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Court Orders Start to Expose ‘Startling’ Data on Litigation
Why Homeowners Insurers Are Unprofitable and What to Do About It: Aon
Market ‘Supercycle’ Likely to Be Prolonged: Lloyd’s CEO Neal
Court to Decide if White, Straight Workers Face Higher Bar in Bias Lawsuits
Closer Look: Lloyd’s Focuses on Delegated Authority Arrangements as Looming Market Risk
Best Agency to Work For – East: Deland, Gibson Insurance Associates Inc.
Best Agency to Work For – Midwest: Ansay and Associates
SILVER Best Agency to Work For – South Central: G&G Independent Insurance
Best Agency to Work For – Southeast: Energy Insurance Agency
Best Agency to Work For – West: CMR Risk & Insurance Services Inc.
Report: Making Friends with the Future – Agency Tech
Marketing Connection: Video Marketing Trends in the
Emerging Risks: Microplastics, 3D
and Heat Pumps
Competitive Advantage: Might the Realtor Ruling Affect Insurance Distribution?
It Covered?: Commoditization and
In the Dark: Telling the Truth About Flooding Requires Accurate Maps and Strong Disclosure Laws
Quote: Navigating Social Inflation in a World of Complex Claims
Closer Look: Update: What’s Going on With Condos?
Agents More ‘Satisfied’ with Commercial Insurers
Overall agent satisfaction with insurers of both personal lines and commercial lines has held strong despite a challenging underwriting environment, says a new J.D. Power study, with commercial lines satisfaction reaching an all-time high.
According to the J.D. Power 2024 U.S. Independent Agent Satisfaction Study, overall satisfaction for independent agents with personal lines insurers is 774, the same as last year. Satisfaction came in at 781 for commercial lines, up from 762 last year. J.D. Power noted this is the first time that agent satisfaction with commercial lines has surpassed that of personal lines. (All scores are on a 1,000-point scale.)
Key findings:
• Stricter underwriting standards and a reduction in the number of clients who qualify for a policy have made it more difficult for independent agents to work with insurers. Across both commercial and personal lines, agents cite higher effort to work with insurers and reduced flexibility in the onboarding process.
• Most independent agents in commercial (54 percent) and personal (62 percent) lines say they are proactively shopping for clients more now than they were two years ago, searching for lower rates and better product coverage.
• Carriers that have been able to maintain the strongest relationships with independent agents have done so by improving quoting platforms to make it easier to initiate new quotes; increasing communication with agents, both during the claims process and through educational and career development initiatives; and offering incentives such as cash rewards, trips and prizes.
“Carriers that recognize the challenges independent agents are facing—and help them navigate those obstacles through a combination of education, easy access to quoting tools and incentives—are managing to earn agent loyalty and satisfaction despite the tough market,” said Stephen Crewdson, senior director of insurance business intelligence at J.D. Power, in a statement. “Agents’ jobs have gotten harder, and a larger portion of agents are proactively shopping ahead for clients. Insurers that want to keep earning agents’ business are finding ways to partner with them every step of the way.”
J.D. Power noted this is the first time that agent satisfaction with commercial lines has surpassed that of personal lines.
Erie Insurance ranks highest among insurers for personal lines in 2024, with a score of 862, followed by Auto-Owners Insurance (845) and The Hanover (800) to round out the top three.
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News & Markets
Court Orders Start to Expose ‘Startling’ Data on Litigation Funding Sources
By Chad Hemenway
There is no federal law that requires the disclosure of litigation funding agreements in court cases, but some disturbing insight has been found in individual jurisdictions that have rules to increase transparency, according a panel on the topic at the American Property Casualty Insurance Association’s (APCIA) annual meeting.
“We don’t know the extent of it because there are so few jurisdictions that require disclosure, but in those few jurisdictions that have disclosure rules, it has been startling what has been uncovered,” said Paul Taylor, a fellow at the National Security Institute at George Mason University’s Antonin Scalia Law School, who served more than 20 years as counsel to the House Judiciary Committee’s Subcommittee on the Constitution and Civil Justice.
Taylor said that in one intellectual property case in federal court in Delaware, a Chinese-backed third-party funder named Purple Vine was involved. The Federal District of Delaware requires litigation finance disclosure via a standing order, and the implications of this particular finding, Taylor continued, are crystal clear when considering information shared during the legal process, especially during discovery — a pretrial exchange of information between parties in the case.
“No matter how airtight a nondisclosure rule might be, there are so many people involved that there’s a lot of room for leakage,” Taylor said at the conference in Chicago. “That’s where sensitive
Why Homeowners Insurers Are Unprofitable and What to Do About It: Aon
Anew report from insurance broker
Aon reveals that the prospective return on equity (ROE) for diversified homeowners insurance carriers decreased by 100 basis points to 5.0% from last year’s ROE, despite carriers receiving significant rate increases in 2023/2024.
More than half the U.S. states under review produced negative ROEs for homeowners carriers, with nearly all states producing a carrier ROE below the 10% cost of capital hurdle after investment gains.
Aon studied 300 insurance groups that represent the aggregate homeowners industry over the last decade. It found that more than 200 fail to earn an underwriting profit at all. Of the insurers that do earn a profit, about 50 of the 100 profitable insurers fail to earn a profit above the 10% ROE hurdle after adding investment gains.
The report highlights the “continued poor underwriting profit results over the
past decade” across the U.S. homeowners line of business. It finds that the last time the industry posted an aggregate underwriting profit was 2019 when the industry combined ratio was 99. Every year since 2019, the reported industry combined ratio for homeowners business was 105 or worse.
“The headline ROE numbers fail to illustrate the wide range of outcomes realized by insurers offering homeowners policies, and we expect insurers will earn meager ROEs insufficient to support the underlying risk,” Paul Eaton, head of US Actuarial of Aon’s Strategy and Technology Group, said.
What to Do
Eaton said Aon’s data show that “both policyholders and insurance carriers need to consider tools for loss mitigation and reduction for the line to find a long term profitable equilibrium.”
“The lack of consistent returns could deter the commitment of new capital to homeowners business,” the report warns, adding that insurers need to identify sources of capital, and quantify the appetite of that capital for various forms of risk.
The poor results have resulted from increased losses from secondary perils such as severe convective storms; the unexpectedly lower lifespan of asphalt shingle roofs and their poor wind performance in windstorms including severe convective storm events; and deductible increases not keeping pace with total insurable value increases leading to greater net exposures for carriers.
The study looks at the possibility that some insurers may be using homeowners as a loss leader so that homeowners combined with auto, and other personal lines, is profitable in its entirety. But Aon’s analysis finds this is a losing strategy.
Aon notes that insured loss from
information could give foreign competitors an advantage in a certain area. If they get sensitive knowledge about a company’s product, it could allow them to just reap proceeds from litigation, which they could use to fund other anti-American projects, whatever they might be.”
Third-party litigation funding (TPLF) — an investment to the plaintiffs from an outside firm in exchange for a share of a settlement or judgement — has been cited repeatedly by the insurance industry as a factor in the rising cost of casualty claims. Industry trade associations have lobbied to increase awareness of the practice and encourage court rules to reveal third-party financers.
Shortly before the panel discussion, APCIA released a statement in support of TPLF-related federal legislation introduced by California Congressman Darrell Issa, chairman of the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet.
“The misuse of the legal system fueled
thunderstorms has increased 80% from the previous decade and that 80% of this can be attributed to exposures growth versus a fundamental change in the nature of the risk. Thus, Aon advises, altering the treatment of depreciation or deductibles are ways to align incentives that may decrease claims and improve insurer profitability.
The report recommends insurers look into “creative approaches” to roof coverage and loss sharing between policyholders and insurers. For example, the roof could have a different deductible than the rest of the structure or homeowner insurers could institute copays for roofs.
As further exposure growth enters high hazard areas, Aon says that insurers should consider analyses to create a robust view of enterprise risk management, understanding location-level hazard and contribution to existing concentrations before binding a policy, evaluating a risk based
by third-party litigation funding has formed a litigious culture, ultimately burdening every consumer and business through increased costs, including the cost of insurance throughout the country,” said Nat Wienecke, APCIA’s senior vice president of federal government relations, in a statement.
‘The misuse of the legal system fueled by third-party litigation funding has formed a litigious culture ...’
Vishal Amin, head of IP policy at Intel, said an “immense amount” of IP cases come not from competitors but from others funded by third parties and are “coming after our interests.”
“It’s almost a form of economic warfare,” Amin told the conference audience. “You have sovereign wealth funds from the Middle East; you have foreign governments [like] the example with the Chinese,
on historical experience and catastrophe modeling, and incorporating the full cost drivers into pricing.
The Aon study suggests that, at prospective 2024 rates and before income taxes, homeowners insurers keep about one cent of profit for every premium dollar they
or Russian oligarchs now funding some of this litigation finance.”
Former Congressman Bob Goodlatte of Virginia, also a panelist, said TPLF upsets the job of a judge to fairly and efficiently administer justice because judges can’t identify potential conflicts of interests. Additionally, he said, plaintiffs’ attorneys may be less likely to settle cases because they are beholden to TPLF contracts. In fact, they may be forced to continue with a case because contract stipulations have not been met.
The terms of insurance contracts involved in a case are confidentially disclosed and the same should go for TPLF agreements, Goodlatte said. Whether through court rules or state or federal law, more needs to be done to stop turning the courts into a “casino,” Goodlatte added.
“The courts were not designed for this purpose, and justice is being denied — not more fairly administered — by having the extensive amount of third-party litigation funding as is taking place,” he said.
earn. That direct profit must be shared between the primary carrier, reinsurance partners and the U.S. Treasury.
The Aon report analyzed state and aggregate statutory filing data to estimate the prospective return on equity for U.S. homeowners business.
News & Markets
Hard Market ‘Supercycle’ Likely to Be Prolonged: Lloyd’s CEO Neal
By L.S. Howard
Now that the market has achieved a first-half profit of £4.9 billion with a combined ratio of 83.7 — its best interim results in 17 years — does this mean the hard market cycle is ending?
During a media briefing to discuss Lloyd’s results, CEO John Neal answered that question with a chuckle. The so-called “supercycle” is likely to be prolonged, he said, citing a reference to the current hard market, which was made earlier this
ALSO SEE Closer Look report, Lloyd’s Focuses on Delegated Authority Arrangements as Looming Market Risk, page 20.
by Patrick Tiernan, Lloyd’s chief of markets.
“We see no evidence of significant change in the marketplace either from the insurance or the reinsurance community,” Neal said. “It’s been difficult to get to a point where we can convince capital and investors that the returns are sustainable, meaningful and consistent.”
Now that Lloyd’s has reached this point of sustainable profits, Neal said, there’s no evidence that prices are changing significantly.
“It’s been five years of hard work to get to where we’re at,” he said, noting that Lloyd’s peer group also have reflected similarly about the need for price adequacy, proper attachment points and the right terms and conditions.
He described H1 results as a “superb set of numbers,” but there’s the rest of the year that includes the remainder of hurricane
season — so discipline must be maintained.
“We’re seeing a profitable, growing market that is well positioned to deliver sustainable value for our customers and our capital providers through whatever may happen in the rest of 2024 and actually into 2025,” Neal said.
In the foreseeable future, underwriting discipline will be key to fairly compensate Lloyd’s investors, said Lloyd’s CFO Burkhard Keese during the media briefing.
“This sustainable market performance is a consequence of managing agents staying focused on disciplined technical underwriting and rigor,” Keese said. “From a market oversight position, we will support those managing agents who demonstrate a disciplined approach and will challenge those where the capabilities required to support a disciplined underwriting approach are lacking.”
Gross written premium increased by
year
6.5%, comprising 5% volume and 1.5% average price growth, “despite all the market rumors of double-digit softening,” Keese said.
While describing the overall rating environment as adequate, he noted there are classes of business where conditions are challenging. “Portfolio management is key and there are a few classes in particular where we will expect that underwriters ensure they are getting the terms and conditions needed to ensure price adequacy.”
On the Watch List
Keese pointed to general liability in the U.S., where increased risk of litigation and social inflation continue to be an issue and underwriters are expected to price for this. “Without any doubt the claim trends we have seen in the last past five years are concerning, and we have no indication that this trend will not continue.”
Keese said Lloyd’s U.S. general liability reserves are adequate, “but terms must continue to reflect the possibility of further adverse developments.”
Another class of business that is being watched is political violence and terrorism.
“Increasing geopolitical risk is clearly a challenge for the underwriters in this class, and we will be looking for evidence that the managing agents are responding to this accordingly, as appropriate, in line with their individual strategies,” he said.
D&O covers are facing persistently challenging market conditions too, “and we need to see underwriters maintaining a disciplined approach to this class,” Keese said.
Property rates continue to hold up for the moment, “but this is based on today’s assessment of near-term risk. This means potential additional climate change are not yet reflected in current rates, so there is no time for complacency.”
Keese said the market has sufficient profits to be resilient through an active H2 hurricane season.
In addition to disciplined growth, Lloyd’s also has managed down its relative catastrophe risk exposure, he said, noting that market’s enhanced profitability increases its ability to absorb catastrophic events.
‘We see no evidence of significant change in the marketplace either from the insurance or the reinsurance community.’
Lloyd’s reported a combined ratio (excluding large and catastrophe risks) of 80.6, which is the 12th consecutive quarter the market has performed with an underlying combined ratio of around 80.
“Assuming a net earned premium of £38 billion for 2024, net large losses need to be at least $7.6 billion before we reach a combined ratio of 100,” Keese explained. “In 2017, [Hurricanes] Harvey, Irma and Maria cost us about £3.6 billion, which was 14.7% of the combined ratio at that time. Today, those losses would amount £4.4 billion, but only 11.7% of the combined ratio.”
Keese noted that this means, even during a year like 2017 with three large hurricanes, Lloyd’s combined ratio could remain below 95.
“Our profitable growth is sustainable. We have seen 16 quarters of top line growth, and our underlying combined ratio has been 80 for 12 quarters,” he said.
Both executives pointed to the ratings hikes received from AM Best and S&P Global Ratings as the cumulation of a fiveyear remediation effort towards resilient profitability — a discipline that is likely to continue.
AM Best moved its Lloyd’s rating from “A” to “A+” in August, while S&P raised its rating from “A+” to “AA-” at the end of 2023.
“Performance remains our number one priority both now and for the future,” said Neal. “That profitable performance is backed by our discipline, both in how we underwrite and manage our capital at Lloyd’s.”
News & Markets
75% of Independent Agencies Report Revenue Gains From 2022-23
Despite challenging conditions, 75% of independent insurance agencies saw revenue gains from 2022 to 2023, according to the 2024 Agency Universe Study. That number is significantly higher than between 2020 and 2021, during which 62% of agencies experienced gains.
According to the biennial report’s findings, the average size of revenue gains in the 2024 study is 26% and is on par with the average gain of 27% reported in 2022. A total of 12% of agencies reported decreases in revenue in the 2024 study, marking a significant drop from the 25% that reported decreases in the 2022 study. The average drop recorded in the 2024 study is 24%. In 2022, that number was 22%.
“Personal lines revenue has grown significantly more in the 2024 study than in 2022, with 72% of agencies reporting an increase compared to 60% in 2022,” a press release said. “Commercial lines revenue grew as well, with 68% of agencies reporting an increase compared to 57% in 2022.”
The study was created by Future One, a collaboration of the Independent Insurance Agents & Brokers of America (Big “I”) and leading independent agency companies. A total of 1,269 agents from lists provided by Big “I” completed the online survey from March 21 to June 3. Big “I” and carrier task force members also shared the open survey link on their websites for agents to participate.
