Insurance Journal West 2023-08-07

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Opening Note

Chairman of the Board Mark Wells | mwells@wellsmedia.com

Chief Executive Officer Joshua Carlson | jcarlson@insurancejournal.com

ADMINISTRATION / CIRCULATION

Congratulations Top 100 Agencies

This year marks the 19th annual publication of Insurance Journal’s Top 100 Independent Agencies special report. One significant trend — the vast majority of firms (84 firms) in the Top 100 saw notable increases in total property/casualty revenue from 2021 to 2022. (See page 32.)

This year’s Top 100 welcomes seven newcomers to the list: Beehive Insurance Agency Inc; Guaranteed Rate Insurance LLC; Hausmann Group; King Insurance Partners; Morris & Garritano; Wallace Welch & Willingham Inc.; and Watkins Insurance Group.

While the list added new agencies, there were six agencies that fell off the ranking due to acquisitions, including: Burnham WGB Insurance Solutions and Westwood Insurance Agency (both now part of BRP Group Inc.); Confie (now part of Alliant Insurance); Haylor Freyer & Coon (now part of Alera Group); M&T Insurance Agency Inc. (now part of Gallagher); and York International Agency (now part of IMA).

And what about the Future Top 100? While the following agencies didn’t make the cut in 2023, their total property/casualty revenue came very close. Special mention goes out to the following agencies:

• Dean & Draper Insurance Agency LP

• Mackoul Risk Solutions LLC

• Connor & Gallagher OneSource

• BKCW Insurance

• Riemer Insurance Group Inc.

Insurance Journal’s Top 100 report would not be possible without the willing participation of all of the agencies, brokerages and agency groups that have shared their information over the years.

All information in this report is gathered from voluntary online submissions and best estimates based on other public information sources.

We thank the many agencies that have contributed and invite others that have never submitted information for the report to consider it next year. Be proud of what you have accomplished.

For questions, comments or criticisms, write to us at Insurance Journal. And congratulations to this year’s top agencies!

Chief Financial Officer Terry Freeburg | tfreeburg@wellsmedia.com

Circulation Manager Elizabeth Duffy | eduffy@wellsmedia.com

Staff Accountant Sarah Kersbergen | skersbergen@wellsmedia.com

EDITORIAL

V.P. of Content Andrea Wells | awells@insurancejournal.com

Executive Editor Emeritus Andrew Simpson | asimpson@wellsmedia.com

National Editor Chad Hemenway | chemenway@insurancejournal.com

Southeast Editor William Rabb | wrabb@insurancejournal.com

South Central Editor/Midwest Editor Ezra Amacher | eamacher@insurancejournal.com

West Editor Don Jergler | djergler@insurancejournal.com

International Editor L.S. Howard | lhoward@insurancejournal.com

Content Editor Allen Laman | alaman@wellsmedia.com

Assistant Editor Jahna Jacobson | jjacobson@insurancejournal.com

Copy Editor Stephanie Jones | sjones@insurancejournal.com

Columnists & Contributors

Contributors: Fatima Dean, Joe Guerrero, Chris Lack, Jim Sams

Columnists: Anita Nevins, Mary Newgard, Catherine Oak, Michael White

SALES / MARKETING

Chief Marketing Officer

Julie Tinney | jtinney@insurancejournal.com

West Sales Dena Kaplan | dkaplan@insurancejournal.com

Romeo Valdez | rvaldez@insurancejournal.com

Kelly DeLaMora | kdelamora@wellsmedia.com

South Central Sales Mindy Trammell | mtrammell@insurancejournal.com

Southeast and East Sales (except for NY, PA, CT)

Howard Simkin | hsimkin@insurancejournal.com

Midwest Sales

Lisa Whalen | (800) 897-9965 x180

East Sales (NY, PA and CT only)

Dave Molchan | (800) 897-9965 x145

Advertising Coordinator Erin Burns | eburns@insurancejournal.com

Insurance Markets Manager

Kristine Honey | khoney@insurancejournal.com

Sr. Sales & Marketing Coordinator

Laura Roy | lroy@insurancejournal.com

Marketing Administrator

Alberto Vazquez | avazquez@insurancejournal.com

Marketing Director Derence Walk | dwalk@insurancejournal.com

DESIGN / WEB / VIDEO

V.P. of Design

Guy Boccia | gboccia@insurancejournal.com

Web Team Lead

Josh Whitlow | jwhitlow@insurancejournal.com

Ad Ops Specialist Jeff Cardrant | jcardrant@insurancejournal.com

Web Developer Terrance Woest | twoest@wellsmedia.com

Web Developer

Jason Chipp | jchipp@wellsmedia.com

V.P. of New Media

Bobbie Dodge | bdodge@insurancejournal.com

Videographer/Editor Ashley Waldrop | awaldrop@insurancejournal.com

ACADEMY OF INSURANCE

Director Patrick Wraight | pwraight@ijacademy.com

Online Training Coordinator

George Jack | gjack@ijacademy.com

Andrea Wells Vice President, Content

Insurance Journal’s Top 100 report would not be possible without the willing participation of all of the agencies, brokerages and agency groups that have shared their information over the years.

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News & Markets

Auto Claims Inflation Speeds Ahead of Premium Increases

Insurance claims inflation has risen faster than the underlying consumer price index (CPI), outpacing auto insurance premium increases, according to a new study, Auto Insurance: The Uncertain Road Ahead, by the American Property Casualty Insurance Association (APCIA).

The national trade association for home, auto and business insurers added that the combination of rapidly increasing overall economic inflation and claims inflation has driven up auto insurance losses and combined ratios.

Miles driven haven’t gone back to pre-pandemic numbers and is unlikely to do so, according to APCIA research, due to high gas prices and continued work-fromhome employer policies.

Despite fewer miles driven, U.S. private passenger vehicle damage claim severity (the average cost per claim for property damage liability and collision) increased nearly 50% from 2018 to 2022, the study found, impacted by rising auto repair and labor costs, inflation and theft rates.

Over the same period, average bodily injury claim severity increased 40%, reflecting an acceleration in medical inflation, legal system abuse and a sharp increase in deadly motor vehicle accidents, the report stated.

“In addition to inflation trends, the private passenger auto insurance sector is also experiencing several other trends, such as increased

frequency and severity of claims cost, riskier driving behavior by the public, cost increases for medical and hospital services, and outsized growth in lawsuit verdicts and legal system abuses, that are negatively impacting and pressuring the industry with increased losses,” said Robert Passmore, department vice president for APCIA and co-author of the paper.

APCIA found that losses on underwriting in 2022 for private U.S. property/ casualty insurers were $25.6 billion, more than double the losses in 2021 and the worst result since 2011.

The aggregate net worth of the U.S. property/casualty insurance industry — the financial cushion to absorb unexpectedly high claims costs, investment losses and catastrophe and weather events — fell by $73.1 billion in 2022. The 6.9% drop from year-end 2021 was the largest percentage decline since the “Great Recession” year of 2008, the study noted.

Individual lawsuit verdicts have increased substantially along all lines, “fueling lawsuit inflation,” the report found.

Private passenger auto insurance experienced the highest direct loss ratio among major lines of business at 80.2% (excluding loss adjustment expenses) in 2022 — an increase of 12.2 points from 2021 and 24.1 points from 2020.

Personal auto premiums increased 6% for the year, “far below the 24% rate of escalating losses,” the report stated.

The study found that auto repair and maintenance costs rose 2% in June 2022, the largest increase in nearly 50 years. Vehicle complexity is one reason for the increased costs, the report added.

“All indicators suggest elevated auto repair and replacement costs will stretch well into 2023 and potentially beyond,” Passmore said. “Medical inflation is also accelerating. Although insurers continue to monitor the situation closely, as claim costs continue to rise, insurers may be forced to pass these loss costs along to policyholders.

“Given the trends, insurers are strongly encouraging drivers to minimize their risk by avoiding risky driving behaviors that may result in a loss. Insurers are also advocating for better infrastructure, including reliable supply chains for critical auto parts and safer roads, which should result in fewer accidents and lower claims costs that help keep insurance premiums affordable for consumers.”

News & Markets

Connecticut Agent’s Failure to Disclose Dog Comes Back to Bite Homeowner

By Andrew G. Simpson

AConnecticut homeowner who is being sued by a woman who alleges his dog bit her in the face is not entitled to insurance coverage because his home insurance application, which was completed by his insurance agent, indicated he did not have a dog.

Providence Mutual Fire Insurance Co. declined to defend Waterbury resident Antonio Laires against the dog bite lawsuit on the grounds that the policy was voided because the misrepresentation regarding the dog was material. Had it known he had a dog, the insurer said it would not have issued the policy.

Laires told the court that the application was completed by his insurance agent, and he was unaware that the application indicated that there were no animals at the premises when he electronically signed it. Because he was unaware that the application was inaccurate, he did not knowingly fail to disclose any material facts, Laires argued.

U.S. District Judge Kari A. Dooley in Connecticut granted Providence Mutual summary judgment, holding that the insurer has neither a duty to defend nor to indemnify because of the material misrepresentation. The judge also found that the homeowner had a responsibility to read the policy that his agent procured before signing it.

Dooley’s ruling does not suggest or offer any opinion as to whether Laire’s allegations implicate liability for the insurance agent with respect to his duties to Laire.

Providence Mutual’s policy said the insurer would not provide coverage to an insured who concealed or misrepresented any material fact or circumstance; engaged in fraudulent conduct; or made materially false statements relating to insurance.

Under the policy, a material representation is one where, had the insurer known the truth, it would not have issued coverage.

In Connecticut, the judge noted, an insurer has a right to rescind coverage for a material misrepresentation in an insurance application if it is not an innocent misrepresentation, but one “known by the insured to be false when made.”

Providence Mutual said that when an insured indicates there is an animal or exotic pet kept on the premises, it sends the applicant a questionnaire seeking more information about the animal or pet. Whether to issue a policy and what premiums to charge depend on the answers received.

The question on the application asked whether there were any animals or exotic pets kept on the premises, to which the application indicated, “N,” or “no.”

Laires told the court that he did not knowingly make such a misrepresentation because his insurance agent filled out the application and did not supply him with the entire document.

Judge Dooley was not persuaded by his story.

“Under Connecticut law a person may

not claim that a misrepresentation is innocent solely because the person failed to read the application before signing it. The law requires that the insured shall not only, in good faith, answer all the interrogatories correctly, but shall use reasonable diligence to see that the answers are correctly written,” she wrote, citing past cases.

Moreover, the judge found his argument that his broker is responsible for the inaccuracy to be without merit. “An insurance broker is the agent of the insured in obtaining an insurance policy. As such, the broker owes a duty of care to the principal,” she noted.

The insurance agent signed the application, attesting that he was Laire’s authorized representative, and that he made a reasonable inquiry to procure the answers to the questions. The essence of the agency relationship is the “manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other to so act,” the opinion concluded.

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Declarations

P/C Underwriting Losses

“Dismal first-quarter 2023 direct incurred loss ratios in the homeowners and private auto business suggests a repeat of 2022, when highly favorable underwriting results in the commercial lines were more than offset by the personal lines losses.”

— Explained Tim Zawacki, principal research analyst, S&P Global Market Intelligence (S&P GMI) in S&P’s 2023 U.S. P&C Insurance Market Report, which sees the property/casualty insurance market heading for a second straight year of underwriting losses. The report estimates a combined ratio of 100.8 for 2023, down from the calendar-year 2022 result of 102.6, but above the profitability threshold of 100.

Alleged ‘Conspirators’

“They were the conspirators, even if they don’t want to admit it.”

— Civil rights attorney Ben Crump at a news conference announced a lawsuit seeking unspecified financial damages against tech and social media giants like Facebook, Amazon and Google. The suit alleges the companies bear some responsibility for radicalizing the shooter who killed 10 Black people in May 2022 at a Buffalo, New York, supermarket. The suit says Payton Gendron was fueled by racist conspiracy theories he encountered online. He was sentenced in February to a life sentence without parole.

Nuclear Waste

“We are a national sacrifice zone.”

— Dawn Chapman of the activist group Just Moms STL — a group pushing for cleanup and federal buyouts in an area near the St. Louis, Missouri, airport — says the region paid a terrible cost with its work on the U.S. nuclear program. The Associate Press reported it reviewed documents showing federal government and companies responsible for nuclear bomb production and atomic waste storage sites in the St. Louis area in the mid- 20th century were aware of health risks, spills, improperly stored contaminants and other problems but often ignored them.

