texas alone, the severe cold wave caused by Uri resulted in the failure of the state’s aging electricity grid, causing the country’s largest power outage in nearly 20 years. More than 4.5 million homes and businesses were without power for several days, producing a record volume of property claims across the state filed for burst pipes, collapsed roofs, spoiled produce, damaged equipment, and business income interruptions, reported to be “enormous.” Altogether, insurers will likely pay an estimated $18 billion in damages, with half the claim costs originating in Texas, according to catastrophe modeling company Karen Clark & Co.(8) The second atypical catastrophic weather event, Hurricane Ida in late-August and early-September, was the second-most damaging and intense hurricane in terms of rainfall volume to make landfall in Louisiana. The Category 4 hurricane subsequently traveled up the eastern coastline to produce extreme wind and rainfall levels resulting in tornadoes, flash flooding and multiple deaths in Pennsylvania, New York and New Jersey. Hurricane Ida was the third tropical storm to hit the New York and New Jersey area in as many weeks, deeply saturating already water-logged soil. Drainage systems were overwhelmed across the region, forcing New York City to shut down much of its transportation system.(9) Reports suggest that the hurricane contributed losses of more than $26 billion to overall third quarter 2021 catastrophe losses of $48.5 billion.(10)

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Continued from page 38 The third uncommon weather event in 2021 was the extraordinary series of 34 tornadoes that tore across eight states on December 10 and 11, considered one of the largest and deadliest tornado events in U.S. history. Early estimates on total damages and economic losses were pegged at $18 billion on December 14, making it the costliest tornado event to date, far exceeding the previous record holder, a tornado outbreak in 2011 that caused $10.2 billion in total damage and economic loss.(11)

Catastrophe Risk Models and the New Normal

Standard catastrophe risk models may not fully capture the potential losses attributable to unusual weather events like the December 2021 tornado outbreak, Hurricane Ida and Winter Storm Uri—what scientists refer to as the “new normal.” But while the outputs of the catastrophe models have improved, the greater frequency of severe catastrophic events over the past 5 years have redefined this “new normal” on an almost annual basis. With past as prologue, a continuing redefinition is likely in the foreseeable future.

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COMMERCIALPROPERTY Consequently, the catastrophe models may create a false sense of security. Model outputs like “maximum probable loss,” stated as a one-in-100-year hurricane, for example, provide an illusion of safety and security. This illusion is affirmed by the fact that Hurricane Ida was one of three major storms in a three-week period to strike New York and New Jersey. The three storms also emphasized the need for windstorm and flood catastrophe modeling companies to gather and assess data pertaining to the hydrological, topological, and geospatial attributes indicating where water is likely to flow and collect during a cumulative series of hurricanes and other major windstorms that occur in a brief period. This data can then be compared with aggregated data on drainage systems to determine if the systems are equipped to handle the capacity of the expected water volumes. Wildfire catastrophe models can be similarly enhanced. For commercial buildings in the wildlandurban interface—the transitional zone between unoccupied wilderness and developed land, the models generally consider the square footage of the

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Continued from page 38 structure and the quality grade of the building materials. The gradual accumulation of trees, shrubs and other combustible materials in proximity to a building generally is not included in wildfire risk modeling data.

Seesawing Replacement Costs

All current catastrophe models use a computerized process to gauge the estimated costs to repair or replace a damaged or destroyed building with materials of the same or comparable quality. Valuing these costs depends on accurate assessments of prices for lumber, steel, and other construction materials, in addition to the current level of wages for local contractors and personnel. Estimating accurate valuations has long been challenging in property insurance. Because commodity prices and labor costs are never static, recent events like the supply chain crisis and rising inflation have added to these difficulties. Prices for building materials through 2021 have been unusually volatile, due in large part to supply chain disruptions.

