June 2024 Louisiana Agent Newsletter

INDEPENDENT INSURANCE AGENTS OF LOUISIANA

LOUISIANAAGENT JUNE 2024

BRET HUGHES Newly Elected IIABL Chairman

“Over his years of service on the board, Bret has displayed the leadership qualities that will make him another great chairman."

- IIABL CEO and President, Ben Albright

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IIABL STAFF Benjamin Albright Chief Executive Officer, President balbright@iiabl.com (225) 236-1357

Jeff Albright Consultant jalbright@iiabl.com (225) 236-1366

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

Jamie Newchurch Director of Insurance Programs jnewchurch@iiabl.com (225) 236-1350

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

Karson Roberts Communications & Events Administrator kroberts@iiabl.com (225) 236-1351

Lyra Roberts E&O Administrator lyra.roberts@iiaba.net (225) 236-1352

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TABLE OF

CONTENTS FEATURED ARTICLES

Bret Hughes Elected to Lead IIABL

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2024 IIABL Legislative Summary

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David Tatman Honored with the Jeff Albright Award

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FEATURED ARTICLES

Trust but Verify: Integrating AI into Your Agency While Avoiding E&O Claims Most Americans Do Not Fully Understand Their Insurance Coverage Auto Claims Severity Up Significantly Since 2020 with No SIgn of Slowing Down

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

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ELECTED

Bret Hughes Elected to Lead IIABL At the Annual IIABL Wild West Convention, IIABL installed new officers and board members, introducing a dynamic new chairman to lead.

KATHLEEN O’REGAN IIABL DIRECTOR OF COMMUNICATIONS & EVENTS

The Independent Insurance Agents and Brokers of Louisiana (IIABL) installed the new 2024-2025 officers and board of director members at the 2024 Annual Convention on Monday, June 17, 2024, at the Hilton Sandestin in Miramar Beach, FL. The officers include Chairman, Bret Hughes; Chairman-Elect, Ross Henry; Secretary/Treasurer, Joe Montgomery; National Director, Johnny Beckmann, III; and Immediate Past Chairman, Armond K. Schwing. Newly elected board member includes Seth Ostendorff. They will officially take office on July 1, 2024.

“Armond has shown great leadership as the Chairman of the IIABL board,” states IIABL CEO & President, Ben Albright. “His guidance is always thoughtfully considered, and he’s been a real asset to the organization.” Albright continues, “Now, we look forward to another great agent leader stepping into the role with Bret Hughes becoming the chair. Over his years of service on the board, Bret has displayed the leadership qualities that will make him another great chairman.”

Chairman, Bret Hughes, is the Owner/President at Hughes Insurance Services in Gonzales. Bret joined the family business 30 years ago. He has carried on the company his father started in 1980 to be a business of caring and conscientious professionals. He and his wife Stacey reside in Gonzales.

Chairman Elect, Ross Henry is the President and CEO or Henry Insurance Services in Baton Rouge. Ross has over 25 years of experience working at Henry Insurance and has been the Principal and Owner since 2006.Through his efforts, Henry Insurance Service has been the recipient of LSU’s 100 Fastest Growing Companies for the past 3 years.

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Secretary-Treasurer, Joe Montgomery is an Insurance Producer at McGriff Insurance Services. Joe has more than 13 years of experience in the insurance industry and has served on the IIABL Board of Directors for the last seven years.

National Director, Johnny Beckmann, is Senior Vice President at AssuredPartners in the Greater New Orleans Area. Beckmann was elected as the IIABL National Director in 2019 for a four year term. He and his wife, Lana, reside in Metairie.

Immediate Past Chairman, Armond K. Schwing, is Chairman and CEO of Schwing Insurance Agency, Inc. in New Iberia. He and his brother, Chet, are 3rd generation owners of the agency started by their grandfather in 1935. Schwing joined the IIABL Board of Directors in 2012. He and his wife, Jennifer, reside in New Iberia.

