Insurance Journal West 2024-08-05 by Insurance Journal

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Congratulations Top 100 Agencies

This year marks the 20th annual publication of Insurance Journal’s Top 100 Independent Agencies special report. Again, a large majority of firms in the Top 100 saw notable increases in total property/casualty revenue year-over-year. From 2022 to 2023 the Total P/C Revenue combined of all 100 firms grew by more than $5 billion in total. (See the full report on page 28.)

This year’s Top 100 welcomes a handful of firms not listed on last year’s report, as well. Newcomers this year include the following: Unison Risk Advisors; Hotchkiss Insurance Agency; The Plastridge Agency Inc.; Haas & Wilkerson Insurance; Florida One Insurance; and Dean & Draper Insurance Agency LP.

While the list added new agencies, there were again agencies that fell off the ranking due to acquisitions, including: Eastern Insurance (now part of Arthur J. Gallagher); Graham Company and FBBInsurance (both now part of Marsh); and Eagan Insurance (now part of Higginbotham).

And what about the Future Top 100? While the following agencies didn’t make the cut in 2024, their total property/casualty revenue came very close.

Special mention goes out to the following agencies:

• RSS Insurance Agency

• Connor & Gallagher OneSource

• BKCW Insurance

• William Raveis Insurance Agency

• The Huneycutt Group Inc.

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

Insurance Journal’s Top 100 report would not be possible without the willing participation of all 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 Executive Officer Joshua Carlson | jcarlson@insurancejournal.com

ADMINISTRATION / CIRCULATION

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: Elizabeth Blosfield, Joseph Cox, Lee Shavel, Patrick Wraight

Columnists: Chris Burand, Tony Caldwell, Catherine Oak, Bill Schoeffler

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

Digital Content Manager

Ashley Cochrane | acochrane@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

Empowering agents through data and technology.

SIAA’s use of data and technology enables us to empower independent agents for success, regardless of where they are on their path:

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Learn how joining our community can help you evolve your agency and career. siaa.com info@siaa.com

Why Now May Be a Good Time to Sell Your Insurance Agency

By Brooke K. DeWyze, Chief Development Officer, PCF Insurance Services

We are in an unprecedented market—and for a few reasons that I’m sure each one of us are feeling in one way or another. Our industry is still helping clients through a hard market with rising premiums and reduced appetite for taking on risk, stemming from a global pandemic, inflation, supply chain disruptions, staffing shortages, natural catastrophes, the rise in nuclear verdicts, and more.

However, in my position as Chief Development Officer for one of the largest insurance brokerages in the U.S., I’m seeing another economic phenomenon that has also not been seen in our lifetime: high interest rates and high multiples at the same time. The dichotomy between these two factors are almost always opposing—that is, if rates are low, owners can command higher multiples or top-dollar for selling their businesses and vice versa. As such, gone are the days when banks were lending capital at a pace that kept-up with the high-volume of M&A transactions.

With deal counts down, interest rates up, and multiples still high, now may be a good time to sell your insurance agency, but this seller-sweet-spot will not last forever. In fact, it may not even last through the end of 2024.

So, if you’ve been considering selling your agency and want to take advantage of this unique moment in time for sellers, I would suggest focusing on three key areas to ensure you get top dollar:

1. Prepare comprehensive financial and operational records. In additional to your financial records, compile any operational procedures, employee manuals and business processes, which will help a potential acquirer understand how your agency operates and ensure a smooth transition, should a transaction take place.

2. Value your agency. It may help to hire a professional appraiser, but research into recent sales of similar agencies and understanding industry benchmarks to set a competitive price will be crucial. Demonstrating long-term growth will also be essential in selling for top dollar.

3. Plan what a smooth transition would look like. One of your top concerns is likely ensuring your employees and clients are taken care of post-acquisition, so be sure the buyer has a solid plan and proven track record for a smooth integration.

At PCF Insurance Services, our M&A strategy centers on bringing tech-forward teams with high-growth potential into our organization, and because we are intentional about the types of businesses we acquire, we value firms that strengthen our core business, align with our entrepreneurial culture, and have a long runway for growth ahead of them. We want the moment that you join our team to be an open door to new opportunities, resources and industry-leading professionals for you, your employees and your clients.

READY FOR GROWTH

“We all want to grow, so we look for agencies with great reputations, cultures, and philosophies. These are the people who will keep our collective knowledge, offerings, and revenues growing.”

Donnette Mayer, Universal Business Insurance (UBI) a PCF business

KNOWLEDGE TO SHARE

“One of the benefits of joining the PCF team is the deep bench strength that we have access to. We all share our knowledge to create a think tank, which makes us unstoppable.”

Seth Zaremba, Zinc a PCF business

THE POWER OF PCF

Insurance is—and always will be— about relationships for us.

Our nationwide team harnesses the power of PCF Insurance’s strong market relationships and shared services approach to deliver more robust, competitive solutions for clients.

The PCF Insurance business model allows for the value-added benefits of a large national brokerage, with the personal attention and service level that comes from a local agent and their team.

Learn more about the potential upside to joining PCF Insurance. Visit our website at pcfins.com/partner-with-us or email us at partnerships@pcfins.com to start the conversation.

INVESTORS IN DATA

“Unlike many of our peers, PCF continues to be an early adopter and heavy investor in operational infrastructure and technology. Ensuring the proper digital platforms and processes are in place is crucial to our ongoing growth and our ability to scale successfully.”

Keith Savino, Broadfield Insurance a PCF business

PRODUCTIVITY THAT SCALES

“Everything that our Shared Services team does is rooted in efficiencies and productivity at scale. They are consistently seeking, integrating and refining opportunities for our collective, long-term success.”

Matt Barber, Western States Insurance Agency a PCF business

News & Markets

Hard Market Conditions Expected to Ease in 2025 as Claims Inflation Softens: Swiss Re

By L.S. Howard

Hard market conditions in the global non-life insurance sector will continue this year, but will begin to ease in 2025, as general inflation and claims inflation conditions soften, according to Swiss Re in a report, which discusses the macroeconomic factors that are driving growth in the non-life insurance and life insurance sectors.

Non-life premiums grew by 3.9% in real terms in 2023, up from 0.8% in 2022 — an improvement primarily driven by rate hardening, said Swiss Re’s sigma report, titled “World insurance: strengthening global resilience with a new lease of life.”

The report noted that rate increases in personal lines have exceeded those in commercial lines, which are beginning to ease after years of hard market conditions.

The profitability of the non-life sector is continuing its upward trajectory, showing a 6% increase in 2023, Swiss Re said, noting that stronger underwriting results and investment returns will drive improved sector profitability.

Swiss Re estimated that non-life insurers’ return on equity will improve to

about 10% in 2024 and 10.7% in 2025, with progress on both the underwriting and investment fronts.

“We see underwriting results turning positive, supported by high premium rates, rising exposures and easing claims growth as inflation moderates. Investment returns will continue to benefit from the higher interest rates, while the cost of capital will remain broadly stable,” the report said, noting that investment returns in both the non-life and life sectors are benefiting from higher interest rates.

In a commentary accompanying the report, Swiss Re said: “An insurance sector in healthy earnings mode will attract more capital. This, in turn, will drive industry growth and expand risk transfer capacity, enabling the industry to contribute more to narrowing existing protection gaps in many parts of the world.”

However, Swiss Re warned in the report that non-life insurers need to remain alert to potential new inflation shocks such as those caused by geopolitical conflicts that disrupt global supply chains and rekindle claims inflation. In addition, social inflation has been a key concern for

liability insurers in the U.S. since 2015, and there are signs that social inflation also is affecting the Australian market.

Macroeconomic Trends

Insurers are benefiting from a resilient macroeconomic environment, said Swiss Re, which forecasts global economic growth of 2.7% in 2024 — a significant improvement over expectations a year ago.

“Steady economic growth, strong labour markets, rising real incomes as inflation moderates, and higher interest rates are driving and will continue to drive insurance demand. And higher interest rates are supporting industry profitability,” the report said. Swiss Re estimates that total premiums — for both non-life and life — will grow by 3.2% in 2024, “with higher interest rates boosting demand for life savings business, and still hard market conditions supporting non-life business, especially in personal lines.”

In a statement accompanying the report, Jerome Jean Haegeli, group chief economist, Swiss Re Institute, said: “The insurance industry has reached a new equilibrium. The global economy has surprised on the upside, which should drive more demand for insurance.”

The report noted that “Growth has proved resilient, disinflation — although bumpy — is running its course, and interest rates have moved higher. This bodes well for stronger investment returns for insurers generally and easing claims costs in non-life.”

Addressing the issue of inflation, Swiss Re said the worst of the post-pandemic global inflation crisis is over, but upside risks remain, “which could continue to put upward pressure on insurance claims.”

“Central banks, meanwhile, will likely continue to prioritize inflation containment over growth,” Swiss Re continued. Further, geopolitical risks are significant and are on the rise, which adds “uncertainty to the outlook for economies and insurance markets.”

News & Markets

What Role Does Insurance Play in a Politically Charged Climate?

By Elizabeth Blosfield

Law enforcement officials are continuing to investigate the July 13 shooting at a Butler, Pennsylvania, rally for former President Donald Trump’s 2024 election campaign. During the incident, the former president was injured, one spectator was killed, and two more were critically injured before the assailant was fatally shot by the U.S. Secret Service. The FBI said in a public statement that the incident is being investigated as an assassination attempt and potential domestic terrorism. The shooter was identified as 20-year-old Thomas Matthew Crooks of Bethel Park, Pennsylvania.

“The U.S. is more polarized than ever before,” said Lucy Straker, U.S. focus group leader of political violence and deadly weapons at Beazley. Speaking during a Carrier Management webinar, “From Ballots to Business: Election-Year Challenges for Insurers,” which took place before the shooting in Pennsylvania, Straker said the U.S. is seeing an increase in what she described as “lone-wolf” attacks, which is contributing to shifting ideas about what terrorism can look like.

“I think that’s what we’re concerned with, as an insurer, is that changing face of terrorism,” she said. “It’s the everyday violence that we see across the U.S. that’s very evident, and that’s what I think our clients need to be aware of and prepare for.”

This comes as more than 160 million Americans are registered to vote in the 2024 U.S. presidential election, according to the World Economic Forum.

“Elections and transitions of power can oftentimes lead to civil unrest and increased geopolitical risk,” said Matt Westhoff, head of North American

To watch the full on-demand webinar, “From Ballots to Business: Election-Year Challenges for Insurers,” visit: https:// www.carriermanagement.com/research/ research/from-ballots-to-business-election-year-challenges-for-insurers/.

commercial property at Beazley, speaking alongside Straker during Carrier Management’s webinar prior to the Pennsylvania shooting. “We saw this in the U.S. just four years ago.”

However, while the U.S. will head to the polls on November 5, the upcoming U.S. election isn’t the only factor that could lead to heightened unrest. This will be a record-breaking year for elections globally. U.S. policy institute The Center for American Progress reported that around the world, more than two billion voters in 50 countries will go to the polls.

“We all know about the election in the U.S., but I think what a lot of people don’t know is that roughly half the world’s population will be voting this year,” Westhoff said.

(Editor’s Note: The United Nations estimates that the global population reached eight billion mid-November 2022, so according to The Center for American Progress, the number of people casting ballots in elections this year is closer to one-quarter of the global population, although this is a difficult figure to estimate.)