Orange Sky at Night

“We looked up in the sky and the whole sky was lit up orange.”

— Kenneth Haydel told the Associated Press he was with family members near a Baton Rouge, Louisiana-area chemical plant when they heard several loud explosions a few seconds apart. Late on July 14, flames erupted at a Dow Chemical plant on the Mississippi River near Plaquemine triggering explosions that shook homes several miles away and sent flames and smoke billowing into the air. The fire reportedly started in an area of the plant that handles ethylene oxide, a flammable and toxic chemical.

Drinking and Driving

“It’s OK to drink if you want to and it’s OK to drive if you want to, but not both at the same time.”

— South Carolina Gov. Henry McMaster said upon signing a bill requiring people with multiple DUI convictions to spend up to one year driving with an ignition interlock, a device that confirms no measurable alcohol levels exist before a driver can operate their vehicle. The AP reported the state has some of the highest rates of deadly impaired driving in the country. The new law is effective for offenders registering a .08 blood alcohol content or higher.

Snap, Crackle, Pop

“You can actually hear the snap, crackle and pop every minute when you’re there as each home is shifting, is moving.”

— Said Janice Hahn, chair of the Los Angeles County Board of Supervisors, who represents the Palos Verdes Peninsula-area where a mid-July landslide tore apart luxury homes, leaving a confused jumble of collapsed roofs, shattered walls, tilted chimneys and decks dangling over an adjacent canyon. Twelve homes were initially red-tagged as unsafe, and residents were given just 20 minutes to evacuate, the AP reported.

Figures

$3.5 Million

$800

Billion

The value of potential losses landlords of office buildings in major cities worldwide may be facing by 2030 from post-pandemic changes in employment trends, according to a report by McKinsey Global Institute. The report modeled the impact of the declining need for office space due to the push for hybrid and remote work on valuations in nine cities globally.

$141

The amount patients spent on medical marijuana in Arkansas from January through June of this year, according to the Arkansas Department of Finance and Administration, which says the state is on track to set a new sales record this year. Those dollars bought a little more than 29,000 pounds of marijuana, state officials said. Medical marijuana sales totaled $134 million in the first six months of 2022.

Penske Truck Leasing Co. will pay a civil penalty of up to $3.5 million for alleged fraudulent safety and emissions inspections on fleet trucks and trucks it rented for commercial use, according to Massachusetts Attorney General Andrea Joy Campbell. The AG’s office said the settlement with Penske, and six of its inspectors, is for allegedly issuing passing inspection certificates on 189 heavy-duty trucks. Most of the inspections took place at its New Bedford facility. Penske has admitted no wrongdoing and maintains that its inspections were “properly and safely conducted.”

1.3 Million

The number of policies in force at Florida’s insurer of last resort, Citizens Property Insurance Corp., as of mid-July, making it the largest property insurer in the state. The Florida Office of Insurance Regulation revealed that number as it reminded carriers of the July 28 deadline to participate in the November round of takeouts from Citizens. The takeouts are part of Citizens’ statutorily mandated depopulation plan, designed to push more insureds back to the private market.

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Business Moves

1985. Mark Boston will serve as a personal lines senior risk consultant and will work alongside Dan Heinze Jr., vice president of Community Business.

In June, Wichita-based Richey Health Benefits, a full-service employee benefits insurance agency, joined Conrade. Robert Richey will continue at Conrade as an employee benefits consultant, as will Tammy Minihan, as an employee benefits account manager, and Rebecca Outland, as an employee benefits service advocate.

Marsh McLennan Agency, Trideo Systems

National

World Insurance Associates, Schlegel & Schlegel Insurance Brokers, Shield Insurance Services

Insurance broker World Insurance Associates has acquired the business of Schlegel & Schlegel Insurance Brokers Inc. of West Yarmouth, Massachusetts.

Schlegel & Schlegel has been providing home, auto and business insurance to customers in Massachusetts since 1972. Paul Schlegel is the agency owner. The firm has four additional agents and two customer service representatives.

WIA also has acquired the business of Shield Insurance Services of Freehold, New Jersey.

Shield specializes in commercial insurance to the transportation sector, with a particular focus on the moving and storage industry. Jose Caraballo is president of Shield.

World Insurance Associates is headquartered in Iselin, New Jersey.

East Arthur J. Gallagher, The Andersen Group

Global insurance broker Arthur J. Gallagher & Co. acquired Chantilly, Virginia-based The Andersen Group.

The Andersen Group is a retail insurance agency serving non-profit trade associations, government contractors and engineering services companies in the greater Washington, D.C., area.

Arthur J. Gallagher & Co. is headquartered in Rolling Meadows, Illinois.

Midwest

Risk Strategies, First Insurance Group Risk Strategies and Premier Financial Corp. announced that Risk Strategies has acquired Ohio-based First Insurance Group from Premier Financial Corp., a community banking and financial services holding company based in Defiance, Ohio.

First Insurance Group, founded in 1946, offers custom insurance placement services for commercial and personal property and casualty, health, life and employee benefits, as well as fee-based consulting services for employee benefits programs and a variety of related services.

Conrade Insurance Group, The Hawkins Group, Boston Insurance, Richey Health Benefits

Newton, Kansas-based Conrade Insurance Group (CIG) completed three business acquisitions during the first half of 2023.

In January, Wichita, Kansas-based The Hawkins Group, including Agency Principal Daniel Hawkins and Employee Benefits Consultant Hannah Hawkins, joined Conrade Insurance Group.

Specializing in group employee benefits, The Hawkins Group brings decades of experience in employer sponsored group health plans, as well as a full offering of ancillary and voluntary employee benefit plans, to the combined firm.

In April, Boston Insurance, led by Mark Boston, joined the group. Boston has been a fixture in the Newton, Kansas, property/ casualty insurance community since

Marsh McLennan Agency, a subsidiary of Marsh, has acquired Arlington Heights, Illinois-based Trideo Systems, a risk management information system (RMIS) provider for health care organizations.

Founded in 2008, Trideo’s RMIS platform enables health care clients nationwide to efficiently manage risk from its inception as an adverse event, to its eventual resolution through the claims process, saving time through improved collaboration on its secured unified platform.

All Trideo employees, including its Co-Founder and Senior Vice President Paresh Purohit, will join Marsh McLennan Agency and work out of the Schaumburg, Illinois, office.

Southeast

Oakbridge Insurance Agency, JHA Risk Management

Georgia-based Oakbridge Insurance Agency has acquired JHA Risk Management in North Carolina.

JHA, based in Rocky Mount, specializes in personal and commercial property/ casualty insurance, along with surety bonds, employee benefits, construction and education coverage.

JHA, founded more than 100 years ago, will maintain its office in North Carolina. Paul Bauer is president.

Hub International, Golden Corner Wealth Advisors

Hub International Ltd., an insurance brokerage and financial services firm, has acquired Golden Corner Wealth Advisors

in Seneca, South Carolina.

Golden Corner, owned by Golden Green Inc., is a financial advisory firm that coaches clients on investments, planning and insurance. Founder Jim Charbonneau and his team will join Hub Carolinas.

Chicago-based Hub’s retirement and private wealth practice includes several registered investment advisory affiliates.

West

NFP, Presidio Financial Services Corp.

NFP acquired Presidio Financial Services Corp. in Westlake Village, California.

Presidio is an independent insurance brokerage that provides products tailored for physicians, doctors, healthcare facilities and healthcare professionals.

Gisela Plazas, Presidio’s founder and CEO, will be joining NFP and working with Scott Foster, NFP’s Healthcare & Life Sciences Specialty practice leader.

NFP is a property/casualty broker,

benefits consultant, wealth manager, and retirement plan advisor.

NSM Insurance Group, Shield Commercial Insurance Services

NSM Insurance Group acquired Shield Commercial Insurance Services in Palm Desert, California.

Shield specializes in insurance solutions for the general contractor and construction liability space. Shield is focused on underwriting business for small and mid-sized contractors, offering coverages for general liability, excess liability, workers’ compensation, inland marine, and contractors professional and pollution liability.

NSM is a specialty insurance provider focused on building insurance programs.

Higginbotham, Cress Insurance Group

Higginbotham acquired Cress Insurance Group in Albuquerque, New Mexico.

Higginbotham and Cress Insurance Group will come together to enhance ser-

vice to the group’s 2,500 clients and serve a broader customer base in New Mexico.

Cress Insurance Group President Tom Cress will continue guiding the agency as managing director.

Cress Insurance Group is an independent commercial and personal property/ casualty insurance and employee benefits agency locally owned since 1984.

Higginbotham, an employee-owned firm, is based in Fort Worth, Texas.

Arthur J. Gallagher, Benchmark Commercial Insurance Services

Arthur J. Gallagher & Co. acquired Carlsbad, California-based Benchmark Commercial Insurance Services.

Benchmark is a retail insurance agency offering commercial and personal risk management and insurance services to business owners in San Diego and the surrounding area.

Robert Cohen and his team will remain in their current location.

People

National

Frank Romeo joined Axis Capital Holdings Limited to lead the company’s entry into the U.S. marine cargo insurance market.

Based in New York, Romeo is responsible for building the program and identifying growth opportunities, with a targeted product launch in the second half of 2023. He has more than 15 years of underwriting experience across U.S. and multinational programs at major global carriers.

Romeo joins Axis from AIG. Jersey City, New Jerseybased Verisk named Samantha Vaughan chief privacy officer.

Vaughn joins Verisk from Dell Technologies, where she was the managing director and global head of privacy legal. Previously, she worked for Prudential Financial, AIG and Selective.

Jared Pelissier joined Alliant Insurance Services as senior vice president, managing director, Alliant Specialty.

He will apply his expertise to expand Alliant’s reach within the technology sector on the West Coast and nationwide.

The addition of Pelissier also broadens the reach and influence of Alliant’s D&O liability practice. His professional experience within the D&O, cyber and property/casualty markets has focused on many Alliant client verticals.

WTW appointed Juan Mascaro as hospitality segment leader, a part of the Real Estate, Hospitality, and Leisure Division within Corporate Risk and Broking (CRB), North America.

Mascaro has more than two

decades of insurance industry experience in underwriting, marketing, and client service roles.

Mascaro joins WTW from Sompo International.

K2 Financial, a business unit of K2 International and part of K2 Insurance Services LLC (K2), appointed Kevin Leach as senior vice president and founder of K2 Financial’s U.S. operation.

Leach formerly was vice president, financial institutions leader at The Hanover Insurance Group, and deputy regional head, financial institutions North America, at Allianz Global Corporate & Specialty.

Liberty Mutual Insurance, based in Boston, Mass., appointed Ben Johnson president of field operations and marketing, Global Risk Solutions (GRS) North America. Johnson will lead a national team of field executives and the marketing and distribution strategy teams. He recently held roles at Ironshore, Liberty Mutual’s wholesale-focused specialty and excess surplus brand.

Fusion Specialty, the global boutique M&A and specialty insurance services group, promoted Michael Federer to the role of CEO, Fusion Specialty North America.

Federer was previously managing partner, sales and distribution, M&A. He has more than 18 years of combined experience as a corporate attorney focused on M&A

deals, and as an M&A insurance underwriter.

Everest Re Group appointed FBI cyber veteran Don Good as chief information security officer.

Good will lead all aspects of Everest’s information security, overseeing the programs, policies, and operations to safeguard the company’s data, systems, and digital assets.

Good has more than three decades of cybersecurity, fraud prevention and risk management experience across complex global technology environments.

John B. Berding has been elected president of American Financial Group Inc.

He will continue to serve as president of American Money Management Corp. (AMMC), AFG’s subsidiary providing investment management services to AFG, its insurance subsidiaries and certain third-party investment entities.

The position of president was previously held by Carl H. Lindner III and S. Craig Lindner, who will continue to serve as AFG’s co-chief executive officers.

East

Lockton hired Chuck Jainchill as its U.S. cyber and technology product leader.

Jainchill joins Lockton after 16 years at AIG, where he most recently served as the global cyber product development

leader. Before that role, he was the division counsel of the professional liability division for AIG financial lines.

Jainchill is based in New York.

The MEMIC Group, headquartered in Portland, Maine, hired underwriters Julie M. Smith in the Southeast and Jeremy Card in New England.

Senior Production Underwriter Smith joined MEMIC in May. Her background and experience in insurance includes multi-line commercial underwriting for national and regional carriers, as well as agency sales and marketing management.

