ADDRESSING THE LOUISIANA INSURANCE CRISIS: A NEW FRONTIER IN CONSUMER
ADVOCACY
BEN ALBRIGHT
EMPOWERING WOMEN IN INSURANCE: THE IIABL INAUGURAL WOMEN IN INSURANCE CONFERENCE KATHLEEN O’REGAN
NAVIGATING E&O CHALLENGES IN THE HARD MARKET
NATHAN DULLE
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
Dustin Wambsgans
Agency Consultant dwambsgans@iiabl.com
(225) 236-1361
IIABL CEO & PRESIDENT
In an effort to confront the ongoing issue of insurance rates afflicting the state, the Independent Insurance Agents & Brokers of Louisiana (IIABL) has launched a consumer-facing website, www.Make-LA-Insurance-Affordable.com. This innovative platform offers resources aimed at educating, informing, and empowering both consumers and industry stakeholders.
Louisiana finds itself at the peak of an insurance crisis, with residents dealing with disproportionately high premiums for homeowners and auto insurance. This challenge is emphasized by two primary factors: Cost of claims and lack of competition. The financial strain on insurance companies is evident, with Louisiana serving as an unprofitable landscape for policy underwriters.
A significant contributor to Louisiana's inflated insurance landscape is the prevalence of litigation, particularly in the aftermath of natural disasters. Following hurricanes such as Laura, Delta, Zeta, and Ida, an alarming surge in insurance claims accompanied by a staggering uptick in lawsuits against insurance providers has been observed. Louisiana residents exhibit a tendency to litigate against their insurers at rates far surpassing national averages, worsening the financial strain on insurance companies and, consequently, driving up premiums for all policyholders.
A critical component in remedying Louisiana's insurance crisis lies in fostering a more competitive marketplace. Regrettably, the state lags behind its counterparts in attracting insurance providers, a predicament worsened by overly restrictive laws unique to Louisiana. By aligning legislative frameworks with neighboring states and dismantling barriers to entry for insurance companies, Louisiana can pave the way for a more vibrant and competitive insurance landscape, ultimately driving down premiums for consumers.
The consumer-facing website created by IIABL serves as a beacon of hope in navigating the complex terrain of insurance reform. Armed with an array of tools and resources, consumers are empowered to become advocates for change, engaging with legislators to champion crucial legislative reforms aimed at dismantling systemic barriers and fostering a more equitable insurance ecosystem.
Central to IIABL's mission is the dissemination of knowledge and advocacy. The website serves as a source of information, explaining the intricacies of the insurance crisis and equipping consumers with the essential insights to navigate the landscape effectively. From understanding the root causes of inflated premiums to unraveling the legislative frameworks governing the insurance industry, consumers are empowered to make informed decisions and actively participate in the quest for reform.
IIABL’s legislative agenda is aimed at addressing the challenges underpinning Louisiana's insurance crisis. From fair claims handling laws to initiatives aimed at curbing inflated medical expenses and reducing excessive litigation, a comprehensive suite of legislative proposals seeks to effect transformative change and usher in a new era of affordability and accessibility in insurance.
Collective action will be important in order to bring about change. IIABL urges consumers and industry stakeholders alike to leverage the resources offered through the consumer-facing website, championing the cause of insurance reform and lending their voices to the call for change. By fostering a culture of advocacy and engagement, Louisiana can chart a course toward a future where insurance is not a burden but a safeguard against uncertainty.
As Louisiana stands at the crossroads of reform, the launch of www.MakeLAInsuranceAffordable.com foreshadows a new dawn in the fight against the state's enduring insurance crisis. With a steadfast commitment to education, advocacy, and legislative reform, IIABL and its partners embark on a journey toward a future where insurance is affordable, accessible, and equitable for all Louisianians. Together, let us seize the opportunity to effect meaningful change and pave the way for a more secure future.
The insurance industry is evolving, and women are playing an increasingly pivotal role in shaping its future. In recognition of their contributions and with a commitment to fostering leadership and empowerment, the Independent Insurance Agents & Brokers of Louisiana (IIABL) proudly announces the inaugural Women In Insurance Conference. Scheduled to take place on April 4-5 at The Southern Hotel in Covington, this groundbreaking event promises to be a transformative experience, focusing on leadership, empowerment, and comradery among women in the insurance industry.
The IIABL Women In Insurance Conference presents a unique opportunity for women in the insurance profession to come together, share experiences, and gain invaluable insights. Here are some compelling reasons why you should mark your calendars and join us for this empowering event:
1. Connect with Like-Minded Professionals: Expand your network and forge meaningful connections with fellow industry professionals. The conference provides a supportive environment for collaboration and idea exchange.