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COMMERCIALPROPERTY The costs of materials and labor to rebuild residential or commercial property have gone up and continue to rise, dramatically in some cases. The costs of lumber and steel are cases in point. Between May 2020 and May 2021, the price for a standard 1,000 board feet of lumber skyrocketed from $347 to $1,675, and have fluctuated since.(12) From March 2020 to July 2021, the benchmark price for rolled steel rose by 215 percent.(13) The cost of gypsum materials used in dry wall were up nearly 16 percent, year-over-year, in August 2021.(14) Overall, the cost of all construction materials increased 23.1 percent in the 12-month period ending in August 2021 and are projected to rise another 5 percent to 11 percent through August 2022.(15) As 2021 progressed, the sky-high prices of some building materials like lumber fell precipitously, while the prices of other materials like copper piping and tubing shot upwards.(16) This dramatic change in prices over such brief durations makes it increasingly difficult for insurance markets to estimate the potential costs for underwriting and pricing purposes. At the same time, building contractors are experiencing a pronounced shortage in available construction workers, particularly in certain trades and in regions where extremely atypical property insurance losses have occurred. Aggregate contractor labor costs increased 4.46 percent in the 12 months through August 2021, due primarily to the lack of available craft professionals. According to an analysis of construction labor supply and demand in March 2021 by the U.S. Bureau of Labor Statistics, an estimated 430,000 additional construction workers were needed in 2021 to address building demand.(17) Another one million more construction workers will likely be needed in 2022 and 2023.(18)

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Continued from page 40

An Unraveling Supply Chain and Inflation In effect, the sharp uptick in more frequent catastrophic weather events is colliding with the higher costs to rebuild damaged or destroyed buildings. A key factor in the construction sector’s volatile price environment is the enduring supply chain crisis.

When consumer and business demand for products dramatically fell during the first months of the pandemic, original equipment manufacturers sharply curtailed production, as did their tiers of suppliers. When demand returned almost as quickly as it plummeted in early 2021, the so-called “bullwhip effect” occurred.(19) The massive upsurge in strong end-market demand made it impossible for suppliers, container ships, railcars, and trucks to serve everyone’s needs simultaneously, causing shipment delays and transportation disruptions.(20) The supply chain challenges are taking longer than expected to normalize, a September report by Fitch Rating stated.(21) In November, the historic logjam of giant containerships stranded at the ports of Los Angeles and Long Beach for more than half a year’s time persisted. This suggests that the availability of

Assuming demand does not slacken, it appears that building contractors will need to increase wage levels to attract the increased volume of workers required. Because commercial and residential construction is driven by regional end-market demand, the costs of building materials and personnel needed to replace a structure damaged by a catastrophic weather event must be more accurately accounted for and reflected in insurer underwriting and pricing. If an unexpected major storm hits a well-populated region, thousands of homes may need repair and replacement at the same time, pushing the cost of goods and contractors even higher. NOMADIC

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COMMERCIALPROPERTY commodities and building materials may remain a problem well into 2022, contributing to further price increases ahead. Both property and casualty insurance underwriters also are grappling with the effects of current inflation and worries over higher interest rates. Both factors are concerning: The high inflation of the 1970s and early 1980s, for example, adversely affected the industry, resulting in weaker underwriting performance and reserve levels.(22) Rising interest rates, on the other hand, deteriorated the value of fixed income assets. If history repeats, Fitch Ratings said the industry will be “challenged” to maintain insurance pricing on pace with more volatile loss trends.(23)

Undervaluation of Assets

Rising costs of construction materials and labor at a time of higher inflation strongly suggests that asset replacement costs are presently undervalued in property underwriting models, resulting in inadequate rates. Inadequate consideration of asset replacement costs has an adverse effect on insurer modeling, pricing, business continuity plans, and the duration of claims adjustment and payments.

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Continued from page 41 The building’s contents, including furniture, fixtures, machinery, inventory, and other items that are not physically part of the building, also require more diligent valuations and proper reporting by insureds and brokers during the underwriting process to ensure there is sufficient coverage in the event of an insurance claim. The insured is responsible for reporting their property and its value to their insurance broker or agent. As the insured’s expert consultant, the broker or agent must ensure that the values reported represent the accurate present cost to repair and/or replace the building and its contents with materials of like kind and quality. To determine proper replacement cost valuations, cost indexes that compare property and content costs across several quarters or years are available from various firms in the market. While it is always important for insureds to report accurate property values to their insurers, due to the supply chain crisis, it is imperative for insureds to also communicate their current inventory fluctuations to their insurers, as well as each