Production Underwriter Card joined MEMIC in April, bringing more than a decade of experience with him from the agency side.

Midwest HOMELINK, headquartered in Waterloo, Iowa, appointed John Unsen as senior vice president of systems.

Most recently, Unsen served as vice president of systems for VGM Insurance and previously as director of operations at VGM Forbin.

MJ Insurance, headquartered in Indianapolis, Indiana, named Leigh Crick as senior vice president of people and culture. Crick has nearly 20 years of experience leading HR functions, including roles as chief human resources officer at Vista Verde Dental Partners and at Hopebridge.

Andy Harter joined Iroquois

Don Good

Kevin Leach

John B. Berding

John Unsen

Mid-Atlantic, headquartered in Midlothian, Virginia, as regional manager, servicing agents in Ohio. Harter most recently served as a marketing rep for Grange Insurance from his home in Gahanna, Ohio.

Andrew (AJ) Donaldson has been named an account administrator within Chicago, Illinois-based RT Specialty ’s Environmental and Construction Professional Practice (RT ECP).

Prior to joining RT ECP, Donaldson held positions at CROPP Cooperative/ Organic Valley in Cashton, Wisconsin, and Happy Valley Farm in Black Earth, Wisconsin. He is based in Janesville, Wisconsin.

Powers Insurance & Risk Management, headquartered in St. Louis, Missouri, hired Giovanni “Johnny” Favazza as commercial lines risk management advisor.

Prior to joining Powers, he worked as a senior account executive at Goosehead Insurance Agency. He previously served as an associate for a California-based investment advisory firm, Westshore Wealth.

Ryan Specialty, headquartered in Chicago, Illinois, appointed Dawn D’Onofrio as chief executive officer and Brian Alvin as chief actuary and chief underwriting officer of Ryan Specialty National

Programs (NSP).

D’Onofrio will continue her duties as CEO of Ryan Specialty managing general underwriters WKFC, CorRisk and AgRisk, roles she has served since 2017.

Alvin will retain his role as chief actuary of WKFC, CorRisk and AgRisk. Before joining WKFC, CorRisk and AgRisk, Alvin served as actuarial director for Ryan Specialty.

South Central

Stephens Insurance LLC, an affiliate of Stephens Inc., hired Rich Krutsch as a senior vice president within the employee benefits division.

Krutsch brings more than 25 years of experience working within human resources and employee benefits functions at a large corporation with a national footprint.

He is based in Fayetteville, Arkansas.

Incline P&C Group, headquartered in Austin, Texas, appointed George Gorney as chief operating officer. He joins Incline from U.S. Risk Insurance Group, where he previously held the role of chief information officer and executive vice president of corporate shared services.

Southeast Retail insurance broker McGriff hired Rodney Ledford as the strategic growth officer for its Small Business and Personal Lines division.

He joins McGriff with 18 years of industry experience, most recently as vice president,

National Partners, for a global insurance carrier.

The Independent Insurance Agents of Georgia installed Woodstock agent Wendi Washowich as president.

Washowich is a client executive at Hamby and Aloisio Risk Management and Insurance in Atlanta and has been active in the IIAG for years.

Others elected to the IIAG board include President-Elect Jimbo Floyd; Vice President Jarrett Bridges; SecretaryTreasurer Robbie Moore; and National Director Andy Siegel

Stephens Insurance named Mark Green senior vice president, focused on cyber risk.

Green brings more than 20 years of experience in the insurance industry, most recently with McGriff, Seibels & Williams. Prior to McGriff, Green was an executive at Willis HRH.

He is based in Birmingham, Alabama.

West LP Insurance Services LLC, headquartered in Reno, Nevada, added Cole Thompson to its Las Vegas commercial lines team.

Thompson will work with commercial clients seeking insurance solutions and risk management services.

Before joining LP Insurance, Thompson was an agent at

Farmers Insurance in southern Nevada.

Kyle Gerdts joined Pinnacle Claims Management Inc., headquartered in Irvine, California, as vice president, sales and account management.

Gerdts joins from HealthComp, where he was director of sales with responsibilities for consultative sales and strategy.

BindDesk Insurance Services, headquartered in San Diego, California, named Robert Young president.

Young has more than 30 years of experience in the insurance industry. He led the startups of two wholesale operations, Magellan Insurance Services and Valiant Insurance Services. His most recent roles include vice president of business development, Midwestern Insurance Alliance, wholesale products division and vice president at Valiant Insurance Services LLC.

Sean Cooper has been named executive vice president and chief actuary at the Workers’ Compensation Insurance Rating Bureau of California, headquartered in Oakland, California.

Cooper has more than 30 years of experience and joined WCIRB in 2022 as executive vice president and deputy chief actuary. He succeeds Dave Bellusci, who has retired.

Andy Harter

Andrew Donaldson

Wendi Washowich

Rodney Ledford

Cole Thompson

Kyle Gerdts

Robert Young

Spotlight: P/C Insurers

Specialty P/C Insurers Outperform Their U.S. Peers: Report

By L.S. Howard

U.S. property/casualty insurers that focused on difficult to place risks distanced themselves from their peers in key metrics measuring earnings, underwriting profitability, balance sheet growth and other indicators of success, according to S&P Global Market Intelligence.

Kinsale Insurance Co., the Richmond, Virginia-based primary operating subsidiary of Kinsale Capital Group Inc., ranked as the top performing U.S. P/C insurer, said the S&P Global Market Intelligence rankings, an inaugural annual report that evaluates the performance of the top 100 net written premium writers in the U.S. for the previous year.

The report said four of the eight top performers specialize in excess and surplus lines (E&S) business: Kinsale Insurance, RLI Corp., W. R. Berkley Corp. and James River Group Ltd.

Kinsale writes a diversified mix of casualty, property and

professional lines business focused on small- and midsized business customers.

“Kinsale headed a list dominated by commercial lines writers in an outcome that reflects the highly favorable underwriting performance that industry segment delivered in 2022,” the report said. (See related chart).

“The U.S. commercial lines combined ratio of 94.4% for the calendar year was the best result since 2015, with profitability in the casualty lines, which accounted for a substantial majority of Kinsale’s premium volume, leading the way,” the S&P report continued.

“Specialty commercial insurers RLI Corp. and Great American Insurance (the name American Financial Group Inc. uses to conduct business) placed second and third, respectively,” the report said.

“Excess and surplus lines insurers, which focus on niche markets that require specialized underwriting expertise and risk-appetite, continue to

grow rapidly as they supply urgently needed property insurance capacity in coastal regions and remain leading providers of liability coverage for a wide range of unique risks,” said Tim Zawacki, principal research analyst at S&P Global Market Intelligence, in a statement accompanying the report.

“The U.S. Property and Casualty Insurance Performance Rankings, which gave several leading E&S carriers top marks for both growth and profitability, suggest that public and private investors’ recent enthusiasm for this business model has been wellplaced,” he added.

Personal Lines

The effects of inflation and natural catastrophes created one of the toughest environments in more than two decades for carriers focused on personal auto and homeowners insurance businesses, according to the section of the report covering personal lines, which “identifies those select

carriers that managed to defy unusually steep odds.”

“The Progressive Corp., placed as one of only three personal lines-focused entities in the top 50, outperformed peers in one of the most challenging operating environments in more than a generation in its core private-passenger auto business,” the report said, emphasizing that the industry’s personal lines combined ratio of 109.9% was the highest since 2001.

Progressive ranked No. 1 among the 32 personal lines-focused entities reviewed in terms of return-on-statutory equity and No. 2 in return-on-average assets. Its operating ratio ranked third among the personal lines-focused companies. Progressive also led its personal lines peers in asset growth and placed second in surplus growth.

“During a year in which the private auto combined ratio exceeded 112% likely for the first time since the 1980s on an industrywide basis, Progressive ascended to the No. 2 position in terms of private auto market share while at the same time outperforming many of its rivals from an underwriting profitability perspective. While Progressive’s GAAP combined ratio straddled management’s 96% benchmark in its two private auto channels, its statutory performance relative to personal lines peers in the key profitability metrics we selected stood out,” the report noted.

Second- and third-placed personal lines writers, American National Group Inc. and the group led by Arbella Mutual Insurance

News & Markets

Sexual harassment is among the misconduct banned by state and federal laws, but California State University`s policy aimed to address it falls short, the audit found. The auditor`s office says it should better guide colleges on what steps to take after an incident is reported.

“Deciding whether to conduct a formal investigation is one of the most critical steps in a campus’ process for responding to an allegation,” the audit says.

“Nonetheless, CSU’s sexual harassment policy lacks detailed guidelines about how to make and document these determinations.”

There were more than 1,200 reports of sexual harassment by employees overall at California State University campuses between 2018 and 2022, the report shows. Of those, 254 were investigated.

Audit: California State University Campuses Mishandled Sexual Harassment Allegations

By Sophie Austin

Aflawed policy at California State University, the largest higher education system in the country, contributed to the closure of nearly a dozen sexual harassment cases without thorough explanation, according to a state audit reviewing 40 cases over the span of seven years.

The audit, released in mid-July, examined allegations of harassment between 2016 and 2022 against employees at the university system’s chancellor`s office and three of 23 campuses: California State University, Fresno, San José State University and Sonoma State University. It found that the colleges failed to discipline people found responsible for misconduct, including one case where officials took no action in the five years after a faculty member was found guilty of sexual harassment, sexual violence and stalking.

“The problems and inconsistencies we found during this audit warrant systemwide changes at CSU,” California State Auditor Grant Parks said in a statement. “In particular, the Chancellor’s Office must take a more active approach to overseeing campuses’ efforts to prevent and address sexual harassment.”

Parks’ office recommended the university system require colleges to find out if someone has been accused of harassment multiple times, make them clearly explain why officials didn’t investigate a case, and give guidance for how to contact accusers.

Jolene Koester, California State University’s interim chancellor, said in a statement that officials would comply with the recommendations. Representatives from California State University, Fresno, San Jose State University and Sonoma State University did not immediately respond to an email request for comment on the audit’s findings.

The largest share of reports, nearly 18%, were at California State University, Fullerton, which is about 22 miles southeast of Los Angeles. There were also nearly 160 employees across all 23 campuses between 2018 and 2022 who were accused of sexual harassment multiple times, according to the report.

One student alleged a faculty member made inappropriate comments to her and compared her to women he had dated. The campus declined to investigate, the audit found. It didn`t specify which campus.

Seven of 21 investigations the auditor`s office reviewed “contained deficiencies that caused us to question the campuses’ determinations that sexual harassment had not occurred.” For example, a faculty member who was found responsible of making inappropriate comments to a contract worker and hugging her, and kissing another worker without their consent was not found to have violated the sexual harassment policy, the audit says.

Austin is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.

Copyright 2023 Associated Press. All rights reserved.

News & Markets

New Mexico Jury Awards $485M in Sexual Assualt Case

Ajury has awarded $485 million in damages in a civil case brought on behalf of an 8-year-old girl who was repeatedly sexually assaulted in a New Mexico foster care program.

The verdict came in late July after Rio Arriba County jurors heard nearly two

weeks of testimony that focused in part on allegations of corporate negligence.

The program allegedly placed the girl in the home of a foster parent despite knowing that he had been accused of sexual assault, according to the lawsuit, which was filed in 2019. It was one of

more than a half-dozen cases arising from sexual assaults of children in the program.

Clarence Garcia, 66, pleaded guilty in January to seven counts of criminal sexual contact with a minor and was sentenced to up to 20 years of probation. Court records show Garcia was accused of sexually abusing six children under his care over six years.

In April, probation officers found that Garcia allegedly violated his probation after they searched his property and found bags of stuffed animals, a yoga book “with young children in suggestive poses” and accessories for firearms.

He faces an Aug. 3 sentencing hearing that could send him to prison for up to 42 years.

The jury awarded $80 million in compensatory damages and $250 million in punitive damages against Acadia Healthcare, the operator of a now-defunct licensed residential treatment facility in New Mexico, the Albuquerque Journal reported.

Acadia said in an email that the victim was not in the direct care of any facility operated by the company but was in a treatment foster care program managed by Familyworks, a nonprofit.

Familyworks and defunct Acadia subsidiary Youth and Family Centered Services of New Mexico Inc. will pay $75 million apiece with $5 million in punitive damages connected to Garcia`s conduct.

“I think the jury’s award and verdict show the little girl she is valued and that what happened to her shouldn’t have happened,” Josh Conaway, an attorney who represented the child told the Santa Fe New Mexican.

