Let the Big Dogs Eat. Join top business and community leaders at top-tier courses across the US in the #1 Charity Event In Golf.™
Make a Difference. Earn Rewards. Compete as a foursome or sponsor a local event for a chance to earn rewards, including a trip to the Applied Underwriters Invitational National Finals at Big Cedar Lodge.
Contact an Applied rep at 877-234-4450 or email invitational@auw.com to get started.
Follow us for a shot at even more rewards. Applied Underwriters Invitational® | #BigDogGolf invitational.com
Spotlight: Why Some Transportation Risks Could Find Options With Captives: Risky Future
Spotlight: Inflation, Rising Claim Costs, Riskier Business Reasons Cited for Rate Increases in A&E Market: Survey
Special Report: Today’s Commercial Property Market in ‘Better Place’
Special Report: An Insurance Journalist’s Perspective on Southern California’s Wildfires
Closer Look: Understanding the Risks and Coverages in Condo Association D&O
Workforce Wellbeing
Rising medical costs and economic uncertainty are stressing out today’s workforce.
That’s according to MetLife’s 2025 U.S. Employee Benefit Trends Study which revealed a decline in employees’ holistic health (-5%), productivity (-5%), and engagement (-7%) across the board and found that a majority of employees are worried about finances.
Rising medical costs (77%) and economic uncertainty (68%) were listed as employees’ primary source of stress amid social and economic turmoil, the survey said. Employees are turning to their employers for stability and support, according to MetLife’s EBTS. Some 81% of employees reported holding their employer accountable for building trust at work, while employees overall are 1.5x more likely to trust their employer than other institutions.
That’s a “great responsibility” for any employer. Building trust comes with a significant opportunity to improve workplace outcomes, according to MetLife’s study, which noted that trust, when combined with employee care, has a profound impact on employees.
“Employees who trust and feel cared for by their employer are more likely to feel holistically healthy (3.8x), engaged (2.4x), and more productive (1.9x) than those with either or neither,” the study said.
MetLife recommends that employers can build trust by fostering a supportive culture and promoting positive benefits experiences.
Workplaces that promote recognition of achievements and hold a culture with transparent leadership and empathy are more likely to foster trust between employees and employers, MetLife’s report said. Combining the right mix of benefits with a positive utilization experience is also highly correlated to increased trust and improved outcomes, the study said.
According to MetLife’s study, employees who use and have positive experiences with their employee benefits are:
• 2.4x more likely to feel holistically healthy.
• 2.1x more likely to trust that their employer will protect them in economic downturns.
• 1.8x more likely to trust their employer’s leadership.
‘Employees who trust and feel cared for by their employer are more likely to feel holistically healthy, engaged, and more productive than those with either
or neither.’
“Our research continues to validate that employers who demonstrate care for their employees see improved workplace health and outcomes,” said Todd Katz, head of Group Benefits at MetLife, when releasing the survey report. “What we’ve newly uncovered this year, given macro challenges, is an opportunity to fortify care by fostering trust.” Employers that focus on prioritizing benefit experiences and culture can effectively build high-trust and high-performing workplaces, he added.
To view MetLife’s 2025 Employee Benefit Trends Study, visit www.metlife.com/ebts2025.
| mwells@wellsmedia.com
Officer
Chief
Carlson | jcarlson@insurancejournal.com
ADMINISTRATION / CIRCULATION
Chief Financial Officer Terry Freeburg | tfreeburg@wellsmedia.com
Circulation Manager Elizabeth Duffy | eduffy@wellsmedia.com
Staff Accountant Sarah Kersbergen | skersbergen@wellsmedia.com
EDITORIAL
V.P. of Content
Andrea Wells | awells@insurancejournal.com
Executive Editor Emeritus
Andrew Simpson | asimpson@wellsmedia.com
National Editor
Chad Hemenway | chemenway@insurancejournal.com
Southeast Editor
William Rabb | wrabb@insurancejournal.com
South Central Editor/Midwest Editor Ezra Amacher | eamacher@insurancejournal.com
West Editor Don Jergler | djergler@insurancejournal.com
International Editor L.S. Howard | lhoward@insurancejournal.com
Content Editor Allen Laman | alaman@wellsmedia.com
Assistant Editors
Jahna Jacobson | jjacobson@insurancejournal.com
Kimberly Tallon | ktallon@carriermanagement.com
Columnists & Contributors
Contributors: Dawn Bennett-Alexander, Russ Banham, Denise Johnson, James Felton Keith, Chris Lack, Francisco Lopes, Mike Zdrojewski
Columnists: Chris Burand, Mary Newgard, Bill Wilson
Marketing Administrator Alberto Vazquez | avazquez@insurancejournal.com
Marketing Director Derence Walk | dwalk@insurancejournal.com
DESIGN / WEB / VIDEO
V.P. of Design
Guy Boccia | gboccia@insurancejournal.com
Web Team Lead
Josh Whitlow | jwhitlow@insurancejournal.com
Ad Ops Specialist
Jeff Cardrant | jcardrant@insurancejournal.com
Web Developer Terrance Woest | twoest@wellsmedia.com
Web Developer
Jason Chipp | jchipp@wellsmedia.com
Digital Content Manager
Ashley Cochrane | acochrane@insurancejournal.com
Videographer/Editor
Ashley Waldrop | awaldrop@insurancejournal.com
ACADEMY OF INSURANCE
Director Patrick Wraight | pwraight@ijacademy.com
Online Training Coordinator George Jack | gjack@ijacademy.com
Every day, we create unique risk solutions for unique businesses.