Incoming Chairman, Bret Hughes, stated “I am excited about the opportunity to serve as the next Chairman of IIABL and I look forward to working with the board, our staff, and all of our members to continue the important work of our association.” Brett continued with a reflection about his predecessors, “It’s truly an honor to follow my good friend, Armond Schwing, in this role. He’s done a fantastic job this past year. Another good friend, Mike Scriber, is rolling off of the board as our immediate past chairman. I want to personally thank Mike for his many years of dedicated Service to our organization.”

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BOARDDIRECTORS Newly elected board member, Seth Ostendorff has over 18 years of experience in the insurance industry and joined Dethloff & Associates in 2020 as a Producer. He also serves as the IIABL Shreveport-Bossier Chapter President.

Ben Albright DMembers e c e m b e rof2the 0 2 3IIABL Board of Directors that were elected for an additional two-year term include: Rob Eppers, Risk Services of Louisiana (Alexandria), Eugene Montgomery, Community Financial Insurance Center (Monroe), Ann Bodkin Smith, Thompson, Smith & Leach Insurance Group (Lafayette), Matthew deBlanc, Continental Insurance Services (Marrero), Robert Stone, Stone Insurance (Metairie), Christy DeSoto, 1st Insurance Marksville (Marksville), Craig Martel, Insurance Unlimited of Louisiana (Lake Charles), and Randy Perise, Blumberg and Associates (Ponchatoula).

Members of the IIABL Board of Directors that continue to serve the second year of their twoyear term include: Matt Graham, Lincon Agency (Ruston); Chris Haik, Higginbotham Insurance Agency (Lafayette), Stuart Harris, McClure, Bomar, & Harris (Shreveport); Chuck LeBlanc, Bourg Insurance Agency (Donaldsonville); Lydia McMorris, Alliant Insurance Services (Baton Rouge); Robby Moss, Hartwig Moss Insurance Agency (New Orleans); and Bobby Palmer, Insurance Underwriters (Metairie).

Maggie Landry, Perkins-McKenzie Insurance (Baton Rouge) was appointed by IIABL Chairman Hughes to serve as the Chair of the Young Agents Committee.

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LEGISLATION

2024 IIABL Legislative Summary In this article, IIABL wraps up the 2024 Louisiana legislative session, highlighting significant property insurance and tort reforms aimed at enhancing market capacity and transparency.

JEFF ALBRIGHT IIABL CONSULTANT

The 2024 Louisiana Legislature session brought significant changes to the state's property insurance landscape, aiming to attract new market capacity and reduce unnecessary litigation. Key reforms include ensuring fair claims handling, allowing policyholders to resolve disputes without going to court, and introducing a more flexible "file & use" system for setting insurance rates. These changes are designed to create a more attractive market for insurers while protecting consumers. Additionally, the Fortified Homes Program was extended, promising safer and more resilient homes, and new regulations were introduced to assist policyholders in the appraisal process.

On the tort reform front, efforts to align Louisiana's laws with national trends saw mixed success. New measures will make medical costs in civil cases more transparent and regulate third-party litigation financing, promoting fairness and transparency. However, some proposed reforms, like extending the time limit for filing lawsuits, sparked debate and faced opposition.

Other noteworthy developments include mandatory disclosures of insurance discounts, protections against including land value in coverage limits, and requirements for insurers to maintain proper documentation for uninsured motorist coverage. These efforts collectively aim to create a more balanced and transparent insurance market in Louisiana.

To read the full list of bills and their details, click here.

AWARD

David Tatman Honored with the Jeff Albright Award At the Annual IIABL Wild West Convention, IIABL honored David Tatman with the inaugural Jeff Albright Award for his exemplary contributions to the insurance industry.