The state Children, Youth and Families Department revoked a license for Acadia- owned Desert Hills in 2019 amid reports of sexual abuse and violence at the residential treatment facility, which served children with intellectual and developmental disabilities as well as behavioral issues.

Copyright 2023 Associated Press. All rights reserved.

Co. Inc., showed top-quartile performance among personal lines-focused carriers from a rates of return standpoint, and placed among the top five in the two metrics used to measure relative underwriting profitability.

American National, a multiline carrier with business spread across personal and commercial P/C, as well as life and annuity, became a subsidiary of Brookfield Reinsurance Ltd. in 2022. “It produced leading results among the personal lines-focused companies in the underwriting profitability and balance sheet growth metrics. With our rankings of personal lines-focused carriers based on the relative success of the entire P&C group, American National’s diversification paid off in 2022 as its loss and

loss-adjustment expense ratio in the commercial lines was 13.8 percentage points lower than in the personal lines,” the report said.

The comparable lack of diversification across Arbella Mutual’s personal and commercial lines made its “presence on the personal lines podium particularly noteworthy,” it noted.

Arbella’s geographical concentration in the New England region helped account for its outperformance, S&P explained. “The group’s homeowners loss and LAE ratio of 48.3% was 28.9 percentage points better than the industry’s, overall, excluding state funds and other residual markets in a year natural catastrophe activity was most significant in other parts of the

country, particularly the upper Midwest and Florida.”

Other top-performing personal lines insurers in S&P’s analysis included CSAA Insurance Exchange; GEICO Corp.’s parent Berkshire Hathaway Inc.; County Financial, the group led by New Jersey Manufacturers Insurance Co.; Liberty Mutual Holding Co. Inc.; Farmers Insurance Group of Cos., and Michigan Farm Bureau Financial Corp.

Methodology

The U.S. Property and Casualty Insurance Performance Rankings are based on statutory financial results collected and compiled by S&P Global Market Intelligence. They are determined using 13 financial

metrics from 2022 statutory filings grouped into six buckets: rates of return, underwriting profitability, balance sheet expansion, investment performance, prior-accident-year reserve development and premium growth.

The categories are given distinct weightings to calculate performance scores for each of the 100-largest U.S. P&C entities based on 2022 net premiums written. Similar calculations are used to rank the largest entities determined by S&P Global Market Intelligence to have commercial and personal lines-focused operations.

More report details are available online at https:// pages.marketintelligence. spglobal.com/PropertyCasualty-Insurance-CompanyRankings-2023.html.

With our deep product and industry expertise, we deliver global solutions to address the unique risks you face. Our experts have a comprehensive understanding of your technology life science business. Let us tailor a solution for your specialized insurance needs.

To learn more, talk to your broker or visit intactspecialty.com

Workers’ Compensation Remains Profit Engine for U.S. P/C Insurers

Workers’ compensation insurers’ underwriting results continued to outpace the rest of the U.S. property/casualty (P/C) commercial sector in 2022, as they benefited from the longterm decline in workplace accidents and a reduction in fraudulent claims, according to an AM Best report.

Favorable prior year loss reserve development continued to bolster the insurance industry’s carried loss reserve position in 2022, as a result of the longterm declines in claims frequency, said the Best’s segment report titled “Workers’ Compensation Remains a Profit Engine for the P/C Industry.”

The workers’ compensation segment has experienced a softer market compared with other commercial lines of coverage, particularly auto and general liability, the report said, noting that pricing has declined since 2015, except for the post-pandemic period, from the second quarter of 2020 through 2021, when modest increases became the norm.

The report highlighted several trends occurring within the segment, including:

• The segment reported a combined ratio

of 87.8 in 2022, almost 15 percentage points lower than the overall P/C segment’s 102.4. The segment’s combined ratio for 2022 includes favorable loss development on older accident years totaling $6.5 billion, which reduced the reported combined ratio by approximately 13.5 percentage points.

• The segment, in which premiums are based on payroll levels, has benefited from the largest U.S. wage growth in over 25 years, coupled with strong job growth, which has helped increase its overall premium to pre-pandemic levels.

• Medical and indemnity severity increased, but the magnitude of these increases was less than the increase in wages. The higher payroll exposure base for workers’ compensation insurance kept the increase in claim severity manageable.

Workers’ compensation written premium has benefited from the consistent rise in demand for labor (following a drop in the unemployment rate from the April 2020 peak of 14.7%), as evidenced by 9%

year-over-year increases in direct premiums written (DPW) and net premiums written in 2022. In the first quarter of 2023, the segment’s DPW was up by 4.7% over the same period in 2022, a little more than half the 8.5% increase from first quarter 2021.

The segment is still subject to a number of factors with longer-term implications on operating performance.

For example workers’ compensation remains susceptible to rising inflationary pressures and higher wages have driven indemnity costs up, resulting in a modest increase in claims severity, the report said.

“Some market observers expect wages and health care costs to rise faster than inflation within another year or so,” said David Blades, associate director, Industry Research and Analytics, AM Best. “This could weaken reserve adequacy and temper the possibility of further improved underwriting results because of higher-than-expected claims from prior accident years.”

A full copy of this report can be obtained via AM Best.

Recreation & Leisure

Fun Equals Risk. Sigh.

By Jahna Jacobson

Those in the insurance industry tend to view everything through a lens of risk and responsibility. Sure, that game/sport/amusement/party looks like a good time, but what horrible thing could happen? And who is going to pay for it when it does?

Especially when that fun is hanging out in a room full of flying axes. Or speeding down a busy, bumpy sidewalk on a tiny scooter. Or jamming a dozen kids into a bounce house to ricochet off each other like Jiffy-Pop.

In some cases, businesses and organizations seek out special coverage to keep users and clients safe. In other instances, a person may want to re-read their homeowner’s policy and health insurance before jumping into the fray.

Shared Electric Scooters

In many cities across the U.S., electric scooters are lined up along the street, or randomly abandoned on sidewalks, ready for rental.

Easy access suggests safety. But while shared electric scooters offer convenience

and a little fun, they can also pitch a rider face-first into a pile of medical expenses.

Greg Reigler, a photographer now living in Atlanta, Georgia, hopped on a scooter one night for a quick, mile-long ride home on familiar streets in Pensacola, Florida. Unfortunately, an unnavigable curb caught his front wheel and sent him flying, resulting in medical and dental injuries totaling nearly $40,000. Reigler was without health insurance, and with no other party to step up for his medical bills, he was on the hook.

“Upon renting the scooter, you agree to the terms and basically sign away liability,” he said. Reigler didn’t file a police report, which precluded him from pursuing compensation from the scooter company or the city. “I was mainly worried about getting to a hospital.”

The scooters can reach speeds exceeding 15 to 20 mph, and generally renters are not required to have a driver’s license. Each state has different rules and regulations regarding electric scooters, but in most cases, electric scooter companies typically won’t cover injuries resulting from an accident.

A 2019 study published in JAMA moni-

tored two Southern California emergency departments that saw 249 patients with electric scooter-related injuries over the course of a year, mostly suffering from fractures, head injuries and soft tissue injuries. Two hundred twenty-eight (91.6%) were injured as riders and 21 (8.4%) as nonriders. About 11% of patients were under 18, and only 4.4% were wearing a helmet. The study’s sample showed riders had little regard for age or helmet requirements.

The rapid growth of shared electric scooter use has not given communities time to address issues such as traffic safety regulations and the impact on pedestrians and other bystanders.

“We’ve seen some municipalities promote electric scooter programs as a way to clear congestion in downtown business areas, with some of them later backing off from that when they realize the hazards that are involved,” said independent business researcher Joseph S. Harrington an independent business researcher in the Insurance Journal Academy of Insurance course “Many Vehicles, Many Uses.”

According to the Insurance Information Institute, standard homeowners’ policies, renter’s insurance, personal auto policy and even motorcycle coverage often exclude liability coverage of shared electric scooters incidents. Health insurance may cover injury from an accident, and some personal umbrella policies may provide some protection.

While electric scooter insurance is not required, those who use them for daily commutes or weekend fun may want to look into coverage for any scooter-related injuries or damages. And wear a helmet.

Jump Around – Inflatables

Once relegated to fairgrounds and festivals, jump houses and other giant inflatables such as waterslides and obstacle courses have become common fixtures at home birthday parties and other family events.

continued on page 28

Spotlight: Recreation & Leisure

continued from page 27

However, in the age of viral videos, wind-borne bounce houses and other inflatable risks have become more visible. A 2022 study from the American Meteorological Society documented 132 wind-related bounce house incidents worldwide between 2000 and 2022, resulting in 479 injuries and at least 28 deaths. At the time of the study, 17 states had no regulations or expressly excluded inflatables from regulation. However, 19 states explicitly cite American Society for Testing and Materials standards specifying wind speed limitations and may require the presence of a meteorologically astute attendant for commercial bounce houses.

The National Electronic Injury Surveillance System (NEISS) estimated 159,569 bounce house injuries in people under 18, with a linear increase from 2000 to 2019. A reported 82,748 kids were injured between 2015 and 2019, compared to only 5,599 from 2000 to 2004. In 95% of all cases, the injuries occurred at the patient’s home.

Bounce house manufacturer and wholesaler, eInflatables, offers insurance advice and recommends that retailers and

rental companies have liability insurance, workers’ compensation and property insurance. Liability coverage is often required to rent to venues such as parks, schools and other public events. The site suggests retailers go through an inflatable insurance broker, who will then go through an underwriter to get a customized policy. Requirements can vary, but a

$1 million minimum policy limit is typical.

Axe and Smash

While the first generation of “extreme sports” is still out there dislocating shoulders and breaking legs, there’s a new adrenaline rush in town. Axe throwing and smash rooms, or rage rooms, have become some of the country’s fastest growing attractions. Both are popular group activities and are even popular outings for corporate team building.

Yet, despite what would be seemingly obvious danger, axe-throwing and plate smashing are made safer with regulations and watchful ownership. And, of course, most places are going to have customers sign waivers that explain the rules and limit the company’s liability.

“Most axe throwing venues are operating under the rules and regulations set by the World Axe Throwing League, including strict safety protocols,” said Brett Pollak, president of Insurance Allies, a Chicago-based agency that specializes in the entertainment industry and hosts the sites AxeThrowingInsurance. com, SmashRoomInsurance.

continued on page 30

Spotlight: Recreation & Leisure

continued from page 28

com, HauntedHouseInsurance.com, as well as PickleballInsurance.com.

There are more than 600 recreational axe-throwing venues across the country up from just a few dozen five years ago.

“These venues don’t need too much coverage above and beyond what you would see in any other entertainment venue,” Pollak explained. “It’s about structuring the policy to cover the things that matter to a venue owner such as, but not limited to, BYOB, or the sale of alcohol, the weapons allowed, etc.”

Most, if not all, insurance coverage for the axe throwing industry is non-admitted and every policy/contract is different. Venue owners need to be informed of coverage and exclusions presented in the contracts.

Axe throwing and smash room businesses need general liability, which may be either occurrence or claims-made general liability insurance policies. Axe-throwing businesses may also need an umbrella, accident insurance, property insurance, workers’ comp and liquor liability.

For smash rooms, which typically let clients go wild on breakables and furniture, Pollak’s smash room insurance site recommends general liability, accident insurance, property insurance, liquor liability insurance and coverages customized

to a client’s needs.

“Safety gear, including full suits and goggles, help protect the participants from flying debris,” Pollak said.

One of the biggest risks is over-exuberant clients accidentally hitting other people in the room, so the number of people per room is limited.

While office equipment is a popular smash room request, the chemicals and other dangerous components in computers, TVs and other electronics have pushed many establishments to pull decommissioned printers and old fax machines from the menu of destruction. They want clients to smash responsibly.

“Business owners are very aware of their business, the risks involved and how to mitigate those risks,” he said. “They strive first and foremost to protect their customers and, in turn, this helps set their business up for long term success by preventing lawsuits.

“In addition to educating venue owners, as an insurance agency we strive to vet prospects and clients, which protects people, and in turn this helps to increase the long-term viability of coverage and price of insurance for the industry as a whole.”

Golf Carts

Many golf cart owners treat their cart as a secondary mode of transportation for getting around their neighborhood, whether for running errands or just for fun.