Gain Valuable Insights into Leadership Strategies: From navigating the complexities of leadership within your agency to mastering self-leadership, our dynamic lineup of speakers will provide practical strategies and inspiration to help you excel in your role.
2. Explore Opportunities for Growth: Whether you're seeking personal or professional development, the Women In Insurance Conference offers a platform to explore new opportunities, gain fresh perspectives, and chart your path to success.
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3. Be Inspired by Accomplished Women in the Industry: Hear from trailblazing women who have shattered glass ceilings and overcome obstacles to achieve success in the insurance industry. Their stories of resilience and triumph will inspire and motivate you to reach new heights in your career.
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We are thrilled about the distinguished speakers who will be gracing the stage during this event. Get ready for a transformative experience as these accomplished individuals share their expertise on crucial topics in the insurance industry. The lineup includes:
1. Clarissa Preston - Achieving Work/Life Balance Across All Seasons of Life: Clarissa Preston, a renowned expert in work/life balance, will share her wisdom on navigating the various seasons of life while maintaining a healthy balance between professional and personal responsibilities. Discover practical tips and strategies to thrive in every aspect of your life.
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Ciara Gravier - Navigating Leadership in Your Agency: Join us as Ciara Gravier, a seasoned industry leader, takes the stage to discuss the nuances of being a leader within your agency. Gain valuable insights, practical strategies, and inspiration to elevate your leadership skills and make a significant impact on your organization.
2. Dr. Andy Yarborough - Mastering Self-Leadership: Dr. Andy Yarbrough, an authority on selfleadership, will guide us through the principles of leading oneself effectively Learn how to harness your strengths, overcome challenges, and foster personal growth and development in both your professional and personal life
This exceptional lineup promises to deliver valuable insights, inspiration, and actionable strategies to empower you both personally and professionally Don't miss this unique opportunity to learn from these industry trailblazers
Before our day begins, embrace the tranquility of the morning with a rejuvenating sunrise yoga session that promises to energize your mind and body. Whether you're a seasoned yogi or a firsttimer, this session is designed for all levels of experience. Led by the owner of Yoga Studio 90 in Baton Rouge, April Hill will guide everyone through a peaceful and scenic setting to practice yoga with gently to help you connect with your body and breath leaving you feeling centered and focused.
BONUS: The first 25 attendees that arrive will receive a limited edition Burns & Wilcox yoga mat! Limited additional yoga mats will be available; we encourage you to bring your own mat just in case for a comfortable experience. Prepare to stretch, breathe, and set a positive tone for the day ahead. This sunrise yoga session is not only a wonderful opportunity for self-care but also a chance to connect with fellow attendees in a serene environment.
The IIABL Women In Insurance Conference stands as a testament to the industry’s commitment to fostering leadership, growth, and collaboration among professionals of all backgrounds. This event will offer a unique opportunity for attendees to gain valuable insights, expand their networks, and explore new avenues for personal and professional development Whether you’re a seasoned industry veteran or just starting your career in insurance, this conference promises to deliver tangible benefits and lasting connections We look forward to welcoming you to The Southern Hotel in Covington for an enriching and inspiring experience See you there!
The insurance market is currently experiencing a hard phase. Certainly, you may have noticed its effects. In a hard market, insurers are not performing as well financially to the extent that business may be unsustainable for both insurers and reinsurers if something does not change. As a result, things change, and consumers face increased premiums and more restrictive terms. As to the reinsurance market, a hardening market can mean increased reinsurance rates and a lack of capacity for direct insurers to cede risk, further increasing rates for consumers.
How does this relate to potential errors & omissions claims? Generally, when consumers feel they are paying more and receiving less in return, problems arise. Consumers are not interested in insurance company survival and are certainly not interested in insurance company profits. Instead, they focus on repairing their house or car and protecting themselves from bankruptcy due to an alleged tort claim. If needed, consumers will blame their insurance agent.
Hardening insurance markets, especially recently, have been closely tied to inflationary pressures. Things cost more, including construction and health care, which are significant value drivers for insurance claims. A common E&O claim scenario involves the customer claiming that the agent improperly valued their property, resulting in lower limits than needed.
When it comes to property valuation, providing estimates preferably more than one is common, and several software programs make it relatively easy. However, it is crucial to communicate in writing that valuation estimates are only estimates. Ultimately, it is the customer who knows their property best. Customers should always be advised, in writing, of the option and desirability to retain the services of a certified or licensed appraiser.
Property valuation claims often arise after several renewals when prior valuations become outdated. During the last four years, given the increase in costs, limits have become outdated, even with an inflation guard endorsement in some policies.