KATHLEEN O’REGAN IIABL DIRECTOR OF COMMUNICATIONS & EVENTS

The Independent Insurance Agents and Brokers of Louisiana (IIABL) honored David Tatman with the inaugural Jeff Albright Award in recognition of his exemplary contributions to the insurance industry. He was presented with the award at the 2024 Annual Convention on Monday, June 17, 2024, at the Hilton Sandestin in Miramar Beach, FL. David Tatman is a longtime friend of IIABL: Lobbyist, consultant, and insurance industry advocate. He founded The Tatman Group in 1997 which has become one of Louisiana’s leading association management and government relations firms. He is a dedicated community leader, devoted husband, father, businessman, and public servant who has significantly contributed to the prosperity of Baton Rouge. David has represented IIABL at the Louisiana Legislature for many years, providing valuable assistance helping to protect the interests of IIABL members and their policyholders.

“David Tatman has done invaluable work behind the scenes of IIABL’s legislative efforts for many years. He’s been critical to our success protecting agents at the capital, and I can’t imagine someone more deserving of this honor,” stated IIABL CEO & President, Ben Albright IIABL introduced the Jeff Albright Award this year in honor of Jeff’s remarkable 45-year insurance career including 36 years at IIABL in various leadership roles, including education director and CEO. The Jeff Albright Award shall henceforth be the highest honor bestowed by the IIABL upon and insurance professional who is not an independent insurance agent.

The award celebrates industry partners, legislative leaders, and any others who have made exemplary contributions to the insurance industry in the spirit of Jeff Albright’s outstanding 45-year career.

A LOOK INTO THE IIABL

WILD WEST CONVENTION

VERIFY

Trust but Verify: Integrating AI into Your Agency While Avoiding E&O Claims This article discusses AI's current and future impact on the insurance industry is explored, including its use in accounting, chatbots, and replacing third-party vendors.

JIM REDEKER

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SENIOR UNDERWRITER SR CORPORATE SOLUTIONS AMERICA HOLDING CORPORATION

Everyone is talking about artificial intelligence (AI) in the insurance industry and the enormous changes we will be seeing in the future. However, AI is already used in insurance agencies in small ways.

Some insurance agencies have turned to AI software in their accounting departments.

Off-the-shelf software developed for other businesses is readily available for use in insurance agencies. We are also seeing chatbots being added to agency websites.

Some chatbots can be as simple as a pop-up that appears to be a live person offering to direct consumers to a specific page on the website. Or, more complex bots collect data provided by the visitor for application purposes. In some cases, once the bot has exhausted the website's information, it can then transfer the visitor to a live person along with a partially completed application so that the human can complete the sale. This results in less time spent by agency employees talking to uninterested potential customers and 24-hour personal access to consumers.

However, one of the largest areas we are seeing AI adoption is as an alternative to thirdparty vendors. For the past decade, we have seen third-party vendors leasing employees from other countries to insurance agencies to handle routine tasks. These tasks do not require licensing or a personal presence within the U.S.—this is the sweet spot for using AI. There are more and more vendors coming out with insurance-related products to handle many of the same tasks these leased employees handle.

From an errors & omissions perspective, the most interesting AI products are software that review a policy to make sure it meets the expectations of what was requested in the application and what was in the binder.

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TRUSTVERIFY Many E&O claims occur when a policy exclusion or sublimit alters the coverage the agency intended to procure for its customer. This results in a claim against the agency for failing to provide the requested coverage.

AI can review an application and binder, checking the policy issued for language that might contradict the expectations. Then, certain policy language is flagged and provided to the agency to review to make sure the policy meets expectations.

Crucially, AI does not make the final call as to what is and is not covered. That is left to a person at the agency to determine. However, it does save countless hours of tedious work reviewing applications, binders and policy language. Furthermore, because the task is being done by AI, it can be completed in minutes as opposed to hours.

While this software is helpful in the admitted market, it pays for itself in the excess & surplus lines market, where carriers can change coverage on a daily basis and without the blessing of a state's department of insurance. In a hard market, many admitted markets are no longer accessible and more business is being placed in the E&S market, making this a good time to adopt the use of an outside source that specializes in policy review.