“I think broadly speaking, the world is a riskier place than it was four years ago. It would be rather unwise not to expect increased civil unrest and political violence. It’s one of those situations where, obviously, we hope for the best but prepare for the worst,” Westhoff said.

Starting a Dialogue

One of the best ways for insurers to prepare, Westhoff said, is simply by starting conversations. “We are starting

to have more conversations with brokers, with clients, wanting to know if they’re prepared from a coverage standpoint,” he said. “They want to know how their coverage would trigger and what their retention level is. So, we are certainly seeing the conversations start, and there are different products out there in the market to protect you depending on what your risk is.”

Insurance coverage exists for events such as political rallies and often covers issues such as loss of attraction — or a decline in business as a result of a certain location being perceived as dangerous — and liability, said Yoni Sherizen, founder of insurtech Gabriel. This is a topic he knows well, as Gabriel was born out of two separate mass shooting incidents occurring in 2016.

On June 12, 2016, four people were killed and seven were injured in a mass shooting in Tel Aviv, in which two Palestinian gunmen opened fire on patrons at the Max Brenner Cafe at the Sarona Market. Four days later, 49 people were killed and 53 injured in a mass shooting at Pulse Nightclub in Florida.

Gabriel’s website says those incidents led Sherizen and co-founder Asaf Adler to think more critically about how chaos and lack of communication, compounded with legacy technology, can lead to damage and loss of life.

“The longer an incident goes on, the more impactful or harmful it becomes,” Sherizen said. “So, what we look to do is to actually minimize that risk.”

Sherizen and Adler worked to build a

continued on page 26

The amount of a hit insurers in the United States could take from damage caused by Hurricane Beryl, catastrophe modeling company Karen Clark & Co (KCC) said. The U.S. estimate includes the privately insured damage to residential, commercial, and industrial properties and automobiles, as well as business interruption, KCC said. It does not include boats, offshore properties, or National Flood Insurance Program losses. KCC also said privately insured losses would be close to $510 million in the Caribbean and $90 million in Mexico.

109

$2.7 Billion Million

The number of AT&T customer accounts affected by a massive hacking incident in which data such as records of calls and texts from 2022 was illegally downloaded in April. The U.S. telecom company said the FBI is investigating and at least one person has been arrested after AT&T call logs were copied from its workspace on a third-party cloud platform in a significant breach of consumer communication records.

8,650

The estimated number of people who died in traffic accidents during the first three months of 2024, a decrease of about 3.2% from Q1 2023, according to the National Highway Traffic Safety Administration. The quarter looks to be the eighth in a row for a decline in traffic fatalities, dating back to the second quarter 2022. The projected decrease in Q1 comes as vehicle miles traveled increased 0.6% from January through March.

$48 Million

The amount Progressive Insurance has agreed to pay to settle with a class of 93,000 New York policyholders who claim the insurer underpaid their total loss claims on their vehicles. The $48 million represents approximately 54% of the compensatory damages alleged by the plaintiffs plus pre-judgment interest. After payment of attorneys’ fees and administrative expenses, the amount to be distributed is approximately $31.3 million, yielding individual payments of about $335 on average.

Declarations

No Labor Cost Depreciations

“As a consumer protection agency, DIFS works to ensure that consumers are protected from confusing or deceptive contract language. … Consumers might not be aware that their insurer depreciates not only damaged property, but also the cost of labor to repair the damaged property.”

— Said Michigan Department of Insurance and Financial Services (DIFS) Director Anita Fox after the department released a bulletin prohibiting insurers from discounting labor costs for depreciation when paying a homeowners insurance claim unless the insured has agreed in advance to the reduction in exchange for a lower premium. Beginning next year, consumers who incur a covered loss to their home will not have labor costs discounted from their claim payment due to depreciation unless the consumer chooses that coverage in exchange for a lower premium.

A Complicated Filing

“This is a complicated rate filing where Allstate is switching complex wildfire models and introducing its wildfire mitigation discounts in compliance with the commissioner’s Safer From Wildfires regulation. … The rate filing is currently under review by the Department.”

— Said a statement from the California Department of Insurance regarding Allstate’s filing seeking to increase its homeowners insurance premiums in California by an average of 34%. According to reports, it would be the largest rate increase this year and would impact more than 350,000 policyholders. Allstate stopped issuing new California homeowners insurance policies in 2022, but it still insures many existing policyholders.

Affordable Housing Coverage

“This new collaboration offers a solution to the broken insurance market, a critical step to making sure New York encourages the creation and preservation of more affordable housing statewide.”

— Rachel Fee, executive director of the New York Housing Conference, said about Vermont-based captive insurer, Milford Street Association Captive Insurance Co., that promises to provide insurance for New York affordable rental housing buildings at a time when advocates say coverage is difficult to afford or obtain. The captive will be owned by its member premium payers and will provide insurance only to New York affordable rental buildings that have a regulatory agreement limiting rents and receive public financing.

Primed for Beryl

“As seen from pre-season forecasts, oceanic conditions in the North Atlantic were primed for storm activity. … With both sea surface temperatures (SSTs) and oceanic heat content at or near record levels across much of the tropical North Atlantic and Caribbean Sea, these environmental conditions were favorable for Beryl’s development.”

— Sarah Hartley, director of Moody’s RMS Event Response, said in the aftermath of Hurricane Beryl. Unusually warm water is a major intensifier of hurricanes and likely contributed to Beryl’s strengthening into a Category 5 storm. Beryl was the first major hurricane of what forecasters expect to be an “extremely active” Atlantic Hurricane season.

Valueless Vehicle Coverage

“While consumers received coverage with no value, Fifth Third Bank profited.”

— The Consumer Financial Protection Bureau (CFPB) said in a statement about the settlement with Cincinnati, Ohio-based Fifth Third Bank over its practice of illegally forcing vehicle insurance onto borrowers who already had coverage. Fifth Third agreed to pay a $5 million fine for demanding borrowers pay for coverage they did not need and to pay a $15 million fine for illegal sales practices.

The CFPB estimates that Fifth Third’s actions harmed 35,000 consumers, including about 1,000 who had their cars repossessed.

‘Home Hardening Helps’

“State policymakers should consider extending the program or establishing a longer program to encourage home hardening among all homeowners. … Home hardening helps prevent future damage, thereby limiting risk for insurers and, in turn, limiting the growth of premiums.”

— Florida Tax Watch, a nonprofit government watchdog in operation for 45 years, said in an analysis of the Florida property insurance market. The group called for more home-hardening considerations and is urging state lawmakers to expand wind-mitigation tax breaks for homeowners struggling with higher insurance premiums. A sales-tax exemption on impact-resistant doors and windows expired at the end of June, the report noted.

With over 23 years of consistent growth, the future looks bright at TWFG. Whether you are a change agent, or an Agent looking for change, there are many opportunities to become part of the TWFG Family – a family of fiercely independent, loyal, and passionate insurance professionals who are committed to serving their communities with integrity. So what are you waiting for?

National

WTW appointed three former Aon executives to roles within its financial institutions and professional services industry division, a part of Corporate Risk and Broking (CRB) North America.

Heather Mann, based in Miami, joins WTW from Aon, where she spent the previous 23 years, most recently serving as an executive vice president.

Bracken was previously chief executive officer at Fortitude Re and CFO at AIG General Insurance. Prior to AIG, he worked in global finance and audit at GE Insurance, GE Capital and Arthur Andersen & Co.

Bracken is based at Zurich North America’s headquarters in Schaumburg, Illinois.

in 2012. He also served a term as chairman from 2015-2018. From 1988 to 2012, he was an attorney in private practice, primarily representing plaintiffs in workers’ compensation, employment matters, and other civil litigation.

Larry Trombino, an attorney by training, is based in New York City. He spent the last 16 years at Aon, most recently serving as a senior vice president in the financial institutions space.

Jeanette Younger, based in San Francisco, also joins WTW from Aon, where she spent the previous eight years. She most recently serving as a vice president, focused on developing E&O insurance programs for large financial institutions and their insurance agents, registered representatives and investment advisors.

Zurich North America appointed James Bracken chief financial officer, succeeding Peter Hirs, who returns to Zurich Insurance Group as group head of mergers and acquisitions.

Ryan Specialty Holdings revealed a handful of executive moves after announcing the retirement of founder Patrick G. Ryan. Edward F. McCormack has been named chief executive officer of RT Specialty. McCormack is currently president of the wholesale brokerage — a role he has held since 2016. He joined RT Specialty in 2010 and has served as chief operating officer and general counsel.

Brenda (Ballard) Austenfeld and Michael T. VanAcker will become co-presidents of RT Specialty.

Austenfeld, who joined RT with its acquisition of Westrope in 2013, is now CEO and president of RT National Property. She will continue in this role.

VanAcker is currently executive vice president of RT Specialty. He began with Ryan Specialty in 2011.

The new roles take effect on October 1, the same day Timothy W. Turner takes over as CEO of Ryan Specialty Holdings. Jeremiah R. Bickham will become president and Janice M. Hamilton will take over as CFO.

Chubb made several executive leadership changes in its North American general insurance business, naming John Lupica executive chairman.

Lupica was vice chairman of Chubb Group and president of North American insurance. In his new role, Lupica will have executive oversight, including strategy, governance and attention to major issues, of Chubb’s general insurance business in North America.

Juan Luis Ortega succeeds Lupica as president of the North American business. Ortega was executive vice president of Chubb Group and president of Chubb’s overseas general insurance unit.

Scott Meyer, senior vice president of Chubb Group and division president of Chubb’s wholesale excess and surplus lines company Westchester, is named to the new position of chief operating officer of North America insurance.

Christopher Maleno, senior vice president of Chubb Group, has been appointed vice chairman, North America insurance. He will retain his current responsibilities as division president, North America field operations.

East

Wesley G. Marshall has been elected to a threeyear term as chairman of the Virginia Workers’ Compensation Commission (VWC). He succeeds Commissioner Robert A. Rapaport, whose term ended June 30, 2024. Marshall, of Richmond, was appointed to the commission

Tony Martinez has been appointed to the new position of chief information officer for Unison Risk Advisors (URA) Inc., the parent company for Baltimorebased RCM&D, Oswald Companies of Cleveland and Miami-based NSI Insurance. He will lead all technology resources throughout the Unison Risk Advisors portfolio. Martinez comes to URA with 25 years of global IT management experience.

Joe Engbert joined Alliant Insurance Services as senior vice president within its Alliant Americas division. Based in Washington D.C., Engbert will focus on designing, implementing and managing property/casualty insurance programs across a wide range of industries.

Before joining Alliant, Engbert was partner, senior vice president, at USI Insurance Services. He previously served as assistant vice president at AHT Insurance and as an account manager at Lockton Companies.

Alliant is headquartered in Irvine, California.

Insurance

broker The IMA Group, headquartered in Tarrytown, New York, named Matt High as

Heather Mann

Larry Trombino

James Bracken

John Lupica

Wesley Marshall

Tony Martinez

executive vice president of evaluation services operations and Elijah Marentette as vice president of payer services.

High, a seasoned healthcare and workers’ compensation executive, brings over two decades of industry expertise. He most recently served as senior vice president of operations at One Call. He has also held leadership positions within the Aetna/Coventry Workers’ Compensation organization.

members of the insurance team at HOVER Inc., and vice president of sales at Westhill.

South Central

Higginbotham named Mary Russell president, Private Client Services.

Russell is a long-time executive team member and former chief operating officer, Personal Insurance, at Fort Worth, Texas-based Higginbotham.