During a hard market, there is often an increase in insurer instability, usually in the form of increased carrier insolvency concerns. State regulators may lower an insurer's rating, place them in rehabilitation status or, worse, begin liquidation. As an insurance agent, you should notify your customers of these changes in writing, so they can decide what they want to do. Do not make the decision for them.
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As a direct result of carrier instability, customers may be required to shop for coverage. This increase in shopping for coverage takes time, and with the insurers being inundated with coverage requests, should be started and followed up in a timely manner. But remember your duty: In most states, an insurance agent must place the coverage as requested or tell the customer they were unable to do so.
With insurers tightening their belts, coverage is more restrictive at renewal, especially if you have to go to the non-admitted market. It's crucial to point out these differences to the customer. If not line by line, at least generally and in writing. Instruct your customer to review the coverage and be sure it meets their needs. Never use the term “apples to apples." Coverage is never identical and, even if the policy wording is the same, the claims departments will vary in how they interpret the policy language. If you are unable to obtain replacement coverage, let your customer know you were unable to do so and that they should look elsewhere for coverage.
In this climate, don't forget the umbrella. Frequently, umbrella and excess carriers, even if they are socalled “follow form" may now have different, more restrictive language. Regardless, check the terms, especially during a hard market period.
CRISTA WALKER VICE PRESIDENT OF AGENT ENGAGEMENT & TECHNOLOGY LIBERTY MUTUAL INSURANCE
I have worked directly for men for the vast majority of my career I recently counted more than 20 consecutive years under the largely capable leadership of men This held true while I was in the military, in tech and in insurance up until three years ago, when an organizational shuffle at Liberty Mutual Insurance put me on a team with a woman as the senior executive leader and women as four of six of my senior leadership peers
To quote my Generation Z daughter, that change just “hit different." Our level of collaboration and innovation felt distinctly empowering, and our team did some of the best, most connected work of our careers.
Fast forward to today. As part of our commitment to be the champion of the independent agent, my team at Liberty Mutual is digging deep into the unique experiences and challenges women in the industry face. This work began with comprehensive research exploring the state of women in independent agencies and grew into the RISE Conference, an International Women's Day event designed to connect women in insurance from all over the country and empower more women to step into leadership and ownership roles.
From that research and from talking to women in agencies across the country, I can tell you this: More women in agencies are ready to be leaders. They are hungry to share their expertise and are uniquely positioned to connect with customers and transform their agencies. So why aren't more women leading? Our research shows that while 85% of women who work on the frontline can picture themselves as a leader at an agency, fewer than one-third of agency principals and owners are women. There is a disconnect here.
Let's explore the data, the opportunities, the ways we can help more women ascend to agency leadership, and why that's a smart idea. Here are five ways to empower women into leadership roles:
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1) Acknowledge why it matters. One of the things I hear most often about women in agencies is how much they contribute to great work cultures. Women in agencies are often the first to remember someone's birthday, the first to offer support for things both work and personal, and the first to build strong personal relationships with clients.
This doesn't come as a surprise, with 2019 research by Harvard Business Review showing that women outscore men on leadership skills, such as inspiring and motivating others, acting with resilience, building relationships and so many more. And women aren't just outpacing men in “soft skills" the bottom line reflects their professional prowess as well.
A 2020 report by McKinsey showed that companies with greater gender diversity on executive teams were 25% more likely to experience above-average profitability than peer companies. Furthermore, companies with more than 30% women on their executive teams were significantly more likely to outperform companies with fewer women on their executive teams. When there are women in the room at every level but especially at the leadership level companies thrive. And with women making up more than half of agency employees, that points to a lot of opportunity for independent agencies.
) Actively mentor and help develop the women around you. While many women express enthusiastic interest in becoming a partner at their agency, they often lack the mentorship and support to get there. According to Liberty Mutual's latest report on the state of women in independent insurance agencies, women are significantly less likely than men to say their manager is developing them for agency leadership. Among millennial employees in particular, 55% of men say their manager is actively developing them for a leadership role, as opposed to 38% of women. This gap is made more significant by the fact that these women are at a pivotal point in their careers for leadership development and growth into more senior roles.
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The data is showing us that there is a big opportunity here to be more active in our support of developing women for leadership. My experience is that women often put themselves last in line in asking for this support. It doesn't mean they aren't interested or worthy. In fact, arguably, women need this more than their male peers to overcome the gap.
Mentorship doesn't have to be so complicated. To start, pay attention to the women at your agency and offer them your support. Notice where they're particularly strong and where they have room and potential to grow. Talk to them about it, point these things out and ask them what they want to achieve both in their career and in their lives. Many women don't aspire to leadership simply because nobody ever helped them see it was possible. Be that person for the women in your agency.