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Still, as great as AI is, it is only as good as the parameters set for it. Recently, an agency’s claim stemmed from a carrier in a tower of insurance that did not include defense coverage in its layer. When a claim reached that layer of the tower, the insured was forced to pay its defense, while the carrier controlled indemnity. The carrier refused to settle and forced the claim to trial. While the carrier eventually settled the claim, the situation left the insured with a seven-figure defense invoice. The insured then sued its insurance agent for failing to ensure that all of the carriers within the tower provided defense coverage.

What was the agency doing to review policies and make sure they meet expectations? They were using an AI vendor. In this claim, the root of the problem was in the contract between the AI vendor and the agency. The contract contained a list of items the AI software would review—and matching coverages in layers of a tower was not included in that list.

When implementing AI into your agency, here are three tips to avoid an E&O claim: 1.) Understand the product and what it can do.

2.) Test the product before purchasing it to make sure it works as promised.

3.) Continue to do things the way you have always done them while you are also using the new AI product.

Overall, continue to have someone review the policies and compare their results with the results of an AI policy review product. By doing so, you can tweak the AI product until it can at least match—if not surpass—the success of your current human process. Once you have reached that level, you can potentially start discontinuing the old manual process and rely more on the AI product.

While this approach creates redundancy and extra costs for a period of time, it is a necessary step to make sure you are getting what you are paying for and reduce the chances of experiencing an AI-related E&O claim. Agencies are also encouraged to seek attorney advice to ensure the AI tool being used complies with applicable laws and regulations.

COVERAGE

Most Americans Do Not Fully Understand Their Insurance Coverage In this article, a survey by Trusted Choice® reveals that most Americans misunderstand their insurance coverage despite believing they understand it, highlighting significant knowledge gaps about specific policies.

OLIVIA OVERMAN IA CONTENT EDITOR

Ahead of National Insurance Awareness Day on Friday, June 28, Trusted Choice®—the national consumer brand representing the members of the Big “I"—surveyed consumers about their insurance acumen. The results revealed that most Americans do not fully understand the insurance coverages they have purchased, yet 86% believe that they do.

"Because insurance protects people's most important assets, it's crucial that policyholders understand their coverage. But unfortunately, our survey shows there is a considerable insurance knowledge gap among consumers," said Charles Symington, Big "I" president and CEO. “Independent insurance agents can bridge that gap by serving as a resource on coverage expectations versus realities, especially in this difficult insurance market where many people need more guidance."

The national survey of 400 consumers who have home, auto, pet, jewelry or personal umbrella insurance revealed some key coverage misconceptions: 1) Flood damage: 56% of Americans are unaware that a standard homeowners policy does not cover flood damage.

2) Home renovations: 70% are unaware that a standard homeowners policy does not cover materials or fixtures that are installed during renovations.

3) Home inventory: 46% do not have or are unsure if they have a home inventory of major household items in case they need to file a claim.

4) Business use of vehicle: 55% are unaware that a standard auto policy does not cover business use of the vehicle.

5) Items stolen from vehicle: 44% incorrectly believe that personal items stolen from their car are covered by a standard auto insurance policy, though it is in fact a standard home or renters insurance policy that typically covers such theft.

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INSURANCECOVERAGE 6) Parking tickets: 57% are unaware that a parking ticket, in general, won't affect a driver's auto insurance premiums.

The results demonstrate the critical need for independent agents to help consumers navigate the various nuances of the insurance market and ensure consumers purchase the coverage they require.

“Insurance coverage can be confusing. Consumers often think they have a strong grasp on understanding their policies, but oftentimes they don't. An independent agent is best equipped to walk consumers through the entire process—from shopping for coverage to purchasing a plan and filing a claim," said Kevin Brandt, executive director of Trusted Choice. “With their unbiased guidance and personalized approach, they empower individuals to navigate policies with clarity and confidence, ensuring they truly understand their coverage and make informed decisions."

