e-Insight - January 2024 by Big I Illinois

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INSIGHT

ILLINOIS

January 2024

Years

Supporting Independent Insurance Agents in Illinois

ILLINOIS Plus

Property & Casualty Outlook New Employer Requirements Move from Burnout to Fully Charged

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INSIGHT Features 11

January 2024

Table of Contents

2023 P&C Combined Ratio Forecasted to Deteriorate to 103.8

ILLINOIS

By Will Jones

P&C Outlook: Premiums in Race to Catch up With Claims Costs

By Thomas Holzheu & James Finucane

March of the Acronyms

History of the Independent Insurance Agent Association in Illinois

Celebrating 125 Years of Independent Insurance Agents of Illinois

Inflation, High Interest Rates, and Catastrophes Contribute to 2023 Underwriting Loss for P&C Industry

By Jennifer Jacobs

By Insurance Information Institute (Triple I)

How to Move from Burnout to Full Charged in Life and Work

What Employers Need to Know About Paid Leave for All Workers and New Pay Transparency Requirements

By Kathy Caprino

By Jennifer Jacobs

In This Issue

Letter from the Editor

President’s Message

Brett’s 5 Sense

Trusted Choice

Associate Member News

Agency Member News

Association Update

Big I Illinois News

Classifieds

info@ilbigi.org | www.ilbigi.org | (217) 793-6660 Insight is the official publication of Big I Illinois. The magazine is published monthly for the members of the state association, with the office located at 4360 Wabash Avenue, Springfield, Illinois 62711-7009; Consumer Website: www.ChooseIndependent.com. Big I Illinois welcomes letters discussing concerns of the insurance industry, articles, editorials, other matters of interest to the membership. The editor reserves the right to edit and select submissions for publication. Address submissions for review to Rachel Romines at rromines@ilbigi.org. For advertising information, contact Tami Hubbell at thubbell@ilbigi.org.

14-Time Winner

Advertisers ILLINOIS

Board of Directors Executive Committee Chairman of the Board - Kevin Lesch klesch@arachasgroup.com President - Allyson Padilla allyson@blanksinsurance.com President-Elect - Patrick Taphorn, CIC, CSRM ptaphorn@unland.com Vice President - Thomas Evans, Jr. tom.evans@assuredpartners.com Secretary/Treasurer - Cindy Jackman, CIC, CISR cjackman@arlingtonroe.com IIABA National Director - George Daly george.daly@thehortongroup.com

Applied Underwriters

Berkshire Hathaway Guard Ins. Group

Big I Markets

EMC Insurance

Envision Healthcare

JM Wilson

Cover Tip

Omaha National

Secura

West Bend

Directors Mohammed Ali - mali@aliminsurance.com Amiri Curry - acurry@assuranceagency.com Charles Hruska - chas@hruskains.com David Jenk, Esq. - djenk@nwibrokers.com Jeff McMillan - jeff@mcmillanins.com Patrick Muldowney - patrick.muldowney@alliant.com Lindsey Polzin - lpolzin@presidiogrp.com Ray Roentz - ray.roentz@hwcrins.com James Sager - james@sagerins.com Luke Sandrock, CIC - lsandrock@2cornerstone.com Noele Tatlock - ntatlock@unland.com

Committee Chairs Budget & Finance | Cindy Jackman, CIC, CISR cjackman@arlingtonroe.com Education | Lisa Lukens salibainsurance@gmail.com Farm Agents Council | Steve Foster s.foster@ciagonline.com Government Relations | Dustin Peterson dustin@peterson.insurance Planning & Coordination | Nick Gunn, CIC nickgunn@nixonagency.com Technology | Brian Ogden brian@ogdeninsurance.com Young Agents | Renee Crissie renee@crissieins.com

Big I Illinois Staff Director of Information and Technology

Shannon Churchill (217) 321-3004 - schurchill@ilbigi.org

Director of Education and Agency Resources

Brett Gerger, CIC (217) 321-3006 - bgerger@ilbigi.org

Accounting & Admin Services

Tami Hubbell, CIC (217) 321-3016 - thubbell@ilbigi.org

Director of Human Resources, Board Admin

Jennifer Jacobs, SHRM-CP (217) 321-3013 - jjacobs@ilbigi.org

Sr. Vice President/Chief Financial Officer

Mark Kuchar (217) 321-3015 - mkuchar@ilbigi.org

Chief Executive Officer

Phil Lackman, IOM (217) 321-3005 - plackman@ilbigi.org

Director of Membership Services

Lori Mahorney, CISR Elite (217) 415-7550 - lmahorney@ilbigi.org

Director of Government Relations

Evan Manning (217) 321-3002 - emanning@ilbigi.org

Office Administrator

Kristi Osmond, CISR (217) 321-3007 - kosmond@ilbigi.org

Director of Communications

Rachel Romines (217) 321-3024 - rromines@ilbigi.org

Marketing Representative Director of Professional Liability & Insurance Products

Tom Ross, CRIS, CPIA (217) 321-3003 - tross@ilbigi.org Carol Wilson, CPIA (217) 321-3011 - cwilson@ilbigi.org

Letter from the Editor

It’s Official – We Are Big I Illinois As we’ve communicated over the past few weeks, the association membership voted in October 2023 to rebrand from IIA of IL to Big I Illinois. This brand better reflects a name that has resonated with agents, carriers, and lawmakers throughout the organization’s 125-year history. It’s an exciting time to be part of an association with such a long-standing history of supporting independent insurance agents in the state. Along with the new brand comes new publication designs. As you can see, Insight magazine received a facelift, as will our digital publications. The Big I Illinois staff has been hard at work for months to update the association website. This became a big project, as we wanted to provide an easier experience for all our website users. Our new website will provide better navigation, a layout allowing users to find exactly what they need and didn’t know they needed, but we still have all the great information our members are used to, like the Solution Center. Look for the new website to launch soon at www.ilbigi.org. Staff email

addresses will also be changing. You’ll now use first initial, last name @ilbigi.org (rromines@ilbigi.org). Add ilbigi.org to your safe senders list to ensure delivery of our digital publications and correspondence. 2024 also marks the association’s 125th Anniversary. Over the next several months, we will be highlighting the association’s rich history in the magazine and other publications. We hope you enjoy looking back at some of the events, news, photos, and more! We plan to end our anniversary celebration with a big party at CONVO in October (official dates coming soon). As we honor the past, we realize how much we’ve learned, how much this association has contributed to the industry, and how much we’ve helped independent insurance agents in Illinois grow and thrive. Moving into the next chapter, we are committed to continuing to be your number-one resource. We look forward to the next 125 years of partnership and success!

Rachel Romines - Big I Illinois Director of Communications/Insight Editor - rromines@ilbigi.org

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President’s Message

Quasquicentennial - pertaining to or marking a period of 125 years. noun. 2. a 125th anniversary. According to Wikipedia the following things occurred in 1899: • January 10 The Tau Kappa Epsilon fraternity is founded, at Illinois Wesleyan University in Bloomington, Illinois. • February 3 Kansas University’s new college basketball team, coached by the game’s inventor, Dr. James Naismith, plays its first game, and is defeated by the YMCA team of Kansas City, Kansas, 16 to 5. • March 2 Mount Rainier National Park is established in the U.S. state of Washington. • June 9 American boxer James J. Jeffries wins the world heavyweight boxing championship when he knocks out Cornish-born Bob Fitzsimmons in the 11th round of a bout at Coney Island at Brooklyn, New York. • July 4 The most famous skeleton of a dinosaur ever found intact, a Diplodicus, is discovered at the Sheep Creek Quarry in the western United States near Medicine Bow, Wyoming. • August 24 France’s Minister of Commerce, Alexandre Millerand, decrees a change in regulations to extend the right to workers’ compensation to cover all profit-making establishments. • December 25 Humphrey Bogart, American actor, was born.