The study examines statistics about independent agencies operating in the U.S., including their numbers, revenue base and sources, number of employees, ownership, mix of business, diversification of products, technology uses, non-insurance income sources and marketing methods.
According to the press release, the estimated total number of independent property/casualty agents and brokers in the U.S. is 39,000. That is a decrease from 40,000 in 2022. Creators of the 2024 Agency Universe Study forecast mergers and acquisitions activity and perpetuation
challenges to continue to impact the agency channel.
One in three agencies expects an ownership change in the next five years, per the findings.
When asked about challenges, more than half (56%) of agencies ranked “finding carriers that will maintain their commitment to their market” as a 6 or 7 on a 7-point scale, where 7 is “extremely challenging.” That number was up from 31% in 2022.
The next-most pressing challenge was “having carriers that are addressing new personal lines risks by adding new products, services or coverages,” at 49%.
Finding and screening job candidates with strong potential was the third-most challenging issue at 46%.
On the technology side, the use of electronic communication tools has increased significantly, with the use of agency e-signature tools increasing to 70% in 2024 from 61% in 2022.
The use of direct bill commission statements has also grown. That number
was 52% in 2024 and 45% in 2022.
According to survey results, more than half of agents are likely to agree that insureds are just as likely to accept e-documents as paper. Forty-six percent agree they have seen significant cost savings by using carriers’ paperless communication options.
The top three technology challenges for agencies were: (1) Dealing with multiple carrier interfaces; (2) Marketing the agency effectively on the internet; and (3) Overall costs of technology. Other technology related concerns were keeping up with the pace of tech changes and effectively using agency system data to make strategic decisions.
“This year’s study provides a valuable look at the independent agency ecosystem as it gains distance from the coronavirus pandemic and navigates the obstacles presented by the hard market,” said Jennifer Becker, Big “I” senior director of agent development, research and education. “Technology adoption continues to prove itself as a key strategy for success.”
Difference
Making a In the Industry
We would like to thank our TSLA Members for your continued support! If you would like to know more information about our association and membership benefits, please contact us: jptsla@tsla.org
Membership and involvement in TSLA has been a tremendous asset to me. It has introduced me to so many great leaders in our industry that span brokerage, carrier, and MGA partners. Through a vast network of industry professionals and volunteers, TSLA provides much needed knowledge of the excess and surplus lines marketplace in the State of Texas. The association is a vital resource for updates and knowledge about legislative and regulatory affairs involving our industry in Texas. I would encourage anyone within our industry to get involved and take advantage of this best-in-class association!
— Wade R Vaché, SVP Scion Underwriting Services, Inc.
Figures
6.63 Million
The number of square miles of ice that covered the Antarctic sea at its annual peak in mid-September this year, the second-lowest on record. Bloomberg reported the area was just shy of last year’s record low and continued what scientists fear is a trend caused by climate change. The preliminary figures were released by the National Snow and Ice Data Center at the University of Colorado at Boulder.
1 in 10
Research by the Federal Reserve Bank of New York finds that nearly one million houses and multifamily buildings in New York, New Jersey and Connecticut — one in 10 properties in the tri-state area — are at high risk of flooding. These properties rank among the top 25% of riskiest properties nationally, the same flood risk category as some homes in coastal Florida, Texas and Louisiana, according to the report, Flood Risk and the Tristate Housing Market.
The number of weather disasters costing $1 billion or more logged in Texas since 1980, according to National Centers for Environmental Information, which catalogs economic losses from severe weather. That’s 57 more than Georgia, the next-closest state. Texas has also racked up the most costs tied to extreme weather of any state, with damages totaling at least $300 billion since 1980.
$1 Million+
The total acres burned in California has surpassed 1 million so far this year. The risk of wildfires increased across California as an autumn heatwave scorched much of the state. In Southern California, the Line Fire’s surge pushed the total acres burned across the state in 2024 to 1,002,618 as of early October, according to Cal Fire.
Declarations
Agents’ Insurer Satisfaction
“Agents’ jobs have gotten harder, and a larger portion of agents are proactively shopping ahead for clients. Insurers that want to keep earning agents’ business are finding ways to partner with them every step of the way.”
— Commented Stephen Crewdson, senior director of insurance business intelligence at J.D. Power, in a statement regarding a new study that found overall agent satisfaction with personal and commercial lines insurers has held strong despite a challenging underwriting environment. Commercial lines satisfaction has reached an all-time high, according to the J.D. Power 2024 U.S. Independent Agent Satisfaction Study.
Louisiana Fortified
“The high level of engagement shows that Louisianans recognize the need to build more resiliently, but it also underscores how much work lies ahead. … Whether registrants were selected, their decision to participate will demonstrate to the legislature that we need to continue supporting the Louisiana Fortify Homes Program.”
— Louisiana Insurance Commissioner Tim Temple said the number of grants has doubled for the latest round of the Louisiana Fortify Homes Program due to the high volume of registrants. The number of grants increased from 300 to 600 after nearly 12,000 homeowners signed up for the lottery. Grants of up to $10,000 are available to upgrade roofs to the Fortified standard.
Delaware Comp Costs
“In the years following the onset of the COVID-19 pandemic, there were important changes in the labor market as well as shifts in the availability of medical services. These changes were likely important drivers of the trends in total costs per claim in Delaware.”
— Said Ramona Tanabe, president and CEO of Workers Compensation Research Institute (WCRI), announcing new WCRI research showing the average cost of workers’ compensation claims in Delaware, for cases with more than seven days of lost work, went up by 3% per year between 2019 and 2022.
Never 'Anything Like This'
“I didn’t know it was possible for a place like Asheville to get something like this. … I was born and raised here and have been here for 42 years. I’ve never seen anything like this.”
— Chad McKinney, co-owner and principal agent at McKinney Insurance Services just south of downtown Asheville, North Carolina, said of the catastrophic damage wrought by Hurricane Helene to his hometown. Asheville insurance agents and their policyholders have been stunned by the extent of Helene’s damage so far inland. The hurricane dumped 14 inches of rain on the picturesque community and flooded hundreds of homes and businesses.
Train Wreck
“I used to feel like those were agencies to protect people, but I don’t feel like that anymore. … They need to come forth and do the right thing. They know these chemicals just don’t go away.”
— Ohio resident Krissy Ferguson told the Associated Press she isn’t living in her home because of concerns over chemicals released when a Norfolk Southern train derailed in February 2023 and a toxic cloud spewed over East Palestine, Ohio. Area residents say the way the Environmental Protection Agency has reported its test results since the derailment makes it hard for residents to know the full extent of contamination.
AI Bill Veto
“While well-intentioned, SB 1047 does not take into account whether an AI system is deployed in high-risk environments, involves critical decision-making or the use of sensitive data. … Instead, the bill applies stringent standards to even the most basic functions — so long as a large system deploys it. I do not believe this is the best approach to protecting the public from real threats posed by the technology.” — California Gov. Gavin Newsom said in a statement about his veto of a bill aimed at establishing safety measures for large artificial intelligence models.
Business Moves
National
Sentry
Insurance, The General
Sentry Insurance said it is buying nonstandard auto insurer The General from American Family Insurance for about $1.7 billion to mark the largest acquisition in the company’s 120-year history.
American Family acquired The General in 2012 when it bought PGC Holdings Corp. and its subsidiaries for $239 million.
Mutual insurer Sentry of Stevens Point, Wisconsin, is known for business insurance but it also has a nonstandard auto, motorcycle, and off-road vehicle insurer in its Dairyland brand, serving customers through its independent-agent network.
Sentry said the brands will operate independently during the integration process.
The 1,300 or so employees from The General will join Sentry’s workforce of 5,000 on Jan.1, 2025, and will continue to be based in Nashville.
The transaction is expected to close by the end of the year, pending regulatory approvals.
FCCI Insurance Group
Sarasota-based FCCI Insurance Group will soon start writing excess and surplus lines across much of the country, the carrier announced.
Florida, Georgia and Texas insurance agents can submit general liability and commercial excess business to FCCI Specialty Insurance Co. starting Oct. 1. By the first quarter of 2025, agents in the Midwest, Mid-Atlantic and Gulf Coast regions can submit those coverages,
according to a news release.
FCCI was founded in 1959 and provides commercial property and casualty insurance, including workers’ compensation, auto and inland marine, as well as risk control services and surety bonds.
East
Relation Insurance Services, The Haney Company
Relation Insurance Services has acquired the assets of The Haney Company Inc. of Silver Spring, Maryland.
Haney offers employee benefits, commercial and personal insurance products. The agency is a specialist in insurance and retirement programs for associations and their executives.
The firm was formed through the merger of separate practices founded by Brian Haney and his father Allen. Brian Haney, his brother Scott, and their father Allen will continue managing the Maryland office as part of Relation Insurance.
California-based Relation is ranked by Insurance Journal within the top 25 largest agencies in the country by revenue and has approximately 1,350 employees across more than 137 locations nationwide.
Duffy Insurance Agency, The Cowan Insurance Agency
Duffy Insurance Agency, based in Lynn, Massachusetts, has acquired The Cowan Insurance Agency of Haverhill, also in Essex County.
The Cowan agency, founded in 1938, is a fourth-generation family business now
led by Stefanie (Cowan) Guillemette. The independent agency sells personal and commercial lines.
Founded in 1996 by the late Paul Duffy and currently led by his son, Marc Duffy, Duffy Insurance Agency is also a family insurance agency that services personal and commercial insurance.
Maury, Donnelly & Parr, Campion Insurance
Baltimore-based Maury, Donnelly & Parr Inc. (MDP) reported its acquisition of another Maryland insurance agency, Campion Insurance in Bel Air.
MDP said the merger broadens its reach and service offerings across the Mid-Atlantic region, including in both commercial and personal lines, and strengthens its high-net-worth practice, an area of focus for MDP.
Other specialties of Campion, a family owned, independent insurance agency, include technology companies, mercantile offices and professional liability.
The Campion team will continue to operate from its Bel Air location, retaining its business while tapping into MDP’s resources including carrier partnerships, operations, and marketing.
Founded in 1875 as a marine insurer to the businesses that utilized the Port of Baltimore, MDP operates today as an agent, consultant, broker, risk manager, and program administrator in the insurance industry. It has nine offices along the East Coast.
Midwest
Bishop Street Underwriters, Conifer Holdings
Bishop Street Underwriters, a multi-boutique insurance platform owned by RedBird Capital Partners, announced it has acquired Conifer Insurance Services, a specialty commercial managing general agency from Conifer Holdings Inc.
The acquisition of Conifer marks Bishop Street’s entry into commercial lines, expanding its multiline, differentiated MGA platform.
Conifer operates a portfolio of three programs across several specialty lines
of business, including main street small and medium sized enterprises (SMEs), hospitality and auto dealers. Conifer’s existing infrastructure presents a significant growth opportunity for Bishop Street, enabling further scale through geographic expansion, new product development and add-on acquisition synergies, the companies said.
Conifer’s 70-plus employees will join Bishop Street’s platform.
In connection with the transactions, Nick Petcoff resigned as the chief executive officer and as a director of Conifer and accepted a position with the purchaser.
Conifer’s board of directors appointed Brian Roney, Conifer’s president, to the position of chief executive officer.
South Central
Inszone Insurance Services, Catalyst Benefits Group
Sacramento, California-based Inszone Insurance Services has acquired Catalyst Benefits Group LLC, an employee benefits insurance brokerage firm based in Tulsa, Oklahoma.
This strategic merger further enhances Inszone’s footprint and capabilities in the employee benefits sector.
This acquisition allows CBG clients to benefit from Inszone’s extensive network of insurance carriers, enhanced back-office support, and a team of specialists dedicated to providing service.
Southeast
Beat Capital Partners, ProRise Insurance Services
Beat Capital Partners, a London-based incubator of underwriting franchises and subsidiary of Ambac Financial Group, has launched a professional liability insurance company, based in Charlotte.
The new firm, ProRise Insurance Services, tapped Doug Karpp, a former executive at Hiscox and AIG, as CEO.
ProRise, specializing in small and medium-sized business management coverage, will write for a consortium led by Beat Syndicate 4242 at Lloyd’s, company leaders said. Products will be distributed
through wholesale brokers and will include private directors and officers, non-profit directors and officers, employment practices liability, fiduciary liability, crime, and professional liability insurance tailored for miscellaneous professionals, architects and engineers, and allied health professionals.
A-G Specialty Insurance, eSportsInsurance
A-G Specialty Insurance, a brokerage specializing in coverage for niche industries, has expanded its reach in the amateur sports world with the acquisition of eSportsInsurance, based in Lilburn, Georgia.
A-G Specialty, headquartered in Berwyn, Pennsylvania, and established in 1983, has focused on insurance solutions for K-12, colleges, clubs and sports camps.
With eSports, it will introduce a comprehensive suite of products for amateur associations, clinics, teams and events to protect against liabilities and event cancellations.
Esports Insurance has been in business for two decades. Terry Green is president.
West
Inszone, Cascade Insurance Center
Inszone Insurance Services acquired Cascade Insurance Center in Bend, Oregon. The Cascade Insurance Center team will continue to operate out of their Bend location under the Inszone Insurance Services umbrella.
California-based Inszone is an insurance brokerage firm that provides property/ casualty insurance and employee benefits services.
NFP, Scott Litman Insurance Agency
NFP acquired Scott Litman Insurance Agency in Calabasas, California.
Scott Litman, president of SLIA, will join NFP as a senior vice president and report to Ed Kurowski, managing director, West region property/casualty.
SLIA offers P/C insurance to clients with a focus on commercial habitational risk in the Los Angeles area. The SLIA team serves Southern California homeowners’ associations, as well as property man-
agement companies, boards of directors, and landlords associated with mid- to large-sized properties.
NFP, an Aon company, is a P/C broker, benefits consultant, wealth manager and retirement plan advisor.
EverPeak Insurance
EverPeak Insurance is launching operations in Arizona.
EverPeak specializes in workers’ compensation coverage for small businesses and those in hard-to-place industries. Its workers’ comp insurance is written on Attune, which has more than 400 class codes that enable agents to generate quotes and bind policies on the platform.
EverPeak was created by Pinnacol Assurance, a workers’ compensation insurer for Colorado companies.
PCF Insurance Services, Top Insurance Associates
PCF Insurance Services acquired the insurance business of Top Insurance Associates in Snohomish, Washington.
The Top Insurance Associates team will join PCF Insurance’s Fortiphi Insurance.
Top Insurance Associates offers personal and commercial insurance services to individual and business clients in Arizona, California, Colorado, Idaho, Oregon and Washington.
Lindon, Utah-based PCF Insurance Services of the West LLC offers commercial and personal lines, life and health, employee benefits, and workers’ compensation insurance services.
CAC Group, Media Guarantor
CAC Group acquired Media Guarantors in Hollywood, California.
Janet Comenos will assume the role of entertainment practice leader at CAC Group.
Fred Milstein, president and CEO of Media Guarantors, will continue to lead the firm under the new structure.
Media Guarantors specializes in completion guarantees for independent film and television projects.
CAC Group is an insurance broker and advisor. The entity comprises CAC Specialty, CAC Agency and CAC Capital.
National
Todd Jackson, owner and partner of McGowan Insurance Group, has been named chairman of the Independent Insurance Agents & Brokers of America (the Big “I”).
Jackson was installed as the 2024-2025 chairman of the industry group at its fall conference in Indianapolis, which also serves as McGowan’s headquarters.
Along with Jackson, Lou Moran III, president of Inter-Agency Insurance Service in Knoxville, Tennessee, was sworn in as Big “I” chairman-elect. Angela Ripley, president of VW Brown Insurance Services in Columbia, Maryland, will be the 2024-2025 vice chair.