Arons Rosen supported clients through complex M&A transactions and lender diligence.

As market president, Arons Rosen will oversee strategic direction and operational execution for the Dallas market, which is among the largest and most robust in IMA’s current market portfolio.

entrance into the E&S market.

Southeast

CRC Group, a wholesale specialty distributor, added Joseph Carothers in Tampa, Florida, as senior team leader.

He previously spent eight years in underwriting with another wholesale brokerage.

Before joining IMA, Marentette was the chief operating officer of Impact Health. He has also held senior executive positions leading products and divisions at Coventry, myMatrixx and Concentra.

Geospatial technology and analytics firm EagleView, headquartered in Rochester, New York, hired Jenna Kinsman as vice president of enterprise growth for its insurance business.

Kinsman most recently worked at Hosta.ai, serving as chief revenue officer. She began her career as a property claims adjuster at Farmers Insurance in 2011.

She also served as national enterprise account leader at Enservio, senior sales executive, and one of the founding

This move marks the final division of the president title that Higginbotham Chairman and CEO Rusty Reid has held since 1989 into three separate division titles, with Chris Rooker as president, Business Insurance; Michael Parks as president, Financial Services and Employee Benefits; and Russell as president, Private Client Services.

In her new role as president, Russell will provide top executive coordination while overseeing operations throughout the division, leading a dedicated team that serves more than 44,000 individual clients across the 17-state Higginbotham footprint.

IMA Financial Group, an independent insurance brokerage and risk management consulting firm, named Jordyn Arons Rosen as its new Dallas Market president.

Arons Rosen succeeds insurance industry veteran Robert Broz, who played a pivotal role in the success of IMA’s Dallas office.

In her former role as IMA’s national practice director of Private Equity and M&A,

Watkins Insurance Group announced that Patrick Watkins has been awarded the distinguished Drex Foreman Award by the Independent Insurance Agents of Texas (IIAT). This prestigious accolade recognizes exemplary leadership and significant contributions to the insurance industry.

As CEO and majority shareholder, Watkins is credited for spearheading numerous initiatives to enhance client engagement, streamline operations, and foster a culture of continuous improvement at Austin-based Watkins Insurance Group.

Incline P&C Group, headquartered in Austin, Texas, appointed Scott Galiardo as chief actuary and chief underwriting officer for commercial and specialty lines, and Tony Urban as chief development officer.

In this newly created role, Galiardo will develop Incline P&C Group’s Actuarial function and lead efforts to build the specialty book and other future commercial insurance. He joins from Sompo International, where he most recently served as ceded reinsurance officer.

Urban also will continue as chief underwriting officer for all personal lines. He will focus particularly on Incline’s

Craig Brown also was named a team leader in CRC’s Tampa office.

He has two decades of industry experience in claims handling and product management.

CRC Group also added Craig Anderson and Joyce Carlton in Florida.

Anderson, who has been in the insurance business for more than 25 years, is now an underwriting team leader for marine business, based in the Tampa-Bayport office.

Previously, Anderson was a wholesale yacht and marine underwriter with a wholesale brokerage.

Carlton joined the TampaBayport operations as an underwriting team leader. She also was previously with a wholesale brokerage.

In Georgia, Alliant Insurance Services named Tammi Starkey senior vice president and producer for its employee benefits group for the company’s Southeast region. Starkey is a certified pharmacy benefits specialist and was previously a senior vice president at a global consulting firm.

Alliant Insurance Services is headquartered in Irvine, California.

Matt High

Elijah Marentette

Jenna Kinsman

Mary Russell

Craig Anderson

Business Moves

National

Marsh McLennan Agency,

The Horton Group

Marsh McLennan Agency said it has a definite agreement to buy Illinois-based brokerage The Horton Group Inc.

The deal is expected to close during the third quarter of 2024.

Orland Park, Illinois-based Horton Group’s CEO, Dan Horton, will join the subsidiary of Marsh, as will Horton employees upon closing of the acquisition. Horton’s nine existing offices will continue to operate.

Founded in 1971, Horton offers property/ casualty insurance, employee benefits consultation, and personal lines coverage to businesses and individuals across Indiana, Illinois, Wisconsin, Minnesota and Florida.

The Horton Group was ranked No. 50 in the Insurance Journal Top 100 Independent Property/Casualty Agencies report in 2023, with nearly $60 million in property/casualty revenue.

East

Relation Insurance Services, York Insurance Services

Insurance brokerage Relation Insurance Services acquired the assets of York Insurance Services Inc. in Forest Hill, Maryland.

York owner Butch Tilley will continue managing the office.

Relation is ranked by Insurance Journal within the top 25 largest agencies in the country by revenue. It has approximately

1,350 employees across more than 137 locations nationwide. Relation is a privately held corporation backed by Aquiline Capital Partners, a private equity firm based in New York and London.

Monroe Insurance Center, Smith Brothers Insurance

Monroe Insurance Center Inc., an independent insurance and risk management agency in Monroe, Connecticut, has merged its operations with Smith Brothers Insurance.

The leadership team at Monroe Insurance Center including John Rodrigues, Anna Rodrigues, Peter Lozier, Gary Freeman, Alan Helfer, and Paul Ackert will continue to serve clients and they will maintain their office in Monroe, while leveraging the resources of Smith Brothers, one of the nation’s largest insurance brokers.

Smith Brothers’ main office is in Glastonbury, Connecticut, and it has other offices across Connecticut, Massachusetts, New Jersey and New York.

Smith Brothers has more than 250 employees.

Midwest

Marsh McLennan Agency, AmeriStar Agency

Marsh McLennan Agency, a subsidiary of Marsh, has acquired AmeriStar Agency Inc., a Wayzata, Minnesota-based independent agency.

Founded in 1987, AmeriStar provides a range of insurance coverage solutions to

high net worth individuals and commercial clients.

All AmeriStar employees, including President Matt Schadow, will join Marsh McLennan Agency and continue to operate out of their existing Wayzata office.

South Central

Arthur J. Gallagher, Zayla Partners

Arthur J. Gallagher & Co. acquired Katy, Texas-based Zayla Partners LLC (Zayla).

Zayla is an executive compensation strategy firm that serves clients across a variety of sizes and industries.

Chris Crawford, Ian Keas and their team will remain in their current locations in Texas and Colorado under the direction of Steve Coco, Global Human Resources & Compensation Consulting managing director for Gallagher’s employee benefits consulting and brokerage operations.

Southeast

Hub International, Skinner & Co.

Hub International, a global insurance brokerage headquartered in Chicago, has acquired Georgia-based Skinner & Co., a brokerage offering commercial coverage, performance bonds and risk management services.

Todd Skinner and team, in Marietta, Georgia, will now join Hub Gulf South and the firm will be referred to as Skinner & Co., a Hub International company.

Hub International, Wyatt Insurance Services

Hub International Ltd., the global insurance brokerage and financial services firm, acquired Wyatt Insurance Services in Tennessee.

With offices in Knoxville and Clarksville, Wyatt is an independent agency specializing in commercial and personal insurance, risk management and employee benefits, particularly for nonprofits and construction companies.

Ashley Wyatt, president, started the agency in Knoxville in 1995; Cliff Horne is partner and benefits advisor; and Andy Huddleston is a partner. They will join the Hub Mid-South team.

Arthur J. Gallagher, NetClaim

Arthur J. Gallagher & Co., the global insurance brokerage and consulting firm, said its claims and risk-management subsidiary, Gallagher Bassett, has acquired Georgia-based NetClaim from NAVEX.

NetClaim, in Norcross, Georgia, provides first-notice-of-loss and first reports of injury for clients, including carriers and third-party administrators across the United States. NAVEX, part of NAVEX Global, produces risk and compliance management software.

Arthur J. Gallagher is an insurance brokerage, risk management and consulting services firm headquartered in Rolling Meadows, Illinois.

PointeNorth Insurance Group, Valdosta Insurance Services, Southern Insurance Advisors

PointeNorth Insurance Group has acquired Valdosta Insurance Services and Southern Insurance Advisors, both based in Georgia.

Valdosta Insurance Services provides property/casualty insurance, employee benefits and life insurance products. Valdosta is headed by Julian “Trey” Sherwood III, president; and Byron Courson, vice president. Both Sherwood and Courson will continue to operate the agency under the Valdosta Insurance brand.

Southern Insurance Advisors, an independent agency in Milton, Georgia, also provides property/casualty coverage. Principal Kevin DiPetrillo will remain on board and the company will operate under the PointeNorth Insurance Group brand.

PointeNorth, headquartered in Atlanta, said it provides growth opportunities for agencies, as well as a perpetuation strategy and continued advancement opportunities for agency employees.

West

Arthur J. Gallagher, Cornerstone Commercial & Personal Insurance Services

Arthur J. Gallagher & Co., the global insurance brokerage and consulting firm headquartered in Meadows, Illinois,

acquired Rancho Cucamonga, Californiabased Cornerstone Commercial & Personal Insurance Services Inc.

Phil Hakopian, Allison Hakopian and their team will remain in their current location under the direction of Scott Firestone, head of Gallagher’s Southwest region retail property/casualty brokerage operations.

Cornerstone Commercial & Personal Insurance Services is a retail insurance agency serving commercial and personal clients primarily in San Bernardino and Riverside counties. The agency maintains a focus on commercial real estate, construction and homeowners associations.

OUT SOU R CING SOLUTION S WIT HSTAF F BOO

Spotlight: Diversity

You Need Diversity to Grow: Ako Founder Nnaji Talks Success Strategies

By Jahna Jacobson

The future is diverse and community is key.

That’s the message from Ngozi Nnaji, founder and managing partner of Ako Insurance Consultants. She started the agency in response to the growing need for the insurance industry to increase the representation of Black professionals.

Nnaji recently visited OnPoint with Peter Van Aartrijk to talk about proactively creating a more diverse industry to serve a rapidly changing insurance market.

In her 25 years in the insurance industry before starting Ako, Nnaji held various roles, including underwriter, production, business development and service roles with global insurance carriers and brokerage firms. Today, her independent insurance agency educates clients about insurance as a wealth-building tool and does outreach to those interested in careers and career development with the hope of diversifying the industry.

“We focus on creating equitable opportunities, and we do that through talent management and talent recruitment,” she said. A lot of that is accomplished through culture work, by working with organizations to create those equitable opportunities for their talent internally, she said.

“But then also we look at what is the external impact of creating equitable opportunities,” Nnaji said. “So, through that, our clients are usually

the insurance employers and stakeholders within our industry. And so, working with them, we also work with the talent themselves.

“We believe that especially with BIPOC [Black, Indigenous, and people of color] talent, there is this lack of understanding, kind of the preparation needed, and the intentionality needed, around creating and identifying your career path,” Nnaji said.

“And, so, not leaving it for chance, but really being, creating foresight and identifying what the next five to 10 years look like for yourself and being able to articulate that. So, we work with talent to help set the stage right for meaningful conversation when they’re looking for positions and jobs and opportunities.”

Nnaji is driven by being a mother, the daughter of a Nigerian immigrant and by

being an advocate. When she was in high school, before she was even considering a career, her father told her that she would be an actuary. “I owe my love and my passion around insurance to my dad,” she said.

After a short stint as an actuary, she found her personality was better suited to a role that would connect her to people and the community, so she became an underwriter. She worked as an underwriter for

20 years.