The legalities of where carts can drive, who can drive, and what licensing they need vary by area. Most golf carts aren’t classified as cars, but in some cases can be classified as low-speed vehicles, a separate class of transportation. But those laws are tightening in some areas. Florida recently passed a law that anyone under the age of 18 will need to have a permit or driver’s license to drive a golf cart as of Oct. 1. The need for these types of restrictions were underscored on

July 17 when a Florida seven-year-old was tragically struck and killed by a golf cart being driven by a three-year-old.

While municipalities may not require insurance to drive golf carts on public roadways, statistics suggest insurance is a good idea, even if it’s not required.

In 2021, researchers reviewed 20072017 data from the NEISS and found an estimated 156,040 people received emergency room treatment for golf cart-related injuries during that period. That same year, a study by the Children’s Hospital of Philadelphia found there are now more than 6,500 golf cart-related injuries in children and adolescents each year, including fractures, dislocations, and head and neck injuries.

Many companies offer some types of golf cart insurance, including many of the same coverages available for other vehicles — liability, collision, comprehensive and even uninsured motorist.

Drones

Recreational drones are the most popular type in the U.S., making up about 63% of 855,860 registered drones (536,183) in the U.S. according to DroneSourced.

But with the fun of flying comes great responsibility. Drones can cause injuries and property damage, and not all activity is covered by insurance. According to DroneSourced, there were approximately 4,250 drone injuries from 2015 to 2020, with multi-rotor drones accounting for over 70% of reported incidents.

Drones are subject to the same regulatory authorities as other aircraft on federal,

state and local levels, said Kevin Amrhein, president of the Florida Insurance School of Continuing Education and the CE partnership, in his Insurance Journal Academy of Insurance course “Drones — Insuring Innovators, Enthusiasts, and Idiots.”

“Liability is the insurance you cannot go without,” Amrhein said. All the ISO (Insurance Services Office Inc.) forms have the same language, and the definition of aircraft liability is very comprehensive.

As drones have become more common, insurance is adapting, so it’s essential to be specific in coverage requests, and double-check endorsements for exclusions that apply to model or hobby aircraft.

Personal Watercraft Insurance

As the relatively new adage goes, it’s impossible to be unhappy on a Jet-Ski. And having the right insurance can add an extra layer of joyful security.

Rick Stern, boat product manager at Progressive, said the company covers

well over 200,000 personal watercrafts (PWCs), and that number grows every year. While PWC insurance is generally affordable, Stern said, the insurance rate varies depending upon the age, power and value of the PWC and the age, experience and driving record of its operator. Each state has its own insurance requirements, but liability to cover injury and property

damage is required in many states and recommended in others.

“Liability coverage will also pay to recover your PWC if it sinks,” Stern said.

Other popular options include comprehensive and collision coverage that will protect PWC from theft, fire, vandalism and collision, and clients also often opt for uninsured boaters and personal effects coverage.

The types of PWC claims have not changed much over the years, Stern said. “One thing we do see is a fair number of PWC-on-PWC claims, since many PWC riders like to go out in pairs.”

There’s a trend towards larger and more powerful PWCs that can seat three people and tow a skier or tube — and the chances of injury increase as the number of participants increases, he added.

In many cases, a little risk is part of having a good time. But if it’s going to rack up hospital, property or legal bills, everyone should make sure they are covered.

$5

AIU protects your clients with broad coverage and competitive rates. Catastrophe can hit any business – especially those with spaces that attract crowds. But standard policies leave gaping holes when it comes to violent attacks, which can leave your client in financial ruin in the wake of tragedy. AIU’s specialty policies and crisis management makes sure your client can recover quickly.

About This Report:

Welcome to the 19th annual Insurance Journal Top 100 Independent P/C Agencies report.

The Top 100 list is ranked by total property/casualty agency revenue for 2022 and comprises only those agencies whose business is primarily retail, and not exclusively wholesale.

Also included is a list of the nation’s Top 20 Bank Holding Companies and Top 20 Banks in Insurance courtesy of the Michael White’s Bank Insurance Fee Income Report - 2023 Edition. (See page 35.)

Insurance Journal wishes to thank all of the agencies and brokerages that were willing to share their information and cooperated in the process for the Top 100 report. The result is a glimpse at some of the nation’s most successful independent insurance agencies and brokerages.

Special Report: Top 100 Agencies ®Insurance Journal

All information in this report has been garnered from voluntary online submissions from agencies and brokerages and best estimates based on other public information sources. There may be agencies eligible for listing but for which no information was received or located.

We encourage all qualifying agencies to submit data for future reports. The more

submissions Insurance Journal receives the more accurate and comprehensive this listing can be. Also, submitted data was not independently verified.

For more information about this report, contact Andrea Wells at: awells@insurancejournal.com.

agency on this list?

Eastern Insurance Group LLC**

Insurance Journal’s 2023 Top 100 Property/Casualty Agencies

continued from page 33

Top 20 Banks in Insurance Brokerage Fee Income (2022/Nationally)

Note about this report: These rankings include commercial banks, savings banks and savings associations (a.k.a. thrifts), which are required to report line item fee income like insurance brokerage. Source: Michael White’s Bank Insurance Fee Income Report - 2023 Edition

Top 20 Bank Holding Companies in Insurance Brokerage Fee Income

(2022/Nationally)

About this report: With a few exceptions, the Federal Reserve Board requires only what it defines as “large” bank holding companies (i.e., BHCs with consolidated assets in excess of $1 billion) to file line item fee income like insurance brokerage. Ranking excludes several traditional life insurers that do not engage in significant banking activities. Source: Michael White’s Bank Insurance Fee Income Report - 2023 Edition

Closer Look: Condos Challenges of Insuring Rentals and Multi-Unit Housing

By Jahna Jacobson

The age-old question in insuring rentals and multi-unit housing is, “Who covers what?”

Whether it’s owner-occupied housing or a landlord-tenant relationship, the changing landscape — from higher costs to the rise of short-term rentals — has demanded the market change along with it.

In the Insurance Journal Academy of Insurance course, “Challenges in New and Old Multi-Unit Housing,” Joe Harrington, an independent business researcher and writer specializing in property/casualty coverages and operations, discusses these evolving needs and developments such as HO-14 coverage.

Harrington divides multi-

unit housing insurance coverage needs into what he calls “two and a half” arrangements.

• Landlord-Tenant – The property is owned by the landlord and insured as a commercial property. Renters insurance may provide a sublimit for tenant additions and alterations. The landlord’s property is covered under the landlord’s commercial property policy. The tenant’s property is covered under renters insurance.

• Condo Community – Owned collectively by a condo association and insured under an association commercial property policy. Ownership and insurance obligations are subject to master agreements. It can

be insured under association or unit-owner policies. The personal property of a condo association within dwelling units is typically covered under condo commercial property policy. The occupant’s personal property is insured under a unit owner’s policy. In owneroccupied units, master agreement provisions will determine who is responsible for various aspects of coverage for structural elements, fixtures, alterations, improvements and appliances.

• Co-op Community – Similar to the condo community, except the co-op typically owns the property and is insured under an association policy. The insurance obligation may fall on unit

occupants, at times.

In owner-occupied units, there is an added layer of concern regarding improvements and alterations, Harrington said. “Has the tenant done anything to the physical unit where it acquires a new and more substantial insurable interest?”

For example, a unit owner may install a drywall partition, but the responsibility falls to the owner if it is not a load-bearing wall. “If they are structural in nature, if they actually bear weight and keep the structure standing, they’re more likely to be the responsibility of the association and covered under the association policy,” Harrington said.

Establishing this distinction is critically important when the

association is required to insure these permanent fixtures. The association policies will typically provide primary coverage over any building property coverage found in a standard unit owner’s policy, Harrington said.

Rise of Renters Insurance

More people are choosing to rent longer because of rising home costs and because renting offers more flexibility and mobility, Harrington said. And landlords are increasingly requiring tenants to have renters insurance coverage.

“While a landlord may not be entitled to any of that coverage, it will lower the likelihood of a dispute between the landlord and the tenant over any loss of the tenant’s property or any loss to someone else’s property or bodily injury to someone else because of liability,” Harrington said.

In landlord-tenant arrangements, the landlord selects between named and opened perils, and the tenant’s personal property is covered on a named (HO-4) or open (HO-14) perils basis.

For condo and co-op communities, the association selects between named or open perils, and the unit owner’s building and personal property are typically insured on a named perils basis. Unit owners’ policies typically include a sublimit for paying a share of an association’s loss assessment. Some unit owners’ policies provide a sublimit for paying a share of an association’s insurance deductibles.

“This whole HO-14 is about appealing to this new semi-affluent, young cohort that is going to be renting for longer and seeks to utilize

and benefit from things like Airbnb,” Harrington said.

HO-4 and HO-14 offer a variety of options to fit landlord and tenant needs.

• Both HO-4 and HO-14 cover tenant liability for damage to the building, subject to the exclusion for property rented and occupied by the insured, with an exception for fire, smoke and explosion. However, HO-4 has a built-in coverage of up to 10% of the personal property limit, and HO-14 makes no mention of this built-in coverage.

• HO-4 covers named perils with an actual cash value settlement for damage to a tenant’s personal property, while HO-14 offers open perils coverage with replacement cost settlement.

• HO-14 offers bed bug remediation coverage as additional insurance up to a built-in limit. HO-4 does not.

• HO-4 excludes coverage for bodily injury and property damage by motor vehicles or watercraft. HO-14 essentially retains that standard but does cover bodily injury and property damage arising from motorized bikes and scooters.

• HO-4 also excludes home sharing liability, but coverage can be added by endorsement. HO-14 includes home sharing liability.

To

The home sharing liability is a significant distinction, Harrington said.

“HO-14 is the only ISO homeowners form, to my knowledge, where the coverage for home sharing liability is actually built into the policy,” he said. “This is a bit problematic for landlords in that if a landlord wants to prohibit home sharing activities, (they) wouldn’t be in a position to mandate a coverage form that covered home sharing activities.”

Questions about the limits of reasonable restrictions and restraint of property use will likely impact the value of units and the need for coverages regarding home sharing activities, he said. “So, would the HO-14 would be a good

form for an insured to buy, at a location where they can’t take advantage of home sharing? However, from the landlord’s perspective, the broader coverage offered elsewhere could be beneficial, especially when discussing liability coverage.”

Unit owners policies typically include a sublimit for paying a share of an association loss assessment. Harrington said this is standard coverage, and it would be hard to imagine a policy not having it.

“Property owners and those responsible for property are looking for ways to cut the cost of coverage, including taking on a bigger deductible,” he said.

“I don’t know, or have any idea how extensively the HO-14 is being used or will be used, but this is some indication of the direction it’s going and landlords have a stake in having their tenants have renters coverage,” Harrington said.

https://www.ijacademy.com/members/courses/857.

Harrington is a former communications director for the American Association of Insurance Services. He’s been active with the Institute’s CPCU Society and continues to serve on the society’s publications committee.

watch the entire course, Challenges in New and Old Multi-Unit Housing, which includes further discussion of liability coverages, loss of use, pet regulations and post-COVID precautions, visit

Spotlight: Claims

The Good, Bad and Ugly of Litigation Financing

By Jim Sams

In insurance defense attorney Dennis Kass’ world, litigation financing firms lurk behind the scenes, pushing plaintiffs to undergo as much treatment as possible so lawyers can maximize the value of claims.

“In a lot of ways, the plaintiffs become pawns in somebody else’s game,” said Kass, a founding partner of the Manning|Kass law firm in San Francisco. “And it’s a dangerous game and it’s kind of a sick game really. But there’s a lot of money at stake here. This is not a small industry.”

Law professor Kenneth Klein lives on the same planet, but he says his world view is shaped by data. Klein, who teaches at the California Western College of Law in San Diego, said a study released in April by Harvard Business School and Stanford University economics professors found that litigation funders actually produce a net benefit.

“These two economists actually modeled the problem and they concluded that on the whole it was very much a benefit if you are trying to reduce unethical behavior because the involvement of litigation financiers primarily eliminates unethical behavior on the defense side and they didn’t see much of it on the plaintiff side.”

Kass and Klein participated in a recent webinar panel discussion hosted by the Coalition Against Insurance Fraud examining the “good, the bad and the ugly” of litigation financing. Matt Lehman, a Republican state representative from Indiana, and Eric Schuller, president of the Alliance for Responsible Consumer Legal Funding in Washington D.C., also spoke during the webinar.

Schuller’s organization represents litigation finance companies that focus on small loans to consumers to pay living expenses while they pursue litigation. His group supports state legislation to regulate the consumer litigation financing industry to ensure financiers behave professionally, fairly and equitably.