Global specialty insurer Chaucer hired Alex Baker as class underwriter within its political violence and crisis management team. Baker will lead the delivery of their growth strategy and portfolio management in the U.S. market.
Baker previously worked at AXA XL (Catlin) for 13 years, specializing in underwriting terrorism and political violence risks.
Resilience, headquartered in New York, named Rebecca Jones as senior vice president of engineering and Jeremy Gittler as global head of claims.
Jones takes over
leadership responsibilities for the company’s engineering team and software
delivery efforts. She brings over 20 years of experience leading growth market technology initiatives for various SaaS companies, most recently serving as senior vice president of technology at Disco.
Gittler will lead the company’s global claims team.
Before joining Resilience, he held underwriting and claims leadership positions at global commercial insurance provider AXA XL, where he launched and built its cyber claims team.
USG Insurance Services
Inc., headquartered in Tampa, Florida, made three new hires to its teams in Texas, Arkansas and Georgia.
Thomas McMahon joins USG’s Arlington, Texas, office with over 25 years of industry experience. He most recently served as a broker and sales manager for FloodFlash.
Kelly Buck joins the USG team in Little Rock, Arkansas, as a producer/broker on their personal lines team. With over 20 years of experience in the insurance industry, she most recently served in personal lines underwriting at Risk Placement Services.
Tara Gudenkauf joins USG’s
Atlanta team as a producer/ broker. With 20 years in the E&S insurance industry and 38 years overall in commercial insurance, Gudenkauf most recently served as senior vice president of underwriting at Southern Insurance Underwriters Inc.
East
W.R. Berkley Corp., headquartered in Greenwich, Connecticut, appointed Antonio Q. L. Rhodes as president of Berkley Mid-Atlantic Insurance Group, a Berkley company.
Rhodes has nearly 20 years of experience in the property/ casualty insurance industry. He most recently served as executive vice president and head of property/casualty for Keystone Insurers Group.
region, which includes Pennsylvania, Delaware, Maryland, Virginia and West Virginia.
Farber has 30 years of experience in asset protection and risk management. Farber served as president and CEO of Agency Partner Donner-Farber & Associates Inc., before joining Acrisure.
Midwest
Alliant Insurance Services
named Brad Heter as vice president and producer within its employee benefits group serving Alliant’s Midwest region, specifically in the Ohio market.
Heter has over 20 years of experience as an employee benefits advisor and joined Alliant from Oswald Companies.
Lockton named Josh Korzon chief operating officer (COO) for the Northeast. Korzon succeeds Tim Ryan, who has been appointed as the company’s U.S. president.
Korzon has 20 years of experience in the insurance industry. He most recently served as executive vice president at Lockton. As Northeast COO, Korzon guides business operations for offices in Boston; Portland, Maine; West Hartford and Norwalk, Connecticut; New York City; Philadelphia and Blue Bell, Pennsylvania; Washington, D.C.; and McLean, Virginia.
Acrisure, headquartered in Grand Rapids, Michigan, appointed Bill Farber as head of growth for its Mid-Atlantic
Christensen Group Insurance, headquartered in Eden Prairie, Minnesota, tapped Chuck Mazzanti to spearhead its expansion into the Chicago metropolitan area.
Mazzanti is a commercial lines producer with over 15 years of industry experience. He most recently served as a construction risk management consultant at Assurance, a Marsh & McLennan Agency LLC company.
Risk Strategies, headquartered in Boston, appointed Tom Panos as managing director of its Chicago office.
Todd Jackson
Rebecca Jones
Jeremy Gittler
Thomas McMahon
Kelly Buck
Josh Korzon
Brad Heter
Chuck Mazzanti
Panos has over 15 years of experience in the insurance industry. He joined The Baldwin Group through its acquisition of Rosenthal Brothers in 2008 when he joined as a producer. Panos’ work has spanned various industry sectors, including real estate, non-profits, manufacturing and distribution, hospitality and warehousing.
JM Wilson, headquartered in Portage, Michigan, hired Savana Musolf and Lisa Hudson as assistant property and casualty underwriters.
Musolf works with independent insurance agents and company underwriters in Michigan and Texas.
Before joining JM Wilson, Musolf worked for over two years as a personal lines CSR at Acrisure.
Hudson supports underwriters with new and renewal property and casualty risks and works with independent insurance agents and company underwriters in Wisconsin and Minnesota. Before joining JM Wilson, Hudson worked as a Medicare Insurance Agent for three years.
Ryan Specialty, headquartered in Chicago, hired Michael F. Albian as president, group captives, Ryan Alternative Risk.
Albian has 15 years of experience in the insurance industry, the last 11 of which he has spent creating, growing and managing numerous group
captive programs. He most recently served as senior vice president at Captive Resources, LLC and previously served as an insurance broker at Hub International and in private wealth management at UBS.
South Central
Stephens Insurance LLC, an affiliate of Stephens Inc., announced Scott Miller will join the firm as a senior vice president within the property/ casualty practice.
Miller brings more than 25 years of experience in the insurance industry, serving clients with complex risk management profiles across the United States.
Based in the firm’s Little Rock, Arkansas, headquarters, he most recently served as a senior vice president at IMA Financial Group.
Fideles Advisors, headquartered in San Antonio, Texas, appointed Tim Lovett chief systems and distribution advisor.
Lovett previously served as director of business development and strategic partnerships at The Hartford and as manager at Nationwide Brokerage Solutions.
Lovett has also provided consultancy within the insurance carrier and distribution arenas, focusing on insurance technology and workflow automation.
Lockton, based in Kansas City, Missouri, hired benefits consultant Chad Young as senior vice president based in its Houston office.
Young previously served
as an account executive at Aetna and held senior account executive roles at Assurant and The Hartford.
He most recently served as an area vice president and a benefits consultant at Arthur J. Gallagher & Co. for over 13 years.
Southeast
CRC Group, a wholesale specialty insurance distributor with headquarters in Birmingham, Alabama, added new faces to its team in the Southeast.
Sam Rector joined the Nashville office as a broker. He has spent almost 10 years in the industry, including recent work as an associate director with a multinational company.
Chris Young is now a personal lines underwriting team leader in CRC’s Alpharetta, Georgia, office. He has some 26 years in the insurance business, including a role as senior personal lines underwriter with a wholesale broker.
Davon Fields has joined CRC’s Birmingham, Alabama, office as a broker. He recently was vice president with an insurance brokerage.
Donnie
Waters was named senior team leader in the group’s Tampa office.
He has more than 20 years’ experience in the industry and was recently a managing partner with a wholesale brokerage.
West
Buckner appointed Kevin Peterson as its new director of partnerships.
Peterson joins Buckner from WCF Insurance, where he was most recently senior vice president of middle market. Before that, he spent over 20 years at Nationwide.
Buckner is headquartered in Salt Lake City, Utah.
The Liberty Company Insurance Brokers named Pierce Dyer vice president and producer. He is based in Seattle and operates from the Woodland Hills, California office.
Pierce Dyer represents the fourth generation of Dyers in the insurance industry. Dyer’s great-grandfather and grandfather founded W.C. Dyer & Sons in 1913 in Salem, Oregon.
The Liberty Company Insurance Brokers is based in Gainesville, Florida.
Chris Mast joined Alliant Insurance Services as senior vice president, producer withing its employee benefits group serving operations in the Rocky Mountain region.
Mast has more than 20 years of experience consulting employers across various industries.
Savana Musolf
Lisa Hudson
Pierce Dyer
Davon Fields
Donnie Waters
Chad Young
Sam Rector
Chris Young
Closer Look: Lloyd’s Market
Lloyd’s Focuses on Delegated Authority Arrangements as Looming Market Risk
By L.S. Howard
While the Lloyd’s market reported its best first-half profit in 17 years, it isn’t resting on its laurels. It is carefully monitoring areas where potential vulnerabilities have been identified.
During a recent market briefing, Rachel Turk, Lloyd’s chief underwriting officer, Lloyd’s, focused on five key areas that occupy her time and attention: property, cyber, U.S. general liability, the legacy market, and, last but certainly not least, the issue of delegated authority arrangements, which she highlighted as a major concern.
Delegated authority business is an area of concern that “seeks to chip away at my
overall positivity [about the market’s performance],” Turk said during the Q3 market briefing on Sept. 20. (Lloyd’s reported an H1 profit of £4.9 billion with a combined ratio of 83.7 on Sept. 5.)
“This is an area of concern that I think I share with many [market practitioners], based on the number of times it comes up in conversation,” she said. “Currently 39% of gross written premium is generated through delegated arrangements and that’s excluding service companies.” (See below for more details about the four other areas of concern for the Lloyd’s market oversight team.)
The reason for Turk’s concern is that the poor performance of the delegated book was one of the contributors to the deteriorating loss ratio
from 2013 onwards. “We must not make the same mistakes again,” she said.
As Lloyd’s is a global leader in the global MGA and delegated authority business, there is reason for caution.
Taking a look at the largest market for MGAs — the United States — of the estimated $102 billion written by U.S. MGUs, more than $14 billion was written by fronting companies, and around $7.5 billion was binder business written by Lloyd’s syndicates, according to a report published by Global Insurance Law Connect (GILC) — Innovation abounds opportunities for growth in the global MGA market.
“Despite recent excellent results, and a favorable current climate, Lloyd’s (and others) believe that delegated business
remains a potential risk for the market, especially if conditions change,” said Ross Baker, partner at London-based law firm Beale & Co, a member of Global Insurance Law Connect, in an emailed statement.
“It remains more important than ever that the right delegated business providers are selected to help avoid the traps of inappropriate risk selection, unrealistic pricing and problems flowing from inadequate terms and conditions,” he added.
Baker said that Lloyd’s recognizes “that poor delegated business arrangements were a key contributing cause of the deteriorating ratios in the years 2013-2019 and is very keen that history does not repeat itself.”
“Lloyd’s has made it clear that there must now be a laser
sharp focus on the framework in place for the selection, oversight and performance management of delegated providers, requiring swift action to exit poor service providers,” Baker continued. “The provision of out-of-date data was a particular bugbear, and the expectation going forward is that real time performance data should be of the highest quality.”
“Thoughtful delegation can bring greater efficiencies, enhanced modeling and alternative access to business so it can and should be a hugely valuable part of the market,” Turk said during the market briefing.
However, given the materiality of this portfolio, syndicates should expect increased performance oversight on this topic going forward, Turk emphasized.
“We expect both open market and delegated portfolios to be constantly course correcting to prevent poor risk selection, inadequate pricing, and terms and conditions getting away from us,” she continued.
Dynamic Portfolio Management
Turk then homed in on an area she described as “bizarre” in 2024: the fact that syndicates are still receiving bordereau data that is out of date. “With that in mind I want to see us all focusing on achieving quality, timely, and ideally, real time performance data, and it is only through this that you can truly execute on dynamic portfolio management ambitions.”
She said that syndicates are expected to have clearly articulated strategies to determine when and where to delegate their authority and that they
are responsible for holding their delegates to account.
It’s important that interests are aligned, she said, emphasizing it is vital that syndicates have a framework that allows them “to appropriately select, oversee, challenge, performance manage, and promptly exit if necessary.”
Baker noted that MGAs are “a hugely valuable part of the insurance market, bringing true innovation and agility.”
He added: “Their growth in recent years has been prolific, backed by the easy availability of private equity and the promise of stable cash flows, following three and a half years of outstanding underlying combined ratios in the low 80s recorded at Lloyd’s.”
MGAs have long provided a unique environment for new insurance ideas, “allowing small teams to innovate and demonstrate agile approaches to service and claims,” according to the GILC report.
“MGAs can also enable start-up entrepreneurial underwriting teams to gain backing from good quality capacity without the need to be directly regulated,” the report noted.
“As a result, the number of MGAs has grown in most major global insurance markets over the past decade, particularly in the US and UK.”
More recently, the GILC report added, less developed insurance markets have recognized the innovation that MGAs can bring to insureds and some have taken steps to encourage the development of their own MGA ecosystems.
“In short, new ideas can get to market more quickly through the MGA distribution model, and with lower risk to large carriers who are inter-
‘Despite recent excellent results, and a favorable current climate, Lloyd’s (and others) believe that delegated business remains a potential risk for the market, especially if conditions change.’
Ross Baker, partner, Beale & Co.
‘We must not make the same mistakes again.’
Rachel Turk, Lloyd’s Chief Underwriting Officer
ested in experimenting with a new idea,” the report went on to say.
The moral of the story, Baker stressed, is that delegated authority business is a valuable part of the global insurance ecosystem but must be carefully selected and monitored.
Other Market Risks
In addition to her concerns about delegated business, Turk also pointed to four other key risk areas that she is monitoring carefully in her market oversight: property, cyber, U.S. general liability, and the legacy market.
For property, cyber and U.S. general liability she focused on the importance of managing exposures. For legacy deals, she pointed to concerns over the lack of proper market oversight of these transactions, given the risks of reserve adequacy.
Property Discipline must be maintained in managing a property portfolio, reflecting the uncertainty that climate change brings, Turk said in her discussion of the property issue.
“The clearest near-term climate signaling events such as wildfire and flooding have had unprecedented impact in recent years and the numbers of costly severe convective storms have outpaced other perils by a large margin,” she said.
In Lloyd’s market oversight, Turk continued, “[W]e have shown our commitment to accept increased exposure for natural catastrophe [business] for those syndicates that consistently demonstrate strong capabilities to price, measure and respond adequately to catastrophe events.”
continued on page 49
Special Report: Best Agency to Work For
Wellesley Hills, Massachusetts
Investing in Employees Is a Priority at Deland, Gibson
By Allen Laman
As Deland, Gibson Insurance Associates Inc. (DG) approaches its 125-year anniversary, the Massachusetts-based independent agency is expanding its footprint and revenue. DG is also continuing its tradition of treating employees right.
For the second straight year, DG has been recognized in Insurance Journal’s Best Agencies to Work for competition.
DG has earned the 2024 Silver regional award in the East region; the agency was recognized in the Bronze category in 2023.
fourth generation to lead the family business in its 124-year history.
Reaching its quasquicentennial will be a big milestone in 2025. But 2024 has been memorable for DG, too. The agency acquired three agencies this year and opened a new location on the south shore of Boston. Building relationships with the new team members has been a positive experience, Chip said.
DG secured the Silver award based on anonymous employee responses to the annual Insurance Journal survey. In those responses, staff praised the agency’s focus on growth, team atmosphere and community giving.
“We have a great culture,” an employee said in the survey. “There is opportunity for advancement, continuing education, expectations are clear and communication agency-wide is very good. It really is collaborative, the team is closely-knit and you feel there are always people around willing to help.”
Chip Gibson and his brother, Ted, took the reins of DG from their father, Charlie, in 2020. Since then, Chip has served as CEO, and Ted has been the agency’s president. The brothers are 50-50 partners and the
Since Chip and Ted took the lead at DG, they have invested in the creation of training platforms, formalized a donation committee with employees, and doubled the staff size from about 40 people to more than 80. In that time, revenue has “almost tripled,” Chip said.
“We got really disciplined around planning and breaking down our goals and attacking them,” Chip said. During a planning session — Chip couldn’t recall the year — he remembered a goal of $20 million in revenue was set by the team.
Back then, it felt far away. But fast forward to today, and “we’re going to blow through that in the next three years or less,” Chip said. “It’s taking it day by day. If you can take a step back, figure out goals that will help your organization, and then have accountability within the organization and day-by-day work at them, things have worked out for us. We’ve been fortunate.”
DG’s core business is personal insurance, commercial insurance and employee benefits.