“I was managing a team and really was faced with some challenges around me being able to be authentic and who I was as a Black woman, as an insurance professional, as a mother, all those things, in the corporation that I was with,” she said.

One of the benefits of the insurance industry is the opportunity to change roles within the industry, she said. “You can kind of redefine yourself, hone skill sets that you hadn’t honed before, and still be an insurance professional,” she said. “That’s what I love about our industry. I probably will pivot five more times after this and still be in this industry.”

She started looking at other options and ways to redefine her purpose. Because of her father’s influence, giving back to the community was import-

Ngozi Nnaji

ant to her, she said. Becoming an agent offered the hands-on interaction she was looking for.

As an agent, she knew she could not only reach business owners and families and educate them about their best insurance options but also recruit them into the industry.

“I really feel like I was directly impacting the wealth generation and the asset protection that these tools of insurance kind of benefit and offer us. And so, I was like, I’m going to do it.”

But even with a degree in actuarial science and 20 years in underwriting, the switch presented challenges, including access to capacity, markets and appointments, access to money and access to know-how.

“Like, there wasn’t anyone

out there kind of saying, ‘Hey, Ngozi, this is how you do it. This is how you build an agency,’” she said.

“I mean, here I am, 20 years in, and I’m having these problems. I wonder what’s happening to those that are two years in or just doing it, you know, really from scratch,” she said. “I need to advocate for others and help them identify the resources they need and connect them to the resources that they need to be successful.”

That drove her to her next step, opening Ako to focus on creating equitable opportunities for individuals in the BIPOC and LGBTQ communities.

“We believe that if you look back in time, U.S. insurance

To better support you and your customers.

To help you protect businesses in your community.

history, you’ll know that Black Wall Street across the country was built off the giveback, the reinvestment of Black insurance companies into Black communities,” she said. “And those Black insurance companies couldn’t have done that work without the blood, sweat and tears of Black insurance agents.”

Black Friday Network

Ako’s Black Friday Network is the first Black-owned, multidisciplinary network of Blackowned independent insurance agencies. “We wanted to create this space where they had the undivided attention of these individuals, these stakeholders, these carriers, so they can tell their story,” Nnaji said. “There are 20 of us that exist across

To listen to the full OnPoint podcast with Ngozi Nnaji, visit: https://www.insurancejournal.tv/videos/23718/

the country to date, and we leverage our market share in the industry community, but also create a space in place that Black agents can thrive.”

“Our goal is to ultimately have insurance companies recognize the opportunity when you diversify your distribution,” she said. “When you start to diversify your distribution, you know, the business imperative around creating equitable opportunities is now you have access to markets that you hadn’t even focused on before.”

To keep your agency thriving. This is our promise. Let’s achieve it together. Learn more at

News & Markets

continued from page 14

team that could deploy next-generation technology solutions covering a range of public safety threats.

Gabriel’s team includes employees and advisors from corporate security, police, military, intelligence and technology backgrounds. The insurtech uses AI and machine learning to replace legacy security systems dependent on human interaction with automated systems.

“We’re on a mission to get this out into the hands of as many people as possible,” Sherizen said. “We called it Gabriel — named after the angel Gabriel — because we really have a vision for a technology that protects anyone, anywhere, wherever they are in the world. It’s always kind of waiting there in the wings, ready to spring into action and help you and support when you really need it.”

So it removes that trigger. But at the point that the weapon is brandished with intent, you have the ability to seek advice from experts like crisis responders.”

Sherizen added that he’s seen insurers moving from a reactive to a preventative posture — a theme he’s observed in his work across the industry beyond civil unrest.

“Most active assailant/workplace violence cover will pick up the pieces once everything is over in a catastrophic incident,” he said. “However, bringing those resources in earlier can help prevent a situation or mitigate the harm in real time, for example, providing smart detection, alerting and incident response tools and regularly training with them.”

Building Relationships, Understanding Coverage

He said preparing for a traditional fire or natural disaster evacuation isn’t enough today. It’s essential that organizations prepare for active threats, which are ongoing situations that change rapidly and require a more advanced set of training and tools.

“Insurers have also been discussing political tension and an increase in incidents for a few months now — not only in the U.S,” he said. “This is an election year in many locations across the globe, and I’ve heard underwriters discuss their anticipated increase of incidents due to social tensions. This means they are expecting increased losses and are, therefore, adjusting their pricing accordingly.”

Beyond active assailant coverage and special event insurance for things like political rallies and protests, another coverage area that could come into play for insurers in the face of civil unrest is deadly weapons coverage, Straker said.

“That’s going to be triggered by the mere brandishing of a weapon, so with 29 states that have the ability to carry weapons now, arguably every single client should be purchasing that,” she said. “If people are there brandishing a weapon, you might not necessarily have to have had any physical damage or bodily injury.

Straker said her advice for insureds is to understand what they’re buying and to build a relationship with their broker and underwriter.

“If a client has purchased our product, when I go into a client meeting, I ask them to explain my product to me. Because I want them to understand the terms, the conditions, and most importantly, what triggers the policy,” she said. “Help me understand what you need cover for, and I can also point you in the right directions, so that comes down to the piece of buying policies that are fit for purpose as well.”

While Sherizen said harnessing better technology can help to prevent these threats, Tom Lewis, crisis management senior underwriter at Aspen Insurance, warned during Carrier Management’s webinar that technological capabilities and social media can create their own set of threats, as well.

“Social media allows people to organize really quickly and effectively,” he said. “It allows unrest to spread across the country, or even across the whole region really quickly. At the moment, we’re seeing misinformation and deep fakes.”

This is aided by social media algorithms that are designed to keep users’ attention

and generate advertising revenue by suggesting content based on users’ social media habits, he said.

However, he’s seen this leading to more polarized debates and stoked tensions.

“People end up in an echo chamber, where they’re really only speaking to people or reading articles that share the opinions that they already have, or more radical versions of those opinions, so they only have their views confirmed or radicalized even further,” he said. “I think that the end point of this is, even in well-established democracies, people can end up seeing political opponents not as rational actors as part of a democratic system but an existential threat in themselves. Once you start viewing political opponents as an existential threat, civil unrest can even become justified in some people’s minds.”

This means denial will be another big threat as the risk of violence increases, Straker added.

“Do not let denial get in the way of doing something about mitigating these risks,” she said. “Identify the warning signs. Understand your people. Know they’re your biggest risk and also your greatest asset.”

It’s important to communicate as well as educate and provide mechanisms for reporting, including anonymous reporting, if an incident occurs, she said. Insureds that find themselves as vulnerable soft targets — meaning they’re open to the public with limited security — should harden their assets especially as the U.S. moves closer to election day, Straker advised.

“We’re almost conditioned to violence as a country, so we accept the fact that violence is part of our everyday existence, whether you see it on social media or whether you read about it in the newspapers,” she said. “We only ever see the biggest, the baddest, the most gory when it comes down to violence. Yet, it’s happening every single day on our doorstep.”

Blosfield is the deputy editor of Carrier Management, a sister publication to Insurance Journal. Email: eblosfield@carriermanagement.com

•

News & Markets

California Contractor Settles EEOC Harassment Charge

Fremont, California-based contractor Superior Automatic Sprinkler Co. agreed to provide monetary and injunctive relief to a construction worker following an investigation by the U.S. Equal Employment Opportunity Commission.

The worker, who is transgender and identifies as queer, filed a charge with EEOC alleging his supervisors and coworkers targeted him with verbal harassment and physical threats

due to his gender identity and sexual orientation. He also alleged that he was transferred to new worksites in retaliation for reporting the harassment, and ultimately was constructively discharged because he did not feel safe enough to return to work.

The EEOC’s investigation reportedly found evidence confirming that despite the worker’s reports of

harassment, he company failed to act appropriately. Such alleged conduct is a violation of Title VII of the Civil Rights Act of 1964, which prohibits discrimination and harassment based on sex, including gender identity.

Following the investigation, the parties engaged in a pre-litigation conciliation process resulting in a settlement that required the company to pay monetary damages, revise its non-discrimination policies, conduct employee training, and provide additional training to managers and staff involved in the investigation of employee complaints of discrimination and harassment.

Colorado Workers with Bird Flu Toiled in Heat, Without Effective Protective Gear

By Leah Douglas and Julie Steenhuysen

Colorado workers who contracted bird flu were working during extreme heat and under large fans, factors that made wearing protective equipment difficult and potentially contributed to their infections, the U.S. Centers for Disease Control and Prevention said.

The CDC had previously confirmed four cases and a fifth presumptive positive case of bird flu among Colorado farm workers who were killing and disposing of chickens that had contracted the virus.

Four other farm workers have contracted avian flu this year from infected dairy cows in Michigan, Texas and Colorado.

The risk to the general public from bird flu remains low, Nirav Shah, principal deputy director of the CDC, said on a call with reporters.

When workers were killing the infected chickens, it was 104 degrees Fahrenheit (40 degrees Celsius) in Colorado, and strong industrial fans made it hard for workers to keep protective gear on their faces, Shah said.

“PPE use was not optimal, particularly the masks and eye protection,” Shah said, referring to personal protective equipment. There have been about 160 people responding to the poultry farm outbreak,

including staff from the U.S. Department of Agriculture and contractors killing and disposing of animals, Julie Gauthier, an official at USDA’s Animal and Plant Health Inspection Service, said on the call. About 60 workers at the farm developed symptoms and were tested, Shah said. Those who tested positive for bird flu had a mix of mild symptoms including conjunctivitis, or pink eye, and mild respiratory symptoms.

Initial analysis of the virus does not show worrisome changes to the virus making it easier to spread among people, and there is no evidence of person-to-person transmission, Shah said. The CDC is not recommending that livestock workers be vaccinated against bird flu, Shah added.

The infected chicken farm is in a county where cows have tested positive for bird flu, Eric Deeble, a U.S. Department of Agriculture official, said on the press call. More than 150 dairy herds across 13 states have been infected with the virus since March, according to the USDA.

An analysis of DNA from an infected worker indicates that the infections at the chicken farm are “largely the same” as those in some of the dairy herds, suggesting that this outbreak may be related to dairy outbreaks in Colorado and other states, Shah said. A CDC investigation into the origin of the outbreak is ongoing, Shah added.

My New Markets

GC/General Contractor Workers’

Comp - High Risk

Market Detail: HR and PEO Consultants offers high risk workers’ compensation programs for general contractors. Highlights include aggressive pricing through various deductible programs and very reasonable collateral requirements on the deductible programs, A rated carriers, and an alternative solution for those clients with high risk/high hazard exposures and high experience modifiers. All types of accounts will be considered: high mod; cancellations/non-renewals; lapse or gaps in coverage; new business; no prior; height exposure over two stories and more. PEO programs are designed to write the following types of risks: bus companies; cell tower work; garbage haulers; heavy construction; building operations; janitorial; landscaping; tree trimming; logging; roofing (commercial and residential); staffing operations; trucking; furniture movers; long haul and short haul; parcel; USL&H; manufacturing; bakeries and more. Loss control programs and safety programs are put in place to combine with the client in an effort to reduce exposure of potential claims and creating a safer work environment.

Available Limits: Not disclosed.

Carrier: Rated A; not disclosed. States: Available in all states plus Washington, D.C.

Contact: Lisa DeNoto; ldenoto@hrpeoconsult.com; 561-866-8674.