When it comes to insurance for midsize and large businesses, we get it. We do it for all kinds of industries, tailoring our policy solutions from traditional to specialized coverage. With our experience in underwriting, innovative service, and claims, we are your one-stop shop.
Connect with your underwriter at The Hartford.
News & Markets
States’ AI-Related Legislation Aimed at Insurance Is ‘Unfounded’, Says NAMIC
By Chad Hemenway
Policy discussions on the use of artificial intelligence in insurance are “unfounded” and “detrimental to policyholders,” according to an analysis from the National Association of Mutual Insurance Companies (NAMIC).
The use of AI in insurance underwriting and rate making has led to concern from some regulators, advocates, and policymakers over whether AI would lead to proxy discrimination, an algorithmic bias,
and eventual changes to the affordability and availability of insurance products in certain areas or for certain classes.
NAMIC said 18 states are currently debating “flawed” AI-related legislation.
Guidance from the National Association of Insurance Commissioners (NAIC) has added to the “nebulous concept of algorithmic bias,” NAMIC said.
“Contrary to what may be perceived as well-intentioned social efforts by regulators, policyholders will be harmed by growing efforts to elevate
concepts of ‘fairness’ divorced from actuarial science,” wrote Lindsey Klarkowski, NAMIC’s policy vice president in data science, AI/[machine learning], and cybersecurity. This will result in “an inevitable break of the insurance product at its core,” she added.
Klarkowski authored the report, meant to dispel five myths about the use of AI and Big Data in the insurance industry.
“In setting rules of the road, policymakers must recognize that insurance is distinct in function and pricing
from many other consumer products,” Klarkowski added in a statement. “Insurance classifies based on risk, and insurance law requires those risk classifications to be actuarially sound and not unfairly discriminatory.”
Any regulation aimed at the industry’s use of AI in pricing has to be unique to the industry, and any restriction on an insurer’s ability to price a policyholder’s risk will lead to more availability and affordability issues, NAMIC concluded, adding that the notion that AI will lead to
US P/C Insurance Industry Income Tops $100B in 2024: Verisk, APCIA
The U.S. property/casualty insurance industry reported its first full-year underwriting gain in four years, fueling a jump in net income to $170 billion, according to a joint report from Verisk and The American Property Casualty Insurance Association (APCIA).
The global data analytics and technology provider and insurance company trade association noted that the net income figure included $70 billion from capital gains realized by insurers in Berkshire Hathaway group. Excluding that hefty investment gain for one enterprise, full-year 2024 net income is estimated to be $100 billion for the industry overall.
Anticipating the $100 billionplus figure last month, S&P GMI reported that this marked the first time in a calendar year that the industry posted net income over $100 billion. Both the S&P GMI and the Verisk/APCIA reports highlight a swing in underwriting results—moving from a net underwriting loss of more than $20 billion in 2023 to an aggregate industry net underwriting profit of more than $20 billion in 2024. Specifically, the Verisk/APCIA report puts the 2024 underwriting gain at $24.8 billion, compared to a $21.8 billion underwriting loss for 2023.
$851 billion in 2023. Earned premiums grew 9.8% to $895 billion.
The combined ratio improved to 96.4 in 2024, down more than 5 points from the 101.6 aggregate industry figure recorded for 2023.
of late-season storms, drove fourth-quarter catastrophe claims to surge 113% higher than the same period in 2023, highlighting both the volatility and financial strain insurers face,” he said.
“While many of the loss drivers of 2023 persisted into 2024, the industry’s ability to bring premiums closer to the requisite levels has led to an underwriting gain for the first time since 2020,” said Saurabh Khemka, co-president of underwriting solutions at Verisk, in a statement.
Net written premiums overall jumped 8.7% to $926 billion in 2024, compared to
Khemka noted necessary premium adjustments in personal auto, in particular, drove improved results for personal lines. “While commercial auto premiums followed a similar trend, its growth rate did not match the levels seen in 2023,” he said.
Among challenges that continue to fuel losses for the industry are property catastrophes, Khemka said, noting that last year marked the second worst year for catastrophic losses since 1950.
“Most notably, Hurricane Milton, along with a series
Robert Gordon, senior vice president, policy, research, and international at APCIA, took note of continuing catastrophes in 2025. “By this time next year, homeowners insurers will have likely reported seven consecutive years of net underwriting losses, including record insured losses caused by the California wildfires this January,” he said.
In spite of the catastrophe losses in 2024, the fourfold jump in net income (including the investment gains recorded for Berkshire’s National Indemnity, National Fire and Marine, and Columbia Insurance Company) helped push policyholders surplus up to nearly $1.1 billion.
bias or disparate impact is in conflict with the risk-based foundation of insurance.