The agency’s benefits team experienced a metamorphosis in 2019, when DG added new talent and grew from servicing primarily small groups to competing with national players.
DG’s “1900 Club” handles high net worth accounts, and the agency recently hired a director of VIP accounts and practice groups who is tasked with formalizing service offerings and risk management strategies.
Chip added that the agency plans to continue to develop and hone DG’s industry practice groups.
One respondent to the Insurance Journal survey highlighted that DG’s leadership “understands the importance of being competitive in the marketplace.” Another said that the “owners of the agency are always thinking ahead” and pointed to one-, three-, and 10-year plans posted at each DG location “so that everyone can see daily what our goals are.”
DG hosts an annual meeting during which yearly goals
are discussed, and in each employee’s individual reviews, “they can see how their individual yearly goals will roll up to the goals of the agency,” the employee said. “This helps everyone to understand that they are part of something bigger and because the culture is inclusive and people are treated so well, everyone wants to do well to help the agency achieve its goals.”
Chip said the folks at DG constantly strive to be better. “It’s easy for someone to be a business owner and hire someone and hope they just sit in that role for the next 40 years,” he said. “But the best people don’t want that. The best people want to grow. The best people want to make more money. They want to do more.”
Deland, Gibson Insurance Associates Inc.
Deland, Gibson Giving Committee volunteering at a local farm.
Chip Gibson
Special Report: Best Agency to Work For
Midwest
Ansay and Associates Port Washington, Wisconsin
‘Employees Are the Heart of This Company’ at Ansay and Associates
By Jahna Jacobson
For over 75 years, Ansay and Associates has invested in its future by investing in its people.
“As a family owned and independent agency, we have the freedom to focus on long-term success rather than short-term gains,” said Mike Ansay, CEO and chairman of the Port Washington, Wisconsin-based agency.
“People want to feel like they’re part of something bigger and that their work has purpose,” he said. “By aligning your company’s vision with their aspirations, you create a shared mission that drives everyone forward.”
Founded by Ansay’s father, Adolph Ansay, in 1946, the agency now serves over 12,000 businesses and 45,000 individuals throughout Wisconsin and the Midwest. The company is Insurance Journal’s Best Agency to Work For Silver award winner for the Midwest this year.
The employee nominations in IJ’s Best Agencies to Work For survey mean his father’s vision is being achieved, said Ansay. “It’s a reflection of the strong culture we’ve built together — one where everyone feels valued, heard, and supported,” he said. “This culture is rooted in the values
my father instilled when he founded this company. His commitment to integrity, hard work, and putting people first has shaped the way we operate today, and I’m proud to continue that legacy.”
Ansay and Associates runs on the main principle that people come first, said one nominating employee. “It not only applies to our clients but our Ansay team/family,” they said. “When you take care of the ‘Person.’ Whether that’s the client, yourself, teammate, or family - all good things fall into place. ... We work for the client - not the dollar ... and I think that shows in our passion for and service to our policyholders.”
The company has an equitable hierarchy in which every employee, from the bottom up, feels as though they are valued and have a stake and a role in creating the agency’s success.
The vision is, “creating a positive, supportive work environment starts with genuinely caring for your employees’ well-being, both professionally and personally,” Ansay said. “Foster a culture where every team member feels valued, empowered, and heard.”
Leadership takes the time to mentor and encourage employees to grow in their careers, said multiple employees. And the agency’s Ansay University provides an opportunity for employees to develop skills and keep up with changes in the industry.
“They are willing to make changes to positions to fit the employee,” said one nominating employee. “People are in roles where their best qualities shine.”
‘Foster a culture where every team member feels valued, empowered, and heard.’
Employees are encouraged to explore every opportunity and get outside their comfort zones to find their niche, said another staff member. “Mike Ansay and all of upper management’s view really is that they succeed when we succeed.”
Recognition and networking events throughout the year celebrate successes and build
camaraderie. For example:
• The agency’s annual Big Ansay Party, known as the “BAP,” includes carrier partners for a day of face-to-face collaboration, food, fun and prizes.
• The company’s “Wheel of Wow” showcases compliments from policyholders and gives associates a chance to win cash prizes.
• The executive team embarks on an annual Ansay Culture Tour, traveling to all the firm’s locations to show appreciation to every team member.
• Employees are also given 32 paid volunteer hours per year to work for causes they support in their communities.
Mike Ansay’s best advice to other agency owners is to prioritize your people above all else. “Our employees are the heart of this company, and to know that they believe in our mission and feel proud to be part of it means a great deal to me,” he said. “It reinforces my belief that when you create a positive environment where people can thrive, success follows naturally.”
“Insurance may seem like a technical business, but at its core, it’s a people business,” Ansay added.
Mike's selfie shows Ansay team members gathered for bike event.
Special Report: Best Agency to Work For
South Central
G&G Independent Insurance Fayetteville, Arkansas
Employee Development, Community Are Key at G&G
By Allen Laman
G&G Independent Insurance has cracked the code.
For the fifth straight year, G&G has been named a finalist in Insurance Journal’s Best Agencies to Work For competition. Five straight years of praise coming from inside the Fayetteville, Arkansas-based agency’s walls. Five straight years of widespread employee appreciation.
This time around, G&G earned the Silver award in IJ’s South Central region — an honor that Jordan Greer, the agency’s CEO and cofounder, said is “a reflection of the strong culture we’ve built together, where everyone feels valued, supported, and part of something bigger.”
Open communication, opportunities for career growth and an overall dedication to employees were among the key themes that G&G team members highlighted in responses to this year’s Best Agencies survey. The annual award is based on those responses.
“G&G is a great place to work because of each person that works here,” an employee said. “Everyone, from the leadership team to the front-line employees, genuinely cares about and supports each other’s success personally and professionally.”
In written responses to emailed interview questions, Greer explained that the agency has a commitment to personal and professional growth, a sense of community and that team members genuinely care for each other’s success.
them identify new areas for growth and explore training opportunities that align with their aspirations.
“We invest in our people, listen to their ideas, and ensure that they have the resources they need to thrive,” Greer said. “That collective effort is what makes G&G so special.”
The agency’s personalized training and onboarding process is designed to equip each employee with the skills they need to succeed and is supported by an in-house trainer. Beyond initial training, G&G ensures continuous growth by offering weekly coaching sessions tailored to individual development goals. Leaders review each employee’s career interests annually to help
Staff expressed similar sentiments in their survey replies.
One respondent, for example, said that the focus is on growth “and G&G enables its staff to grow,” whether that be paying for certification classes and incentivizing development with a salary raise or by helping an employee continue education. Employees also receive fitness and wellness benefits.
Team members who responded to the survey expressed appreciation for the weekly department meetings and quarterly performance reviews. Greer shared that transparency “is crucial because it fosters open communication, trust, and alignment. When employees have a clear understanding of their performance and the company’s goals, they feel more engaged and empowered to contribute to improvements.”
When it comes to employee recognition, the agency’s Exceptional Experiences program honors G&G employees who exemplify G&G’s core values and commitment to excellence. Each quarter,
one outstanding employee is rewarded with an all expenses paid trip to Mexico. “This unique program is a testament to our appreciation for those who go above and beyond in their roles,” an employee said.
The agency also gives back through the G&G Foundation, an employee-run and employee-funded nonprofit organization. The foundation “focuses on supporting and uplifting the communities we serve, allowing our team to make a positive impact both inside and outside the workplace,” a respondent said.
When asked about advice to other agency owners striving to make their agency a Best Place to Work, Greer encouraged owners to focus on building a people-first culture.
Investing in employee growth, creating open lines of communication where feedback is encouraged and making sure employees know that their voices matter are key elements of such a culture. Offering meaningful benefits to “show you value more than just the work they do” is important, too.
“When your employees feel valued, engaged, and empowered, they’ll not only perform at their best but also help shape a positive, thriving workplace,” Greer said.
G&G employees celebrate Inc. 5000 recognition.
Jordan Greer
Special Report: Best Agency to Work For
Southeast
Energy Insurance Agency Lexington, Kentucky
At Energy, ‘You Are Not Just a Number’
By William Rabb
The president of Energy Insurance Agency, an operation with a large presence in Kentucky, said it is “incredibly humbling” for the agency to again be named one of Insurance Journal’s Best Agencies to Work For in the Southeast.
“This recognition is a testament to the hard work, dedication, and positive culture that we’ve cultivated within our organization,” said Mark Kelder, whose 140-employee agency has offices in Lexington, Louisville, Barbourville, Fort Thomas, London, Whitley City and Winchester in Kentucky, and Cincinnati and other sites in Ohio.
Energy was named the Bronze award winner for the Southeast in 2023, based on employee responses in IJ’s Best Agencies to Work For survey. This year, the firm took it up a notch, coming in as the Silver award winner, thanks to comments from producers and other staff members.
“Energy is a very tight-knit workplace. Everyone here knows each other and we all get along,” one worker said. “We go to community events and give back. Our management team really looks out for all of us. We celebrate everyone’s special moments and achievements.”
“I have worked for three agencies in my career. This will be where I retire,” said another. “They care about you as a person and you are not just a
number. That, combined with an opportunity to make a great living, is why I feel strongly.”
Energy was founded in 1982 in the basement of the founder’s home. Since then, it has grown steadily, now with associates licensed in 48 states, writing premium of more than $125 million. Kelder attributes the agency’s growth and employee satisfaction to its people-first culture.
The agency treats workers as its greatest asset and invests in professional and personal development. Strong community involvement, along
with continually improving technology and personalized service to clients doesn’t hurt, either, Kelder noted.
“My advice to other agency owners striving to create a ‘Best Place to Work’ is to prioritize culture, communication, and employee engagement,” he told Insurance Journal. “Invest in your team’s development, listen to their feedback, and create a positive and supportive work environment. Remember, happy employees lead to happy clients.”
The agency, like most around the region, is not without its challenges, as carriers raise premiums, reduce coverage and juggle more frequent natural disasters. Kelder believes the biggest challenges in the coming year will be:
Navigating carrier changes: “We will need to adapt to changes in carrier underwriting guidelines and pricing.”
Managing claims: “We will
continue to focus on providing efficient and effective claims handling to our clients. I envision the ability to handle claims a key differentiator from our competition moving forward.”
Meeting those challenges, Kelder said, means strengthening relationships with carriers; diversifying product offerings; investing in technology to improve efficiency and reduce agency costs; keeping up with trends in the industry; helping clients reduce risk; and keeping clients informed about rising costs, coverage issues and new and specialized insurance products.
Team members at Energy Insurance Agency
Energy office building in Lexington
Special Report: Best Agency to Work For
West
San Diego, California
CMR Leaders Show and Get Employee Appreciation
By Don Jergler
It’s often easy to put a finger on exactly why someone likes their job, and if there’s more than one thing to like, that says something good about the workplace. But what does it say if there are almost too many reasons to list?
Employees at CMR Risk & Insurance Services Inc. in San Diego, California, came up with long lists of reasons why they like working there on nominating forms to vote for their firm in Insurance Journal’s annual 2024 Best Agencies to Work For survey. CMR Risk took home Silver — Best Agency West.
“Our agency stands out as the best place to work because of its commitment to fostering a supportive, inclusive, and innovative work environment,” one employee wrote. “We prioritize employee well-being through comprehensive benefit systems, flexible work arrangements, and opportunities for continuous professional development. The collaborative atmosphere here encourages every team member to contribute their unique strengths, knowing their voices are valued and their efforts recognized.”
The employee also said leaders there are “deeply invested” in the success of employees, and they promote “a culture of transparency, trust, and mutual respect.”
The firm has 55 employees and reports annual revenues of $14.85 million. Its specialties include construction, real estate, nonprofits, surety, complex workers’ compensation
The firm’s employees said they like the freedom to volunteer. Several employees took part in an annual IICF charity clean up event.
and employee benefits.
Employees didn’t hold back on giving reasons why their firm is a great place to work.
“CMR Risk & Insurance Services stands out as one of the best agencies to work for due to its strong commitment to employee development, supportive work environment, and emphasis on work-life balance,” an employee wrote. “At CMR, employees are not
just valued team members but are seen as integral to the company’s success. The agency fosters a culture of continuous learning and growth, offering ample opportunities for professional development through training programs, certifications, and mentorship.”
The leadership employs an array of metrics to measure how employees feel about the firm, including a quarterly Employee Net Promoter Score (a survey asking employees to rate how highly they’d recommend someone to work there), and a Trailing Twelve Month Turnover (a measurement of employee retention).
Those are just some of several methods the firm’s leaders use to get a handle on employee satisfaction, according to CEO Travis Pearson, who’s been in the insurance business for 30 years.
“The working experience is a huge thing for us,” Pearson said. “Our bottom line and our top line are the result of the quality of our people. If we focus on being able to recruit and retain the best people by
creating a desirable place to work, the top line and bottom line just follow suit.”
Based on the variety of comments from employees, it makes sense that the firm’s leaders have numerous ways to measure how their employees feel.
“CMR delivers. We have two new office spaces, great technology, great leadership and company wide communication,” wrote another employee. “Fun events, training, and lots of community/charity involvement. Leaders keep us in the loop with finances, goals and issues.”
There was one common theme among the nominations: Employees feel appreciated and connected to management.
“CMR cares for not only the employee completing the job but the employee as a whole. Everyone from our CEO to our admin support team is very appreciative, easy going and open/willing to have a conversation,” an employee wrote.
“CMR also ensures the employee is taken care of from a health standpoint, work/life balance and mentally, offering a wide benefits package as well as trainings to help employees be better,” they said.
CMR Risk & Insurance Services Inc.
CMR employees gathered for the annual luncheon in 2023.
News & Markets
Long COVID Claims Still Impact California’s Workers Comp System, Report Shows
The impact and surge of long-term COVID on the California workers’ compensation system since 2020 has been prevalent, including long-term impacts on disability and long-term patterns of medical cost and treatment on long COVID claims.
That’s from a report by the Workers’ Compensation Insurance Rating Bureau of California.
The WCIRB report finds long Covid is still prevalent, with roughly 30% of California adults having reported activity limitations from long COVID, and there is an even higher prevalence in healthcare, manufacturing and retail industries.
The report’s findings include:
• More than one-in-seven COVID-19 claims with medical payments filed
between April 2020 and July 2021 were estimated to involve long COVID over a 30-month post-acute care period.
• 5% of all COVID-19 claims filed between April 2020 and July 2021, including indemnity-only claims, were estimated to involve long COVID.
• Roughly 40% of COVID-19 claims involving hospitalization were estimated to involve long COVID over a 30-month post-acute care period.
According to the report, long COVID claims compared to other COVID-19 claims have a higher share of indemnity claims and higher average incurred indemnity losses at roughly 30 months after policy inception, driven by a longer average duration (27 weeks) of temporary disability benefits, and a higher share of claims (35 claim average) involving permanent disability benefits.
• Long COVID claims incurred higher indemnity and medical losses than other COVID-19 claims, mostly driven by a higher share of permanent disability claims.
Long COVID PD claims averaged $79,828 compared with $31,230 for COVID claims, and long COVID TD claims averaged $19,694 compared with $3,711 for COVID claims, the report shows.
Long COVID claims were also more likely to involve litigation and have higher ALAE payments, according to the report.
Washington Paper Mill Fined Nearly $650K in Machine Operator Death
The Washington State Department of Labor & Industries cited and fined a mill operator in Camas following an investigation into the death of a worker who was crushed by a packing machine that had no safety guards in place.
The company, Georgia Pacific, also reportedly failed to follow basic procedures to make sure machinery would not accidentally turn on.
L&I cited and fined the company $648,292 for violations of fundamental safety rules that contributed directly to the worker’s death, along with other safety issues identified at the site.