Alarm Installation Contractors

Market Detail: Insurance Protection Advisors offers an exclusive in-house program for residential and commercial alarm installation contractors. Target clients include alarm installation contractors — CCTV, building access badges, conference/ training room automation and home theater installation. Monitoring exposures must be subcontracted out with proper risk transfer. Medical alarms, correctional facilities and casinos are not eligible. Coverage and highlights: professional liability; per project aggregate; fire damage legal liability; medical payments; worksite pollution. Special extensions available: additional insured and waiver of subro-

gation (as required by written contract); “automatic” scheduled entities; per project aggregate; employee benefits liability; primary/non-contributory wording available; minimum premium $5,000. Submission requirements: industry standard Acord; IPA supplemental; loss runs — five years valued within past 90 days and details of losses excess of $25,000; firms in business less than five year — will need owner(s) resume. $6 million maximum premium, $1 million minimum premium; has pen.

Available Limits: General liability - $1 million / $2 million; follow form excess - $5 million in-house authority.

Carrier: Summit Specialty; non-admitted; rated A VIII by AM Best. States: Available in most states plus District of Columbia. Not available in Alaska, Hawaii, New York, and Cook County, Illinois.

Contact: Dylan Brightman; dbrightman@ insprotectadvisors.com; 972-403-2417.

PEO & Temporary Staffing Program

Market Detail: RPS Signature Programs specializes in insurance for professional employer organizations (PEOs) and temporary staffing agencies. We provide them with a variety of workers’ compensation insurance options that include guaranteed cost, large deductible, administrative services only and captive policy solutions. PEO and temporary staffing insurance is a specialty niche that requires the right knowledge and experience to navigate successfully for your insureds. These organizations are in the unique role of serving as an employer that provides labor on a contingent basis to their own clients. An integral part of staffing company’s success and ability to function is the administration and management of a workers’ compensation program for their placed employees. We cater to professional employer organizations and temporary staffing agencies. Primary offering: workers’ compensation. Other product offerings: general liability; property; hired and non-owned auto; employment practices liability (EPL); professional liability; umbrella; cyber liability; crime. RPS program highlights: claims expertise and advocacy; client stewardship reviews;

experience mod analytics and management; industry benchmarking studies; consultative service platforms; underwriting, compliance and risk evaluation expertise; risk portfolio, service and relationship management; data visualization; risk alerts; claims, payroll and policy data integration; predictive rate modeling. RPS clients are assigned to a team of industry specialists who are dedicated to providing a wealth of resources to service insureds’ needs. Our approach ensures that managing our insurance program is seamless and easy. The RPS Signature Programs PEO and Temporary Staffing team provides one source for all of the products and services insureds’ need.

Available Limits: Not disclosed. Carrier: Not disclosed.

States: Available in all states plus District of Columbia.

Contact: Dino Fabrizio; dino_fabrizio@ rpsins.com; 407-758-8658.

Large Builders Risk and Property Coverage

Market Detail: Bermuda Brokers provides larger builders risk and property placements direct in Bermuda. Bermuda Brokers specializes in working with managing general agents, program managers and brokers, helping them establish and develop niche programs.

Available Limits: Not disclosed.

Carrier: Not disclosed.

States: Available in all states plus District of Columbia.

Contact: Kurt Bounds; kurt@bermudabrokers.com; 630-815-7005.

About This Report:

Welcome to the 20th annual Insurance Journal Top 100 Independent P/C Agencies report.

The Top 100 list is ranked by total property/casualty agency revenue for 2023 and comprises only those agencies whose business is primarily retail, and not exclusively wholesale.

Special Report: Top 100 Agencies ®Insurance Journal

Also included is a list of the nation’s Top 20 Bank Holding Companies and Top 20 Banks in Insurance, courtesy of Michael White’s Bank Insurance Fee Income Report - 2024 Edition. (See page 31.)

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.

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.

Is your agency on this list?

Tell everyone! For reprints, badges, plaques and more, call (800) 897-9965 x125 or email us at: reprints@insurancejournal.com.

Insurance Journal’s 2024 Top 100 Property/Casualty Agencies

®Insurance Journal

Editor’s

Insurance Journal’s 2024 Top 100 Property/Casualty Agencies

Top 20 Banks in Insurance Brokerage Fee Income (2023/Nationally)

®Insurance Journal

www.discovercard.com/

www.trustmark.com/

www.firstcitizens.com/

Peoples Bank Marietta, Ohio www.peoplesbancorp.com/

Fifth Third Bank

Ohio www.53.com/

$15,266,000 Washington Federal Bank, N.A. Seattle, Washington www.wafdbank.com/

$14,071,000 Provident Bank Jersey City, New Jersey www.provident.bank/ 15 $14,045,000 First State Community Bank Farmington, Missouri www.fscb.com/ 16 $13,670,000 Pinnacle Bank Nashville, Tennessee www.pnfp.com/

$13,398,000 Citizens Bank NA Providence, Rhode Island www.citizensbank.com/

$13,095,000 Choice Financial Group Fargo, North Dakota www.bankwithchoice.com/ 19 $12,390,000 First United Bank and Trust Co. Durant, Oklahoma www.firstunitedbank.com/

20 $12,148,000 Arvest Bank Fayetteville, Arkansas www.arvest.com/

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 - 2024 Edition

Top 20 Bank Holding Companies in Insurance Brokerage Fee Income (2023/Nationally)

Spotlight: Condos

Condos: A Difficult Market to Navigate

By Patrick Wraight

The condominium building is an interesting form of owning property where an individual owns their unit, what is sometimes referred to as a box of air, and at the same time, becomes a part of the condominium ownership association, which owns the real property. In essence, one becomes a shareholder and stakeholder in the larger organization simply by owning the place where they live.

It’s a bit more complicated than that because there are residential condominiums that are owned as long-term rental units, others that are owned as short-term rental units, and others that are non-residential units. For this discussion, let’s stick to the residential units in residential buildings. These are the condos that many of us think about when we think about this topic.

We are hearing from many around the insurance industry that condominium buildings are getting harder to insure. The terms are getting restrictive. The underwriting requirements are getting harder to deal with, and the price is getting very high. So, what’s going on?

A Hard Market

This is a classic hard market problem, but there is more going on.

Let’s just start with the simplest, most direct answer. As this is being written, we are in the middle of a hard market. The primary characteristics of hard markets are that prices are high, underwriting is tight, and companies shy away from certain types of insureds.

When insurance companies see their profitability and policyholders’ surplus begin to diminish, they are going to take certain steps to ensure that they continue

in business. Every dollar that an insurance company brings in can be set into different categories of expenses on the other side of the balance sheet. Some money is spent on operations, which is the same as every other business in the world. Insurance companies also have to make a profit because that’s one of the biggest reasons a person or organization enters into business. But there’s more to it than that.

Money for Claims

Carriers must account for the claims that the insurance company knows about and reserve money to pay them. Every time a claim is reported, the company needs to determine how much money the claim could be worth and set that money aside. Insurance companies also have to set aside money for the potential future claims that may come.

Insurance companies need access to

money because of the risks that they accept. Each policy represents the potential for a claim for the limits of that policy. That’s part of why each state requires that an insurance company maintain policyholders’ surplus. This is money that isn’t earmarked for a reported claim, daily operations of the company, profit or some other purpose. It’s set aside in case the insurance company can’t cashflow claims with current premium payments or other sources of money.

Combined Ratios and Inflation

In recent years, insurance companies’ combined ratios have exceeded 100%, meaning that the company was paying out more than they were bringing in through premiums. That was fine for a while because the companies had investments that could make up the difference so that they were still making a profit.

The condominium as a way of owning property is about 60 years old in the United States.

When inflation hit and hit and hit, those investments began to bring in reduced investment income, making those ratios harder to sustain. That’s a simplified look at one of the causes of a hard market, and poor economic conditions, which in the end means that insurance companies have started to protect themselves by writing fewer risks, charging more for the risks that they are writing, and restricting coverage through policy changes.

Aging Condominium Buildings

Those general market conditions don’t tell the whole story. The condominium as a way of owning property is about 60 years old in the United States. The first condominium laws went into effect in Puerto Rico and Hawaii in 1958. Ever since then, condominium buildings have been built in cities all over the United States. Many of those buildings were built in the 1960s, ‘70s, and ‘80s. This puts those buildings at 40 years old and up, which means that they were constructed accord-

ing to the building codes in effect when they were built.

Buildings are just like everything else in the world around us. They need maintenance, upgrades and changes. In 2021, a portion of the Champlain Towers South building in Surfside, Florida, collapsed in the middle of the night. That building was completed in 1981. Investigators determined that the building collapse was caused by deferred maintenance. Deferred maintenance issues are caused when someone is aware of a problem with a building but for some reason, the problem isn’t fixed right away.

In your house, it would be like that time when you discovered a leak under a bathroom sink, but since no one uses that bathroom, you just shut the water off and said to yourself that you’ll fix that when you have time later. The sink’s leaked for the last decade. That’s deferred maintenance.

Condominium associations will struggle

with these maintenance and upgrade issues because the association has one primary source of income, the association fees that are charged to unit owners. If those fees are not raised appropriately to meet the financial needs of the organization, then they have to choose how to spend the money that they have, and they have to determine how they are going to raise enough money for any additional budget items, like significant maintenance.

Condominium Association Boards

Condominium associations are run by elected boards. These boards are made up of unit owners who seek election to the board and they serve according to the by-laws of the association. The fact that these boards are comprised of volunteers who run for election for any number of reasons and with any number of backgrounds means that the board can sometimes be difficult.

continued on page 34

Spotlight: Condos

continued from page 33

Let’s go back to the deferred maintenance issue and say for example that a resident noticed something off in an underground parking structure so the board votes and approves hiring a structural engineer to investigate. The engineer returns with a report that includes a recommendation. She recommends that the association make significant repairs, making the parking garage unusable for a minimum of one year.

The board then has to decide how it will vote to proceed, knowing that residents will not be happy about not having their parking spot, nor will they be happy about the cost of this repair work. Maybe they ask the engineer for some options for temporary repairs, or incremental repairs that will minimize the disruption to the residents. Maybe the board will pay the cost to bring another engineer in for a second opinion and start the process over. In the meantime, the inspections, reports and deliberations happen over several months of board meetings. Maybe the board can’t take action because they have a hard time getting the required quorum in the summer. After all, people take vacations. Then board member elections come up again and some new board members cycle off the board and new members join. The board has to elect a new president. So,

after all that, the new board needs to come up to speed on all of the board business that has been pending, including getting their insurance renewal quotes from their insurance companies.

Insurer Actions and Concerns

Add to this that the board may not have any people who understand their insurance needs, the insurance process, or why the insurance company keeps demanding that they take the electrical boxes out of residents’ closets. If we change our scenario a little so that instead of a resident discovering a potential problem and the board hiring an engineer, the insurance company sends an inspector out to look around, take pictures, and check on the building while underwriting the renewal.

When the insurance company sends a field underwriter out to look at the building, the field underwriter will send a report back to the company and three things are likely to happen if there are any issues at all with the building, since the building is potentially the largest exposure that the association has.

The insurance company could offer to renew the policy with a significant premium increase. This is hard for the association to swallow, but it’s the easiest option to deal with.

The insurer could offer to renew the

policy with a less significant premium increase and with significant coverage changes. This may be easier to deal with for the association because the price tag is higher but lower than it could be. They could talk themselves into the reduced coverage in several ways, including thinking that a loss isn’t that likely, is it?