Schuller said his industry makes it possible for people with limited means to survive while they pursue their legal claims. He said acceptance of consumer legal funding — once banned by champerty laws — grew during the civil rights movement, when organizations such as the NAACP helped plaintiffs with their household expenses while they pursued lawsuits against organizations that discriminated against them.

[Editor’s Note: According to Black’s Law definition, champerty is a form of maintenance — referred to as maintenance for profit — and is defined as a

“bargain between a stranger and a party to a lawsuit by which the stranger pursues the party’s claim in consideration of receiving part of any judgment proceeds.”]

“The litigation financier is spending their own money,” Schuller said. “They become themselves a screening device to sort out the wheat from chaff in the merits of a claim.”

The Coalition displayed a map that showed 14 states that have enacted legislation on litigation financing. Most of those laws address the consumer side.

Rep. Lehman, for example, was behind a bill that passed in Indiana limiting interest rates for consumer litigation loans to 36%. This year, the Indiana legislature passed a bill that requires disclosure of litigation funding contracts to opposing parties.

Some states went too far, according to Schuller who said consumer litigation lenders are not active in Arkansas and West Virginia because those states limited interest rates to 17% and 18%, respectively. He said the cost of capital is too great to earn any profit with

Dennis Kass

Kenneth Klein

rates capped that low.

Schuller said other than a few disclosure laws such as Indiana’s, the commercial side of litigation funding is largely unregulated. He said that may be because lawmakers view such financial arrangements as business-to-business contracts.

Kass said in concept, litigation financing is a great idea. “It makes sense to level the playing field.”

But Kass said California’s experience with Proposition 65 shows how some good ideas can go wrong. The ballot measure approved by voters in 1986 requires businesses to post notices of any hazardous

materials contained in their products or on their premises.

“It is now the source of the biggest shakedown lawsuits in the state,” he said.

verdicts.

“We have really robust laws in the United States on the corporate practice of medicine. We want someone who has taken the Hippocratic oath to control medical care,” he said.

Kass said unregulated litigation financiers are driving explosive growth in the size of

But with litigation financing, it’s the “wild, wild West,” Kass added.

“Anytime you have something that is unregulated and acting in the dark, it leads to abuse,” Kass said. “We’re seeing some of these little PI (personal injury) attorneys taken over by the ligation funders. They are controlling the doctors that the plaintiffs go to.”

Kass said occasionally he can learn about a litigation finance agreement by searching public records for Uniform Commercial Code filings by major funders. But he said doctors who treat plaintiffs never want to talk about those funding arrangements when they are deposed.

“Conservative treatment, consisting of chiropractic manipulation, is not good for investors,” Kass said. “They don’t make much money. A claim with epidural injections, that leads to good money.”

Klein said he agrees that there are bad actors in the litigation funding space, but there are also “go-to doctors” for insurers who offer only opinions that benefit defendants.

Klein said nuclear verdicts don’t become judgments if

they are not supported by evidence. He said the legal system has safeguards to ensure that the amount of damages awarded by juries are not overblown. And sometimes large awards are just.

“If you get to a nuclear judgment, that is evidence that somebody acted really badly,” Klein said.

Kass and Klein agreed on one thing: Both attorneys said the public would benefit if litigation funding agreements were fully disclosed.

But Klein said that should work both ways. Plaintiffs should have access to the defense attorney’s agreement with the insurer. He said plaintiffs also should be able to learn whether the insurance company’s claims adjuster has a financial incentive to reduce the payout.

“I think there should be full transparency,” Klein said.

Sams is the editor of Claims Journal, a Wells Media Group publication. Email: jsams@claimsjournal.com.

‘The litigation financier is spending their own money. … They become themselves a screening device to sort out the wheat from chaff in the merits of a claim.’

‘Anytime you have something that is unregulated and acting in the dark, it leads to abuse.’

Idea Exchange: Disability Insurance Has COVID Impacted the

Way We Look at Disability Insurance?

The COVID-19 pandemic reshaped industries across the globe, and the disability insurance sector was no exception. As the world grappled with unprecedented challenges, carriers in this space were compelled to revolutionize their underwriting procedures and embrace unique work arrangements and digital solutions at a pace not seen before in this industry.

By Chris Lack

Historically, working from home has been a challenge for disability insurers. When you’re working from home you may get up and work out for two hours, start working at 11 in the morning and finish at seven, eight or even nine o’clock at night. You may take a two-hour break to walk the dog in the middle of the day, and travel pressures are greatly reduced if not completely done away with. When you’re a disability insurance underwriter, all these things must be taken into account when considering the risk of a potential insured.

“Historically, the disability insurance industry has been concerned by people that work from home, often leading to limited or even declined coverage. The advisor who now has clients working from home who were, in the past, impacted by this underwriting philosophy have options they didn’t have before. There are still potential challenges in the adjudication of a claim when they never walk out of their home. Determining if they are working or not, or to what extent, is more difficult,” says George Davidson, founder of Secura Consultants, a Minneapolis-based firm that works with insurance advisors assisting in the placement of disability income protection solutions.

According to Matt Riordan, CEO at Secura Consultants, one of the positive changes to come from the COVID-19 pandemic and its impact on work was the forced shift to electronic engagement tools.

“COVID required many tedious procedures to change when more customers began working from home and were no longer able to meet advisors face-to-face,” Riordan said. “The challenges underwriters faced during that time brought about increased flexibility when it comes to labs, exams and financial requirements. There’s also been an increase in the utilization of digital health data and obtaining records digitally, which is streamlining the process. The ability to make decisions based on digitally obtained information is starting to increase.”

Davidson concurs.

“What COVID did was accelerate the changes carriers had been talking about for years when it came to electronic engagement.

Not only with advisors and distributors, but also with the insureds.

We now have a greater ability to complete applications, obtain underwriting requirements, and deliver policies electronically. It has streamlined the process across the board,” he said.

In terms of excess lines, coverage has also been impacted to a degree. For instance, if you look at medical insurance during the height of the pandemic, you

would think that the medical insurance carriers got slaughtered, but the opposite happened. Nobody went out to go get their heart examined or followed through on their regular exams; they didn’t leave their house. The residual effect was that it was probably a most profitable year for those carriers.

There’s little doubt that the medical profession has been especially disrupted during the pandemic. First, there were certain classes of doctors that weren’t working during the pandemic, like orthopedic surgeons and plastic surgeons and oral maxillofacial surgeons, because no one was sticking their face in someone’s mouth for the first six months of the pandemic. Second, take the ER doctors and all healthcare workers that were on the frontline — not only could they not stop working, but many of them suffered from exhaustion, severe stress, and in many cases, this led to PTSD and depression. They were overwhelmed, overworked and overrun in the early days of the pandemic in certain major metropolitan areas. These factors were problematic for disability insurance carriers, and in many ways, we are still seeing the impact of these early traumatic days as this class of worker heals and recovers.

Although the numbers tell us that the pandemic is in the rear-view mirror for most of us, there are still residual effects that will likely impact the insurance industry down the road. One area where that is being felt is regarding the role COVID plays in professional sports in general, and myocarditis in particular, which is the inflammation of the heart muscle, particularly in young men ages 18 to 30. Case in point is former Red Sox pitcher Eduardo Rodriquez, who missed the entire 2020 season as a result of the disease, brought on by a bout with COVID. This is expected to be an ongoing conversation over the next few years.

Another topic sure to bubble to the surface is what’s being labeled as long COVID. This will be a lot harder to nail down for underwriters because it’s the new kid on the block and its symptoms can range from physical (muscle pain and overall weakness) to mental (memory loss and stress). This most likely will be a driver of claims moving forward.

Davidson feels a fly in the ointment is that the symptoms are different for each person. “Some people have difficulty thinking or concentrating which is commonly referred to as brain fog, some suffer from extreme fatigue, others have difficulty breathing or episodes of severe coughing; there’s not a consistent symptom pattern that a medical professional can definitively say, yes, this is long COVID,” Davidson explained. “This is complicated further when you bring an insurance carrier into the mix and they must determine if and when to pay out a claim. I think what we will see is that more and more long COVID cases will end up in the realm of a long-term disability. And that a COVID diagnosis with lingering symptoms may in fact lead to underwriting challenges in the future.”

Another area that was devastated in the early days of the pandemic was live sporting events, meetings and concerts, which lost billions of dollars in a segment that earns a couple hundred million in gross

premium in a good year. The only way you’re getting major live events insured these days is to have very broad-based communicable disease exclusions. While some of those exclusions did exist in some policies before the COVID outbreak, there was also the ability to buy out coverage for communicable disease. Buying out these exclusions now in 2023 is limited in capacity and cost prohibitive in most cases.

COVID impacted employer-sponsored plans because people were being laid off and things were happening in the workforce that caused a contraction with the premium base. And it was a short-term event, or people were sick, and they passed away.

The life insurance side saw a significant uptick in death claims, thus their results were impacted. However, in the individual long-term disability marketplace, there was virtually no impact.

But long COVID could be the wild card. It is still just being understood and developed. “I’ve personally had discussions with insurance carriers who were denying suspected long COVID claims because there was no objective medical diagnosis. And without that definitive medical diagnosis of this issue, insurance carriers were having a really hard time approving a claim,” Davidson said.

There are clouds on the horizon, and it’s not yet known whether the skies will clear or if they’ll turn into a hurricane. What’s certain is that now more than ever is the time for advisors to have a conversation with their clients about income protection. The pandemic has shifted the earth beneath the insurance industry’s feet, and in a lot of ways we are all still struggling to gain our balance in an uncertain world.

Lack is director of the Business Development, Sports and Entertainment Division, of Mahwah, New Jersey-based Exceptional Risk Advisors LLC. He is an expert on high-limit specialty life, accident and disability products for clients with extraordinary insurance needs. Phone: 201-335-5939. Email: chris. lack@exceptionalriskadvisors.com.

Idea Exchange: Underwriting

Underwriters Need to Think Like Data Analysts

Automation

is central to many carriers, MGUs and agents as they grow their business and work to keep pace with rapidly advancing technologies. In recent years, underwriting has become much more technology- and data-driven, changing the role of underwriting from what many insurance veterans have become accustomed to.

By Fatima Dean

The traditional underwriting role may still exist in some areas, but we are increasingly seeing companies throughout the industry whose focus is on hiring more technologically trained talent, such as data scientists and developers, as the industry continues to evolve.

With the addition of this new, tech-savvy talent, the underwriter’s role is being redefined at its core, requiring new and different skill sets. This is the face of progress for our industry that represents a new and diverse array of innovative thinking and perspectives that is vastly different from the past 30 years of industry standards.

Technology Is Changing Job Descriptions

Beyond the mere explosion in data volume to which underwriters have access, more technological tools are being developed to enable and apply that data to everyday decision-making.

In the past, underwriters have had to pull data from five or six different systems being supplied by various third parties, each in their own format, and interpret the

data from different reporting platforms. Today, insurance organizations are searching for technology that is capable of compiling and interpreting data from multiple sources and placing it at the underwriter’s fingertips, leading to faster decision-making on a risk. As a result, the need to analyze data from multiple sources has decreased, and the need for underwriters who can quickly grasp a data platform and process data quickly has increased.

The emergence of AI and machine learning has diminished the role an underwriter might play in identifying ineligible risks, freeing underwriters to focus only on the risks that could be worthwhile. Within a comparatively short time, AI tools now automatically score applications as they are submitted, preventing underwriters from needing to process and review all

submissions manually. This represents a radical change in the skill sets needed for today’s underwriters.

By removing the need to sort through applications to find risks that could be considered, underwriters can now focus on more extensively understanding those risks, tailoring pricing and ensuring coverage is adequate. While these aspects have always been a part of the underwriter job description, these advances have allowed underwriters to build more specialized expertise.

Adaptability Will Be Key

Often, veteran underwriters looking to use new technologies and tools will ask about what specific platforms or groups of technologies they will need to become proficient in to fully embrace both the technology and the change happening to the practice of insurance underwriting.

The truth is there is no single technology

platform that underwriters must master. Having a familiarity with all emerging technologies would be nice, but that is an impractical expectation that is unlikely to become commonplace given the pace of technology.

It would also be a fruitless exercise, as many MGUs and carriers are developing their own proprietary solutions that are customized to their unique needs.

Rather than trying to learn how to use all the tools on the market, underwriters should remain aware of the impacts technology is having on their role in the industry. Maintaining a familiarity with emerging tech tools is also helpful, but more critically, tomorrow’s underwriters will need to have a broader understanding of how technology and data will be utilized to be both predictive and prescriptive.