On March 8, a 32-year-old Georgia Pacific machine operator called four times in one hour to ask for help troubleshooting a large piece of equipment for stacking boxes in preparation for shipping.
Before anyone responded to assist him, co-workers nearby reportedly noticed boxes backing up on the conveyor belt and went to investigate and found the man crushed between the large metal arms that help feed the boxes through the machine and the conveyor belt.
Management and workers told inspectors that the permanent machine guards that attached directly to the equipment were removed in 2017. They were replaced with a fence built around the machine that failed to prevent physical access to parts of the machine that could cause serious injury or death.
Georgia Pacific’s own analysis reportedly showed that they needed doors guarding this machine that would not unlock unless power to the machine was shut off. Construction for the installation of the doors was not completed until
after the machine operator was killed on the job.
Georgia Pacific was also cited for failing to follow rules protecting employees who are working alone in an isolated area. Safety rules require pulp and paper mills to periodically check-in with these workers. Employees at the mill reportedly told inspectors they were aware of a policy requiring a lead to check in with employees working alone every two hours, but said it hasn’t been enforced for years.
The company is appealing L&I’s decision.
BUILD BETTER COVERAGE WITH COMPREHENSIVE CONSTRUCTION RISKS
News & Markets
WCIRB Summarizes 2024 California Workers’ Comp Legislation
The Workers’ Compensation Insurance Rating Bureau is giving its take on bills passed and passed on by California Legislature this year.
The Legislature recessed for the year and Gov. Gavin Newsom had until Sept. 30 to sign or veto any bills. The WCIRB analysis includes passed legislation and bills that were vetoed.
The following bills were signed by the Newsom and become law effective Jan. 1, 2025 (except for Assembly Bill 171, which the Governor signed and became effective on July 2, 2024):
Assembly Bill 171
The bill deems a petition for reconsideration to have been denied by the Workers’ Compensation Appeals Board unless it is acted upon by the WCAB within 60 days from the date a trial judge transmits a case to the WCAB until July 1, 2026. The bill also requires a trial judge, when it transmits a case to the WCAB, to provide notice to the parties of the case and the WCAB.
Assembly Bill 1239
The bill extends the authorization to deposit workers’ comp indemnity payments in a prepaid card account until January 1, 2027.
Assembly Bill 1870
Employers are required to post a notice in a prominent place that includes information regarding to whom injuries should be reported, the rights of an employee to select and change a treating physician and certain employee protections against discrimination. It also requires the notice to include information about an injured employee’s ability to consult a licensed attorney to advise them of their rights under workers’ compensations laws.
Assembly Bill 2337
The bill allows all documents that require a signature for workers’ comp purposes to be filed with an electronic signature.
Senate Bill 1455
This bill extends the sunset date for the Contractors State License Board from Jan. 1, 2025 to Jan. 1, 2029. SB 216, passed in 2022, required contractors with certain license types to have workers’ comp insurance unless they have no employees and file a certification of exemption with the CSLB. This bill extends the deadline for applicants and licensees to comply with the SB 216 requirement from Jan. 1, 2026 to January 2028. The bill also requires the CSLB to establish a process and procedure
to verify that applicants or licensees without an employee or employees are eligible for exemption from the workers’ comp requirement.
Newsom vetoed the following bills:
Senate Bill 636
Existing law requires every employer to establish a medical treatment utilization review process. This bill would have required the physician conducting medical treatment utilization review to be licensed by California state law.
Senate Bill 1299
The bill would have created a disputable presumption that a heat-related injury that develops within a specified timeframe after working outdoors for an employer in the agriculture industry that fails to comply with heat illness prevention standards arose out of and came in the course of employment. The bill would have also required the Workers’ Compensation Appeals Board to find in favor of the employee if the employer fails to rebut the presumption. The bill specified that compensation awarded for heat-related injury to farmworkers was to include, among other things, medical treatment and disability.
My New Markets
Workers’ Compensation Insurance Programs
Market Detail: Viacomp Inc. is a family-owned and independently operated insurance brokerage specializing in workers’ compensation coverage. For over 20 years, we’ve been providing insurance agencies across the country a comprehensive marketing solution that helps ensure their clients are both maximizing savings and receiving quality customer service year after year. Our team of experienced insurance professionals is committed to delivering responsive and personalized service with a constant commitment to excellence. By focusing exclusively on workers’ compensation coverage, we are able to provide our retail agency partners access to a wide range of A-rated carriers for various types of accounts. Targeted operations include contractors, healthcare operations, trucking and transportation risk, manufacturers, warehousing and distribution companies, retail stores, agriculture and farming ops, schools and other educational centers, and more. Submission Requirements: Acord 130; currently valued loss runs; experience mod worksheet (if applicable). Has pen, appointment required. Available Limits: Not disclosed.
Carrier: Admitted; rated A- or better by AM Best.
States: Available in most states plus District of Columbia. Not available in Alaska, Hawaii, North Dakota, Ohio, Wyoming.
Market Detail: Flow Flood Insurance offers agents a marketplace to quote flood insurance efficiently. With access to six private quotes and the NFIP rate, Flow Flood empowers agents with competitive options, streamlined processes, and superior customer service. Join Flow Flood to elevate your agency’s flood insurance offerings and provide clients with the best solutions in the market. Has pen. Available Limits: Not disclosed.
Carrier: Six Lloyds syndicates; non-admitted; rated A by AM Best.
States: Available in all states plus District of Columbia.
Market Detail: Striker Insurance Services, a Risk Theory company, offers the STRIKER Commercial Auto Insurance Program. Striker provides commercial auto insurance solutions to many different classes including contractors, construction, agriculture, manufacturing and wholesale business segments. Experienced underwriters provide superior customer service and are available to review accounts and partner with appointed agents to quickly quote and bind policies. Eligible risks: broad list of eligible approved and preferred classes; focus on contractors and construction related operations, wholesale, manufacturing, agriculture segments; 5 power unit minimum; 3+ years in business. Commercial auto policies provide: $1 million CSL AL coverage; stated value APD; blanket additional insured; blanket waiver of subrogation; primary and noncontributory language; owned, hired and non-owned coverage; PIP, MP per statutory requirements; telematics programs; standard ISO forms, rules, rates. Submission requirements: narrative detailing operations/Acord application; target/expiring/renewal premiums; driver’s list on Excel; vehicle list on Excel; no device policy (if applicable); five years of currently valued loss runs (within 90 days of effective date). Has pen; appointment required.
Available Limits: Not disclosed
Carriers: Admitted and non-admitted; rated A- VIII by AM Best.
States: Available in Alabama, Arizona, Arkansas, Florida, Illinois, Indiana, Mississippi, Ohio, Oklahoma, Tennessee, Texas.
Market Detail: Encore Fiduciary offers Fidelity Bonds for benefit plans subject
to Employee Retirement Income Security Act (ERISA). Encore’s bonds meet the fraud and dishonesty standard of ERISA Section 412(a) and (b). Encore offers coverage with a broad definition of “employee.” We do not have a retention for ERISA plans for employee theft coverage. Carrier is Hudson Insurance Company, rated “A/ Excellent” by AM Best. Hudson is also a Department of Treasury approved Surety, which is a requirement of ERISA. Has pen.
Available Limits: Not disclosed.
Carrier: Hudson Insurance Company; admitted; rated “A/Excellent” by AM Best. States: Available in all states plus District of Columbia.
Contact: John O’Brien; jobrien@encorefiduciary.com; 571-730-4810.
Crime Insurance
Market Detail: Landy Insurance Agency offers an admitted crime program from an A+ Superior carrier, available in all 50 states. Social engineering and ERISA compliance automatically included. Low minimum premiums, minimum of three employees/independent contractors. Three-year policy option available. All professional classes, financial institutions, health and medical, retail and mercantile, non-profits and municipalities. $400 minimum premium; has pen; appointment required.
Available Limits: Limits from $50,000 to $50,000,000.
Carrier: Admitted, A+ Superior carrier. States: Available in all states plus District of Columbia.
That used to be one of my biggest beefs as an agency owner — I have all of these pieces of tech and none of them talked to each other,”
Vonda Copeland, co-owner and vice president of operations at Copeland Insurance Agency in Manhattan, Kansas, told Insurance Journal. “None of them were integrated, or the ones that did integrate with certain management systems or CRMs we’re very limited.”
Copeland was not alone in being frustrated with the lack of connectivity across agency technologies. But she’s also not alone in feeling like things are getting better.
“I see that the tech is starting to open a bit more,” she said. “Insurance carriers and third-party tech providers are starting to play well with others a little better than they used to because that’s really what we need them to do — we need them to be able to talk to each other,” adds Copeland, who also serves as the executive committee secretary and assistant treasurer of the National Association of Professional Insurance Agents.
Technological innovation is accelerating and connectivity in particular is changing, according to some in the industry, although others still think there is a long way to go when it comes to getting various pieces of technology to connect or work well together.
Copeland says one driver for better connectivity between agency tech stacks has been agency owners themselves. “Some pretty savvy agency owners have said, ‘Well, if this doesn’t talk to each other, then I’m going to get another
piece of technology that does or I’m going to build my own integration,’” Copeland says. “And I have seen that happen over and over again.”
Others note that artificial intelligence (AI) is playing a positive role when it comes to customer service, data management and other areas.
Brendan Mulcahy, SIAA’s vice president, technology and innovation partnerships, is among those who thinks there is still more to be done. “The honest answer is there are still a lot of systems that don’t talk to each other,” Mulcahy told Insurance Journal. That includes even some of the “basic stuff” in agency tech, he added.
When systems do not connect, the agency is stuck with the burdensome process of manually keeping up with the same information in two places.
“For example, if you use a marketing platform for your prospecting and your outreach, and you use a management system for policy storage and so on, is the information in sync? If you have, for example, a producer working in one and then a CSR working in the other, are they working from the same information? That’s still a challenge,” Mulcahy said.
While some vendors are providing better connectivity options than others, it is often still the case that different systems solving different problems are competing, he said.
Biggest Agency Needs
There are three things that Tony Martinez, chief information officer, at Unison Risk Advisors sees as the biggest needs in agency technology today overall. Some of these are outwardly facing and some are more operation and internal in nature.
“First is that the industry needs to be more efficient in serving customers and improving the overall customer experience,” Martinez said. “How does the industry simplify the comparison and renewal experience? How does the industry utilize AI-powered chatbots to field customer inquiries? How does the industry use AI tools to streamline claims processing?”
The second item is just data. “The industry can benefit from access to consistent, cleaner, more accurate data to understand the market, customers and trends,” Martinez added. “This will allow for better business decisions and expose opportunities to focus sales resources.”
The third biggest need — efficiency and profit growth. “The industry needs to adopt automation for internal functions such as repetitive tasks, underwriting and renewals,” he said. “This streamlines operations, increases customer satisfaction and frees up labor to focus on sales and revenue growth.”
other,” he said. “Unfortunately, integration and connectivity, while making progress, and definitely getting better, there’s still room for improvement.”
Chris Cline, executive director of the Agents Council for Technology and author of “The Inertia of Legacy,” agrees that efficiency and connectivity continue to be huge when discussing agency technology today. But he says while there’s still frustrations among agency owners and their technology providers, connections are getting better.
“So, those opposing systems don’t always talk well to each
“There are definitely frustrations in the industry today, and opportunities, to get better, quicker, faster and talk about how we can better leverage data and connectivity,” Cline said. But the industry
continues to “chip away” at improving connectivity and efficiency through technology improvements, he added.
One challenge to improving connectivity is that agencies are “still living in a world where data is inconsistent,” Cline said. “It’s not housed necessarily in single systems so it lives in disparate worlds where it might not be [stored in] the same way.” So, creating better standards for data is still a huge opportunity to solve, he added.
“Carriers, customers and everybody consume and share data differently so the question remains, how can agencies efficiently get that data into management systems for things like PDFs and spreadsheets or handwritten forms?” Cline asked. “It’s been a real pain point over the years,” he
Special Report: Agency Technology
continued from page 29 added.
The good news is that now the industry is beginning to see some solutions emerge that can help agencies consume these “flat, editable freeform data transfers across producer applications,” he said. “From my observations, we are starting to see conversations even if these aren’t the words people use, we’re starting to focus on really fundamental core processes rather than maybe just some of the shiny or more romantic things.”
AI Innovation Wave
AI innovators are opening new doors with expanded connectivity that links agency data and data from other sources into technologies helping to solve real agency problems.
“Third-party technology providers have recognized the needs in the insurance industry and are designing AI programs for these needs,” said
Jessica Jung, president, Oswald Companies. “They understand that AI can enhance customer service through systems such as chatbots and virtual assistants.”
But it’s helping in other more sophisticated ways, too.
“Technology to help us mine and cultivate data will give industry professionals more time to focus on advising their clients to make informed decisions backed by actionable insights powered by accurate data,” Jung told Insurance Journal.
One AI analytics firm, DONNA ai (aureusanalytics. com/donna), provides insights for independent agencies about customers and their books of business by delivering “sentiment scores” for things like customer experience, account rounding, improving retention and even customer loyalty. Anurag Shah, CEO and co-founder of DONNA ai, says the platform can integrate
with agency management system providers, CRMs and other external data providers to provide benchmarking tools agencies can use to compare their firms with others as well. While AI is the new buzzword in agency tech, it’s not new — nor is it as important as the data itself, Shah says.
What makes AI work
is
the data
and agencies have a lot of it.
“From my perspective, I mean whether it’s AI or not, if it has business value, then it’s valuable.” For example, “if you are processing large volumes of data and finding patterns and insights and generating something valuable for the users, there is already some AI component in it,” Shah said. What makes AI work is the data, and agencies have a lot of it.
“Artificial intelligence helps us analyze data faster, better understand and act on trends, and make risk financing decisions,” Jung said. “Technology has enabled the industry to collect much more data. The key is using it more strategically to drive quantifiable outcomes for clients. That’s where AI can help.”
A good example would be the use of client data across all areas of integrated risk to proactively reduce losses and a client’s overall cost of risk, Jung added.
Shah said DONNA has processed 60 million policy records, which indicates that the model works. However, it’s the amount of data that it has processed, and what has been learned from that data that is more relevant, he said.
The data is probably more important than the model, but the combination is “really the magic,” he added.
A Digital Roundtrip
Elad Tsur, the chief AI officer of Applied Systems, joined Applied in July 2024 with the acquisition of Planck, a company that Tsur helped co-found in 2016. Planck is an AI-based data platform for commercial underwriting. “We started Planck with the belief that access to real-time data to get a full picture of a business is more crucial than ever when identifying the actual risk factors that are core to insurance,” Tsur said in statement in July. Taylor Rhodes, CEO of Applied, has long believed there is enormous potential to apply AI capabilities throughout the insurance lifecycle, or the digital roundtrip of insurance as he often refers to the evolution of industry technology. “Intelligent automation can make better use of data,” he told Insurance Journal.
“There’s plenty of opportunities throughout that digital roundtrip of insurance for AI to create intelligent automation, understand what data is telling you at a certain point in a workflow, and assert insight or the appropriate level of understanding, knowledge or recognition of patterns at the point of new sale renewal, prospecting, underwriting advisory services, etc.”
While Planck’s AI-platform serves commercial carrier needs in underwriting, the technology behind Planck could also be applied to other products throughout Applied’s ecosystem, Rhodes told Insurance Journal in July. continued on page 32
Specialized protection serves complex needs.
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Special Report: Agency Technology
continued from page 30
“Planck brings a huge shot in the arm in terms of just pure capacity — our R&D capacity around AI,” he said. “We have a large portfolio of products that service the carrier side of the market, the agency side of the market, and we can take their AI expertise and the capabilities and the proprietary technology they’ve built and inject those into our product set.”