While undervaluation of assets has long been a challenge during the underwriting process, deepening the impact are current events like the increasing frequency of more severe windstorms, wildfires and floods, along with the supply chain crisis and inflation. Other factors adding to the undervaluing of asset replacement costs include demographic shifts to higher risk geographies along coastlines and in the wildland-urban interface; an aging building stock; and rising GDP in the United States, which has increased property exposure values. In November 2021, it was estimated that commercial properties were undervalued for insurance underwriting purposes by more than 30 percent.(24) One part of the problem is that insureds often misunderstand valuation on a replacement cost basis. The replacement value of a building, for example, is not its market value, meaning the price the building may command in the current real estate market. It also isn’t the property’s book value, meaning the carrying value on the balance sheet for accounting purposes. Rather, it is the cost the insured will incur to rebuild or replace the building with materials of like kind and quality. NOMADIC

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Continued from page 42

building’s characteristics like square footage, number of stories, and whether it comprises a parking garage.

widescale and prolonged power outages, evident in the severity of claims produced by Winter Storm Uri in Texas.

These varied considerations also are important for the smaller percentage of insureds that purchase commercial property coverage which utilizes valuation on an actual cash value basis, as opposed to a replacement cost basis. In the context of commercial property insurance, “actual cash value” is the cost to repair or replace property on the date of loss with like kind and quality materials minus depreciation. In all cases, brokers should collaborate with their clients to determine accurate values.

Inaccurate asset valuations provided by insureds compound these modeling challenges, because the setting of deductibles and sub-limits are based on the replacement values. In effect, asset undervaluation may result in unintended risk to the insured organization’s balance sheet. Unaware of the true extent of the risk, senior management may fail to set aside enough capital to cover the organization’s retained risks or may procure property insurance with insufficient coverage limits. These risks underline the importance of having proper and accurate valuations to ensure carriers are appropriately paid for the exposures they assume, assisting insurers to effectively manage their portfolio of property catastrophe risks.

Added up, these complex issues are an obstacle to the ability of catastrophe models to produce optimally accurate loss projections. While the use of advanced AI and machine learning technologies has improved the estimations of property insurance losses from natural disasters, the models’ forwardlooking projections strain to account for the increased frequency in nonconforming weather events, seesawing damage repair costs, and longerduration business interruptions caused by both

What Can Be Done

While these challenges appear unique, the property insurance industry enjoys a long record of successfully addressing prior crises. For example, Hurricane Andrew in 1992, the costliest ($15.5

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Continued from page 43

billion) natural disaster in U.S. history at the time, prompted the development of the catastrophe modeling industry.(25) Subsequent natural disasters like hurricanes Katrina in 2005, Ike in 2008, Sandy in 2012, and Harvey, Irma and Maria in 2017 caused hundreds of billions of dollars in insured property losses.(26) The industry is now at a crossroad, where crucial decisions must be made. In making these determinations, the following considerations may be useful:

In light of a future with more frequent and severe catastrophic weather events and related insured losses, the property insurance industry should consider providing policyholders greater support for taking certain risk mitigation measures. That support may include potential premium discounts or credits for protective measures such as improving the insulation of buildings and pipes, retrofitting storm drainage systems, and installing electrical generators for unexpected electrical outages. The industry also may benefit by cultivating data-sharing relationships with other industry sectors, such as energy companies, construction material providers, and technology firms offering geospatial mapping and satellite imagery services. Using data and analytics tools, insurers can assess this data to derive more accurate and real-time insights into the changing nature of commercial property insurance risks. Lastly, the property insurance industry needs to price for today’s “new normal” in volatility to achieve an accurate, fair and adequate pricing of risk.