The insurance company could simply non-renew the policy because of the conditions that they found on inspection. This is one of the worst cases for the insured because then they will have to go through the process of looking for other companies to write the insurance and many of them will start asking questions, which will need answers.

It’s also possible that the insurance company provides a conditional renewal on the condition that certain repairs get made within a specific time. That’s a difficult option for the association because then they have to do something about the expensive repairs quickly or go looking for other insurance, which will easily be more expensive than the current company.

In the end, this segment of the insurance market is very difficult to navigate and there are no simple answers.

Wraight, CIC, CRM, AU, is director of Insurance Journal’s Academy of Insurance. He can be reached at pwraight@ijacademy.com.

INSURANCE INDUSTRY CHARITABLE FOUNDATION

Helping communities and enriching lives, together.

IICF Month of Giving

October 2024

Be a Part of Something Greater

Insurance Industry Charitable Foundation (IICF) is a unique nonprofit that unites the collective strengths of the insurance industry to help communities and enrich lives through grants, volunteer service and leadership. IICF is celebrating our 30th anniversary of serving as the philanthropic foundation of the insurance industry, having contributed $48 million in community grants along with nearly 340,000 volunteer hours served by industry professionals across the US and UK. Join with us as #insurancegivesback!

Register as a team or individual volunteer for the IICF Month of Giving and sign up for projects near you at: volunteer.iicf.org

Since 1998, IICF has hosted the longest ongoing volunteer initiative in the industry and this year we are expanding to the Month of Giving. Join with colleagues in giving back as we celebrate insurance industry volunteerism throughout our 30th Anniversary year!

Midwest Division

Kelly Hartweg Phone: (773) 991-2149 khartweg@iicf.org

Northeast Division

Betsy Myatt Phone: (917) 544-0895 emyatt@iicf.org

Southeast Division

Sarah Conway Phone: (214) 228-2910 sconway@iicf.org

Western Division

Melissa-Anne Duncan Phone: (714) 870-1084 maduncan@iicf.org UK Division

Wendy Wilder Phone: +44 (0) 7469 392 453 wwilder@iicf.org

Spotlight: Recreation and Leisure

Youth Sports Liability Market in ‘Armageddon Mode’

By Allen Laman

Beset with massive rate increases, dramatic rejections of coverage, and severely dwindling market capacity, the current youth sports liability market is historically challenging, according to insurance professionals with expertise in the area.

“I feel like there’s been a massive shift that’s been happening,” said Tyrre Burks, founder and CEO of Player’s Health, a sports-centric insurance provider. “Especially within amateur sports in general, the market is probably the hardest that we’ve seen in history.”

Fewer Youth Sports Carriers

Burks said 30 carriers used to write youth sports insurance. That number has dwindled to “a little less than a handful,” over the course of just 10 years. Now, if organizations get two quotes “it’s a miracle,” Burks said.

Youth sports formerly had low-frequency, high-severity liability claims related to sexual abuse and molestation (SAM). In the past decade, though, frequency and severity have increased, Burks said, and the market is responding to the huge losses that came with settlements like the widely publicized USA Gymnastics and Boy Scouts of

America class action lawsuits.

“The way that I see it is that you had these large, generalist carriers that had small sports books,” Burks explained, “and if those books run hot, they’re just going to move off them.”

Sexual abuse presents long-tail liability, and there aren’t many carriers that want to have the reserve requirement for the changing risk.

Burks explained that in addition to SAM, assault and battery is an increasing risk in youth sports organizations. Many carriers are beginning to exclude the risk, though, as parents attack referees and “the environment becomes more competitive,” Burks said.

“It’s a lot more toxic than it used to be.”

A specialty understanding of this risk is needed to write it long-term, Burks said. “And I think a lot of carriers started to see the legislative environment change and the liability environment change in terms of responsibilities that these organizations have. And they didn’t have the tools and the resources to help them manage their risks.”

National governing bodies used to be able to secure liability towers between $5 million and $20 million that included sexual abuse coverage. Today, Burks said national governing continued on page 38

Spotlight: Recreation and Leisure

continued from page 36

bodies are lucky to secure $1 million in coverage. This problem also exists at the club level. Players Health writes approximately 2,000 gymnastics clubs, and “they can’t get general liability with sexual abuse north of $25,000,” Burks said.

Liability capacity is “extremely scarce” in the marketplace, he said.

Chris Price, principal at ESP Specialty Insurance, explained that the sharpened focus on risk management and past claims data has led some carriers to reassess their offerings, particularly in sports perceived as high risk.

“This adjustment has made it crucial for us to prioritize scale and the diversification of sports premiums to maintain stability in coverage offerings,” he said.

“There’s a noticeable uptick in demand for comprehensive packages like general liability,

including participant legal liability, and specific policies like sexual abuse and excess accident medical,” Price said. “Leagues and coaches are becoming more aware of the necessity for broader coverage, including directors and officers liability with an EPLI sub-limit. Additionally, there is an increasing demand for ancillary coverages such as equipment, crime and cyber protections.”

The market has seen rate increases and more restrictive terms, particularly concerning sexual abuse and brain injury coverages, he said. Still, he added that well-positioned brokers and MGAs “continue to navigate these challenges effectively. Technological advancements are also transforming purchasing habits, indicating a dynamic future for the industry.”

Risk Management: ‘Only Way They’re Going to Be Insured’

Burks explained that the cli-

mate hasn’t reached the point where organizations can’t get coverage, but the question has become: Can they afford the coverage they already have?

An increase of half a million dollars on a million-dollar policy can strain youth sports organizations.

“We’ll be on this path for a while,” Burks said.

Players Health has developed a platform that combines athlete safety programs with insurance. Services available through that platform include coaching and staff credentialing, background checks, adjudication and adverse action. Education and training, incident reporting and investigative services and injury management are also accessible through the program.

“I think one of the things that we’re trying to do is we’re trying to give visibility on risk. We’re trying to actually make it more attractive for more

carriers to want to write this risk. It’s not a good thing for us to have no competition and organizations seeing 50% rate increases.”

Burks said brokers who are experts and risk advisors are needed now more than ever, especially in the youth sports space. Players Health has focused on supporting its brokers by helping them be better risk advisors for their clients, he said — a necessary step in securing affordable coverage.

“The risk management is key,” Burks said. “It’s the only way they’re going to be insured long-term.”

When asked for examples of how league operators and coaches are better managing risks, Price said that as new volunteers cycle in, training and background checks mandated by state and federal laws, as well as carriers, are becoming more common.

“Leagues frequently seek guidance on implementing safety measures like heat exhaustion protocols and waiver recommendations, showing a proactive approach to risk management,” he added.

Every claim an organization has will have a dramatic effect on the next year’s premiums, which will impact budgets and ultimately the athletes’ parents and guardians, Burks said.

“These organizations need to know what they can do to prevent these claims from happening, and the more effective that they are going to be able to do that, the better their budgets are going to look next year,” Burks said.

“We’re in an Armageddon mode right now, in that you have to be that thoughtful about it.”

Idea Exchange: Agency Management

Upskilling: Three Skills to Sharpen as a Seasoned Agent Who Wants More

Whether they own their own agency or not, an insurance producer is essentially an independent businessperson. Why? Because a producer’s income, as someone whose primary income is based on commissions, is largely up to the producer. This may be obvious, but I find many producers don’t think about their careers and their potential in this way. Those who not only recognize and accept this fact but choose to move forward by enhancing both their selling and business skills are following a formula to achieve never-ending increases in income.

By Tony Caldwell

their income. In other words, as long as you are willing and able to spend more time working, you can increase your income without having to think about what you make per hour. Income increases just come with more hours. But when you run out of time to add to your workday physically or practically, the only way to increase income is to determine what tasks in your day bring in the most revenue per hour and focus your time on those tasks. The implication of this principle is that to continue to make increases in income, you have to become more efficient at income generation. This is, of course, outside of premium rate increases, which generally follow inflation and do not produce an increase in real income.

independent insurance agent, you are a skilled salesperson. The key to increasing your sales success and income, whether its closing rate, prospecting ability, account rounding, renewal success or other keys is additional education, training and practice. When was the last time you took a sales course of any kind focused exclusively on the art, or science, of selling? When I ask most seasoned pros, it’s been years, often decades, ago. Some successful producers never had any formal sales education.

“Time has no value until you run out of it.”

That’s what I like to tell busy insurance professionals who aren’t satisfied with

Three proven methods can help you achieve this.

Become a Better Salesperson

If you make a good living as an

In our industry we recognize the need for continuing insurance education to reinforce what we already know, increase the depth of our knowledge and to keep up with changing trends. The same is important to maximize our sales capabilities. Many excellent sales courses exist that are industry specific like Dynamics of Selling, the Wedge or even carrier-sponsored sales training. Valuable general courses are also available, often with

coaching as an added component like the Sandler Training Program and the venerable Dale Carnegie courses. These programs offer the mid-career agent, who wants to grow their capability and income, a reinforcement of what they already know, additional techniques or skills, and perhaps updated information on buying styles or other important topics.

Becoming better at anything requires training in addition to education. While many producers confuse the two, training is taking learned information and putting it to work over and over again until a new skill, or an existing one, is honed to a sharp edge. Like the marathon runner who runs every day to maintain and increase fitness, the producer in search of more income finds ways to repeat new skills frequently.

The last part of becoming a better salesperson is perhaps the most neglected and the most important — practice. Practice differs from training because it takes place

either in the classroom, in a group setting, or one-on-one with a coach rather than in a real-life sales setting. Practice helps the professional fine-tune a skill. Practice opens the door for mentors and coaches to provide perspective and feedback on performance to improve it.

Think of a professional golfer who studies the game in a class or through a book. They study the equipment, courses and match strategy. That player is getting educated. Of course, in addition, they keep playing every week and repeating the new things they have learned as they train themselves to get better. But the best aspiring golfer will also seek coaching and feedback as they fine-tune their performance. Great insurance producers, those who make the highest incomes, do the same thing.

Become a Better Business Manager

Early in my career, I encountered the Pareto Principal, which is often referred to as the “80/20” rule wherein 80% of results (like sales income) comes from 20% of customers. I decided to test the theory by giving away 80% of my customers while retaining 80% of my income (created by the other 20% of my customers). After a couple of months, I had replaced the income I’d given away and encouraged my partners to test the theory themselves. They weren’t willing to take the risk. Over the next several years, my income grew substantially while theirs stagnated. None of us had added additional hours to our workday.

Other ways to improve the management of your business or book of business include regularly analyzing it and determining key performance statistics like revenue per account, lines of business per customer and retention rate. Only when you know where you are, can you develop a plan to improve. Without working more hours, can you increase your income by managing your retention rate, revenue per customer and other performance metrics? Of course, you can and now you are increasing income with no additional work by managing your sales efforts.

You can also consider analyzing carrier compensation and competitiveness.

Agents should put more time where the rewards are greater and find ways to maximize time effectiveness with a more rigorous time management program. For example, you may want to try hiring your own assistant (not your agency provided CSR) to take scheduling, follow up and other activities, which will likely cost less than that calculated goal hourly income.

Strategies like these can improve your income results, often with less effort required going forward, as you manage your “business” better.

Become a Better Insurance Technician

Our books of business are largely built on relationships, it’s true. But often, those with whom you can build relationships are determined by how much you know. Larger, more complicated accounts require more technical knowledge to write them successfully. To move up the commission food chain, an agent might want to hone their expertise. Our industry offers many opportunities to do so.