Tsur said the Planck AI platform continues to service commercial insurers through Applied’s IVANs arm but
noted that the plan behind the acquisition into Applied is to build the AI technology out further. “We immediately saw it was just beginning to scratch the surface of what we can do together,” Tsur said. “We had a very successful product for the underwriting domain” but now want to bring that same technology and product to the distribution side.
Rhodes said in July: “We’ve got a product team focused in Ivans on the carrier side and a product team focused within Applied and EZLynx on the agency side. So now what we
Why Tech Matters in M&A
Yeah, so in terms of technology and AI specifically, Technology and AI innovation makes an impact when it comes to merger and acquisition decision, according to Brooke DeWyze, chief development officer for PCF Insurance Services.
DeWyze, who spends her time at PCF evaluating independent agencies that are interested in becoming a PCF partner, told Insurance Journal that agency technology plays a significant role in sourcing.
“From start to finish, from sourcing deals all the way through the acquisition, we are looking at the agency to see what type of tech stack they have, how they’re embracing it, and how they’re utilizing it,” she said.
She believes AI will continue to drive greater efficiency into insights and strategic advantages, not only through the deal process, but also within the agency.
“Some of the ways that I’m currently using AI in the M&A space is just in terms of deal sourcing and target identification,” she said. AI driven market intelligence is key because it can sift through massive amounts of data and identify potential targets that meet specific criteria such as geography, focus, product line, client base, she added. “It can also do trend analysis.”
She also sees it playing a role in agency valuations and financial modeling. “I foresee it helping in that realm in terms of predictive analysis, where it can help us predict what an agency might look like in the future as we acquire it, as well as help with scenario planning and gaining efficiencies,” she said. “When we’re looking at agencies, we really want to see how technologically advanced they are, how they’re embracing technology,” she said. “We definitely want to see how they’re looking at technology and AI specifically.”
can do is take this platform, this AI technology capability and skillset, and we can work with our product leaders on both the agency and the carrier side simultaneously.”
Tsur said the team will add the same AI capabilities to Applied Epic in the first half of 2025 with the launch of the Applied Book Builder, which uses the power of AI to enrich commercial risk profiles based on thousands of publicly available sources. The AI tech aims to round out risk profiles and identify coverage gaps within existing policies, then deliver corresponding market placement insights to help teams submit business to appropriate carriers. Applied says that the new AI-integration will enable “insurance producers and account managers to target new commercial lines prospects and cross-sell and upsell opportunities.”
Tsur explained the platform will have five layers of AI that will provide knowledge and insights into business that will create what he calls “wisdom” or “underwriting insights” to make recommendations and ultimately deliver a “co-pilot” to help CSRs and producers. There may even one day be a sixth AI layer — a pilot, but Tsur says this is something that is still far away for the insurance industry. This would be the “full agent layer,” he said.
“We’re nowhere near that, at least not in the next, let’s say couple of years,” Tsur said.
For now, AI innovators in the insurance industry need to stay focused on data and commit to prioritizing data governance, says Tony Martinez, chief information officer, at Unison Risk Advisors. “It’s all about people, process and technolo-
gy,” Martinez said. “Many think automation is scary. It isn’t. It frees up your thinkers and your resources to do what’s more important and takes some of the repetitive tasks away. It unlocks trapped capacity.”
To unlock that trapped capacity, agencies will need to invest in people first. “Business intelligence folks, people who have the ability to run a complex data analysis and make it simple for producers and principals to understand what they should do next strategically, people who can translate and speak to both the business and the technology side are going to become more and more in demand in the industry,” said Abrianne Harmon, director of innovation for Alkeme Insurance based in Ladera Ranch, California, which ranks 34th on Insurance Journal’s Top 100 Agencies list. Technology should be able to help in an increasingly fastpaced and difficult insurance market like today, Harmon said. “It’s really burning our account managers on the backend, and I hope that using AI would give them a better quality of life, more comfort in the workplace,” she said.
“I hope to not see it start replacing people in the industry, and I don’t think it will,” she added.
Where AI can help the most will be to augment certain roles, not replace them, she said. “Areas that we need to focus on as producers and as operations people is not how AI can replace producers,” she said. “Brokers who want to do well will embrace AI for repetitive tasks but could also go even further onto the human side to help build relationships and help their clients grow organically,” she added.
Closer Look: Condominiums Update: What’s Going on With Condos?
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.
By Patrick Wraight
It’s a bit more complicated than that because there are residential condominiums that are owned as longterm 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 restrictive. The underwriting requirements are harder to deal with, and the pricing is very high.
So, what’s going on?
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 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 gets into business.
But there’s more to it than that.
Insurance companies also have to set aside money for claims. That money is divided to account for the claims that the insurance company knows about and has set aside money for. 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 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.
In recent years, insurance companies’ combined ratios have exceeded 100%, meaning the companies were 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. When inflation hit and hit and hit, those investments began to bring in less investment income,
making those ratios harder to sustain.
That’s a simplified look at the causes of a hard market. The ongoing poor economic conditions have driven insurance companies to protect themselves by writing fewer risks, charging more for the risks that they are writing, and restricting coverage through policy changes.
The Aging Problem
The general market conditions don’t tell the whole story, however.
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. Since then, condominium buildings have been built in cities all over the United States.
means that they were constructed according to the building codes in effect when they were built.
Buildings need maintenance, upgrades and changes. When they aren’t maintained appropriately, bad things can happen.
For example, in 2021, a portion of the Champlain Towers South condominium 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 because no one uses that bathroom you shut the water off and told yourself that you’ll fix it later. Now,
however, the sink has leaked for a 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 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: Not Always Helpful
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.
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 the board asks the engineer for some options for temporary repairs, or incremental repairs that will minimize the disruption to the residents. Perhaps 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
Many of those buildings were built in the 1960s, 70s, and 80s. This puts those buildings at 40 years old and up, which continued on page 36
Closer Look: Condominiums
continued from page 35
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 board members cycle off the board and new members join. The board has to elect a new president. 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.
Add to this the fact 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
1,662 results for ‘personal auto’
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 field underwriter is sent to look at the building and the underwriter sends a report back to the company, three things are likely to happen if there are any issues at all with the building.
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 insurance company 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 nonrenew the policy because of the conditions 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 likely will be more expensive than that available from the current company.
In the end, this segment of the insurance market is very difficult to navigate and there are no simple answers.
Wraight is director of Insurance Journal’s Academy of Insurance. He can be reached at pwraight@ ijacademy.com.
Idea Exchange: The Marketing Connection
Video Marketing Trends in the Insurance Industry: Engaging Audiences & Building Trust
The insurance industry, traditionally rooted in face-toface interactions and extensive documentation, is undergoing a significant transformation with the rise of video marketing.
By Kristen Nevins
As digital communication becomes the norm, retail insurance agents, wholesalers, MGAs, carriers and insurtechs increasingly turn to video content to engage clients, explain complex products, and build trust in a competitive marketplace.
The Rise of Video Marketing in Insurance
Video content has surged in popularity across industries, and insurance is no exception. The insurance sector, known for its intricate products and regulations, benefits significantly from video content’s ability to simplify complex concepts and make them more accessible.
For retail insurance agents, video marketing offers a dynamic way to present policy options, explain coverage details, and share customer testimonials. Instead of relying solely on text-heavy documents, agents can use short, engaging videos to demonstrate the value of different insurance products, making it easier for clients to understand their options.
Wholesalers and MGAs are also recognizing the potential of video marketing to enhance their relationships with retail agents. By creating instructional videos, webinars, and product demonstrations, these intermediaries can provide valuable resources that help agents sell more effectively. Additionally, video content allows wholesalers to showcase their expertise and build credibility in a crowded market.
The Power of Live Webinars
Live webinars have become a cornerstone of video marketing in the insurance industry. Unlike pre-recorded videos,
webinars offer a real-time, interactive platform for professionals to engage with their audience. This format is particularly effective for discussing complex topics, answering questions, and providing personalized advice.
Carriers and insurtechs are leveraging live webinars to educate their clients and partners. These sessions often feature industry experts who can delve into intricate subjects such as regulatory changes, new product launches, or risk management strategies. The live format allows for immediate feedback and interaction, creating a more engaging and informative experience for attendees.
Retail insurance agents can also harness the power of live webinars to build stronger relationships with their clients and prospects. Agents can position themselves as knowledgeable and approachable advisors by hosting webinars on topics such as understanding policy options, navigating claims processes, or emerging industry trends. This format allows agents to showcase their expertise and offers a valuable opportunity to address client concerns directly and in real-time. And, hosting regular webinars can help agents stay top-of-mind with their audience, fostering trust and loyalty over time.
their relationships with retail agents. By hosting regular webinars on topics relevant to their agents’ needs, they can position themselves as trusted partners and thought leaders. Webinars also provide a platform for showcasing new products or services, helping agents stay informed and better serve their clients.
Building Trust Through Authenticity
One of the key advantages of video marketing is its ability to convey authenticity — a crucial factor in building trust in the insurance industry. In a sector where clients are often skeptical and risk-averse, videos that feature real people, transparent information, and relatable stories can go a long way in establishing credibility.
Retail insurance agents can use video testimonials from satisfied clients to demonstrate their commitment to customer service and highlight others’ positive experiences. When presented in a genuine and unscripted manner, these testimonials can resonate more deeply with potential clients than traditional advertising.
For insurtechs and carriers, behindthe-scenes videos and interviews with company leaders can humanize their brand and make them more relatable to their audience. Showing the faces behind the company and sharing their vision and
For MGAs and wholesalers, live webinars offer an opportunity to deepen continued on page 49
Spotlight: Claims
Equipment Breakdown Tops Small Restaurant Claims List
By Allen Laman
With restaurant sales projected to top $1 trillion and reach record-breaking heights this year, a California-based insurance technology company versed in the space recently analyzed data from more than 30,000 small business restaurant owners across the U.S. to determine the most frequent and severe claims they face. Equipment breakdown, employee injury, customer slip and fall, theft and vandalism were the five most frequent claims at restaurants from January 2021 to July 2024, according to the new report from NEXT Insurance.
Water damage, fire, food spoilage, power outage and wind (excluding hurricanes) rounded out the top 10 on the list, which was compiled from findings that come from anonymized data from small businesses that purchased insurance from NEXT.
“By analyzing a four-year snapshot of our restaurant data, we’re able to uncover trends that not only aid in risk assessment but also empower small businesses to plan for growth and future success,” said Effi Fuks Leichtag, chief product officer at NEXT.
The report also shared select state-level numbers.
The top claim driver in Pennsylvania was equipment breakdown, while employee injury claims topped the list in Florida. Vandalism was the primary driver in California. Fire was the top claim source in both New Jersey and Tennessee.
Mississippi’s top claim cause was wind (excluding hurricanes), spoilage claims topped the list in Michigan and power outages were No. 1 in Virginia.
Data from the study period shows restaurants with a business insurance claim had an average total loss of around $9,000. Fine dining restaurants took the biggest loss per business, with average claims nearly double of all restaurants.
The report shows that the top four most expensive restaurant claims from 2021 to 2024 were fire, slip and fall, assault and battery, and water damage.
Leichtag said that the claim severity “falls off a cliff” after those big four.
When asked about emerging risks, Leichtag said that NEXT is seeing restaurants reduce the number of employees per dollar of revenue. So, even when payroll relatively increases, fewer employees are being hired, he explained.
“Now, if we associate it to automation and the ability to do more, and we see more small restaurants [implementing] cooking technology, point of sale self-ordering that you see in the kiosks — that means that even if the employee injury
aspect is getting better through training or just better safety, the damage of an employee incapable of working is much more dramatic,” Leichtag said.
“Right? Because you’re just dependent on less and less individuals. So, it has both a positive and a negative effect. The positive is restaurants need less employees to operate [and] they can pay them more. We see it. The negative is if that employee is quitting or injured or a claim has happened and the employee cannot be there, that can be negative.”
Equipment breakdowns could be amplified by similar challenges. From a hardware perspective, if restaurants become more reliant on automated and internet-connected devices to order, cook or serve their food, internet outages can “turn off a business,” according to Leichtag.
Many restaurants don’t accept cash as payment and must temporarily close during outages because they can’t collect money.
Separately, compromising on workers’ compensation can be “devastating” for restaurant owners, Leichtag said. He said that restaurants are among the hardest businesses to run, and it may be tempting for owners to see employee protection — not benefits — as a corner to cut.
“Buying workers’ comp for a restaurant is one of the things that many restaurant owners under-appreciate,” he said, adding that coverage is essential for everyone who works in a kitchen, even if they’re a contractor.
In February, the National Restaurant Association forecasted that the restaurant industry will hit $1.1 trillion in sales in 2024. A total of 15.7 million employees work in the industry, and that number is expected to increase to 16.9 million by 2032.
More than 90% of restaurants have fewer than 50 employees, and more than 70% are single-unit operations. Seventy-six percent of operators say technology gives them a competitive edge, and nearly half of operators think using technology to help with labor challenges will become more common this year.
Supreme Court to Decide if White, Straight Workers Face Higher Bar in Bias Lawsuits
By Daniel Wiessner
The U.S. Supreme Court agreed in early October to decide whether it should be more difficult for workers from “majority backgrounds,” such as white or heterosexual people, to prove workplace discrimination claims.
The justices took up an appeal by Marlean Ames, a heterosexual woman, seeking to revive her lawsuit against the Ohio Department of Youth Services, in which she said she lost her job to a gay man and was passed over for a promotion in favor of a gay woman in violation of federal civil rights law.
The Cincinnati, Ohio-based 6th U.S. Circuit Court of Appeals decided last year that she had not shown the “background circumstances” that courts require to prove that she faced discrimination because she is straight, as she alleged. She brought her lawsuit under Title VII of the Civil Rights Act of 1964, the landmark federal law banning workplace discrimination based on traits including race, sex, religion and national origin.
Since the 1980s, at least four other U.S. appeals courts have adopted similar hurdles to proving discrimination claims against members of majority groups, largely in cases involving white men. Those courts have said the higher bar is justified because discrimination against those workers is relatively uncommon. But other courts have said that Title VII does not distinguish between bias against minority and majority groups.
A Supreme Court ruling in favor of Ames could provide a boost to the growing number of lawsuits by white and straight workers claiming they were discriminated against under company diversity, equity and inclusion policies.
The court will hear arguments in the case in its new term, which began October 7, and a decision is expected by the end of June.
Lawyers for Ames and the Ohio agency, which oversees the confinement and rehabilitation of juvenile felony offenders, did not immediately respond to requests for comment.
Ames was in charge of ensuring the agency’s compliance with a federal law designed to deter sexual assaults in prisons. She has said that despite receiving positive feedback for her job performance, she was demoted to her old job in 2019 and had her pay cut by nearly $20 an hour.
Ames has said she was replaced by a younger gay man, and that later in 2019 she was denied a promotion she had sought that went to a gay woman.
She sued the department in 2020. An Ohio federal judge dismissed the case last year, saying she had not shown the “background circumstances” to support her discrimination claim.
The 6th Circuit upheld that decision last December. The 6th Circuit said that background circumstances can include evidence that a member of a minority group, such as a gay person, made the challenged employment decision, or data showing a larger pattern of discrimination by an employer against members of a majority group.
Copyright 2024 Reuters.
Idea Exchange: Emerging Risks
3 Emerging Risks: Microplastics, 3D Printing and Heat Pumps
We often take for granted the resources and materials that help us run our businesses and build our homes.
Steel, cement, plastic — building blocks such as these have afforded us the flexibility to grow our communities, create new products, and power innovation. But we’re also beginning to understand their potential costs and consequences.