I recently was reviewing some highlights of a speaker for a future event and I was struck by what he had to say. Finding it poignant not only for my agency and me but for our association. The speaker discussed his struggle with bringing new ideas to his multigenerational organization as a young and green professional. After he nervously presented his ideas to his father, he was met with kindness and support. His ideas were new and innovative, unconventional to his current business model, and not tested in his locale. However, with the support of those who came before him, he was able to grow his idea into success. There is a lot that has been learned in the last 12-18 months in our industry, and while I find value in the struggles we have faced, I, like many, would like to move past it in 2024. As we move into the year, celebrating all we have accomplished as an association in the past 125 years, I hope that we can also focus on the future. Supporting our new and young agents and agencies with mentorship and education, providing our members with market access, and discovering and vetting new technology that will help our members have a sustainable competitive advantage for another 125 years. I wish you all much success and support this New Year! Regards, Allyson Padilla

AND on August 2, 1899, Big I of Illinois was established. While a number of things are different than they were 125 years ago, one thing remains the same, we are committed to providing a sustainable competitive advantage for our members.

Allyson Padilla - Big I Illinois President - (618) 393-2195 - allyson@blanksinsurance.com 8

Insight

January 2024

New Year Luckily, this has been an uneventful, pretty boring year. Might be good for a hard reset, as they say in the IT world. Your association will start 2024 by changing our name and celebrating our 125th anniversary. We are now Big I Illinois (what most have called us for years anyway, so we might as well make it official). So that is a perfect way to engage in a hard reset or a new beginning. Let’s set our New Year’s resolutions. Mine: 1. Quit beating my children; 2. Quit kicking the dogs; 3. Get in shape (I contend that round is a shape); and 4. Quit sniffing glue. Just kidding, I would never kick my dogs. In all seriousness, resolutions are just goals, and we should set some lofty and some attainable goals. Putting something on paper, knowing that you will not succeed, nor will you try to succeed, is a waste of your time and effort. Intentions are significant, but the effort and follow-through are everything. My daughter intends to get great grades, but playing video games and hanging out with friends 24/7 seem not to produce great grades. Her intentions are legitimate, but her effort and follow-through are horrible. In this climate, we are seeing insurer moratoriums, complete market exits by insurers, higher loss ratios, increased incidents of storms, increased premiums, increased non-renewal and cancellations, and greater uncertainty. Our New Year’s list could be: 1. Add insurers to my choices; 2. Stop my insureds from having losses; 3. Reduce storms; 4. Lessen my insureds’ premiums; 5. Don’t allow my insurer to cancel or non-renew my clients; and erase any uncertainty. This list would fail quicker than it took me to type it out as many things will be out of your control. However, these would be good to write down because it puts your challenges right in front of you. Be careful not to make your list too big, as it could cause you not to accomplish anything due to being overwhelmed. So now we have the challenges identified (yours may be more wide-ranging and different). Narrow your scope so that you can have achievable goals. If you check off all of your goals during the year, reassess and work toward further goals. From our previous list, we could develop the following list: 1. Constantly and actively look for new insurer opportunities (will be very difficult as most insurers are not looking for new contract opportunities). 2. Educate your consumers better so they understand the purpose of insurance and the ramifications of their inaction or action (do not skimp on coverage to secure consumers). Remember, at the end of the day they assume every scenario is covered. Additionally, they need to understand every covered claim doesn’t need to be filed. 3. Better educate your staff and yourself in order to become more creative with coverages. This is a perfect opportunity to make you and your staff more valuable to your consumers. At the end of this market climate, consumers will remember you were honest and truly had their back. 4. Increase due diligence in follow-ups and policy reviews as this will convey to consumers how important they are to you.

Brett’s 5Sense (inflation)

Four things are achievable and will put you in a better place than where you were. Now we have our Agency/Agent New Year’s resolutions. Hopefully, they last until this time next year, and then we can reassess. What else can we do? Develop or reassess your agency’s best practices. Here is my cursory list, but your list should be much more extensive. The first ones are E&O related. These have never been more important than they are now. 1. Get every proposal/declination in writing and signed off on. Remember, the faintest ink is better than the best memory (Dennis Garrett). 2. Get everyone in the Agency licensed. 3. Keep copies of everything that goes out of your office, especially certificates of insurance (you will thank me when your first fraud investigation happens). 4. Ensure you follow all rules and regulations, but still be creative. If you have a question or need clarification, reach out to me directly (bgerger@ilbigi.org) . 5. Treat everyone how you want to be treated (Golden Rule). Let’s make this your best year yet and really enjoy the journey as well as the 125th-year celebration. 2023 was full of lemons, so let’s make some frozen lemonade and vodkas or just lemonade slushies, depending on your preference, and lemon meringue pie. We will determine our path through hard work, perseverance, and collaboration. All three things that define this association… BIG I ILLINOIS . Here is where we will all get fired up, clap, hoot and holler, and run out into the marketplace. In the immortal words of John “Bluto” Blutarsky, “What? Over? Did you say ‘over’? Nothing is over until we decide it is! Was it over when the Germans bombed Pearl Harbor? Hell no!...It ain’t over now, ‘cause when the goin’ gets tough, the tough get goin’. Who’s with me? Let’s go!” Let’s embrace this new year with a new name, a celebration, and a renewed energy to tackle these challenges head-on together. As always, this is just Brett’s “5”Sense and I hope it was helpful. You can contact me through CONNECT and if it is urgent, do not hesitate to reach me through CONNECT. I may be pushing you to CONNECT. If you need any clarification or have any suggestions for future articles, please email me at bgerger@ilbigi.org.

Brett Gerger - Big I Illinois Director of Agency Resources/Education - bgerger@ilbigi.org January 2024

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2023 P&C Combined Ratio Forecasted to Deteriorate to 103.8 By Will Jones The 2023 net combined ratio for the property & casualty industry is forecast to be 103.8, according to the latest underwriting projections by actuaries at the Insurance Information Institute (Triple-I) and Milliman. The projection is worse than the 102.2 combined ratio predicted earlier this year, which is, in part, due to severe convective storm losses being the highest in decades, the report said. Also, hard markets continue with 2023 net written premium growth forecast at 8.3%. The projections were announced in a quarterly report, “Insurance Economics and Underwriting Objections: A Forward View,” and the findings were presented in a webinar. Michel Léonard, chief economist and data scientist at Triple-I, discussed key macroeconomic trends impacting the p&c industry results, including inflation, increasing interest rates and overall economic underlying growth. He identified the top risk scenarios for 2024 as geopolitics, weakening employment and gross domestic product (GDP) contraction. “The Fed may also keep increasing rates into 2025, pushing down home and auto insurance underlying economic growth,” he said. Another area of concern, Léonard said, is p&c replacement costs. Between 2020 and 2023, replacement costs increased an average of 45%, while inflation for the overall U.S. economy increased 15% within that same period. “Increases in p&c replacement costs should continue to slow down faster than overall inflation over the next three years,” he said. “However, it will take 10 years of normal inflation for insurance replacement costs to process pandemic-related increases.” Meanwhile, Dale Porfilio, chief insurance officer at Triple-I, discussed the overall p&c industry underwriting projections. “We forecast personal lines to improve each year from 2023 through 2025, but still lag behind strong underwriting profitability in commercial lines,” he said. He also noted that the improvements are expected to result in “the overall p&c industry returning to a small underwriting profit in 2025.”

“Costlier replacement parts and low inventories are contributing to current and future loss pressures,” he said, adding, “Unless replacement cost begins to decrease materially - which is not currently forecast - we project personal auto to remain at an underwriting loss through 2025.” For homeowners, Porfilio noted that catastrophe losses in the first half of 2023 were elevated and that approximately 70% of those losses were in the homeowners line. “For 2023, the net combined ratio is forecast at 110.9, 6.2 pts worse than 2022.” Lastly, Jason B. Kurtz, a principal and consulting actuary at Milliman, said that commercial property, general liability, and workers compensation continued to be bright spots for the industry, while commercial auto continues to be troubled. For commercial property, the 2023 net combined ratio is forecast at 91.6, nearly identical to 2022. “Hard market conditions continue into 2023, most notably in catastropheprone regions,” Kurtz said. “We expect premium growth to moderate through 2025.” But for commercial auto, underwriting losses continue. Direct incurred loss ratios in the first half of 2023 were at the highest in at least 15 years. “There will be a continued need for rate to improve the combined ratio results,” Kurtz said. “We are forecasting the 2023 combined ratio at 106.7, 2024 at 103.4 and 2025 at 102.7.” However, Kurtz noted that the general liability 2023 net combined ratio forecast of 96.9 falls between 2021 and 2022 actual results. He also said that premium growth is forecast to moderate in 2023-2025 as a result of the recent improved underwriting performance and lower GDP growth expectations. Turning to workers comp, Kurtz noted that the 2023 net combined ratio forecast of 90.6 continues the string of underwriting profits. “Favorable results are forecast to continue through 2025, with premium growth 2.7% for 2023, 1.9% for 2024 and 1.9% for 2025,” he said.