3) Recognize and reward women's contributions. One of the reasons leadership feels so unattainable to women is because the culture tells them their work and efforts aren't as valuable as men's. The gender wage gap is a very real thing, and the financial services industry is one of the biggest offenders. In insurance in particular, female producers make 67 cents on the dollar compared to male producers, according to the U.S. Department of Labor.
Pay inequity impacts women in countless ways that make it harder for them to advance. It makes it harder for them to pursue opportunities for continuing education, have better access to childcare, afford highquality health care and so much more.
Most women in insurance agencies are acutely aware of this, with 64% of women in frontline roles saying they feel they are paid somewhat less or significantly less than their male peers, according to the 2022 state of women in independent agencies research. When asked what they would change about working in insurance, many respondents mentioned equal pay.
Women pointed out that, often, the things that go unnoticed are the things that keep the agency running and make it a great place to work but don't necessarily result in big sales numbers. It's never a “good time" to consider pay equity. But considering that women leaders are driving more success in business, perhaps we can't afford not to think about fairness in pay
4) Address disparities in caregiving. It's no secret that women have to navigate complex relationships between caregiving and career Women are far more likely than men to be responsible for most or all of their family's housework and caregiving, according to “Women in the Workplace 2022," a study from McKinsey & Co and LeanIn Fifty-eight percent of women in entry-level jobs, compared to 30% of men in entrylevel jobs, are responsible for most or all of their household labor.
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Meanwhile, men's responsibilities at home steadily decrease as they get promoted. Twenty-one percent are responsible for most or all of the housework and childcare when in first-level management, dropping to 13% in senior management and up. However, most women don't get that privilege. Instead, 58% of women in first-level management roles and 52% who are senior managers or higher are still responsible for their family's housework and childcare.
With many women who work outside the home also serving as primary caregivers at home, this gets tricky … and frankly exhausting. When compared with men who have young children, women with children are less likely to agree they have a healthy work-life balance, less likely to aspire to lead and less likely to be actively developed for leadership, as shared in Liberty Mutual's 2023 State of Women Outlook. Perhaps that's why we see female principals and owners much less likely to have young children (11%) than male principals and owners (22%). It seems that for women specifically, as caregiving responsibility trends upwards, career advancement can stagnate.
Now, employers aren't in a position to tell people how to divvy up responsibilities at home, but they can certainly do more to help women navigate this reality at work. Flexible scheduling and paid leave are important first steps to leveling this playing field for women. For the most part, insurance agencies are already setting a great example of this, with more than 80% of women in insurance saying their job allows them work-life balance and 92% of women in frontline roles saying they receive flexibility when they need it. When you offer a robust set of benefits that includes, among other things, parental leave and childcare assistance, you send a message to women that you understand the reality of their lives. You remove an incredibly high barrier to entry and a new pathway to leadership emerges.
5) Let women redefine what it means to be a leader. Leadership isn't just a role to be filled it's a wholeself process to embark on. I noticed tremendous growth in myself when I had the opportunity to step into a leadership role, and that had a cascading effect on the people around me. I would venture to say that being a leader has made me more myself. More women need to have this opportunity.
Research shows there are reasons to be optimistic about the progress being made to uplift women within the independent agent system. The percentage of agencies with at least one woman in a principal or senior management role increased by 7% between 2018 and 2020, rising to 42%, according to the 2020 Agency Universe Study and between 2020 and 2022, that number rose to 47%.
Women need to know they not only can be successful and still be who they are, they can be successful because of who they are.Women are already prepared to lead they just need agencies to give them opportunities to do so. And when they do, the future is brighter for all of us.
A few days ago, I received an email question about the watercraft exclusion on a BOP policy. The exclusionary wording is identical to that in the ISO BOP, the relevant language being:
Aircraft, Auto Or Watercraft:
“Bodily injury” or “property damage” arising out of the ownership, maintenance, use or entrustment to others of any aircraft, “auto” or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and “loading or unloading”.
This exclusion applies even if the claims allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by an insured, if the “occurrence” which caused the “bodily injury” or “property damage” involved the ownership, maintenance, use or entrustment to others of any aircraft, “auto” or watercraft that is owned or operated by or rented or loaned to any insured:
This exclusion does not apply to:
(1) A watercraft while ashore on premises you own or rent;
(2) A watercraft you do not own that is:
(a) Less than 51 feet long; and
(b) Not being used to carry persons or property for a charge;
The insured was considering a river cruise for staff and customers but was concerned that someone could be injured and sue the insured. So the coverage issue was posed to the BOP carrier who responded that there would be no liability coverage “as the policy excludes on-water activity.”