By Lee Shavel
The growing worries over microplastics pollution, in addition to the latest developments in 3D-printed construction and home heating, are three emerging risks that could impact insurers today and in the future.
Tiny Pellets, Big Problems
For years, scientists and environmental watchdogs have been ringing alarm bells over the tiny — often microscopic — plastic materials known as microplastics. Due to their size and ubiquity, microplastics can enter the environment through various pathways — via the manufacturing process, for instance, or through the environmental breakdown of plastic products such as water bottles.
Microplastics have been found piling up
in oceans and along shorelines, and have been detected in both bottled and treated tap water. These plastics have been found in soil and food supply chains, and recent research has identified these tiny plastics throughout the human body.
New research may be shedding more conclusive light on the potential health risks. A March 2024 study published in The New England Journal of Medicine found that patients undergoing carotid endarterectomy treatment within whom micro- or nanoplastics had been detected were at an elevated risk for a cardiovascular event such as a heart attack or stroke as compared to those with no evidence of plastics.
Tracking the many potential exposure pathways for humans may prove uncertain, however. Verisk recently conducted a comparative analysis of data from the U.S. Centers for Disease Control and Prevention (CDC) and the National Centers for Environmental Information (NCEI), which found a heavy concentration of microplastics along the U.S. East and Gulf coasts. Though several counties surveyed showed both high concentrations of microplastics and elevated rates of heart disease, others revealed normal or below-average rates. And though they have been identified throughout our seas and oceans, measuring marine microplastics is only one way to
estimate possible human exposure. Several U.S. states are beginning to track microplastics. For example, California regulators mandated in 2022 that approximately 30 of the state’s largest water systems conduct quarterly testing over a two-year period. Other states have followed suit, passing laws mandating
drinking water testing.
Litigation regarding plastics and microplastics appears to be in its infancy. To date, there have been just two notable settlements involving plastics manufacturers regarding microplastics pollution of nearby environments amounting to more than $50 million in total. But since January, at least seven class-action suits have been filed against businesses over alleged false advertising vis-a-vis the presence of microplastics in their products.
Is 3D-Printed Construction Ready for Primetime?
3D-printed buildings have been hailed by some as a solution to America’s affordable housing crisis. Whether the technology can fulfill such lofty ambitions remains to be seen, but 3D printing appears to be slowly gaining momentum in the construction industry, and its potential impact on property insurers isn’t
quite clear yet.
The emerging construction technology is projected to grow into a $3.3 billion industry by 2031 — up from $1.2 billion in 2021. It may take many years still before 3D-printed commercial buildings are a routine feature of America’s built environment, but it’s not too soon to begin considering the possible implications of this technology as it matures.
3D printing creates structures by laying material down, layer-by-layer, generally without the use of tooling, dies or fixtures. In the construction industry, the “printers” generally employ three different methods. Extrusion printers may be attached to robotic arms and cranes and layer material via a nozzle. Powder bonding uses powdered material either melted with a laser on an object layer-by-layer or adhered using a liquid that binds the material together. Finally, spraying is an additive technique that, as the name suggests, sprays material via a high-velocity jet.
This construction method offers a range of benefits — such as speed, customizable construction methods, and eco-friendly materials — but is not without its drawbacks. It’s difficult, for instance, to determine the long-term durability and performance of 3D-printed buildings, and the materials used to print them. How a building is printed also appears to influence its ability to withstand fire, and questions remain about the long-term structural integrity of buildings erected using this novel technique — not to mention the likely building code obstacles it faces.
Potential Concerns of Residential Heat Pumps
Homeowners looking to improve energy efficiency and reduce costs are starting to turn to heat pumps. While these systems have several benefits, there may be issues
insurers should consider as the number of heat pumps increases.
Recently, governors in 24 states have committed to installing 20 million residential heat pumps by 2030. Beyond that boost from state officials, the Inflation Reduction Act has directed federal tax incentives toward homeowners who install heat pumps. Last year, heat pump sales eclipsed gas boilers in the U.S. and have outsold gas boilers for three of the past four years. While heat pumps are only installed in approximately 16% of U.S. homes, sales have been growing at a rate of 15% a year.
At a high level, these systems capture outdoor air, extract and amplify the heat from it using a refrigerant, and then disperse that heat — either into a single room or, in multi-zoned systems, across an entire residence. They typically have a pair of coils: one outdoors to capture the air and one indoors to help distribute it. This process can also be reversed, enabling heat pumps to double as air conditioners.
Heat pumps are significantly more efficient than fossil fuel-based heating options, according to research, and could produce carbon-busting benefits for our environment. A study examining California households, for example, suggested that a switch from natural gas to electric options such as heat pumps could yield a reduction of up to 54% in greenhouse gas emissions.
These products do invite some potential
fire risks, however. Starting in 2025, all residential heat pumps (and air conditioners) are required to use a new class of refrigerants called A2Ls. These chemical substances have a similar toxicity designation (low toxicity) as the refrigerants they’re replacing, but they’re also more flammable. Home heating is the second leading cause of residential fires, behind cooking, so any changes in the makeup of home heating appliances will likely influence the future trajectory of residential fire risk. Heat pumps nevertheless appear to pose a lesser residential fire threat than those presented by other heating methods, such as heating stoves, furnaces and baseboard heaters.
Because they’re generally situated outside of a structure, heat pumps can be exposed to natural perils. With prices ranging from $7,000 to $14,000 or more, depending on the size, feature set, and energy efficiency — the cost to repair or replace these units may be a consideration. Whether it’s the potential risk of fire of home heat pumps, the structural integrity of 3D-printed buildings, or the potential for litigation involving microplastics, these three issues should be on insurers’ radar as they continue to develop.
Shavel is president and CEO 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.
Idea Exchange: The Competitive Advantage
Might the Realtor Ruling Affect Insurance Distribution?
The fairly recent ruling on how realtors are paid seems likely to dramatically alter real estate sales. I’m not in that business so I don’t know all the ins and outs, both the obvious and the not so obvious, unintentional effects. The crux of the ruling seems to be that sellers should not have to pay the buyer’s realtor’s commission. On the surface, this makes sense. Each party should pay for their own advisor.
Why shouldn’t the same logic apply to insurance? Agents are paid by insurance companies, but the insurance contract is between the insured and the carrier. The agents’ contracts are with the insurer, not the insured.
By Chris Burand
(Depending on the state, the applicable legal definition, the applicable standard of care, and other factors, a “broker” may, or may not, work for the insured but the vast majority of insurance distributors are agents.) Why should the insured not have to pay for insurance advice?
It is much easier to hide the commission in the premium and then for the agent to pretend to work for the insured, and a large proportion of agents pretend to work for the insured. Consider captive agents. They literally work for the carrier. While they may be independent contractors, or not, on paper they can only represent one de facto carrier. They are “captive.” They work for the insurance company. One such carrier even quit training these independent contractors because by training them, the agents might no longer be considered independent contractors. So now you have untrained people selling insurance simply because they have a license. They pretend to work for the insured.
From this perspective, captive agents should be forced to give a disclosure to insureds they are working for the carrier and that if they want true, unbiased advice, they should hire an advisor.
Independent agents have far more flex-
ibility and the opportunity, if accepted, to truly work for the insured but the majority do not. Many are peddlers and order takers. And most errors and omissions (E&O) carriers, consultants and defense attorneys promote the safety of being peddlers and order takers. In classes they frequently tell audiences: “Don’t offer coverage advice.”
“Don’t tell them you are an expert.” “Don’t tell them you are a professional.” To not be a professional is to be an amateur.
Independent agents have an advantage of being paid by the carrier while suggesting, if not outright promising, to work for the insured. Not a smart promise from an
E&O perspective, but it is a competitive advantage.
But it leaves the insured out in the cold because they think someone is looking out for them when no one really is. Hiring one’s own advisor is important because it’s not only the carrier/agent relationship that works against insureds, the law also generally works against insureds. The laws in most states require the insured to read, and it may be unsaid, but it also requires them to understand their insurance policy. Unless the agent has created a “special” relationship, the burden is on the insured to read and understand their own insur-
ance. That is a ridiculous standard.
The insurance guru Bill Wilson recently posted a claims situation involving a rented car. His example involved how if you rent a car and let someone else drive, and that other person does not have their own insurance, there is likely coverage in some situations, but not in other situations. His point was that everyone reading insurance policies must understand the policy language in context with the situation. This is why black and white coverage questions are rare. As he wrote, “And consumers are expected to handle their insurance decisions without the assistance of an
educated professional?” Exactly!
Agents that offer no real advice are not worth 13%, 14% or 15% commission. Carriers are wasting their money and insureds are being overcharged. Instead, the carrier should pay for their distributor and insureds should pay for their advisor. Minimize the conflict of interest.
For all the agents who want to offer advice but are scared based on what they’ve heard in E&O classes, really good news exists. First, agents that truly offer quality advice have fewer E&O events. You’ve been scared into believing the wrong thing (mostly because the rest of
the class consists of order takers and the speaker doesn’t want to deal with all the bad reviews he/she would get by speaking the truth). Second, you can make a lot more money by offering quality advice. The business model must change but you are being shorted by insurance companies at 14% commission. The carriers, like carriers always do, prefer to strike a solution based on the law of large numbers. This law is dead today on a claims level and commission level. The logic is that order taker agents are worth 8%-9%. But quality agents are worth around 18%. So, they pay in the middle.
Professional agents are worth around 18% and if you change your business model to be a true advisor, clearly and legally on the side of the insured, you can make 18%. The business model must change because this model requires more education (for example, you must be able to succinctly describe why the uninsured driver in the rental car example would be covered under some instances and not others), more time, and a much higher standard of care. The 18% commission is not a free ride, but it is close because competition is much less. Most agents may want to offer advice, but they won’t put the work into being able to offer competent advice.
The process for building your business model to make 18% varies depending on the state, the line of business involved, and the peculiarities of your agency. High quality legal advice is required (let me know if you need references) but I’ve never had a client fail when going to this model and none have seen additional E&O claims. In fact, their E&O exposures have decreased. And they go home every night feeling much more fulfilled and that they have done well for their customers.
It will be interesting to see if the realtor ruling opens the door to similar suits in the insurance industry. It makes sense that at the least, additional disclosures should be required to identify for whom the agent is truly working.
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: Is It Covered?
Logic & Language and Forms & Facts Commoditization and Storytelling
Last year, I addressed the issue of insurance policy commoditization in the context of industry advertising in at least four of my monthly columns. Over the years, I’ve blogged about it several times. Recently, I’ve posted about it on my LinkedIn account.
By Bill Wilson
My main point with all of these articles and social media posts is to point out that our incessant industry price-focused advertising leads consumers to believe that insurance, especially home and auto insurance, is a commodity differentiated only by price.
So, in the minds of most consumers and consumer media authors, as long as you’re comparing “apples to apples,” the only thing you need to know about
insurance products are their prices. In other words, in the case of auto insurance, if you’re quoting the same limits and deductibles for coverages like liability, medical payments, UM/UIM, and physical damage, then all you need to make a purchasing decision is a list of insurers and their prices. In suggesting this, one state insurance department advised, “Yes, it’s just that simple.”
Astute industry practitioners know that this isn’t true. Pesky things like insuring agreements, exclusions, limitations, conditions and claims practices within these coverage categories prevent insurance policies from being identical or even comparable in some cases.
The problems is, within our own industry we have far too many “unastute” practitioners. I suspect that “unastute” isn’t a word but didn’t want to use the more inflammatory “ignorant.” How do I know this? One telling clue is the hundreds,
perhaps thousands, of coverage questions I’ve received from people in the industry over the years that begin with something like, “Does ‘a’ homeowners policy cover,” or “Does ‘an’ auto policy cover,” or “Does ‘a’ CGL policy cover …?” As I so often say, “RTFP!”
How do we expect consumers to understand that there’s more to an insurance purchasing decision than price when our own advertising focuses almost exclusively on price and so many in our industry don’t understand the subtle, but often significant, differences between policies?
The only way I know I can personally do something about it is to continue to speak and write about this issue. And, hopefully, those that share my view will share what I write about. You can start by simply Googling “bill wilson insurance commodity” and you’ll find articles I’ve written here, on my blog, and elsewhere. I also invite you to follow me on Linkedin
where I post almost daily at https://www. linkedin.com/in/bill-wilson-69937811.
If you would like to join me in the pulpit, one of the best ways to communicate with others is via storytelling. By “storytelling,” I’m not referring to fiction and fables, but rather illustrating important points with memorable and true examples. I’ll devote the remainder of this month’s column to a few “stories” and you can find more by searching online, as I described in the last paragraph.
Educate and Review
When my son moved into his first apartment, the management required renter’s insurance and could refer tenants to an affiliated entity that was selling a relatively inexpensive HO-4 product. When I examined that policy, I found that it was basic named perils, had minimal additional coverag-
When Tim gets through showing them the holes in their current insurance programs and explaining how he can fix these gaps inexpensively while significantly improving his coverage, they often leave his office paying a higher premium than when they came in.
least 20% lower than every other carrier in the agency. He included a detailed breakdown of his coverage analysis for their home and auto forms.
es, and included only a $50,000 liability limit. Clearly, the property manager doesn’t understand the significance to the property owner of renters with very low liability limits.
I found my son a much broader perils HO-4, with substantive additional coverages, and a $300,000 liability limit for only an additional $80 in premium. Even better, another HO-4 had open perils, higher limit additional coverages, and $500,000 in liability coverage for an additional $120, much better coverage for an extra $10 a month.
The moral of this story is that a little can buy a lot when you’re increasing coverage or limits. This is a true story and a factual statement. Share stories like this with your customers. Perhaps more important, first share stories like this with your staff.
I’ve written before about my friend, Missouri agent Tim Wahl, CIC, who sells on coverage, not price. Over the years, he has seen an almost weekly parade of contractors and other business owners who come into his office in the hopes of “saving money.”
It often just takes educating the policyholder or prospect on how they can get a lot for a little by shopping coverage and not price. Everyone prefers to buy on value. Everyone wants a bargain. Otherwise, we’d all be driving used Yugos. The key to improving sales begins with educating yourself, then your customers. Start by reviewing the carriers and products you sell.
To illustrate, about this time last year, my friend Tim sent me an email telling me that the agency was dropping a personal lines carrier, one that was quoting home and auto at
For example, the auto form did not cover acquired autos unless the carrier insured ALL autos owned by the insured. None of the agency’s other auto insurers had such a restriction. Even worse, as we both understood the policy, there was no coverage for business use of an auto that involved transporting persons or property. In one case I recalled, an insurance agent, under his own auto policy with this type of exclusion, had an auto collision claim denied that occurred while he was “delivering” a policy to a customer.
The subject insurer’s homeowners policies excluded any loss if any insured failed to take “ALL reasonable” steps to save and preserve property from a covered cause of loss. What is “reasonable”? Also excluded was “ANY substantial” change or increase in hazard within the control or knowledge of an insured. Would that include storing a two-gallon can of gasoline in the garage for the riding mower? What constitutes “substantial”?
Why was the agency dropping this insurer? Because these aren’t products a consumer should buy when there are far superior forms available for a little more in cost.
The insurer’s website says they deliver quality coverage at an affordable price. Talk is cheap. So are some insurance products. Stop talking cheap and start telling stories that focus on value and encourage and enable wise purchasing decisions.
OK, stepping down off the soap box. At least until next month.
Wilson, CPCU, ARM, AIM, AAM is the founder and CEO of InsuranceCommentary.com and the author of six books, including “When Words Collide…Resolving Insurance Coverage and Claims Disputes.” He can be reached at Bill@InsuranceCommentary.com.