Will Jones is IA editor-in-chief and can be reached at william.jones@iiaba.net.

In personal auto, Porfilio forecasts premium growth of 11% in 2023 as rate increases start to exceed loss trends, allowing the 2023 net combined ratio to improve incrementally to 110.5 from 112.2 in 2022. January 2024

insight

US PROPERTY & CASUALTY OUTLOOK Premiums in Race to Catch Up With Claims Costs By Thomas Holzheu & James Finucane We expect 2023 to be a transition year for US P&C industry profitability, from a difficult 2022 to a stronger 2024 as higher premiums and interest rates improve industry results. The P&C industry has not yet reached the inflection point between premium growth rates and claims costs. Instead, strong and accelerating rate increases in personal lines, an ongoing hard market in commercial property and high reinvestment yields were offset by the costliest second quarter for natural catastrophes since 2011, persistent inflation, and slowing favorable reserve development. Through H1 2023 underwriting losses reached USD 22 billion, resulting in net income of just USD 2 billion despite higher investment earnings. We lower our 2023 ROE estimate to 6.5% from 8.0% and raise our premium growth estimate to 9.0% from 7.5%.

A 14% jump in total loss costs outweighed 6% net earned premium growth, resulting in an underwriting loss of USD 22 billion.3This was partially offset by net investment income increasing 28% year-on-year. First half net income was just USD 2 billion. Halfway through peak hurricane season without a major claims event, we expect stronger underwriting results in H2 2023 as the sharpest inflationary impact on loss costs recedes, and gains from higher interest rates accrue. On Q2 2023 earnings calls insurers have also indicated that personal lines rate increases will be higher than initially expected.

Underwriting

• Natural catastrophe losses and persistent inflation weighed on results, with an industry underwriting loss of USD 22 billion in H1 2023. • Premium growth remains strong, while momentum has shifted to personal lines. • In commercial lines, strong property growth is offset by weak or negative growth in liability lines. • We raise our premium growth estimate to 9.0% from 7.5% in 2023 and still expect 5.5% in 2024. • With just USD 2 billion net income in H1 2023, we lower our industry ROE forecast to 6.5% from 8.0% in 2023 but maintain our forecast at 9.5% in 2024.

We revise our 2023 combined ratio forecast up to 102.0%. The industry net combined ratio jumped to 107.3% in Q2 2023, with natural catastrophes adding 11.8 percentage points4 (ppts), well above the 10-year average of 6.3%. Inflation continues to raise claims severities across property lines. Year-to-date, the personal lines loss ratio was nearly 23ppts higher than commercial lines as catastrophes affected homeowners more than commercial policies. We expect loss severities to ease as average US headline CPI inflation decelerates to our forecast 4.0% in 2023 and 2.5% in 2024, setting the stage for improved underwriting results as rate gains eventually outpace claims costs. (See Table 1, below)

Profitability

Property loss costs surge. In the first half of 2023, homeowners and commercial property claims costs increased by 36% and 30% respectively y-o-y, driven up by inflation and natural catastrophe losses and delaying overall industry profitability improvement. The homeowners loss ratio is up by 15ppts from 1H22, to over 82% - the highest 1H in over a decade. Partly as a result, insurers are restricting business in catastrophe-prone markets, and the availability and affordability of insurance has now gained the attention of Congress.5 In California, for example – where insurers have announced pullbacks this year – there is an estimated 20%

We anticipate lower 2023 ROE after an active H1 for catastrophes. We estimate 2023 industry ROE at 6.5%, down from 8.0% previously, and maintain it at 9.5% for 2024. Though this year is a huge improvement on 2022 (ROE: 2.4%) as higher investment returns have boosted insurers’ profitability, elevated catastrophe activity is weighing on underwriting results. USD 34 billion of severe convective storm claims in 1H231 drove an estimated USD 16 billion in extra claims costs,2 with a higher share retained in net results.

Table 1. US P&C Insurance Sector Outlook US P&C Insurers

Q2 2022

Q3 2022

Q4 2022

Q1 2023

Q2 2023

2022

2023 E

2024 F

Quarterly data

Annual

Projected

Prior

Projected

Prior

DPW, YOY change

9.7

7.9

8.9

8.4

8.1

9.8

9.0

7.5

5.5

Combined ratio

104.0

106.4

104.2

102.6

107.3

102.7

102.0

100.0

98.5

Underwriting result

-5.6

-8.0

-2.5

-4.8

-0.9

-3.2

-2.0

0.0

1.5

Investment yield

2.6

2.9

3.5

3.2

2.7

3.5

3.7

Return on equity

0.5

-2.1

4.0

3.6

-1.9

2.4

6.5

8.0

9.5

For source information, visit www.swissre.com/institute/research/sigma-Vresearch/Insurance-Monitoring/us-property-casualty-outlook-september-2023.html.

Insight

January 2024

less availability for insurance options than a year ago.6 More homeowners are also choosing to go without insurance: only about 88% are insured today, compared with up to 95% a few years ago. The worst appears to be over for personal auto. The line’s 112% combined ratio in 2022 was the highest since at least 1975 and the loss ratio is still elevated in 2023, suggesting a way to go before it turns a profit again. However, in Q2 2023, growth in direct premiums earned kept pace with loss costs for the first time in more than two years. We expect this trend to continue, with rate increases expected to exceed most indicators of claims severities. For example, the July Consumer Price Index showed car insurance prices up by 19.1% y-o-y, while prices of used cars declined 6.6%, motor vehicle body work increased 7.1% and repairs were up 17.0%. Based on CPI data, statutory rate filings and earnings call commentary, we expect earned premiums growth rates to continue to accelerate while loss costs decelerate. A potential stumbling block is the United Auto Workers strike that began on September 15, which will disrupt supply chains and cut new vehicle production, and could cause an uptick in used car values.

Investment Income We continue to forecast the average investment yield at 3.5% in 2023 and 3.7% in 2024. In Q2 2023 the investment yield was 3.2% (3.3% excluding a realized capital loss) as recurring income increased 25% from a year earlier. Reinvestment yields remain above rates on maturing securities, and we still see the 2023 reinvestment yield averaging 5.2%. We expect the upper bound of the Fed funds target range to remain at 5.25% through the end of this year before declining to 4.35% during 2024. We forecast the 10-year Treasury yield to average 3.9% and 3.7% in 2023 and 2024, respectively.

This article originally appeared on the SwissRe website at https://www.swissre.com/institute/research/sigma-research/ Insurance-Monitoring/us-property-casualty-outlookseptember-2023.html. Visit the website to view source information. Thomas Holzheu is Chief Economist Americas, Swiss Re Institute and James Finucane is Senior Economist, Swiss Re Institute.