Increasingly volatile and difficult to predict loss costs associated with the greater frequency of severe catastrophic weather events require the entire insurance ecosystem—insurers, reinsurers, catastrophe modeling firms, brokers, and risk managers—to take a harder look at these factors. Each party needs to examine in depth and detail how they can in their respective roles develop more accurate and near-real-time data on building condition, local drainage systems, real estate and housing development trends, access to available construction materials and local construction personnel, and other loss exposure information. Due to the heightened possibility of a supply and labor crunch in the aftermath of a natural disaster that causes widespread property damage in a region, risk managers and property owners may consider the value of entering into agreements with building contractors in advance to ensure the availability of construction materials and services at that time. To assure more comprehensive underwriting of a building’s replacement value, more frequent and in-depth property damage risk appraisals from qualified sources are needed. Such appraisals should occur on an annual basis at a minimum and consider the impact of more frequent catastrophic weather events, potential supply chain disruptions and rising inflation in valuing replacement costs. In turn, this information gives risk managers and property owners a clearer sense of the risk their organizations can bear and how much should be transferred to property insurers and reinsurers. In analyzing property values, an insurer’s loss control staff can be a resource. In this regard, the industry should consider upgrading loss prevention services provided to commercial property owners.

We’re confident an industry-led approach to these myriad challenges will be to the betterment of all parties. Bob Meyer is Executive Vice President, North America Property. Matt Booker is Executive Vice President, Westchester Property. Derek Talbott is Senior Vice President, Chubb Group Division President North America Property. About Westchester

Westchester is one of the largest and most diverse excess and surplus lines commercial property and casualty insurance underwriters in the United States. Focused on the wholesale distribution channel, Westchester provides innovative specialty products for property, specialty casualty, environmental, financial lines, inland marine, product recall, small business, and programs. The business is further distinguished by exceptional financial strength, underwriting excellence, and superior claims handling expertise. Westchester is a division of Chubb, the world’s largest publicly traded property and casualty insurer. With operations in 54 countries, Chubb provides commercial and personal property and casualty insurance, personal accident and supplemental health insurance, reinsurance and life insurance to a diverse group of clients. Parent company Chubb Limited is listed on the New York Stock Exchange (NYSE: CB) and is a component of the S&P 500 index. Chubb maintains executive offices in Zurich, New York, London, Paris and other locations, and employs approximately 31,000 people worldwide. Additional information can be found at: www.chubb.com

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COMMERCIALPROPERTY (1)The Construction Association. Prices for key construction materials continue to increase in August while contractors struggle to get those products delivered on time. Sept. 10, 2021 (https://www.agc.org/news/2021/09/10/prices-keyconstruction-materials-continue-increase-august-whilecontractors) (2)The Washington Post, Prices climbed 7percent in December compared with last year, largest rise in nearly four decades as inflation spreads through economy. Jan. 12, 2022 (3)World Meteorological Organization. State of Climate in 2021: Extreme events and major impacts. Oct. 31, 2021. (4)NOAA National Centers for Environmental Information, Billion Dollar Weather and Climate Disasters, Oct. 8, 2021. (5)E.g., Swiss Re, Global Catastrophe Half-Year 2021 Report. (6)Guy Carpenter (Marsh & McLennan). Ida Drives Big Share of 3Q Insured Losses. October 8, 2021. (7)Business Insurance. “Flurry of litigation likely in wake of Texas storm power outages. Feb. 23, 2021. (8)Ibid. (9)New York Times. “After the Flood, It’s Not Just `About the Coming Back.” Nov. 8, 2021. (10)Guy Carpenter (Marsh & McLennan). Ida Drives Big Share of 3Q Insured Losses. October 8, 2021. (11)AccuWeather. Death toll climbs from one of the costliest tornado events in history. Dece,ber 14, 2021. (12)The Mercury News (citing Wells Fargo analysts). “Lumber prices soar.” May 17, 2021. (13)Fortune. “Steel Prices are up 200%.” July 8, 2021. (14)CNBC. “Toll Brothers CEO says lumber prices coming back down to offset some other cost increases.” Aug. 25, 2021. (15)Commercial Property Executive (citing JLL Construction Outlook). “Construction Costs Will Keep Rising. Here’s How much.” Oct. 7, 2021. (16)Florida Realtors. “Lumber Prices Plummet—But Other Building Costs Soar. Aug. 27, 2021. (17)ABC News. “The Construction Industry Needs to Hire and Additional 430,000 Craft Professionals in 2021.” March 23, 2021. (18)CNN Business (citing Associated Builders and Contractors). “America desperately needs 1 million more construction workers.” July 11, 2021. (19)Chief Executive. How companies are taking on supply chain disruption. Sept. 13, 2021. (20)New York Times. “How the Supply Chain Broke, and Why It Won’t be Fixed Anytime Soon.” Oct. 22, 2021.