As business changes ever more rapidly, those with the latest industry knowledge, are best positioned to sell to new businesses, or take existing business away from someone else because they are expert in a new area of risk that the incumbent may have ignored. For example, as artificial intelligence becomes more widely used, additional coverage expertise could be required as it was when cyber liability exposures exploded along with the “internet of things.”

As a mid-career insurance professional, you have a choice. You can settle for what you have already achieved, as most of your colleagues and competitors will. Or you can seek ways to become more successful — and do it without sacrificing work-life balance.

Never stop improving.

Sharpen your skills as an insurance expert, business manager and sales professional, and unleash unlimited earning potential.

Caldwell is an author, speaker and mentor who has helped independent agents create over 250 independent insurance agencies. Website: www.tonycaldwell.net. Email: tonyc@oneagentsalliance.net.

Idea Exchange: The Competitive Advantage

Agency E&O Lessons to Consider

I’m seeing more cases of carriers rescinding policies for application errors, fraud or outright lies (call it what you will) than I’ve ever seen, and these are situations when there is an errors and omission (E&O) claim against the agent.

increased the applicable standard of care; and 3) he had no conscience.

No one needs an agent if that agent is not going to offer quality advice, complete applications and advise on coverage. An agent is 100% waste of money without those services.

was included without even advising the insured because even incompetent agents do that. And now this insured is suing the agent.

By Chris Burand

The standard of care agents must meet is rising relative to their responsibility to assure the carrier the application is correct. In other words, most E&O classes focus on the standard as it applies to consumers. Pay attention to the standard as it applies to carriers. The standard is rising more in some states than others, but agents who want to avoid E&O cases, and especially avoiding losing an E&O case, are wise to take additional steps, steps which many insureds will not appreciate and steps that will potentially increase the staff’s workload.

'Not My Problem'

A case I recently read involved what appeared to be a lie relative to who owned a vehicle. It turned out the applicant did not really own their vehicle, which may be causal to the reckless driving he exhibited resulting in a serious crash. The carrier rescinded the coverage for lying. Not only was the carrier sued for denying the claim but so was the agency. Agencies always lose time and money and incur increased stress when sued. It’s just a matter of how much.

I’ve personally seen more than one agent look the other way and purposely not ask or verify whether their insured owned the vehicles listed on the application.

As one producer told me last year, “That just takes more work and it’s not my problem!” He was correct on the first count and possibly correct on the second count assuming three points: 1) That his state’s standard of care is so poor as to be a moot legal point; 2) no one in his agency

Not an Order Taker

I recently saw another case where this point is especially pertinent. The insured clearly needed a specific coverage — business interruption. BI is a standard coverage in commercial lines and for the life of me, I cannot fathom why any agent would not automatically include, if not at least offer, this coverage to 100% of their clients. Failure to do so indicates a level of ineptness that should preclude them from having an insurance license, or they are simply trying to make a price sale by excluding key coverages hoping the insured would not notice. I suppose an innocent mistake could occur, too, but that is highly unlikely except in a horribly run agency without common checks and balances.

On the insured’s part, he was self-assured and appeared to know what coverages he had without actually reading the policies or having the insurance background to know what coverages existed or what he might need. Knowing what coverages you need goes way beyond common sense, especially in the commercial space but also on personal property relative to ordinance coverages.

The insured certainly could have done a better job, but as with so many business owners, their excessive confidence in “just knowing” and their skill set not including reading boring insurance policies points to the need for an agent to advise.

While states have generally established extremely low standards of care, no one needs an agent that does not advise on the coverages needed. This insured needed a good agent, not an order taker, to advise him on the coverages he needed. The agent really should have made sure BI

I read about another case that involved several interesting E&O points. This case was detailed in Carrier Management, Insurance Journal’s sister publication, regarding a carrier sending a nonrenewal to a homeowner for failure to make the required underwriting improvements. The underwriter was correct to be concerned because the house burned down shortly thereafter.

The insured sued the carrier and the

agency because they never received their nonrenewal notice and did not know their home was not insured at the time of loss. Several courts ruled the carrier only had the responsibility to prove they sent the nonrenewal (they sent it certified, but the post office couldn’t figure out how to deliver it). The courts ruled that absent a special relationship, the agency had no duty to notify the insured of the nonrenewal.

This case has several interesting E&O prevention points to discuss and then I’ll unify the three cases for additional E&O advice. If the agency was regularly notifying its clients of nonrenewals but failed to notify this client of the nonrenewal, the agent quite possibly would not have won the case. Consistency is critical, especially now that good plaintiff attorneys can more

easily identify the consistency with which agents act using what is effectively AI in their discovery process.

Second is the method of delivery of the nonrenewal notice. Many laws exist relative to the Electronic Policy Delivery Act dating back to the late 1990s. This act created different rules for notifications and policies delivered via the U.S. Postal Service versus email-like delivery.

As we all know, the postal service is perfect. Therefore, the laws were written such that if the sender can prove they sent the notification/policy, surely the insured must have received it.

However, the rules are opposite for electronic delivery. There, the sender must prove the recipient received it, not just that they had sent it.

No one needs an agent if that agent is not going to offer quality advice.

The carrier in this case had sent the notice physically rather than electronically. Agents need to understand this law, specific to their insured’s state when forwarding policies and notices.

Two Important Points

To tie these cases together, the best E&O advice that exists are the following two points:

• Don’t write lousy clients. The commission earned on a $1,000 or $5,000 policy is not worth the headache. Just think how many of those policies you must write just to cover your E&O deductible.

• If clients have the coverage they need, the odds of an E&O claim are miniscule. Things must really, really go wrong for a strong case to be brought. When clients have the coverage they need, an agent can do almost everything else wrong and not ever be sued. And selling clients the coverage they need has absolutely NOTHING to do with traditional cross-selling. Traditional cross-selling generally means selling clients two insufficient policies instead of one.

There is the old cross-selling story that the coverage and E&O guru Mike Edwards used to tell about how cross-selling insurance is not the same thing as asking someone if they want fries with their hamburger. Cross-selling insurance is generally a red herring.

Instead, the best cross-sale possible is, “Do you want advice with that policy?”

This increases the standard of care, but my clients who do it well have lower E&O exposures and higher incomes.

Considerable work is required to take this approach and make it work, but the effort is worth it. And you’ll get better quality clients in the process, making your life less stressful, too.

Burand is the founder and owner of Burand & Associates LLC based in Pueblo, Colo. Phone: 719-4853868. E-mail: chris@burand-associates.com.

Idea Exchange: Minding Your Business

Proper Profit Center Accounting

Do owners really know which departments or lines of business are making money in their agency? What are small commercial accounts costing the agency? How can the agency make personal lines more profitable? When is it time to hire a new producer or account manager for commercial lines? What would it cost to set up a benefits department with experienced people to start rounding out the agency’s accounts?

These and other important questions can be answered by establishing good profit center accounting.

Profit center accounting is a tool for management to assist them in making strategic management decisions. The concept is to allow a closer review of small portions of the overall agency in order to evaluate how each of these segments is performing. Using the knowledge gained from this tool, resources, especially personnel, can be optimally allocated among the centers. Profit centers may also stimulate healthy competition between each department or unit.

Oak & Associates recommends that agencies perform a thorough review of the firm using profit centers at least annually as a minimum.

The Past Ways

Most agencies rely on the traditional profit and loss statement that reflects the various overall revenues, expenses and profit for the whole agency. However, these figures are not broken down into smaller segments or lines. This traditional method provides no insight into the true profitability of individual lines of business, internal departments, branch offices, or even individual producers.

The lack of profit centers limits the information available to agency owners when making important management decisions. The real issues, opportunities and constraints are hidden in the numbers and might never be understood due to the limitation of using single department accounting.

Establishing Profit Centers

So, what are “profit centers” anyway? The first categories to be considered should be by line of business (personal lines, commercial lines, benefits, life, etc.). Agencies with a small commercial department or a VIP personal lines department should have separate profit centers for these departments, as well. Noncommission income, such as premium finance or contingent income, should also be segregated. This will allow management to quickly see revenue AND expenses AND profit by line of business.

Most firms know the overall agency revenue, but not the expenses and profits by line of business. Overstaffing or understaffing situations can be easily determined relative to sales and service staff needed.

Profit centers by location are also very useful. Location “A” might be increasing revenue over time, while location “B” has stagnant growth and increasing expenses.

Management needs to have accurate information to make effective decisions. In some cases, it might make sense to assign profit centers to each producer or by producer teams. This way, producers can be held accountable or rewarded for the profitability or lack thereof in their department. Keep in mind that it often makes sense to create a profit center for administration, as well.

Use Sub-category Codes

For most accounting systems, profit centers can easily be established by creating sub-category codes. For example, commission income might be category 4000. Personal lines could be set up as 4010, and commercial lines could be 4020, etc. The

coding might be a suffix, such as 6200-100 in some cases, or for QuickBooks, it would be unique classes. Each revenue and expense category should be broken down by each of the defined profit centers. When done properly, management can have a separate financial statement for each of the established profit centers, as well as a consolidated financial statement for the agency overall. The same approach can be

Catherine Oak and

Bill Schoeffler

used for the balance sheet, as well!

For some situations, the agency might find it easier to export the accounting data to an Excel spreadsheet to do the final calculations. The reason for this is due to the number of manual calculations the bookkeeper has to do as she/he is entering the indirect expenses in the system. For instance, if the agency has a complex formula to allocate expenses,

the bookkeeper might find it easier to perform those calculations in Excel rather than manually doing it and then entering the numbers into the agency accounting software. The Excel spreadsheet allows the bookkeeper/accounting manager to preset the formulas, and once the numbers are entered, Excel will automatically allocate the expenses based on the formulas that are set up.

Making Proper Allocations

If there is a weak link in profit center accounting, it is in the proper allocation of income and expenses. When allocations are not accurately assigned, the results will not just be inaccurate but can be misleading. Management could easily make poor decisions based on interpreting bad data. The goal is to create an accurate yet efficontinued on page 46

Idea Exchange: Minding Your Business

continued from page 45

cient allocation process. Once the structure for allocations is established, the process is easy, albeit a little time-consuming.

This is the best way to do it. Income and expenses can be broken down into two categories — direct and indirect.

Direct income and expenses can be clearly identified as belonging 100% to a specified profit center. In contrast, indirect income and expenses can be assigned to multiple profit centers. For example, the salary for a personal lines CSR is easily identified as a direct expense to the PL profit center, while the cost of office supplies or the bookkeeper would likely fall across several profit centers.

Commission income is usually specified on the insurance company statements by line of business. Sub producer codes can be obtained if further refinement is required, such as income by branch office. Contingent income is also often broken down by line of business.

Indirect expenses can be allocated by commission volume, commissions, number of employees, number of accounts, or even time spent. After careful analysis, most of the time there is one best approach, but once in a while, the choice is

murky and may require a little finesse.

It is important to keep the whole process in perspective. Do not create a very complex allocation system that is very time-consuming when a simple approach that is fairly accurate will do and save lots of time. For example, telephone expenses can be allocated by commissions or by employee. If a more complex formula is created, the time spent figuring the allocation might not be worth the gain in accuracy since the overall cost for telephone expenses is usually less than 2% of total revenue! It is easy to allocate the cell phone costs to producers and which lines of business they sell.

Each revenue and expense category should be broken down by each of the defined profit centers.

Get Compensation Expense Allocations Right!