Pricing: commercial lines rate trends are bifurcating. Average rates for commercial lines increased by 8.9% year-on-year in Q2 2023, slightly faster than the 8.3% gain in Q1 2023, the latest CIAB survey reports (see Appendix). Property rate gains remain strong but decelerated slightly, rising 20% after a 21% increase in Q1 2023. By contrast, rate gain momentum in liability lines is significantly lower, remaining generally steady in the low to high single-digits except for D&O and cyber, where price gains are slowing. Overall, we expect rate Table 2. H1 2023 Premium Growth and Loss Ratios increases through 2023 as inflation by Line of Business and catastrophes put upward pressure on claims and operating costs. Direct premium

Growth Personal lines look to be the growth engine of 2023. Both personal auto and homeowners’ premiums grew by double digits in H1 2023, driving strong P&C industry growth of 8.6% (see Table 2). Commercial lines’ growth rates are weakening overall and reflect rate trends: fire & allied lines grew 17% but were offset by general liability (sum of other liability, medical professional liability and product liability) premiums down 1%. We revise up our estimate of total direct premiums written growth to 9.0% in 2023 and maintain it at 5.5% for 2024, driven by rate gains in personal lines and commercial property. US real GDP – a general proxy for exposures – is forecast to grow by 2.1% in 2023 and 0.9% in 2024. (See Table 2)

Line of business

written year to date USD millions

YOY growth %

Direct loss ratio* YTD %

LR change YOY %

Fire & Allied Cmbnd

43,422

17.0

64.6

8.1

Other Liab (Occurrence)

36,834

3.6

63.7

0.1

Workers’ Comp

29,696

3.1

48.0

-0.1

Comm’l Multi Prl

30,495

10.6

64.2

11.0

Comm’l Auto Liab

23,663

-1.3

72.4

3.7

Other Liab (Claims)

19,215

-6.4

48.1

-3.3

Inland Marine

18,167

7.3

42.2

-2.9

Comm’l Auto Phys

7,111

5.1

68.4

5.7 2.3

Med Prof Liab

6,158

-1

57.6

Fidelity & Surety

5,360

7.3

22.5

4.9

Finl & Mrtg Grty

2,935

-1.4

2.8

25.6

Ocean Marine

2,980

5.4

48.3

-10.2

Product Liability

2,498

-0.6

44.2

10.9

Earthquake

2,606

23.0

1.6

-0.3

Warranty

1,822

-8.7

64.1

5.7

Credit

1,455

9.9

40.3

14.3

Aircraft

1,247

7.5

46.0

-21.4

Boiler & Machinery

1,400

13.3

36.1

7.1 3.3

Commercial Total

235,086

4.7

56.3

Pvt Pass Auto Liab

45,175

8.6

75.6

3.5

Pvt Pass Auto Phys Damage

65,537

14.2

79.2

-0.9

Homeowner, Farmowner

72,778

11.1

82.7

14.9

Personal Total

223,221

10.9

78.9

6.0

*Pure direct loss ratio (excluding LAE) = Direct losses incurred / Direct premiums earned

January 2024

insight

MARCH OF THE ACRONYMS By Jennifer Jacobs In in the fall of 2011, I found myself on the sidelines of a debate that began in 1993 when our association merged with PIA and became the PIIAI. That year, the convention was labeled as the first PIIAI convention, and marketing materials and press releases were promoting that year of the merger as the date the association was founded. Jack Payan, who had spent many years in service to the industry as President of three organizations: the Chicago Board of Underwriters; Independent Insurance Agents of Illinois; and Independent Insurance Agents of America, took offense at the new founding date. Jack’s history of the association went back much farther than that and he couldn’t fathom not bringing forward the history of the IIAI when we merged with the PIA. In a letter to Tom Walsh, who was newly installed as PIIAI president that year, Jack wrote about his “consternation when I attended my 36th consecutive Illinois annual convention in 1993. That convention was billed as the 1st Annual Convention of the PIIAI. It should have been the 94th annual convention of the newly combined organization. I was in shock, but quickly realized that nobody seemed to care how I felt about the subject.” Jack’s tenacity finally paid off and he found the right audience in the Executive Committee. It was agreed that the association should adhere to the original founding date of 1899, and at the same time, Jack landed a book deal that ensured he would have access to association resources in exchange for volunteering his time in writing and researching the association’s history. I quickly went from sitting on the sidelines to being declared the research assistant on this project. In addition to receiving a printed carbon copy of every piece of correspondence Jack sent related to the book and its publication, I was charged with digging through the association archives (boxes and boxes of photos and documents) to locate the images and lists he requested. It was tedious work, but I truly enjoyed being immersed, so to speak, in the association’s history. Countless hours of research and several months later, I met with Jack over egg salad sandwiches at his kitchen table in Palos Heights and finalized the materials for publication. The finished product, March of the Acronyms debuted at the association’s convention (the 113th annual event). Jack attended the Past Presidents Dinner and a special book signing event to much fanfare and celebration. Two months later, Jack was laid to rest and left us with a lasting legacy. I am grateful to have worked with him on the history book. What follows is my edit of Jack’s original research on the association history. If you would like to read March of the Acronyms in its entirety, please reach out to me at jjacobs@ilbigi.org or (217) 321-3013 and I would be happy to mail you a copy.

Jennifer Jacobs, SHRM-CP, is Big I Illinois Director of Human Resources and liaison to the Board of Directors.

Insight

January 2024

History of the Independent Agent Association in Illinois Cincinnati had been the Western Capital of the rapidly growing country’s insurance industry but as the muddy frontier town of Chicago began to outgrow its more easterly rival, Chicago became the industry hub. When Gurdon S. Hubbard wrote the first fire insurance policy in the city in 1834 for the Howard Insurance Company, there were no automobiles, nor electric lights, much less television. Liability insurance, workers’ compensation and accident and health coverages as well as fidelity and surety, were unknown. By 1849, the city was a boom town of 23,047 people and it was in that year that Hubbard helped organize the Chicago Board of Underwriters (CBU). The CBU had been founded with both company people and agents as members and was the second oldest insurance association in the nation. The first was the Greater Board of Underwriters of Cincinnati, which was established in 1846. Throughout the latter part of the 19th Century, the insurance agency system was fragmented, and agents had grown disgusted with the treatment that they were receiving from the insurance companies of the day. Of primary importance was commissions, but other issues such as direct writing and ownership of their expiration lists were key issues as well. With this backdrop, 20 insurance men representing agencies from across the country responded to a letter from a Denver agent to meet in Chicago at the Great Northern Hotel which was at the Northeast corner of Jackson and Dearborn, where the Everett Dirksen Federal Building now stands. The twoday meeting resulted in the formation of the first national association of insurance agents, the National Association of Local Fire Insurance Agents (NALFIA) which was established on September 30, 1896. Illinois reporter C.M. Cartwright of the Chicago InterOcean was at that first meeting, and he later became the managing editor of the National Underwriter. Two of the “Immortal Twenty” agents at that first meeting were from Illinois, Thomas L Fekete from East Saint Louis and Jacob Wachenheimer from Peoria. Interestingly, there we no representatives from Chicago at the historic meeting, although the Chicago Board of Underwriters (CBU) had been established since 1849 in that city and was a powerful organization in its own right at the time.

Many of the original founding members, as well as several other influential agents from Illinois provided a strong voice for the state by serving on the NALIFA Executive Committee throughout the early years. A later constitutional change made by the national association, then called the National Association of Insurance Agents (NAIA), mandated each state shall provide a representative to be known as a State National Director (SND). The new board was granted constitutional powers which had previously been the sole purview of the Executive Committee. The new powers included the formulation of statements and policies and the drafting of resolutions to be presented at membership meetings. For the first time, the SNDs would also serve as the nominating committee to present candidates for officer positions. This provided a greater opportunity for members representing all of the state affiliates to play a role in the governance of the organization. Another national organization, The National Association of Mutual Insurance Agents, came on the scene in 1931, but did not have a state affiliate until 1952 when Ray Mead of Peoria became the first president of the Illinois Association of Mutual Insurance Agents. The organization became what was known as Illinois Association of Professional Insurance Agents in 1981. The Illinois PIA ceased to exist in 1993 when the group merged with the Independent Insurance Agents of Illinois (IIAI), forming what would be called the PIIAI until 2009. The merged organization formally voted to disaffiliate with the PIA in November of 2000. In 2009, the PIIAI changed its name to the Independent Insurance Agents of Illinois (IIA of IL). The national PIA organization still exists today. In the mid 1980s, the CBU turned over the administration of most of its services such as education, legislative and other support, to the IIAI. The CBU remained active until 2006 when participation had waned and the organization discontinued its meetings and operations. A new local organization was formed in 2015, Chicagoland IIA. A local affiliate of the IIA of IL, Chicagoland IIA’s mission is to advocate for and provide relevant content for agents in Cook County.

One of the early goals of NALFIA was to create state associations of agents countrywide, as few existed at the time. The creation of the Independent Insurance Agents of Illinois (IIAI) was a direct result of that commitment and the IIAI was founded in 1899 under the leadership of its first president, R.W. Hosmer of Chicago. Jacob Wachenheimer of Callender & Company Agency in Peoria, was a prime organizer of the association as was Chicagoan Clarence S. Pellet who was, at the time, president of the CBU. Other agents who were also influential in the establishment of the IIAI included C.F. Hildreth, of Freeport; J.A. Giberson, of Alton; George Taylor, of Streator and several others. The venerable and powerful CBU provided the seed money to the fledgling organization. Almost immediately, 36 agents statewide joined the association.