Idea Exchange: Claims
In the
Dark:
Telling the Truth About Flooding Requires Accurate Maps and Strong Disclosure Laws
Hundreds of thousands of Americans already live in homes that have repeatedly flooded. To get a good handle on the extent of those losses, check out the Federal Emergency Management Agency’s web page that hosts an extensive dataset with information on structures that have had multiple National Flood Insurance Program (NFIP) claims. Millions more people could be at risk by the end of the century as the seas continue to rise and extreme weather events become more common.
By Joel Scata
Unfortunately, inaccurate and backward-looking flood maps and the lack of disclosure of a property’s flood history leave homeowners, homebuyers and renters in the dark about their vulnerability to flooding. Outdated flood maps, or maps that fail to depict future flood risks, lead people to underestimate their danger. Lack of disclosure of past flood damages and other information hinders fully informed decision making, like choosing whether to buy flood insurance, and can lead to fami-
lies being trapped in a nightmarish cycle of flooding, rebuilding, and repeating. Modernizing flood maps to show the future potential for flooding and requiring disclosure of past flood damages in real estate transactions could help people make better decisions about where they should live, how much they’re willing to pay to accept the risk that comes with a home, and other decisions. Maps should be more granular and accurate in their assessment of the potential for flooding and include projected future flood conditions. The more information a person has — and the better that information is — the better equipped they will be to avoid living in a flood-prone home or decrease their vulnerability to future floods.
Key to Increasing Flood Resilience
only for who must buy flood insurance but also where FEMA’s floodplain management regulations apply.
Due to these requirements, FEMA’s maps are the standard nearly everyone turns to. Developers, emergency managers and homeowners and buyers all rely on these maps for assessing and preparing for flooding. If FEMA’s flood maps are not accurate, communities will be misinformed about their true flood exposure.
Unfortunately, FEMA flood maps under-represent the true extent of the 100year floodplain. Therefore, they under-represent the actual risks of flooding.
For the U.S. to successfully adapt to sea level rise and flooding fueled by climate change, FEMA must develop more reliable flood maps that show where flooding is likely to occur both now and in the future. Currently, FEMA provides flood maps for 22,000 communities across the country. The maps provide the basis not
FEMA only maps the 100-year floodplain with a 50th percentile confidence. That means there is only a 50% chance that a 100-year flood would stay inside the line that FEMA draws on its maps. Basically, we are making development decisions with the certainty of a coin flip. We deserve better odds than that.
According to FEMA, NFIP policy holders who live outside the mapped floodplain, “file more than 25% of NFIP claims and receive one-third of disaster assistance for flooding.” Even worse, nearly 20% of the most flood-prone properties in the country (what FEMA calls Severe Repetitive Loss Properties, which have each flooded five times on average) also are located outside the floodplain, as currently delineated. Those numbers speak directly to the inadequacy of the flood maps we are using to guide all development decisions nationwide.
Mapping with a higher degree of confidence to show the true extent of areas vulnerable to flooding is a much-needed step in the right direction.
However, even if FEMA could rectify the mapping program’s shortcomings, new maps still will not provide an accurate depiction of risk due to the absence of future conditions projections, like sea level rise, changes in rainfall and expected population growth.
For far too long, FEMA’s flood maps
have defined flood risk based solely on past events. Historical storms are used to calibrate computer models that are used to map flood projections, on the assumption that the past should inform future decisions. Yet, by not taking climate impacts and other factors into account, communities are using bad flood maps to make even worse decisions about where it’s safe to build.
FEMA is now looking at how flood maps can incorporate information on future climate impacts. This would ensure that flood maps capture areas that are at risk today, as well as areas that will be under threat decades from now.
face of future climate impacts.
If these changing flood dynamics are not considered, communities may choose to locate development in areas that appear safe from flooding today but will be a flood disaster tomorrow. A federal advisory committee, established to review and make recommendations to FEMA on how to improve the mapping program, specifically recommended such an approach. FEMA should follow through on the recommendations and enact policy changes that would require future conditions to be included on FEMA’s flood maps.
also have a right to know a property’s flood history and flood insurance requirements. Too many states have either inadequate or no statutory or regulatory flood risk disclosure requirements for home sales. Due to this lack of disclosure, homebuyers are not given the information that they need to make informed decisions about whether they should buy a house or purchase flood insurance. The purchase of a home is often a family’s biggest financial investment. Homebuyers deserve to know whether that investment is going to be underwater. If a seller knows, then it is only right the buyer does too.
‘Modernizing flood maps to show the future potential for flooding and requiring disclosure of past flood damages in real estate transactions could help people make better decisions about where they should live, how much they’re willing to pay to accept the risk that comes with a home, and other decisions.’
For renters, the outlook is even more bleak. Only nine states require that renters be told whether a property is at risk of flooding. In 2024, Vermont became the ninth state by requiring landlords to inform prospective renters whether the property is in a FEMA-designated flood zone.
Strong Real Estate Disclosure Laws Needed
That’s important. Decades from now, we will still be relying on the homes, businesses and infrastructure that are built today. Making sure flood maps accurately portray those future risks is critical to making decisions that will stand up in the
More precise and forward-looking flood maps are just one part of the safety equation. Everyone should have a right to know more than just whether a property is inside a mapped flood zone. They should
Inadequate disclosure laws mean far too many people have little knowledge of whether the place they may call home has ever flooded and thus, is likely to flood again. This problem could be solved simply by being told the truth about past flooding damages. Information that the seller or lessor of a home may have and should be required to provide a renter or prospective buyer.
Making sure information is passed from an owner to a seller or renter about flooding damages, legal requirements to
Source: Natural Resources Defense Council continued on page 48
Idea Exchange: Claims
continued from page 47
purchase flood insurance and other risk information is justified because floods are costly. A homebuyer can incur tens of thousands of dollars in flood damage costs over the course of their mortgage, if they purchase a previously flooded home.
According to a study the Natural Resources Defense Council (NRDC) commissioned from the actuarial firm Milliman, 6.6% of all homes (28,826 homes) sold in 2021 in New Jersey, New York and North Carolina, were estimated to have been previously flooded. For the individual homebuyer in North Carolina, the Milliman analysis found that over the life of a 30-year mortgage, buyers of a previously flooded home can expect to incur $36,328 in flood damages compared with homes that do not have a history of flooding. In New Jersey, homebuyers who purchase previously flooded homes can expect to pay $50,351 over a 30-year mortgage on average. In New York, the dollar amount is even higher. Homebuyers who purchase previously flooded homes can expect to pay $93,774 over a 30-year mortgage in comparison to a home that wasn’t previously flooded. Given the high cost, states should not keep homebuyers in the dark about a home’s flood history.
Strong real estate disclosure laws that require a seller to inform a buyer about a property’s flood history and risk would help address this problem. However, such disclosure and transparency provisions should also not be limited to disclosure requirements imposed on sellers. The NFIP must also improve the information that is available to the public. `
Current homeowners who do have not the luxury of living in a state with good flood-hazard disclosure laws should have a right to know about their property’s flood risk. This should include any history of flood insurance coverage, damage claims paid and whether there is a legal requirement to purchase flood insurance because of past owners’ receipt of federal disaster aid. This is information that FEMA should have if a property was ever covered by the NFIP, and it should make it public and easily searchable by address. In addition, FEMA should provide greater access to a
community or region’s flood risk information, such as aggregate claims and policy history, repeatedly flooded areas and whether NFIP-participating communities are complying with the requirements of the program.
People Deserve to Know Their Flood Risk
As sea levels rise and heavy rainstorms become more common, homeowners, buyers and renters deserve to know their vulnerability to flood when choosing where their family will call home.
Transparency about flood damages and risks ensures that the market is not only fair (both sides of a transaction have the same information), but also is influenced by that information.
Homebuyers who have access to flood-
risk information when browsing home listings online are more likely to view and make offers on homes with lower flood risk than those who don’t have access. In addition, knowing the level of one’s flood risk helps change patterns of behavior related to flood insurance, potentially increasing uptake of flood insurance policies. The more information people have about flooding, the better equipped they are for avoiding or mitigating the next potential disaster.
Scata focuses on issues related to preparing the U.S. for water-related impacts of climate change, including federal flood policy reform and adapting to sea-level rise. Prior to joining NRDC in 2014, Scata was a Peace Corps volunteer in Mali, working to conserve land threatened by desertification.
Idea Exchange: The Marketing Connection
continued from page 37
values helps to build a connection with clients and partners, fostering long-term trust.
Video Marketing Best Practices
To maximize the impact of video marketing, insurance professionals should consider the following best practices: Keep it concise. Attention spans are short, so it’s important to convey key messages quickly. Aim for videos under two minutes for general content, and no longer than 30-45 minutes for webinars. Focus on quality. High-quality production values reflect professionalism and can
enhance the message’s credibility. Invest in good lighting, sound, and editing to create polished and visually appealing videos. Use clear, simple language. Avoid jargon and technical terms that might confuse the audience. Instead, use plain language and analogies to explain complex concepts.
Leverage multiple platforms. Distribute video content across various channels, including social media, email newsletters, and company websites, to reach a broader audience.
Engage with your audience. Encourage interaction by asking questions, inviting comments, and providing opportunities
Closer Look: Lloyd’s Market
continued from page 21
Understanding Cyber and Liability Exposures
Turning to the area of cyber, Turk said, the CrowdStrike event provided a “warning shot for our industry.” She described the event as a reminder “of the critical necessity to deeply understand our exposure to real or potential events impacting our market.” (On July 19, the cybersecurity company CrowdStrike distributed a faulty software update that caused nearly 8.5 million Microsoft systems to crash, which affected many industries, such as airlines, banks, hospitals and hotels.)
Another key risk area discussed by Turk was U.S. general liability. While positive steps have been taken “to materially reduce line sizes as well as more sophistication around how and where capacity is deployed,” she questioned whether such corrective actions have been enough.
“We do not believe that challenges in this class are just contained in the back years and thus those employing constant scepticism will be better placed for success,” Turk continued.
“We’ll be vigilant about plans that expand into areas that serve to threaten the green shoots of positivity and we’ll continue to remind you that absent of any meaningful tort reform, claims
inflation remains a major headwind to price adequacy in this class,” she said, noting that Lloyd’s insurers are expected to maintain sufficient capital to withstand 45% deterioration in reserving levels.
Legacy Market
Turk then moved on to discuss the legacy market, which also carries its own reserve adequacy issues. Legacy insurance deals involve the transfer or acquisition of legacy or old-year liabilities in order to close a book of insurance business. Turk explained that Lloyd’s “performance oversight risks being undermined without taking a more sophisticated lens in this area.”
In an emailed statement, a Lloyd’s representative explained, in the “live” market at Lloyd’s, any significant changes must go through an approval process, but legacy transactions are not captured within this process. “Thus, there is a risk that a significant transaction is undertaken within the Lloyd’s market on which Lloyd’s has no prior knowledge, or one in which reserve strength is significantly undermined,” the representative continued.
As a result of these oversight concerns, Turk said, from Jan. 1, 2025, all new legacy deals within and between the Lloyd’s market will require a pre-transaction review and approval by Lloyds.
for live Q&A during webinars.
As video marketing continues to gain traction in the insurance industry, professionals across the sector are discovering its potential to transform their communication strategies. Whether through short explainer videos, in-depth product demonstrations, or live webinars, video content offers a powerful way to engage audiences, simplify complex products, and build trust.
Nevins is the Director of Marketing & Operations at Direct Connection Advertising & Marketing. Visit directconnectionusa.com to learn more.
Despite the five oversight concerns she listed, Turk emphasized that she would “be doing the market a disservice” if she didn’t reiterate “that market performance is strong.”
Underlying combined ratios exclude major claims, and Turk noted: “Underlying combined ratios in the low 80s are perhaps only seen once in an underwriting career, so together we should celebrate this success, and I have every confidence that sustainable profitable performance will remain given the laser focus on consistent portfolio management and managing the bottom line.”
Closing Quote
Navigating Social Inflation in a World of Complex Claims
By Brent Williams
As social inflation continues to exert pressure on the insurance industry, this is not only a financial issue, but one with far-reaching impacts on insurers, beneficiaries and society at large.
Rising litigation costs, evolving societal expectations, and increasingly complex claims are not isolated challenges — they are part of a larger wave of change. To meet these challenges, insurers must explore changes across the board, from modernization efforts to reforms within the legal system itself, as well as cultural shifts that prioritize both efficiency and empathy.
Social inflation refers to the upward trend in insurance claim costs driven by a combination of legal and societal factors, distinct from traditional economic inflation. Unlike economic inflation, which reflects changes in the cost of goods and services, social inflation stems from a broader set of influences, including increased litigation frequency, escalating jury awards, evolving societal expectations of corporate responsibility, and changes in legal practices.
This phenomenon has become particularly pronounced in sectors such as life and liability insurance, where claim valuations have seen a significant rise. Legal frameworks that permit extended
litigation processes and large punitive damage awards are key contributors to this trend.
Additionally, the growing influence of litigation funding and the public’s increased scrutiny of corporate practices have intensified the financial pressures faced by insurers.
The rise in costs associated with social inflation is not merely the result of higher claim values but reflects a fundamental shift in how claims are processed and contested. According to a recent report from the Swiss Re Institute, the surge in large court verdicts has driven a 57% increase in liability claims in the U.S. over the past decade, with social inflation peaking at 7% annually in 2023. Jurors and courts are increasingly awarding higher compensation as a reflection of societal demands for fairness, justice, and accountability in corporate behavior. This shift has led to more frequent and higher-cost claims, particularly in cases where punitive damages are involved. According to Swiss Re, legal expenses in the U.S. are rising at a rate that surpasses economic inflation, signaling an urgent need for the insurance industry to adapt.
Addressing social inflation requires a multidimensional strategy that goes beyond cost control and delves into structural reform. This includes revisiting legal frameworks that contribute to protracted litigation and higher settlement costs. The existing system often delays claim resolutions, leading to elevated legal expenses that ultimately increase premiums for policyholders. Implementing legal reforms, such as caps
on damages or streamlined litigation processes, could help mitigate the financial pressures on insurers and improve the overall efficiency and fairness of the claims process.
In addition to necessary legal reforms, a fundamental shift in corporate culture is imperative. Insurers must adopt a framework of enhanced transparency and prioritize the customer. This entails not only optimizing the claims process but also improving communication channels and transparency with policyholders and beneficiaries.
Gianfranco Lot, Swiss Re’s chief underwriting officer, P&C Re, highlighting the severity of the issue, noted that U.S. liability lines exposed to bodily injury claims have incurred cumulative underwriting losses of $43 billion over the past five years. This has led to a significant decline in available capacity for global businesses, with rate increases failing to keep pace with escalating loss trends.
The integration of automation and data analytics can significantly enhance both efficiency and transparency. These technologies allow carriers to better leverage data,
improving the prediction of claim trends, risk assessments, and process optimizations. As a result, claims can be handled more quickly, with fewer errors, and beneficiaries can receive real-time updates.
Given the escalating underwriting losses and increasing litigation costs faced by insurers, technology must be leveraged as a crucial component of a broader strategy to address these challenges. While technology alone cannot resolve systemic issues, its role in reducing operational costs and enhancing data accuracy is vital.
As social inflation intensifies, the industry is faced with implementing a multifaceted strategy encompassing both internal and systemic reforms. Legal changes, corporate transparency, and technological advancements must collectively contribute to a more equitable and efficient claims process. Insurers adept at integrating these elements will be better positioned to manage the complexities of rising claim costs while upholding their obligations to beneficiaries.
Williams is founder and CEO of Benekiva.
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