Once the data and technology chart the course, the underwriter will need to steer the ship and make course corrections

where necessary (depending on the data only as a tool within a larger toolbox).

In years past, technology itself was promoted as a solution. Now, as the industry adapts to a changing insurance landscape, it has become clearer that the solution is to apply talent, as well as select technologies, to help better understand risks — or analyze data — to increase profitability.

Underwriters can better equip themselves by understanding the problems technology can help them solve on a single risk and being prepared to dive deeper into successfully managing a risk portfolio, which may be a new skill set for some.

What Should Underwriters Expect?

Looking ahead, underwriters should expect technology to be an instrumental part of the job, and in many ways it will enable better processing and utilization of data in assessing underwriting risks.

This will be a transition for experienced and veteran underwriters, as historically they have had complete control over the assessment and decision-making regarding risk. Going forward, underwriters’ decision-making will be aided by an avalanche of data at their disposal — far too much for one person to fully grasp — and utilizing technology to assist in processing this data will become an essential part of the role.

To many, these innovative technologies may be viewed as disruptive to a core underwriting function. This can create an atmosphere of suspicion and mistrust, especially after some of the shortcomings of insurtech 1.0. However, this is no longer about the future. It’s about today.

MGAs and carriers are already investing in new technology platforms that will allow them to leverage data as a strategic asset — and the next generation of underwriters is being hired with this in mind.

For veteran underwriters, this will mean becoming even more flexible and adaptable to how technology will impact their jobs, and require a new data-minded approach in assessing and underwriting risk.

Dean is director, client development, at ReSource Pro and a former underwriter. Website: https://www. resourcepro.com/.

Idea Exchange: Minding Your Business

Effective Sales Management & Monitoring Producer Performance

Who is responsible for sales management in most firms? Often the task falls to the owner or the top producer in the firm. This is not necessarily a good idea, because sales management can take away time from the manager’s own sales efforts. And, good producers do not always make good managers.

By Catherine Oak

Sales management, as important as it is, does not have to be a full-time job in most firms. If goals are set properly, communicated and monitored, if the right people are hired and developed, and if management will remove any unreasonable obstacles to production, producers essentially should manage themselves. They simply need to know that their performance is being monitored and that poor performance will not be tolerated.

Producer Performance

What is an acceptable level of producer performance for experienced, seasoned producers? It depends on a number of factors, such as:

• Available producer support.

• Sales skills of the producer.

• Size and type of accounts in the geographic area.

• The competition.

• The local economy.

• The markets represented.

If performance standards are not set for producers, they will set their own — which most likely will be lower than what management expects.

Management can use the performance of the best producer who has ever worked for the firm as a guideline for top producer performance. The average property/ casualty commissions per producer of firms in our database is in the range of $250,000 to $400,000. The range is based on the size of the firm. These commissions include house accounts and direct-bill

commissions, which are not necessarily commissions handled. Well-run firms have $500,000 to $700,000 in commissions per producer. In surveys in which owners are asked what size book they would expect experienced producers to handle after three years in the firm, they report $150,000 to $250,000 in commissions handled, based on the size of the firm. With respect to their expectations for new business produced each year in addition to the books handled, the range is $50,000 to $100,000, based on the size of the firm.

For new producers without experience, approximately $80,000 to $100,000 in commissions handled is expected after three years and new business of $25,000 to $40,000 in commissions per year. For new producers with experience (and without existing books of business) $150,000 to $200,000 in commissions handled is expected in three years, with $35,000 to $50,000 in new commissions produced per year.

Production Goals

Producers should be involved in the goal-setting process. Each year, every producer (including seasoned ones) should be given a new production requirement, for example 10%-25% growth, net of attrition, depending on the size of their book.

The producer should let management know how this production will be accomplished (for example, the number of quotes and policies that need to be written to accomplish his or her annual objective). Based on the producer’s own hit ratio and size of account written, it should be determined whether or not the production goal is achievable. The goals should be broken down into monthly quote-to-write activity to make it easier to manage producer performance.

Management actually needs two sales goals for each producer. One goal is the required new business increase in the number of accounts or commissions handled by the producer. The second goal should specify the type of account, as well as the source of the new business to be

pursued such as account development, writing new accounts from referrals, target marketing or direct-mail programs, etc.

Sales Meetings

Effective weekly sales meetings need to be held so sales activity can be properly monitored. Specific sales activity should include new business produced, lost business, hit ratio for each producer, prospect activity, what referrals have been obtained from new sales, etc.

These meetings should provide owner and non-owner production staff with information on markets, sales goals, collection problems and service backlogs.

Producers have egos and need recognition. These meetings also are an excellent time to recognize superior performance, encourage double-teaming, and provide support through coaching and training.

Compensation

Well-designed compensation plans make special provisions for above-average performance. This can be in the form of additional commissions for increasing levels of new production, additional perks, bonuses or other incentives. For example, an additional 5% in commissions could be paid per $50,000 in new production after a certain minimum commission goal is met.

Today, many firms pay more commission for new vs. renewal business (such as 40% new and 30% renewal commission).

In addition to structuring an effective compensation plan for producers, we recommend that owners compensate account managers over and above their salaries for their production efforts. In addition to account managers handling the phone calls, mail, claims and/or the renewal process, they often do a good job of account development in existing accounts.

Owners now realize they cannot afford to pay producers for sales or service work done by account managers. The key to compensating staff or producers is to pay based on the job performed. This is why many firms have stopped paying commercial producers for personal lines accounts

and often have lowered the amount paid to producers for small commercial accounts. We recommend that incentives for new business be paid to the service staff. We suggest giving a first-year commission percentage and/or a flat dollar amount per new policy. Usually, the firm easily can afford to pay the new commission for account managers on new business, as the amount given is often lower than what the firm would have paid in commission to producers for the same new accounts.

Support Producers

All producers need time to sell new accounts. In the firms we have worked with that provide support for good producers, there is better productivity and more growth for new production. Producer support can come from these three main areas: development of leads and appointments; assistance in marketing/placement; and servicing of accounts written.

Target Marketing

To achieve a high level of performance, producers need to target larger accounts, target certain classes of business, and write more lines of coverage for each account.

A sales assistant or even a telemarketer can help develop the leads for larger accounts and can target particular industries where the producer has some interest or expertise (that is, where he or she has written at least three of the same type of accounts).

The best source of new sales is referrals from a producer’s existing accounts, especially in his or her area of expertise. Referrals should be sought from new accounts for which a difficult renewal has been placed and/or that has had excellent claims service.

Hit Ratios

Another sales management key is managing the producer’s hit ratio.

Producers can greatly improve their hit ratio on writing new accounts when they have good marketing/placement support. Some firms are using a central marketing person or department to help write new medium-size or large commercial accounts. A hit ratio of 20% to 25% is average for commercial lines, but obviously the closer to 100%, the better. In personal lines, the hit ratio is usually 40% to 60%.

Hit ratios can be improved when more time is spent qualifying the prospect. Key

areas to uncover in the first critical 20- to 30-minute interview are: What is most important to the prospect in the insurance program? What are the politics, price and product the producer is competing against? Has the producer built a good rapport after this initial meeting, etc.?

Survey forms and collection of copies of existing policies should be completed in the second interview after the prospect has been properly qualified. If the producer hit ratios are improved, the firm’s expenses will be reduced greatly.

Sales Management Is Critical

To have a successful, growing firm, proper management of sales and producer performance is critical. Sales management can be easy if a process is established that monitors specific sales activity and performance. Effective sales management not only will reward the owners but will assist non-owner producers in achieving their goals.

Oak is founder of the international consulting firm, Oak & Associates, based in Bend, Oregon, and Sonoma, California. Phone: 707-935-6565. Email: catoak@gmail.com.

My New Markets

Workers’ Compensation

Market Detail: GMI Insurance Services offers workers’ compensation coverage for contractors, healthcare businesses, retailers and auto dealers, plus hundreds of other classes. GMI has over a decade of experience writing this state-regulated coverage — with partners who include an AM Best “A++” rated admitted carrier. GMI has over four decades of experience insuring a wide variety of business classes. Targeted classes include construction, healthcare, manufacturing, USL&H, auto dealers, retail and distribution. Program highlights: A.M. Best “A++”-rated admitted carrier; unique carrier relationships; minimum premium $40,000; no maximum premium; no XMOD restrictions.

Available Limits: Not disclosed.

Carrier: Admitted, rated A++ by AM Best. States: Available in most states plus District of Columbia; not available in North Dakota, Ohio, Washington, Wyoming.

Contact: Shawn Michael Hall Sr.; SHall@ GMI-Insurance.com; 440-773-7983.

Camps

Market Detail: Acadia Insurance Group offers Camp Acadia, an insurance program with coverage for boys’ and girls’ camps. Acadia Insurance has supported such camps for years and offers a targeted insurance program backed by deep underwriting expertise combined with local claims and loss control services. Camp Acadia is formulated for all major exposures, with coverage designed to help protect the unique risks boys’ and girls’ camps face. General eligibility/appetite: Follows American Camp Association (ACA) accreditation or meets these standards; licensed in each state’s Department of Human Services (camps are regulated by state); experienced management; formally trained staff — include annual background checks, SAM training, etc.; smoke detectors in all buildings; and favorable loss control with compliance of recommendations. Camp activities typically covered in the program: arts and crafts; music; nature and environmental studies; performing arts; photography; pottery; sports — basketball, soccer, football, lacrosse, volleyball, tennis; cooking; woodworking; riflery; biking;

ceramics; hiking; archery; team building; waterfront activities; horseback riding; rock climbing; etc. Appointment required.

Available Limits: Not disclosed.

Carrier: Acadia Insurance Group.

States: Available in Connecticut, Maine, Massachusetts, New Hampshire, New York, Vermont.

Contact: John Varitimos; john.varitimos@ acadia-ins.com; 800-773-4300.

Aircraft — Helicopters and Jets

Market Detail: Transport Risk Management Inc. offers an aircraft insurance program with a focus on helicopters and jets.

Transport Risk Management is a brokerage engaged in the practice of aviation insurance and risk management services with offices located in Denver, Colorado; Austin, Texas; Los Angeles, California; and Scottsdale, Arizona. Transport Risk provides its clients with a complete service for all their insurance, reinsurance and risk management needs. $1 billion maximum premium, $1 million minimum premium. Available Limits: Not disclosed.

Carrier: Various — all appointments and London; admitted and non-admitted; rated A++XV AM Best.

States: Available in 50 states plus District of Columbia.

Contact: Terry Miller; uav@transportrisk. com; 720-208-0844.

Cannabis - Operators & LRO

Market Detail: XPT Specialty offers an insurance program for cannabis operations for both operators and LRO, including grow ops. XPT Specialty brings together underwriting and wholesale brokerage firms across many specialty lines through acquisitions and new product development. XPT Specialty stands apart by delivering expertise through a collaborative partnership culture. Appointment required.

Available Limits: Not disclosed.

Carrier: Not disclosed.

States: Available in Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Hawaii, Illinois, Iowa, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico,

New York, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Utah, Vermont, Washington, West Virginia.

Contact: Emily Kalmbach; ekalmbach@ xptholdco.com; 888-977-3255.

Intermodal Hauler (APD- MTC)

Mexico DL OK

Market Detail: ATM Underwriters LLC offers a program for intermodal haulers. ATM Underwriters LLC is a specialty wholesale underwriter with 30-plus years of experience serving professional insurance agents all over the country. Takes great pride in personal service and fast quote turnaround. No appointment needed.

Available Limits: Not disclosed.

Carrier: Non-admitted; rated A by AM Best. States: Available in 50 states plus District of Columbia.

Contact: Syed Jafri; quote@atmunderwriters.com; 515-514-1867.

Pizza Delivery, Non-Owned

& Hired Auto

Market Detail: IPC specializes in hired and non-owned auto liability for food delivery risks including liquor delivery on a nationwide basis except Florida. Writes store owners that deliver their own food, businesses that deliver food on behalf of others (food couriers) and grocery delivery. Entertains limits up to $2 million. $2 million maximum premium; $100,000 minimum premium; has pen.

Available limits: Up to $2 million

Carrier: Non-admitted; rated A- by AM Best. States: Available in most states plus District of Columbia; not available in Florida.

Contact: Tammy Sunderland; tammy@ ipc-nv.com; 775-782-6655.