January 2024

insight

5 2 1 Timeline provided by Phil Lackman.

1849

The Chicago Board of Underwriters (CBU) is organized

1869

General Assembly passes law allowing the organization of fire insurance companies

1940

National Association of Insurance Women (NAIW) formed

1945

McCarran-Ferguson Act Passed

1971

IL General Assembly fails to renew Rating Law, begins Illinois’ File and Use System

1871

Great Chicago Fire

1933

Allan I Wolf becomes second Illinois agent elected president of NAIA

1893

Illinois Department of Insurance created

1931

Professional Insurance Agents (National) formed

1952

Walter M. Sheldon becomes Third Illinois agent elected president of NAIA

Celebrating 125 Years of the Indepe

Throughout 2024, we’ll be looking back on the history of our Association made this long history possible. Since 1899, it has been a privilege to re changed over the years, the mission of what we do remains the

1971

Harry Parrish becomes fourth Illinois agent elected president of NAIA

Without your Association, the legislative and marketplace environment o detrimental to the independent agency channel. With the many people seen an industry that is as relevant a

Through world wars, pandemics, economic calamities, natural disasters Illinois. Your Association is proud of the work agents do in their commu organizations, and businesses

From advocacy to education, resources to event making the next 125 years as successful as the fir

National Association Logos Through the Years

1976

National Association changes name from NAIA to Independent Insurance Agents of America (IIAA)

1976

IIABA created NAPAC, now InsurPac

2009

PIIAI changes name to Independent Insurance Agents of Illinois (IIA of IL)

2015

Agents organize Chicagoland IIA local board

Insight

2018

State Supreme Court upholds and strengthens Producer Tort Reforms

1982

Jack Payan becomes fifth Illinois Agent elected IIABA President

2006

Chicago Board of Underwriters Operations Cease

2022

Greg Sandrock elected to IIABA Executive Committee

January 2024

5 1896

National Association of Local Fire Insurance Agents (NALFIA) formed

1930

Agents Qualification Law (licensing) passed in Illinois

1899

Independent Insurance Agents of Illinois formed

1930

Illinois Farm Agents Association established

1904

The Yonkers Case Agents Own Their Expirations

1914

The Insurance Federation of Illinois (companies) formed

1952

Illinois Association of Mutual Insurance Agents (later PIA) formed

1913

NALFIA changed name to National Association of Insurance Agents (NAIA)

1913

CF Hildreth becomes first Illinois agent elected president of NAIA

1956

Big I logo came into use by national association

5 2

ependent Insurance Agents of Illinois

ation and paying tribute to many of the people and organizations who have to represent independent agents across this state. While many things have s the same – to provide a competitive advantage to our members.

ment of our state is likely to have seen many changes that would have been eople who have been involved in our work over the years, we have instead vant and important as it has ever been.

1967

Proposed state tax on agents’ commissions defeated

asters, and more, the independent agent has stood strong in the state of ommunities everyday to support the insuring public and the many people, esses that make our state great!

1965

State Association changes name to Independent Insurance Agents of Illinois

vents, products to programs – we’re committed to e first. We thank you for being part of this journey!

1993

IIAI & PIA Merger creates PIIAI

2002

National Association adds Brokers to name - becoming Independent Insurance Agents and Brokers of America (IIABA)

2023

IIA of IL Membership votes to change name to Big I Illinois January 2024

1995

1997

Insurance Producer Tort Reform Passed

Financial Institutions Insurance Sales Act Passed

2001

2000

Ownership of Expirations Codified in State Statute

ILLIN O I S

Disaffiliation from PIA

1999

PIIAI celebrates centennial

We will continue the celebration in next month’s Insight magazine. Stay tuned!

insight

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DEC

Inflation, High Interest Rates, and Catastrophes Contribute to 2023 Underwriting Loss for P&C Industry

By Insurance Information Institute (Triple I)

The 2023 net combined ratio for the property/casualty industry is forecast to be 103.8, in part due to severe convective storm losses being the highest in decades. Hard markets continue with 2023 net written premium growth forecast at 8.3%, according to the latest underwriting projections by actuaries at the Insurance Information Institute (Triple-I) and Milliman. The quarterly report, Insurance Economics and Underwriting Objections: A Forward View, was presented on Nov. 2, at an exclusive members only virtual webinar. Michel Léonard, Ph.D., CBE, Chief Economist and Data Scientist at Triple-I, discussed key macroeconomic trends impacting the property/casualty industry results including inflation, increasing interest rates and overall economic underlying growth. “P/C growth has improved in 2023, growing 1.3% versus 2.1% for overall gross domestic product (GDP). While many hurdles could derail such improvements, P&C underlying economic growth is currently positioned to increase faster than overall GDP by 2.6% versus 1.7% in 2024 and by 4.5% versus 2.0% in 2025,” he explained. Léonard noted that top risk scenarios for 2024 include geopolitics, weaking employment and gross domestic product (GDP) contraction. “The Fed may also keep increasing rates into 2025, pushing down home and auto insurance underlying economic growth.” Another area of concern, Léonard said, is P/C replacement costs. Between 2020 and 2023, P/C replacement costs increased an average of 45% whereas inflation for the overall U.S. economy increased 15% within that same period. “Increases in P/C replacement costs should continue to slow down faster than overall inflation over the next three years,” he said. “However, it will take 10 years of normal inflation for insurance replacement costs to process pandemic-related increases.” Normal inflation is defined as 2% per year. Dale Porfilio, FCAS, MAAA, Chief Insurance Officer at Triple-I, discussed the overall P&C industry underwriting projections. “We forecast personal lines to improve each year from 2023 through 2025, but still lag behind strong underwriting profitability in commercial lines,” he said. He also noted that the improvements are expected to result in “the overall P&C industry returning to a small underwriting profit in 2025.” Looking at personal auto, Porfilio forecast premium growth of 11.0% in 2023 as rate increases start to exceed loss trends, allowing the 2023 net combined ratio to improve incrementally to 110.5 from 112.2 in 2022. “Costlier replacement parts and low inventories are contributing to current and future loss pressures,” he said, adding, “unless replacement cost begins to decrease materially – which is not currently forecast - we project personal auto to remain at an underwriting loss through 2025.” January 2024

For homeowners, Porfilio noted that 2023H1 catastrophe losses were elevated and that approximately 70% of those losses were in the homeowners line. “For 2023, the net combined ratio is forecast at 110.9, 6.2 pts worse than 2022.” Jason B. Kurtz, FCAS, MAAA, a principal and consulting actuary at Milliman – a premier global consulting and actuarial firm – said that commercial property, general liability, and workers’ compensation continued to be bright spots for the industry, while commercial auto continues to be troubled. For commercial property, the 2023 net combined ratio is forecast at 91.6, nearly identical to 2022. “Hard market conditions continue into 2023, most notably in catastropheprone regions,” Kurtz said. “We expect premium growth to moderate through 2025.” For commercial auto, underwriting losses continue, with 2023H1 direct incurred loss ratios at the highest in at least 15 years. “There will be a continued need for rate to improve the combined ratio results,” said Kurtz, adding, “We are forecasting the 2023 combined ratio at 106.7, 2024 at 103.4 and 2025 at 102.7. These combined ratios lead to a continued need for rate and that should help drive premium growth going forward. Inflation and prior year adverse development continue to weigh on this line and continue to bear watching moving ahead.” Looking at general liability, Kurtz noted that the 2023 net combined ratio forecast of 96.9 falls between 2021 and 2022 actual results. He also said that premium growth is forecast to moderate in 2023-2025 as a result of the recent improved underwriting performance and lower GDP growth expectations. Turning to workers’ compensation, Kurtz noted that the 2023 net combined ratio forecast of 90.6 continues the string of underwriting profits. “Favorable results are forecast to continue through 2025, with premium growth 2.7% for 2023, 1.9% for 2024 and 1.9% for 2025.” Donna Glenn, Chief Actuary at the National Council on Compensation Insurance (NCCI), shared preliminary numbers for 2023 on workers’ compensation (WC) premium, payroll, and underwriting profitability. She noted that premium increased 11% in 2022, returning to near the pre-pandemic levels of 2019. Glenn also indicated that the 2023 combined ratio should be very similar to 2022, resulting in a full decade of WC calendar year combined ratios under 100. “All in all, the results for the first half of 2023 are remarkably stable,” she said. “I want to be clear - we continue to be vigilant in monitoring results and trends.” To view the press release in full, go to https://www.iii.org.

insight

How to Move from BURNOUT to

FULLY CHARGED in Life and Work

By Kathy Caprino

According to recent studies, burnout is on the rise dramatically, and looking only at how much we are working is not providing all the key answers we need to address the critical questions of what causes this increasing physical and emotional challenge. More than 50% of managers studied have indicated feeling burnout, and other reports have shown that Gen Z, millennials and women are the most stressed.