The biggest expense in all agencies is employee compensation (including owners and producers), so accuracy really counts with these expenses. Service staff is often a direct expense since an agency might

have two PL CSRs and three CL CSRs. For those service employees that split their time between roles, the salary costs are often best allocated by time. Producer commissions are direct expenses, but if a producer is paid a salary and handles multiple lines, the salary can be allocated by a ratio of commissions by line handled by the producer. Employee benefits and payroll taxes should match the same allocation approaches used above for property/ casualty employee compensation.

Administration expenses need to be charged back to each department. The salaries for accounting personnel, the receptionist, data entry people, and clerical staff can be allocated to each department by a ratio of commissions, number of accounts, or time spent. If the firm has an HR person or an IT person, expenses for those personnel are split based on a ratio of employees in each profit center. Office managers and owners paid a management fee need to assess their time and allocate their costs proportionally.

Indirect overhead expenses are typically allocated by either a ratio of commissions or by a ratio of employees in that profit center. Rent and automation expenses are good examples of expenses that are often allocated by the number of employees. Keep in mind to use the “full-time equivalent” number of employees, not the actual count of bodies. Someone who splits his or her time at the rate of 75% in one department and 25% in another, counts as 0.75 for the first department and 0.25 for the second department.

Office supplies, telephone and postage might be allocated by using a ratio of commissions or number of accounts. However, that approach in some agencies might not be appropriate because one line of business might not use the same number of supplies or postage or have phone charges in the same proportion as the other lines. A weighting factor on top of the ratio of commissions can prove to be helpful in those cases.

Keep in mind there are no hard-set rules for how allocations are done since every agency is unique. Again, there is a need to be accurate yet as elegant and simple as possible. Review the allocations after the

first six months after the firm incorporates profit center accounting and then again in another six months. An annual review of allocations after the first year is adequate to make sure the accounting is fair and accurate.

It is also very important to get department managers involved in the process. This way, the managers are both responsible and accountable for the profitability of their department. Bonuses can be tied to profit center performance.

How to Use It

Once all the income and expenses are properly allocated to the various profit centers, then proper management can begin. Management can now run reports to determine the profitability of each business segment. A quick review of the results will indicate if that new program the agency has been working hard on is paying off. For example, is personal lines just an accommodation, or is it a moneymaking department?

In some cases, the information will confirm a gut feeling. But don’t be surprised if the numbers contradict intuitive expectations. Management can now get clear answers to questions posed in “what if” scenarios.

Wouldn’t it be great to know the answers to the following questions? Was the direct mail program or new ad campaign for the personal lines department profitable? Are the perquisites paid to the commercial lines producers cost-effective? Is the staffing for the service department adequate? How would it impact the bottom line if the firm added a producer paid on a commission basis which brought in $75,000 in commission revenue the first year? Should the agency purchase a book of business?

Summary

Asking the right questions and then getting answers is a fundamental part of management. A good understanding of income flow, cost structure, and the profit potential within a business is critical to establishing and implementing effective strategies. One cannot know which direction is forward unless the direction of the path already covered is known.

Profit center accounting does require a certain level of sophistication to establish and maintain. It also requires some commitment and discipline to make the results meaningful.

Being informed will help make management more effective because it has the tools to know what to change. It also will

assist in bringing the agency to the next level.

Oak, CRM, CIC, is the founder of the consulting firm, Oak & Associates, based in Northern California and Central Oregon. Schoeffler, CIC, is an associate of the firm. Phone: 707-935-6565. Email: catoak@gmail. com.

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Idea Exchange: Emerging Issues

3 Emerging Risks: Severe Convective Storms, Battery Energy Storage and Drones

There’s something very human about attempting to master nature itself. We live in an uncertain time, however — one in which unpredictable weather patterns make it increasingly difficult to protect our property and communities from severe and destructive storms fueled in part by the climate. This classic push-and-pull — the uncertainty of nature, coupled with the human desire to resist and defend against the elements — is illustrated in three emerging risks.

By Lee Shavel

The growing danger of destructive convective storms, and the latest advancements in battery energy storage and drone technology are three risks insurers should keep an eye on as severe weather increases.

The Rising Threat of Convective Storms

The high winds and heavy rains that accompany powerful convective storms can endanger countless lives, and often carry a heavy price tag for businesses and property owners. These dangers often reverberate throughout the insurance industry. For example, according to Verisk’s 2024 Executive Insights: Homeowners report, wind and hail together averaged 62% of total homeowners catastrophe losses in 2023.

Convective storms — which form when heat and moisture are vertically transported into the air — have increased approximately 7% annually over the past 30 years, according to a recent report, and forecasters are predicting similarly volatile weather patterns in the U.S. for the remainder of 2024.

Compounding these risks to property and personal safety are the rising temperatures and weather patterns associated with the ongoing climate crisis. Changes in ocean temperatures have likely contributed to an increase in the frequency

and severity of high-wind storms like hurricanes, thunderstorms and tornadoes.

A recent study published in the Journal of Applied Meteorology and Climatology, for instance, found that tornadoes are increasingly likely to form in colder weather and in pockets of the country outside of the central Plains states — effectively shifting “Tornado Alley” eastward.

And unfortunately, convective storms are affecting areas most vulnerable to property damage. According to a 2023 Verisk analysis, roof conditions tend to be the poorest where hail or wind events are the most frequent and severe.

Property damage isn’t the only risk

from these storms. Power outages from severe storms have doubled across the United States over the past two decades, rising from approximately 50 to more than 100 annually in the past few years. The frequency and duration of these outages have also increased, according to the same report. These outages can affect people’s lives and businesses and disrupt access to medical services, clean water, heating, cooling, and food.

For homeowners, these storms can entail a convective double-whammy: costly damage from high winds and hail plus flooding from potential sump pump failures prompted by grid outages.

Surge in Battery Storage Increases Fire Risk

Many Americans are turning to a tried-and-true option to help contend with changing weather patterns and an ever-increasing demand for energy: the battery.

Battery energy storage systems, or BESS, have grown sharply in popularity in recent years and are projected to continue growing through 2024. The U.S. Energy Information Agency (EIA) expects capacity for these lithium battery-powered systems to double in the U.S. this year, after growing by a whopping 70% from 2022 to 2023.

But these lithium battery energy storage systems invite potential concerns, with fire risk being chief among them. In 2019, for example, four firefighters were seriously injured battling a blaze at a BESS in Arizona — just one of several blazes linked to these

systems in recent years. For commercial property insurers, the prospect of a BESS fire could mean damage both to the unit itself and to any property near enough to the flames or flying debris. Similar fire concerns hang over residential storage systems, though research to date indicates that commercial and residential BESS account for a small fraction of lithium-ion battery fires.

One additional challenge may loom even larger for residential users: cost. According to available estimates, a BESS could run homeowners anywhere between $12,000 and $22,000, depending on the technology, which might influence the overall value of the insured property.

Are Drones Ready for Takeoff?

Recent updates to federal regulation regarding unmanned aerial systems (UASs) — more commonly known as drones — coupled with a spike in recent years of commercial drone registrations, suggest that drones are poised to impact a wide variety of industries, and bring potential exposure to insurers.

In 2019, for example, 385,000 small commercial UAS were registered with the FAA. Five years later, that number has more than doubled to 842,000. The FAA expects the trend to continue. By 2028, it predicts the number of small, unmanned aircraft to reach 1.1 million.

Drone versatility is evident in the many recreational and commercial use cases. They can map wildfires, measure wind speeds, and survey damage from tornados and hurricanes. In other instances, drones have been used to respond to 911 calls, entertain crowds at light shows, and remove trash from the world’s tallest mountain. In many cases, drones have replaced laborious and time-consuming tasks for workers with a safer and lower-cost solution.

Drones already play a key role in the energy, construction and agricultural sectors. In March, for instance, the FAA approved an exemption waiver by one Texas-based drone manufacturer to “swarm” up to three drones carrying payloads above 55 pounds, potentially paving the way for scaled application

across U.S. farmland.

The technology is not without potential risks.

One study, for example, examined U.S. emergency department visits and found there was an increase in drone-related injuries between 2010 and 2017. Recent examples include a teenager who was hospitalized after an accident in Florida and a Taiwanese actor who was injured after a drone with a camera hit his face.

As these weather, energy and technology risks expand, insurers need to monitor the impact on their book of business this year and beyond.

Shavel is president and chief executive officer of Verisk, a data analytics and technology partner to the global insurance industry. He brings nearly 30 years of experience advising and leading publicly traded companies to Verisk.

Closing Quote

Behind the Development of the AI Marketing Toolkit

By Joseph Cox

In today’s fast-paced insurance market where time is more precious than ever, the ability to streamline operations and offload routine tasks is invaluable. Communication and relationships remain at the heart of what makes independent agents successful. However, meeting the increasing demands of clients requires enhanced operational efficiency. Artificial intelligence is transforming various industries by streamlining processes and improving productivity.

Trusted Choice, as part of the Independent Insurance Agents and Brokers Association whose mission is to empower independent insurance agents, recognized the opportunity to create a resource that specifically speaks to independent

agents and highlights exactly what they need to know about AI and how to get started.

“In today’s rapidly evolving market, independent agents can leverage AI to enhance their marketing strategies and stay competitive,” said Kevin Brandt, executive director of Trusted Choice.

“Trusted Choice is dedicated to helping agents navigate market complexities, improve client communications, and maintain strong client relationships through innovative solutions and continuous support. Our commitment is to support these agents every step of the way, providing them with the tools and resources they need to adapt and thrive.”

Now is the perfect time for an agent to explore these tools and maintain their competitive edge within the insurance industry.

Given that 80% of Trusted Choice member agencies operate with less than 10 employees, many of these agencies lack a dedicated fulltime marketing professional. To address the needs of inde-

pendent agents, Trusted Choice was inspired to create the AI Marketing Toolkit — a comprehensive guide designed to help agents begin to harness the power of artificial intelligence to enhance their marketing quality and efficiency.

AI and Marketing: A Natural Synergy

The integration of AI into marketing is not just innovative but increasingly essential. AI tools are particularly adept at handling a variety of marketing tasks, which can transform the way agents connect with their clients and optimize their outreach efforts. Below are a few of the marketing tasks outlined in the guide where AI can be a true game changer:

Content Creation: AI can assist in generating high-quality, traffic-driving blog posts, social media content, and email newsletters.

SEO Optimizing: Input the keywords you want a piece of content or a web page to rank for and AI tools can quickly modify your copy.

Sales Enablement: Create

call scripts, presentation outlines, or even practice sales calls.

Image Generation:

Generative AI can now also create high-resolution images to use in marketing materials.

Embracing AI for Future Success

The AI Marketing Toolkit is not just a technological upgrade; it is a strategic companion designed to empower independent agents by offering agents step-by-step guidance on how to embrace this new technology. By integrating AI into their marketing strategies, agents can look forward to more effective communication, improved client relationships, and a more modern and robust business model that saves time and increases efficiency.

“In collaboration with our supporting partners and Big 'I' teammates, we are working to create clarity and a better understanding of the many opportunities and some of the risks associated with AI in our industry,” said Chris Cline, executive director, Big “I” Agents Council of Technology (ACT).

This initiative is one of the many ways Trusted Choice and the Big “I” supports agents by providing them with the tools and resources needed to succeed in an increasingly competitive market. Embracing AI today means being ready for the challenges of tomorrow, and we are here to help our agents every step of the way.

Cox is marketing director, Trusted Choice/Big “I.”

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