AUTO CLAIMS

Auto Claims Severity Up Significantly Since 2020 With No Sign of Slowing This article discusses the 2024 report highlights which are worsening auto insurance claims severity, driven by rising bodily injury and material damage costs ANNEMARIE MCPHERSON SPEARS IA NEWS EDITOR

The high claims severity that plagued the personal auto insurance market in 2023 shows no signs of abating, according to the “2024 LexisNexis® U.S. Auto Insurance Trends Report," released today, which offered various other insights into the auto insurance market.

Bodily injury severity has risen 20% from the end of 2020 to the end of 2023, according to the report, while severity for all material damage coverages has increased 47%.

Contributing factors include parts and labor shortages, storage costs, attorney involvement and increases in medical treatment costs.

In a separate study in 2023, LexisNexis commissioned a market research study to learn about third-party claimants who hired an attorney in auto claims—a major contributor to claims cost increases.

Following an auto accident, 85% of claimants were approached by one attorney while about 60% heard from two or more. Among the claimants who hired an attorney, 51% received a higher settlement amount, the study found, and of the claimants who used legal counsel, nearly two-thirds would definitely do so again, with another quarter saying they probably would.

Further, total loss claims have increased 29% since 2020, with more than 1 in 4 collision claims in 2023 deemed total losses. In cases of total loss, 46% of consumers were dissatisfied with their claims experience, with 40% of all respondents said it took a month or longer to obtain the full payment for their claim.

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AUTOCLAIMS As total miles driven returned to 2019 levels in 2023, the risky driving patterns that emerged during the COVID-19 pandemic continued to rise, with all moving and non-moving driving violations increasing 4% year-over-year in 2023. Major speeding violations were up 10% from 2022 to 2023—and up 36% from 2019. Additionally, driving under the influence (DUI) violations grew 8% from 2022 to 2023.

Distracted driving violations increased by 10% from 2022 to 2023. Young drivers are most susceptible to distraction, with distracted driving violations by Generation Z increasing 24% from 2022, and 66% from 2019. The same violation increased 9% from 2022 among millennials.

Although risky driving behavior persists, many insurers haven't updated their pricing models to reflect those changes, the report warned.

As carriers seek to alleviate the inflation and high claims costs that contributed to a property & casualty combined ratio of 105% in 2023, significant rate increases of 14% reduced pressure on profits but also led to a drop of three percentage points in retention from 83% to 80%, LexisNexis found.

Among respondents with auto insurance at the end of 2023, 41% had shopped at least once for a new policy in 2023. Many ended up switching, causing the number of new policies to rise 6.2% in 2023.

Meanwhile, insurance industry advertising spending decreased roughly 45% from its height in 2021.

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AUTOCLAIMS With low-risk customers prompted to jump to better options in the market, insurers may be retaining policies with higher risk at the wrong price, the report points out. “Insurers who are not actively engaged in managing the change in risk in their renewals may find it difficult to maintain profitability.

The lack of a consistent renewal strategy could also threaten new business rate competitiveness.

Insurers can update renewal underwriting strategies by leveraging predictive internal and external data and models to help maintain price to risk."

Meanwhile, electric vehicles (EVs) are another emerging factor in personal auto. As the EV market continues to emerge, with a 54% increase in EV sales in 2023 over 2022, insurance risks also continue to grow. Claim frequency and severity for EVs were respectively 17% and 34% higher than for private passenger autos overall. And while EVs still only comprise 1.5% of all private passenger autos, they accounted for 2.3% of the total claims payment among all personal autos in 2023.