Here’s what Sangwan shares on how to overcome burnout in effective and longer-lasting ways:

In my work as a career and leadership coach, and formerly as a therapist, as well as in my prior corporate life, I have witnessed countless examples of people experiencing extreme stress and burnout in ways (and with symptoms) that they sometimes consciously understood, but more often than not, were not fully clear to them.

Neha Sangwan: Operating with a faster is better mentality and constantly aspiring to do more with less, our stress levels have been snowballing for decades. We have developed many time-tested strategies that were getting us by—but the pandemic stopped us in our tracks. Stripped of our coping mechanisms, we fully experienced our emotions and also had the time and space to reflect on whether we truly liked the jobs, relationships, and life we had chosen. Many of us were just going through the motions. As we sat in discomfort, we realized that something had to change.

To learn more about what contributes to burnout and to learn key steps to help us address chronic stress and recharge ourselves and our lives and careers, I caught up with Dr. Neha Sangwan, a recognized expert on this topic. Neha Sangwan, MD, is CEO and founder of Intuitive Intelligence, and an internal medicine physician, international speaker and corporate communication expert. Her private practice and corporate consulting focuses on empowering individuals, organizational leaders, and their teams with the tools for clear, effective communication. She addresses the root causes of stress, miscommunication, and interpersonal conflict, often healing chronic conditions such as headaches, insomnia, anxiety, depression, and burnout. She consults with organizations such as the American Heart Association, American Express, Kaiser Permanente, and Google, and has shared her journey on the stages of TEDx Berkeley, TEDx San Luis Obispo, and TEDx Babson. She is the author of TalkRx: Five Steps to Honest Conversations that Create Connection, Health and Happiness and the new book, Powered by Me: From Burned Out to Fully Charged at Work and in Life. 20

Insight

Kathy Caprino: Neha, as a physician and an expert in this area, what are you seeing today as a global epidemic of burnout/mental health? Why did you write this book now, and what are the key issues you address?

I wrote the book Powered by Me: From Burned Out to Fully Charged at Work and in Life because it’s time we address the root cause of our stress and heal. Rather than offering people some time off and a cocktail of medications and then sending them back in the ring for round two at their job (with no new skills or understanding of how they got there), I wanted to demystify burnout and personalize the healing to each individual. With anxiety, depression and burnout on the rise, it was clear that the world needs root-cause solutions. Caprino: You have a very personal and powerful story of burnout. Can you share that and the path it made possible for you?

January 2024

Sangwan: I am the middle daughter of immigrants and sought harmony and peace in the household. My father longed for me to become an engineer (just like him) and my mother hoped I would fulfill her unmet dreams by becoming a physician.

For chronic conditions or prolonged stress that result in burnout, traditional physicians have a toolkit to avert you falling over a cliff by giving you paid time off and a cocktail of medications that can help you with anxiety, depression or sleep.

As soon as I realized these professions were not mutually exclusive, my people-pleasing nature led me to follow a path that appeased not only my parents but also the Indian community. So, I became a mechanical and biomedical engineer, worked as a manufacturing engineer at Motorola, and I continued on to become an internal medicine physician.

The problem is that 10 days or a month later, you get sent back in the ring for round two with no new understanding of how you got there or how to do it differently. As a physician wanting to get to the root cause of my own burnout, I was surprised to discover this huge gap in our ability to help our patients heal.

In June 2004, I was caring for 18 hospitalized patients when I turned to a nurse and asked “Nina, could you please give 40 mEq of IV potassium to the gentleman in room #636?”

Caprino: In your book, you discuss the core relationship between boundaries and burnout. Can you share more about that?

She responded “Dr. Sangwan, are you okay?”

Sangwan: Boundaries serve an important function: helping us navigate safety, growth and connection in our lives. In our childhood, we learn boundaries from observing family interactions and noticing what connects us or distances us from others. Boundaries can be a way to protect ourselves and are often where we learn about vulnerability and what’s safe (or not safe). How well your boundaries match your relationships, job and environment will determine how you feel in them.

That was my first indication I might not be. I replied, “Yeah, why?” “Because that’s the fourth time you’ve asked me that same question in under five minutes and I’ve answered you every time.” Following my consultation with a psychiatry colleague, I left with two prescriptions - one for stress-related medical leave and another for Prozac. During my time off I learned that stress causes or exacerbates more than 80% of all illnesses. This gave me powerful insight into how to heal - by getting to the root of my own and my patients’ stress. Caprino: We seek doctors’ help all the time for symptoms of ailments that are stemming from burnout, but I and many others have found that the type of “help” received from doctors is often unhelpful and doesn’t get at key root causes, so our challenges continue. As a personal example, I suffered for four straight years with chronic, serious infections of my trachea, and I went to a number of doctors all of whom couldn’t identify a cause (and didn’t try) but simply plied me with antibiotics that wreaked havoc on my body. But ever since the day I left my terribly stressful corporate life behind (and launched my own business), I’ve never had a tracheal infection again. I know beyond doubt that it was extreme stress, exhaustion and a host of other emotional factors that contributed to my chronic illness. Can you explain what doctors DO and DON’T know about burnout? Sangwan: Traditional medicine is very useful for crisis care. If you get into an accident and break your leg, need surgery or are having an acute illness, our Western medical system is the perfect place to go for antibiotics or acute pain relief.

To evaluate where you are on the spectrum from burned out to fully charged, determine whether you’re experiencing a net gain or net drain of energy on a physical, mental, emotional, social or spiritual level. As life changes, boundaries that once served you can now be too tight or too porous. Wherever you discover a net drain of energy, that’s the right place to consider adjusting your boundaries. If you’re feeling exhausted, it may require a mindset shift from what your education, professional training and cultural norms may have taught you, in order to draw healthier boundaries around your own physical health, and to get more rest and prioritize good nutrition.

continued...

“...stress causes or exacerbates more than 80% of all illnesses.”

In 1994-1998, when I was a medical student at SUNY Buffalo, I didn’t learn about burnout. My medical training was about pushing through my body, not partnering with it. My education focused on the anatomy of our bodies, the pathophysiology of disease, and drugs to relieve symptoms. These are often helpful short-term to stop a patient’s symptoms or discomfort, but the bigger question remains what’s the root cause of my ailment and how can I best heal?

January 2024

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Trusted Choice®

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Caprino: Where does conflict come in? What are the longterm consequences of avoiding or mismanaging conflict? Sangwan: Conflict arises when we go against what we want or value in order to please another person or fit in with a group. When interpersonal conflict arises between two people and they ignore it, they may get temporary relief, but the conflict doesn’t go away. In fact, most often the conflict festers and creates distance in their relationship. And the most interesting part is how conflict changes location - from being an interpersonal conflict to an internal one. When this occurs, the person who didn’t speak up starts beating themselves up for not having the courage to address the issue. This often results in their frustration surfacing at an inopportune moment. By avoiding conflict in the moment, you can escape temporary discomfort, but this choice often sacrifices the quality of your long-term relationship. When you’re willing to experience the short-term dip of discomfort that comes with addressing conflict, you gain the opportunity to have a more authentic and aligned relationship and grow together in the future. Caprino: Finally, what are three instrumental steps we can take today to help us start healing from and overcoming burnout today? Sangwan: I’d suggest these:

Assess: Know Where You Are To figure out where you are on the spectrum from burned out to fully charged, you can answer a few questions to identify where you’re experiencing a net gain or net drain of energy on a physical, mental, emotional, social and spiritual level. Here are some key questions.