Idea Exchange: Ask the Insurance Recruiter

Six Strategies That Take Weeks Off Your Hiring Process

Do you think your hiring process takes too long? Have issues with timing cost you time, money and the chance to hire top talent?

One of the first lessons I learned as a young recruiter was, “Time kills all deals.” Seventeen years later I still think this statement is spot on. Rarely do candidates or hiring managers mean to slow play the process, but it happens. It’s easy to get distracted. The problem when an occasional “cog in the wheel” becomes the norm is you start to form bad hiring habits.

Here are six ways you can push the pace in the hiring process.

1) To Get the Deal Done — Give Permission to Abandon Your Process. After a six-plus month search to find a commercial lines account manager, an agency finally found a great candidate but struggled to get the second interview completed because the people this person would work with couldn’t interview for two weeks. Rather than wait, the producer said to the service manager, “Do you like this candidate?” The manager said emphatically, “Yes!” To which the producer replied, “Then just hire her. We’re losing good people because our process is taking too long.”

2) Write Simple, Easy to Update Job Ads. A client recently shared, “Our Chief Financial Officer was hiring a business analyst. We reviewed 200-plus resumes only to find out he required a designation that no one had because we

didn’t mention it in the job ad.”

The sole purpose of a job ad is to deliver quality not quantity. I’d rather have one great applicant than 200 people I’m never going to hire. Short job postings allow you to quickly update and rewrite when you must refine the qualifications mid-search.

3) Deputize One Person to Screen Resumes. “Sometimes our hiring managers get into Workday to review applications. Other times HR does it. Hiring managers aren’t in the system every day, so it causes delays.”

Recruiting is just one of 15 responsibilities hiring managers have. Relying on them to be consistent is a tall order. One person needs to review, screen and delete applications. Involve hiring managers to interview a vetted list of candidates.

4) Automate as Much Information Gathering as Possible. Questionnaires, email templates and “challenge questions” replace the 20 minutes HR spends on the phone or a hiring manager during an hour-long interview. Consider automated responses to job applicants that also gather critical screening information. Not only is this information easy to store, it’s also a good test of the candidate’s interest and willingness to engage. Consider these:

• Thanks for applying for our position. While we review your qualifications, we need additional information. Please reply as soon as possible.

• When are you available to start?

• What is your compensation target?

• Do you want a remote, hybrid or office-based position?

• Please outline the reason for your recent job changes.

• Why are you considering new career opportunities?

By Mary Newgard

5) Give Hiring Managers a Script. I just had an HR director tell me that a hiring manager asked how they could find out a candidate’s marital status.

Uh, no. Wrong question for lots of reasons.

A simple interview script — Do’s and Don’ts For Hiring Managers — accomplishes a few important things:

• Keeps interviews on track and limits tangents/distractions.

• Helps hiring managers feel prepared and set goals.

• Avoids E&O issues by clearly outlining inappropriate and/or illegal questions.

6) Combine Hiring Teams for Similar Position. If you have similar job openings for multiple teams, combine the job ads and interview activity as much as possible so you can:

• Get more bang for your buck using one job board slot for several jobs.

• Put less strain on your HR team to organize and screen applications.

• Send bulk referrals to all hiring managers which speeds up interview requests and avoids candidates slipping through the cracks.

• Schedule joint interviews. Candidates love it because they meet multiple people and find the team/position that fits them best.

Newgard is partner and senior search consultant for Capstone Search Group, a national recruiting firm dedicated to the insurance industry.

Email: asktherecruiter@ csgrecruiting.com.

Idea Exchange: The Marketing Connection

5 Tips for Applying H2H Marketing to Your Insurance

Business

Human-tohuman (H2H) marketing is a specialized approach that focuses on fostering authentic connections and establishing meaningful relationships with potential customers.

By Anita Nevins

In an era where automation often dominates marketing strategies, it’s crucial to acknowledge the significance of the human element in your interactions.

This principle is especially important in the insurance industry, where trust and personal relationships play a vital role in business development. In fact, human-tohuman marketing aligns seamlessly with the needs of our industry.

The effectiveness of H2H marketing extends beyond the boundaries of business-to-consumer (B2C) interactions and applies equally well to business-to-business (B2B) engagements. To incorporate these principles into your marketing campaigns, here are some valuable tips to consider.

1. Reach your customers where they are. An essential aspect of human-to-human

marketing is connecting with your customers on their preferred platforms. If your target audience frequently engages on platforms like LinkedIn, for example, it’s crucial to adapt your strategy and find ways to make yourself accessible to them in that specific environment.

2. Foster authentic communication. Authenticity is key in human-to-human marketing, as people connect best with real individuals. You don’t have to strive

for perfection in your communications or marketing efforts. In fact, being relatable and transparent can significantly contribute to building trust.

To achieve this, consider adopting a more human and direct approach in your interactions with customers. Engage with your audience by promptly addressing their questions and comments. Avoid using pre-written responses — be genuine and personalized in your communication.

Additionally, don’t shy away from occasionally sharing content that goes beyond the realm of “strictly business.” Inject a personal touch by sharing glimpses of you (or your team’s) life — such as pictures with pets, humorous memes, or images showcasing employees enjoying their work. This kind of content adds a human element to your brand and strengthens the connection with your audience.

3. Embrace active listening! This is the foundation of all marketing efforts from an H2H perspective. Remember that your marketing is not about what your business needs — it’s about what your customer needs. Before planning any marketing initiative or message, consider what your customer wants, what they fear, what their aspirations are, and what keeps them up at night.

It isn’t unusual for companies to put their best foot forward and oversell in an effort to gain customers’ business when designing marketing messages. But listening to your customers — really listening to them — can help you develop the most profound and effective marketing messages, while placing emphasis on what they need instead of what you think or want them to need.

4. Ask open-ended questions. Automation is on the rise, with chatbots replacing in-person customer support and personalized (yet automated) outreach becoming the norm — and we believe there is an application for computer generated service. However, personalization cannot replace genuine human interaction and connection. Engaging in deep, one-on-one conversations with every prospect is challenging when marketing at scale. Nonetheless, you can infuse human-tohuman principles into your outreach strategies in various ways.

For example, rather than relying solely on multiple-choice options in surveys and polls for gathering customer feedback, incorporate more open-ended questions. These questions should aim to deepen your understanding instead of simply advancing the customer through your sales funnel.

During personal interviews, expand your focus beyond specific product or brand opinions. Instead, inquire about the challenges individuals face in the insurance industry as a whole. By casting a wider net, you gain insights into their daily struggles and discover how you can better assist them.

5. Be transparent. Nobody’s perfect. Authenticity often means admitting your flaws. Doing this can inspire trust, especially when someone leaves a negative review. Occasional negative reviews are inevitable for most businesses. How you deal with them can reflect very well on you, though, and inspire trust in the person leaving the review and the audience reading. Where possible and appropriate, the H2H ethos suggests you honestly admit your mistake before offering to make amends.

H2H marketing is not always the easiest method. But when done right, you can foster deeper connections that benefit both you and your customers. Actively listen to your prospects, develop a deep understanding of their opinions and challenges, put their needs first — and generate fantastic results.

Nevins is the founder and co-CEO of Direct Con-

nection Advertising & Marketing. She manages the company and is heavily involved in strategy and planning for the agency’s clients. Website: directconnectionusa.com

August 7, 2023

Truck Insurance Exchange

6301 Owensmouth Avenue

Woodland Hills, CA 91367

The above company has made application to the Division of Insurance to amend their Foreign Company License to transact Property and Casualty Insurance in the Commonwealth of Massachusetts.

Any person having any information regarding the company which relates to its suitability for the license or authority the applicant has requested is asked to notify the Division by personal letter to the Commissioner of Insurance, 1000 Washington Street, Suite 810, Boston, MA 021186200, Attn: Financial Surveillance and Company Licensing within 14 days of the date of this notice.

August 7, 2023

Farmers Insurance Exchange 6301 Owensmouth Avenue Woodland Hills, CA 91367

The above company has made application to the Division of Insurance to amend their Foreign Company License to transact Property and Casualty Insurance in the Commonwealth of Massachusetts.

Any person having any information regarding the company which relates to its suitability for the license or authority the applicant has requested is asked to notify the Division by personal letter to the Commissioner of Insurance, 1000 Washington Street, Suite 810, Boston, MA 021186200, Attn: Financial Surveillance and Company Licensing within 14 days of the date of this notice.

7, 2023

National Title

Company 1207 W. Broadway St., Suite C Columbia, MO 65203

The above company has made application to the Division of Insurance to obtain a Foreign Company License to transact Property and Casualty Insurance in the Commonwealth of Massachusetts.

Any person having any information regarding the company which relates to its suitability for the license or authority the applicant has requested is asked to notify the Division by personal letter to the Commissioner of Insurance, 1000 Washington Street, Suite 810, Boston, MA 021186200, Attn: Financial Surveillance and Company Licensing within 14 days of the date of this notice.

Closing Quote

The State of the MGA Market

resources and practice areas around MGA business creation recognizing the continued upside to the MGA segment.

Seizing Opportunity

By Joe Guerrero

With forecasts of turbulence for the U.S. economy at the end of last year, 2023 opened to a slow but promising start. This signaled continued opportunities for growth for existing managing general agency (MGA) participants and entrepreneurs in the MGA/ managing general underwriter (MGU) market who provide expertise in niche areas, offer capacity and showcase a history of positive results.

Despite a strong start, projections for the second half of 2023 remain uncertain for the U.S. economy. The ongoing concerns include cooling labor markets, declining consumer sentiment and risks of a recession. Fortunately, the MGA/MGU market is able to take advantage of potential headwinds, keeping MGAs/ MGUs as attractive business models for carriers, investors and underwriting talent.

Why? MGAs that continue to invest in broader operational capability tied to data, analytics and unique expertise will be well-positioned to effectively execute for carriers, investors and brokers looking for growth. Similarly, consolidation remains robust and is fueling new MGU creation for entrepreneurial underwriting and management talent. Reinsurance brokers and carriers also continue to focus

While the natural inclination is to retract spending and save money for rainy days ahead during economic uncertainty, MGA startups will continue to drive growth. As many sectors experience a hardening market, events will create strong tailwinds for disciplined underwriters willing to deploy capacity, particularly on the E&S front. Similarly, good MGAs are always going to find attractive acquisition offers despite temporary or even protracted market conditions. An MGA with longevity, niche experience, good underwriting results and impressive premium volume (excess of $25 million) will continue to draw considerable interest. More established MGAs will likely remain attractive to potential buyers and carriers as market needs for these traditionally nimble, entrepreneurial organizations are expected to continue to expand.

Building Advantages

The expansion of the MGA space is a direct result

of deep niche underwriting expertise, generating profitable underwriting, speed to market, nimbleness and willingness to enact change quickly, as well as the entrepreneurial spirit. Those capabilities will continue to woo carriers and investors into the second half of 2023 and beyond as MGAs provide a lower-cost platform for their participation in sectors that can drive diversification and profitable growth.

Venturing into emerging risk areas and growth industries, equipped with agile technology, business processes and products, MGAs can address market needs that carriers either don’t have the appetite for or lack the experience to properly address. This enhanced flexibility allows MGAs to step into markets experiencing significant demand and a shortfall of capacity supply. This type of agility is particularly valuable in a tumultuous economic environment and hard insurance market.

Unlike larger carriers, most MGAs are not burdened with decades of operational complexities such as administrative, managerial legacy system platform issues that can slow them down in the face of

competition. Their smaller size can be an advantage as they create efficiencies that ensure tailored products and operating approaches that deliver quotes to consumers quickly. This speed will be key as consumers and agents move into the second half of 2023 looking for automated solutions that meet them on their own terms and quickly.

Additionally, MGAs have been at the forefront of technology advancements within the insurance industry aimed at streamlining and simplifying operations around policy management, binding, quotation and claims management. Not only has this tech-forward approach improved the operations of many MGAs, it also has resulted in increased profitably for investors.

As we move through 2023, new tools and technology designed specifically for the insurance industry will continue to create advantages for more tech-savvy and data focused MGAs.

Navigating the Future

While the MGA business model is solid, its success is not preordained. Growth for MGAs, especially for new startups, requires planning, strategy and an entrepreneurial mindset. The state of the MGA market is promising and robust, but complicated. Finding a way to reduce complexity will maximize opportunity for those insurance leaders willing to prepare themselves for what’s next.

Guerrero is president of DOXA Insurance Holdings LLC. Email: joe. guerrero@doxainsurance.com.