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ADVERTISER INDEX COMPANY AF Group AmWINS Access Insurance Services, LLC Berkshire Hathaway GUARD Ins Cos Burns & Wilcox, Ltd. Commercial Sector Insurance Brokers CRC Group Gulf States Insurance Homebuilders SIF Imperial PFS Independent Market Solutions

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COMPANY LA Workers Compensation Corporation LCI Workers' Comp LUBA Workers' Comp Lane & Associates, Inc: Progressive RLI Stonetrust Insurance UFG Insurance Wright Flood

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LOUISIANAAGENT

UPCOMINGEVENTS Date & Time

Location

Registration

IIABL & IIAM Young Agents Conference

August 22-24

Royal Sonesta New Orleans

Online Registration

IIAGNO Town Hall Meeting

August 29

Metairie Country Club

Online Registration

IIASB September Luncheon

September 17 9:00 am - 12:00 pm

The Shreveport Club

Online Registration

IIABR September Luncheon

September 19 11:30 am - 1:00 pm

Juban’s

Online Registration

IIABR Fall Social

October 10 11:30 am - 1:00 pm

BRQ

Online Registration

IIABL Cook-off

October 2024

TBD

Coming Soon

IIABR November Luncheon

November 11 11:30 am - 1:00 pm

Juban’s

Online Registration

IIAGNO Past Presidents Christmas Luncheon

December 13

Metairie Country Club

Online Registration

Event

2024

INDUSTRY PARTNERS

PLATINUM LEVEL PARTNER

GOLD LEVEL PARTNERS

SILVER LEVEL PARTNERS

BRONZE LEVEL PARTNERS Accentus Insurance Group AFCO Credit Corporation | BankDirect Capital AF Group Allied Trust Insurance Co. AmTrust North America Berkshire Hathaway GUARD Insurance Companies Commercial Sector Insurance Brokers EMC Insurance Companies FCCI Insurance Group Foremost Insurance Group Gulf States Insurance Company

Homebuilders SIF Hartford Financial Services Group Iroquois South, Inc. Jencap Insurance Services Lane & Associates, Inc. Liberty Mutual National General, an Allstate company Risk Placement Services (RPS) SafeCo/Liberty Mutual Summit Consulting Wright Flood Updated 6/27/24

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LOUISIANAAGENT

IIABL 2023-2024

BOARD OF DIRECTORS & OFFICERS PRESIDENT, ARMOND K. SCHWING Schwing Insurance Agency, Inc. - New Iberia PRESIDENT-ELECT, BRET HUGHES Hughes Insurance Services, Inc - Gonzales SECRETARY-TREASURER, ROSS HENRY Henry Insurance Service, Inc. - Baton Rouge NATIONAL DIRECTOR, JOHNNY BECKMANN, III Assured Partners - Metairie PAST PRESIDENT, MICHAEL SCRIBER Scriber Insurance - Ruston YOUNG AGENT REP, KRISTIN SWANSON SCOTT Swanson & Associates - New Orleans ANN BODKIN-SMITH Thomson Smith & Leach Insurance Group - Lafayette MATTHEW DEBLANC Continental Insurance Services - Marrero CHRISTY DESOTO 1st Insurance of Marksville - Marksville DOMINIQUE DICARLO CROUCH Riverlands Insurance Agency - LaPlace ROB W. EPPERS Risk Services of Louisiana - Alexandria MATT GRAHAM Lincoln Agency - Ruston CHRISTOPHER S. HAIK Higginbotham Insurance - Lafayette STUART HARRIS McClure, Bomar & Harris, LLC - Shreveport BEAU HEAROD Jeff Davis Insurance - Jennings CHARLES H. LEBLANC Bourg Insurance Agency, Inc. - Donaldsonville CRAIG MARTEL Insurance Unlimited of LA, LLC - Lake Charles LYDIA MCMORRIS Alliant Insurance Services - Baton Rouge A. EUGENE MONTGOMERY, III Community Financial Insurance Center, LLC - Monroe JOE KING MONTGOMERY McGriff Insurance Services - Monroe HARTWIG "ROBBY" MOSS, IV Hartwig Moss Insurance - New Orleans ROBERT LOUIS PALMER, JR. Insurance Underwriters, Ltd. - Metairie RANDY PERISE Blumberg and Associates - Ponchatoula ROBERT STONE Stone Insurance, Inc. - Metairie