Listen: Tune In To Your Body’s Unique Language Learn how to interpret the unique physical signals (e.g. heart racing, throat constriction, muscles clenching, stomach turning, etc.) that your body is sending you. Check out this body map to help.* (*Warning: Please get any physical symptoms checked out by a medical professional first, then consider other potential causes.) Release: Empower Yourself Learn the powerful connection between your breath and your emotions. Just by deepening your breath, you will learn a powerful way to facilitate challenging emotions moving through you. There are many ways to do this (soft belly breathing, autogenics, guided imagery, to name a few). Here’s a link for you to experience them and discover which ones resonate most. Overall, remember, burnout is not a personal failure - it’s a wakeup call - telling you it’s time to up level the way you’re living and being in the world.

This article originally appeared at https://kathycaprino. com/2023/11/how-to-move-from-burnout-to-fully-charged-inlife-and-work/ Kathy Caprino is a global career and leadership coach, executive and leadership trainer, host of Finding Brave podcast, and author of The Most Powerful You. Visit kathycaprino.com for more information.

Thank You! Agents

We appreciate your continued support and wish you all the very best for the new year.

WWW.GUARD.COM January 2024

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What Employers Ne

PAID LEAVE FO and

NEW PAY TRAN Illinois Paid Leave for All Workers Takes Effect January 1st City of Chicago plans expanded leave ordinance On January 1, 2024, a new Illinois law mandating paid leave for all workers will take effect. All employers will need to ensure that their existing policies are in compliance, consider procedures for recordkeeping, and develop additional handbook policies may to help manage staffing issues while employees are away. According to the Illinois Department of Labor, workers can begin using their earned time off on March 31, 2024 or 90 days after they begin employment with a business. Employers that currently offer a minimum of 40 hours of paid time off that can be used for any purpose need not modify their existing policies. However, paid leave must be provided to part-time employees on a pro-rata basis of one hour for every 40 hours worked, which may be new for some businesses. The leave must be available to employees for any purpose. Because of that, existing policies and procedures may need to be modified as employers will not be permitted to request a reason or require documentation for employees to use the mandated paid leave. Employers may, however, develop a written policy that requires employees to provide 7 days’ notice for any foreseeable absence such as a planned vacation. When the reason is unforeseeable, employees need only give as much notice as is practicable. To address staffing and coverage issues that may arise due to unplanned absences with little notice, employers may need to update their call-in procedures. Employers must also keep a record of the time off accruals for three years and provide a balance to employees upon request.

Insight

The intent of the law is to protect employee wages and provide relief for employees who need to take time off for mental wellbeing or to handle health or family issues. The law has been constructed to allow up to a full week of paid leave to be taken at one time. With this in mind, employees earning the 40 hours of leave on an accrual basis must be allowed to carry over leave. This leave does not need to be paid out upon separation of employment. Employers may opt to front-load the 40 hours of leave for full-time exempt employees and if they choose to allow the 40 hours upfront, carryover is not required. Previously, the City of Chicago had implemented an ordinance requiring five days of paid leave for any reason. The Chicago ordinance did meet the requirements of the new Paid Leave for All Workers Act. However, on November 9, 2023, the City of Chicago passed a new ordinance requiring five days of paid sick leave in addition to the five days of paid leave for any reason. Implementation of the Chicago ordinance has been delayed in order to consider protections for small businesses. For more information, including FAQ, Proposed Rules, and Webinars hosted by the IL Department of Labor, visit: https:// labor.illinois.gov/laws-rules/paidleave.html.

Jennifer Jacobs, SHRM-CP, is Big I Illinois Director of Human Resources and liaison to the Board of Directors.

January 2024

Need to Know About

FOR ALL WORKERS

ANSPARENCY REQUIREMENTS By Jennifer Jacobs

New Pay Transparency Requirements on the Horizon Illinois continues to mandate benefits, creating more enticing opportunities and workplace protections for employees and at the same time, taking away what once was a competitive advantage for employers who offered cutting-edge benefits. Paid leave for all workers takes effect January 1, 2024 and on the horizon in 2025 will be additional pay transparency required by a new amendment to the Illinois Equal Pay Act. Under the new provisions, employers with more than 15 employees must disclose the pay scale and benefits in any job posting. Additionally, employers will be required to notify internal employees of an opportunity for promotion within 14 days of posting a position externally. Providing pay scales when advertising open positions has been trending over the last few years. Employment platform Indeed has been promoting the inclusion of salary information for some time and places such a value on this information that they will use their algorithms to provide a “salary estimate” if employers fail to post a salary range in the job description. While many companies have concerns over job-hopping or having to explain their reasoning for salaries with each individual employee when a salary range is published, posting your company’s pay scale for a position does minimize the amount of time wasted on vetting candidates who are outside of your desired salary range.

ILLINOIS Solution Center

Here are a few things your business can do to prepare for the 2024 salary range posting requirements: • Conduct a review of your compensation plan. HR consulting firms, like Big I Hires partner The Workplace Advisors, can provide assistance with benchmarking, market pricing, and developing an overall strategy for effective compensation plans. • Review and document all benefits your business offers to employees. Providing the link to an online source or listing of benefits is one way to comply with the requirement. • Establish a review process to evaluate and update your compensation and benefits. • If you utilize a third- party recruiting solution, ensure that their processes and practices will be in compliance with Illinois requirements. Watch for more on compensation strategies in future editions of Insight.

Solutions and Resources for Your Agency

Time Off Calculator

Wage Scenario Calculator

Paid Leave Sample Policies

Compensation Tips & Articles

iiaofil.org/solutioncenter January 2024

insight

Associate Member News Thank you to our Associate Members.

Diamond Level

Platinum Level

Gold Level

Arlington/Roe Blue Cross/Blue Shield of IL Pekin Insurance

Progressive Surplus Line Association of Illinois

Silver Level Imperial PFS IMT Insurance Keystone Insurance Group, Inc. SECURA Insurance West Bend Mutual Insurance Co.

Bronze Level A. J. Wayne & Associates AAA Insurance AMERISAFE AmTrust North America Auto-Owners Insurance Co. Badger Mutual Insurance Company Berkley Aspire Berkley Management Protection Berkley Small Business Solutions Berkshire Hathaway Guard Insurance Companies BluSky Restoration Contractors BriteCo Jewelry & Watch Insurance Central Illinois Mutual Insurance Company Chubb Columbia Insurance Group Continental Western Group Cornerstone National Insurance Company Cowbell Cyber Donald Gaddis Company, Inc. Donegal Insurance Group EMC Insurance Encova Insurance Erie Insurance Group Foremost Choice Property & Casualty Forreston Mutual Insurance Company Frankenmuth Insurance Grinnell Mutual Reinsurance Company IA Valuations Illinois Mine Subsidence Ins. Fund 26

Insight

Illinois Public Risk Fund Indiana Farmers Insurance Insurance Program Managers Group J M Wilson Liberty Mutual/Safeco Insurance Madison Mutual Insurance Company Main Street America Insurance Maximum Independent Brokerage, LLC Mercury Insurance Group Method Workers Comp Midwest Insurance Company Nationwide NHRMA Mutual Workers’ Compensation Novatae Risk Group Previsor Insurance & Missouri Employers Mutual PuroClean Disaster Services Rhodian Group Rockford Mutual Insurance Company ServiceMaster DSI SERVPRO of Gurnee Society Insurance SPRISKA - Specialty Risk of America Steadily Travelers UFG Insurance Universal Property & Casualty Utica National Insurance Group W. A. Schickedanz Agency, Inc./Interstate Risk Placement Western National Insurance Westfield January 2024

Agency Member News Big I Illinois Member Bennie Jones Receives NAAIA Agent & Broker Award

The National African American Insurance Association (NAAIA) announced the association’s 2023 Leadership Awards, recognizing excellence and leadership, at their annual event in October. Bennie Jones of Risk Management Solutions of America, Inc. in Chicago was selected as the recipient of the NAAIA Agent and Broker Leader Award. This award recognizes an African American Insurance Agent or Broker who has demonstrated business success, significant and positive impact upon the industry and the community served. He/she may have also demonstrated significant contributions to helping others to succeed and/or to enter and excel in their industry career.