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Continued from page 44 (21)Fitch Ratings. “Ongoing Supply-Chain Issues to Constrain US Building Products Sales.” Sept. 17, 2021. (22)Fitch Ratings. Inflation, Rising Rates Fuel Downside Risk for US P/C Insurers. Oct. 28, 2021. (23)Ibid. (24)Inside P&C. Insured values in the property market still 30 percent to 50 percent undervalued: Icat CUO. Nov. 23, 2021. (25)Insurance Information Institute. Hurricane Andrew and Insurance: The Enduring Impact of an Historic Storm. August 2012. (26)Wikipedia. List of costliest Atlantic hurricanes. Dec. 21, 2021.

CORNER

WEBSITE ADA COMPLIANCE

Over the last few years, attorneys have been targeting small businesses and their websites for not being “ADA-Compliant.” Title III of the Americans with Disabilities Act (ADA) requires that businesses and nonprofit service providers make accessibility accommodations to enable the disabled public to access the same services as clients who are not disabled. This includes electronic media and websites. While the ADA applies to businesses with 15 or more employees, even smaller companies can benefit from ensuring their websites are ADA-compliant. Doing so opens your company up to more potential clients and limits liability. Web developers should include ADA-compliant features in the original site and application plans. We recommend you click through and read the information at the Additional Resources below to educate yourself on ADA website compliance issues and make sure you take steps to protect yourself from a frivolous lawsuit.

Additional Resources Forge3 is a firm that creates agency websites. They recently published an extensive resource guide for agencies. Agency Revolution also recently published an article on How Website Accessibility Helps Grow Your Business. How to use Amazon web service’s Amazon Polly to automatically add audio to your website. Neilson Marketing Services has an ADA-Compliant Service that can be added to your existing website. Agents Council for Technology (ACT) created an ADA FAQ page with background and links.

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LOUISIANAAGENT

IIABL EDUCATION FEB 2022 CALENDAR OF EVENTS SUNDAY

Jan 30

MONDAY

TUESDAY

Feb 1

LIVE WEBINAR! 8-9a Condos & How to Insure Them

WEDNESDAY

12-2p Workers' Comp: 5 Mistakes Every Agent Makes

LIVE WEBINAR! 12-3p Agent's E&O Duties, Best Practices, Operations, Workflows, & Certificates

LIVE WEBINAR! 12-3p Flood Insurance, FEMA, & the NFIP

LIVE WEBINAR! 8-10a How to Understand Commercial Property Underwriting & Cope 1-2p Homeowners Loss Settlement Issues

8-11a That's Personal: Home & Auto Exposures Your Insured Doesn't Share (& Why That's Bad)

LIVE WEBINAR! 12-3pm Lurking: Surprises in the contractor's CGL Policy & Endorsements to Watch Out For

10a-12p ISO's 2022 Homeowners' Changes

Mar 1

LIVE WEBINAR! 1-2p Additional Insured Endorsements for Contractors 10a-12p Properly Calculating & Insuring the Business Income Exposure 2-4p Why Cert of Ins... Just Why? IIABL's Grand Slam Event Reception & Baseball Game

LIVE WEBINAR! 1-2p Insurance Issues for the Commercial Tenant

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& EVENTS THURSDAY

FRIDAY

SATURDAY

LIVE WEBINAR! 8-11a Homeowners in Real Life: Tales of Claims & Coverage 12-3p Is This Stuff For Real? Understanding & Insuring Emerging Risks

1-3p Why Business Income is the MOST important Prop Coverage

29 5

IIABL CE ON DEMAND E&O Risk Management Ethics Flood Commercial Lines Courses Personal Lines Courses Professional Development

OTHER EDUCATIONAL RESOURCES

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IIAGNOUPDATE 2022 Events March 24 April August October December

BBQ Social Golf Tournament Town Hall Meeting Company Appreciation Event Past Presidents Christmas Luncheon

We are in the process of planning our calendar for 2022. We can't wait to see all of our IIAGNO members! More information will be released soon!