Is the insurer correctly interpreting the watercraft exclusion?
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First, in the exclusion excerpt above, note that there are two specific exceptions to the exclusion. The first one doesn’t apply since, as the carrier puts it, this is an “on-water” exposure. In the second exception, the boat in question is over 51 feet long and is being used to carry persons for a charge. So, it appears that neither exception to the exclusion applies in this case.
However, is the stem of the exclusion even triggered at all? It says:
“Bodily injury” or “property damage” arising out of the ownership, maintenance, use or entrustment to others of any aircraft, “auto” or watercraft owned or operated by or rented or loaned to any insured. To trigger the exclusion, two sets of conditions must be met:
First, the insured must own, maintain, use, or entrust the watercraft to others (“arising out of the ownership, maintenance, use or entrustment to others of any…watercraft”). The insured does not own the boat, nor does the insured entrust the boat to others, and it’s not maintaining the boat. Is the insured “using” the boat? I would argue that being a passenger on a watercraft does not involve “use” of the boat, as in the vessel being entrusted to the insured. However, even if one could argue that this does constitute “use,” another set of conditions must be met….
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Ben Albright
December 2023
Second, the watercraft must be “owned or operated by or rented or loaned to any insured.” First, we’ve established that the boat is not owned by a BOP insured. None of the claim scenarios addressed to the carrier involved any operation of the boat. Second, the insured is not renting or chartering the boat, but rather simply paying passenger fees. Also, the boat is not being “loaned” to an insured, something that implies a transfer of temporary possession.
So, the bottom line is that the exclusion is not triggered at all, so the exceptions to the exclusion are of no consequence.
Years ago, when my son was 6-8 years old, we went on a cruise hosted by my employer on the General Jackson paddlewheeler in Nashville, the largest in the world. My son was able to visit the bridge and meet the captain who let him sit on the captain’s chair and steer the vessel. If my son had struck another vessel and my employer was sued, there is no exclusion in the ISO BOP or CGL policies that apply to this scenario. Due to similar language, ISO homeowners policies would also extend liability coverage if I was sued since the exclusion in those forms do not apply to use of a watercraft of this type without ownership or rental.
This exclusion applies not only to watercraft, but also to aircraft and autos. Over the years, I have encountered dozens of improperly denied claims because the carrier did not recognize the circumstances under which the exclusion is triggered.
RTFP! And RTFP with comprehension.
PRESIDENT, ARMOND K. SCHWING PRESIDENT-ELECT, BRET HUGHES
SECRETARY-TREASURER, ROSS HENRY
NATIONAL DIRECTOR, JOHNNY BECKMANN, III
PAST PRESIDENT, MICHAEL SCRIBER
YOUNG AGENT REP, KRISTIN SWANSON SCOTT
Schwing Insurance Agency, Inc - New Iberia
Hughes Insurance Services, Inc - Gonzales
Henry Insurance Service, Inc. - Baton Rouge
Assured Partners - Metairie
Scriber Insurance - Ruston
Swanson & Associates - New Orleans
ANN BODKIN-SMITH
MATTHEW DEBLANC
CHRISTY DESOTO
DOMINIQUE DICARLO CROUCH
ROB W. EPPERS
MATT GRAHAM
CHRISTOPHER S. HAIK
STUART HARRIS
BEAU HEAROD
CHARLES H. LEBLANC
CRAIG MARTEL
LYDIA MCMORRIS
A. EUGENE MONTGOMERY, III
JOE KING MONTGOMERY
HARTWIG "ROBBY" MOSS, IV
ROBERT LOUIS PALMER, JR.
RANDY PERISE
ROBERT STONE
Thomson Smith & Leach Insurance Group - Lafayette
Continental Insurance Services - Marrero
1st Insurance of Marksville - Marksville
Riverlands Insurance Agency - LaPlace
Risk Services of Louisiana - Alexandria
Lincoln Agency - Ruston
Higginbotham Insurance - Lafayette
McClure, Bomar & Harris, LLC - Shreveport
Jeff Davis Insurance - Jennings
Bourg Insurance Agency, Inc - Donaldsonville
Insurance Unlimited of LA, LLC - Lake Charles
Alliant Insurance Services - Baton Rouge
Community Financial Insurance Center, LLC - Monroe
McGriff Insurance Services - Monroe
Hartwig Moss Insurance - New Orleans
Insurance Underwriters, Ltd - Metairie
Blumberg and Associates - Ponchatoula
Stone Insurance, Inc. - Metairie