Don was a lifelong and active member of Trinity Lutheran Church. He served on the First National Bank of Arenzville board of directors for nearly 50 years, and also served on the Arenzville Town Board, Passavant Area Hospital board of directors, and was president of the Jacksonville Country Club board. He enjoyed watching his boys play football, spending time in Florida, Ludington, Michigan, and the Lake of the Ozarks. The Big I Illinois Board of Directors and Staff extend our condolences to the friends, family, and co-workers of Don Wessler.

“Bennie has demonstrated leadership, both in his community and in the industry when it comes to developing and recruiting diverse talent,” said Phil Lackman, CEO. “Big I Illinois is proud to have had Bennie serve on our Executive Committee and we are grateful for his continued guidance in the association’s own D&I initiatives.” Congratulations to Bennie Jones!

In Memoriam... Don Wessler, 91, of Arenzville, passed away on December 8, 2023 in Jacksonville, IL. He was born August 12, 1932, in Jacksonville, the son of Edward “Pete” and Marcella Zulauf Wessler. Don married Shirlee A. Rowden on August 28, 1953, in Ferguson, Missouri, and she preceded him in death on December 4, 2022. Don is survived by two sons, Jeff (Gale) Wessler of Arenzville and Jay (Shelley) Wessler of Concord; five grandchildren, 16 great-grandchildren, and several nieces and nephews. Don graduated from Arenzville High School in 1950 and met Shirlee while attending CulverStockton College on a basketball scholarship. Following his college graduation in 1954, Don served in the United States Army for two years stationed at Fort Dietrich, Maryland. Following his discharge, Don went to work for A.C. Hart in Arenzville and later formed Wessler Bros. Agency, which continues as a family-owned and operated business today.

January 2024

2023 JM Wilson Insurance Insight OUTLINES-v2.indd 3

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Association Update

ILLINOIS

Enhancing Our Knowledge Mark Kuchar

Mark attended the annual two-day Federal Income Tax update offered by the University of Illinois. The hours counted not only for his IRS designation, but toward his insurance license CE as well. In addition to being Big I Illinois CFO, he is also a tax preparer. Mark has been doing taxes since 1985 and is always ready to assist you with individual tax questions.

Tami Hubbell

Tami attended the December James K. Ruble seminar as part of her CIC designation update. She learned from Bobby Shomo on property coverage traps and catastrophic loss. Keith Wilts presented on commercial property and business and personal auto.

Staff Holiday Outing Ax Throwing

Shannon Churchill

Shannon Churchill attended Association Forum’s Holiday Showcase 2023 Incubate, where she spent two days learning with other association peers on topics including cyberattacks, association growth, leveraging technology and data, AI, innovation, and more. Shannon serves as a member of the ISAE Board of Directors, a chapter of Association Forum, and says “this is a great opportunity to interact with other association professionals throughout the state. Discussing trends, challenges and meeting with industry partners during the tradeshow is beneficial so Big I Illinois can continue to bring forward-thinking trends, and valuable resources to the membership.”

Big I Illinois staff has been hosting monthly virtual town meetings over the past few months. Topics have included Navigating the Hard Market, Market Access options, the state of the industry, and agency marketing made easy. Sessions were recorded and are available in CONNECT. These virtual meetings continue in 2024, starting with Resources to Hire, Retain, and Compensate Your Staff on January 22. The next several months will include topics on the economy, in-depth information on legislative events, surplis lines, and many more! Visit CONNECT for details and to sign up for these free sessions.

Insight

January 2024

Big I Illinois News

Welcome New Big I Illinois Members! Member Agency Babcock & Associates, Inc. Glen Carbon, IL Harry Rice Insurance Agency Lawrenceville, IL Zumstein Insurance Agency Canton, IL

For information regarding Big I Illinois membership or company sponsorship, contact Lori Mahorney, Director of Membership Services, at (217) 321-3008, lmahorney@ilbigi.org.

January 2024

insight

Classifieds INDEPENDENT INSURANCE AGENCIES WANTED

17. We are an Independent family-owned agency located in the Chicago area. We are looking to expand through growth and acquisition. If you have a small to medium sized agency and are looking to sell, call or send us a message. We are strictly looking for Personal Lines and Small Commercial accounts with preferred companies.

GALO Insurance Agency, Inc (847) 832-0888 steve@galoagency.com

AGENCY OR BOOK OF BUSINESS FOR SALE

34. Small established agency in southern Illinois for sale. Can be sold as just the book of business or the physical location. The book of business includes personal and commercial P&C as well as individual and group medical. The physical location includes the building as well as furniture.

For details, contact Tami Hubbell at the IIA of IL: thubbell@iiaofil.org or (217) 321-3016 and reference blind ad #34.

AGENCY WANTED

20. Since 2004, Central Illinois Agents Group LLC has been providing independent agents with a variety of markets with contingency opportunities. Agents have availability to several markets that they may not be able to sustain or maintain on their own. We have markets for personal, commercial, agricultural and crop insurance lines. Let us help you get to the next level.

Visit www.ciagonline.com for contact information.

The next step in your

insurance career is a few clicks away.

INDUSTRY JOB BOARD LISTING iiaofil.org/careers 30

Insight

LOOKING FOR AN EXIT STRATEGY?

23. Are you looking for an exit strategy while still continuing to produce for a few years or are you ready to sell now? Paczolt Insurance would like to talk with you! We are an independent agency dating back to the 1970s that is located in the western suburbs. Our focus is on mid-to-small commercial accounts and personal lines. Our companies include EMC, Badger Mutual, Safeco, Progressive, and Travelers. We have the flexibility and capital to get a deal done. Contact:

Susan Troppito Paczolt Insurance susan@piaigroup.com (708) 215-5202

AGENCY/AGENTS/PRODUCERS WANTED

02. Forest Park/Oak Park agency for over 60 years, will meet your needs by providing space, markets, marketing & sales support, automation, merging with or purchasing your agency. Perpetuation/ Succession Plans, Buy-Sell Agreements also available. We have experienced, educated and dedicated staff for you and your clients. Have access to our numerous companies, office services and many other resources. Retain ownership in your book with contingency. Please look closely at us- we are an agency you want to do business with! We’ve done it before, we know howwe make it easy! Visit our website at forestagency.com/ agents.html, or call for a confidential discussion and a list of Agency benefits. Dan Browne will provide an agency evaluation/ appraisal at little cost to you. Please call:

Dan Browne or Cathy Hall Forest Insurance (708) 383-9000 www.forestinsured.com/mergers-acquisitions

OPPORTUNITIES/SPACE AVAILABLE/ RETAIN OWNERSHIP

13. We are a 100 year old Northbrook agency looking to discuss any mutually beneficial opportunity. Our producers, mergers, clusters and agency purchases receive 50% commissions on new and renewal business without any expenses. We can provide: office space, phones, agency management system, service renewals and changes. The companies we represent are: Badger Mutual, Employers Mutual, General Casualty, Guide One, Hartford, Kemper, Progressive, Rockford Mutual, Safeco, State Auto, Travelers and Met Life. Contact:

Nancy Solomon Martini, Miller & Schloss, Inc. (847) 291-1313 Ron@martini-miller.com

January 2024

Commercial | Farm | Agribusiness | Specialty

Betsy V. Commercial Lines Underwriter

Brian R. Farm Lines Underwriter

Jamie V. Specialty Lines Underwriter

Matthew B. Illinois Sales Manager

Hear from our experts. Want to learn more about what SECURA has to offer? Scan the QR code or visit secura.net/IL-agents for more information about the SECURA team.

Interested in building a relationship? Contact us at secura.net/IL-agents.

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MORE TO LOVE FROM APPLIED.® Workers’ Compensation • Transportation – Liability & Physical Damage • Construction Liability • Fine Art & Collections Homeowners – Including California Wildfire & Gulf Region Hurricane • Structured Insurance • Financial Lines • Surety Aviation & Space • Environmental & Pollution Liability • Real Estate • Reinsurance • Warranty & Contractual Liability Infrastructure • Entertainment & Sports

...And More To Come.

It Pays To Get A Quote From Applied.® Learn more at auw.com/MoreToLove or call sales (877) 234-4450 ©2023 Applied Underwriters, Inc. Rated A- (Excellent) by AM Best. Insurance plans protected U.S. Patent No. 7,908,157.

e-Insight - January 2024

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e-Insight - January 2024

What Employers Need PAID LEAVE FOR NEW PAY TRANSPARENCY and