IIABRUPDATE 2022 Events May 5 Top Golf Event September 8 Luncheon November 10 Fall Social We are in the process of planning our calendar for 2022. We can't wait to see all of our IIABR members! More information will be released soon!

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ADVERTISER INDEX COMPANY

PAGE

Accident Fund Insurance Company of America

Agile Premium Finance

Allied Trust Insurance Company

Amerisafe

AmTrust North America

AmWINS Access Home Insurance Company

Berkshire Hathaway GUARD Insurance Company 42 Burns & Wilcox Ltd.

Commercial Sector Insurance Brokers

EMC Insurance

FCCI Insurance Group

Foremost Insurance Group

Forest Insurance Facilities

The Gray Insurance Company

Homebuilders Self Insurers Fund

Imperial PFS

Iroquois

Lane & Associates, Inc.

LCI Workers' Comp

Lighthouse Property Insurance Group

LUBA

LWCC

National General

Progressive

RISCOM

RPS/Risk Placement Services

SafePoint Insurance

Stonetrust

Summit

United Fire Group

UPC Insurance

Wright Flood

2022

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INDUSTRY PARTNERS

LOUISIANAAGENT

GOLD LEVEL PARTNERS

SILVER LEVEL PARTNERS

BRONZE LEVEL PARTNERS Accident Fund Insurance Company of America

Gulf States Insurance Company

Allied Trust Insurance Co.

Homebuilders SIF

Berkshire Hathaway GUARD Insurance Companies

Iroquois South, Inc.

Commercial Sector Insurance Brokers

Lane & Associates, Inc.

EMC Insurance Companies

LUBA Workers' Comp

FCCI Insurance Group

RPS/Risk Placement Services

Foremost Insurance Group

Summit Consulting, Inc.

Forest Insurance Facilities

Wright Flood

Partners as of January 31, 2022

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LOUISIANAAGENT

IIABL 2021-2022

BOARD OF DIRECTORS & OFFICERS PRESIDENT, DONELSON P. STIEL David H. Stiel, Jr. Agency - Franklin PRESIDENT-ELECT, MICHAEL SCRIBER Scriber Insurance - Ruston SECRETARY-TREASURER, ARMOND K. SCHWING Schwing Insurance Agency, Inc. NATIONAL DIRECTOR, JOHNNY BECKMANN, III Assured Partners - Metairie PAST PRESIDENT, BRENDA CASE Lowry-Dunham, Case & Vivien - Slidell YOUNG AGENT REPRESENTATIVE, BRITTNI LAGARDE Southern Insurance Agency - New Orleans ANN BODKIN-SMITH Thomson Smith & Leach Insurance Group - Lafayette MATTHEW DEBLANC Continental Insurance Services - Marrero ROB W. EPPERS Risk Services of Louisiana - Shreveport MATT GRAHAM Lincoln Agency - Ruston CHRISTOPHER S. HAIK Haik Insurance Holdings, LLC - Lafayette STUART HARRIS McClure, Bomar & Harris, LLC - Shreveport ROSS HENRY Henry Insurance Service, Inc. - Baton Rouge BRET HUGHES Hughes Insurance Services, LLC - Gonzales CHARLES H. LEBLANC Bourg Insurance Agency, Inc. - Donaldsonville LYDIA MCMORRIS Alliant Insurance Services - Baton Rouge A. EUGENE MONTGOMERY, III Community Financial Insurance Center, LLC - Monroe JOE KING MONTGOMERY Thomas & Farr Agency, Inc. - Monroe HARTWIG "ROBBY" MOSS, IV Hartwig Moss Insurance - New Orleans PAUL R. OWEN John Hendry Insurance - Zachary ROBERT LOUIS PALMER Insurance Underwriters, Ltd. - Metairie MARTIN "TEENY" PERRET Quality Plus - Lafayette ROBERT G. RIVIERE Riviere Insurance Agency - Thibodaux ROBERT STONE Stone Insurance, Inc. - Metairie