“The data insurers use for risk-based pricing is data that is actuarially sound and correlated with risk and does not include nor use certain protected class attributes,” Klarkowski wrote. “To argue that insurer use of data, algorithms, or AI in risk-based pricing is biased or skewed would be to say that the actuarially sound data is not representative of the risk the policyholder represents, which insurance laws already prohibit.”
Separately, if a disparate impact standard were applied
to insurance, the industry’s pricing approach would no longer be based on underlying
insurance costs and result in rates that are unfairly discriminatory. The industry already
adheres to the legal standard of unfair discrimination, NAMIC said.
AM Best: US P/C Industry in 2024 Posts First Underwriting Profit in Four Years
By Chad Hemenway
For the first time in four years, the U.S. property/ casualty industry will finish a year with an underwriting profit.
AM Best in a “First Look” at U.S. P/C financial results said the industry left 2024 with a $22.9 billion net underwriting
gain. The industry booked an underwriting loss of $21.3 billion in 2023.
The industry combined ratio for 2024 was 96.6 compared to 101.6 the year prior.
Industry policyholder surplus grew about 7% in 2024 to $1.1 trillion.
Data in the special report are provided by companies that
submitted year-end statutory statements as of March 11, AM Best said. The companies account for about 97% of industry net premiums and 96% of policyholder surplus, the rating agency added.
In a larger report on the U.S. P/C segment released in February, which included an estimate of underwriting
income for 2024, AM Best said the industry would take an underwriting loss of $2.6 billion—still an improvement from the loss recorded in 2023 but far from the agency’s early insight now of a nearly $23 billion underwriting profit. AM Best once again pointed to personal lines as the primary reason for the turnaround in underwriting results.
AM Best has said it expects the industry in 2025 to “build on its solid rebound” with improved underwriting and operating results, even as insurers field more losses from secondary perils and continued adverse litigation trends.
Net catastrophe losses in 2024 were about $76.3 billion compared to about $67.7 billion in 2023. AM Best said it estimates catastrophe losses added 8.7 points to the 2024 combined ratio.
News & Markets
US Property/Catastrophe Reinsurance Rates Likely to Stabilize During Midyear Renewals
By L.S. Howard
Reinsurance renewal rates continued dropping during January renewals, but U.S. property/catastrophe reinsurance pricing is likely to stabilize during the coming midyear renewals, according to a report from Moody’s Ratings.
“The upcoming midyear 2025 reinsurance renewals, which focus on the U.S., will be influenced by large U.S. catastrophe loss events over the past year—particularly Hurricanes Helene and Milton and the Los Angeles wildfires—which are likely to provide support to reinsurance pricing for U.S. exposures,” said the Moody’s report, titled “January renewal prices dip, but US catastrophe events could slow decline,” which was published on March 13.
As a result, Moody’s believes it is likely that U.S. P/C reinsurance pricing will stabilize, “supported by the potential for significant price increases for accounts that have had sizable losses over the past year.”
At the Jan. 1, 2025 renewals, there were moderate risk-adjusted pricing decreases for property coverage, said Moody’s, noting, however, that prices depended on the geographic region and whether accounts were hit by losses last year.
Despite significant global insured catastrophe losses over the past several years, “reinsurers have reported strong results as higher attachment points for P/C reinsurance improved underwriting results for reinsurers and boosted capital across the sector,” which meant there was sufficient reinsurance capacity to meet
demand, Moody’s said.
January Renewals
Typically, between 40% and 60% of a global reinsurer’s portfolio is renewed on Jan. 1, including a substantial majority of European business, Moody’s continued.
“Several European-based global reinsurers reported premium growth for reinsurance business renewed 1 January, as firms sought to deploy capital in a still-attractive pricing environment. Gross premiums written increased at Swiss Re (7.0%), SCOR (9.6%) and Hannover Re (7.6%), while Munich Re’s premium volume was down 2.4% because of underwriting actions intended to reduce business not meeting its return hurdles.”
decreased by 6.2% at the January renewals, which was the first decrease since the January 2017 renewal period that marked the end of the soft market for reinsurance.
• Commercial Directors and Officers
• Employment Practices Liability
• Excess Casualty
• Financial Institutions
• Cyber Liability
Pricing across the portfolios of these European reinsurers was generally flat, ranging from a 2.1% decrease, reported by Hannover Re, to a 2.8% overall increase, reported by Swiss Re, Moody’s said.
• Private Company Liability
“For its nonproportional business, SCOR reported the first pricing decrease (-0.8%) since the January 2017 renewals.”
For the key U.S. property catastrophe reinsurance segment, reinsurance broker Guy Carpenter reported overall pricing
Source: Guy Carpenter and Artemis.bm via Moodys’ Ratings
“Generally, pricing was largely stable in working layers—the lower levels of reinsurance used for more frequent and smaller claims. However, pricing was lower at the top end of reinsurance programs where there was plenty of capacity available for coverage of less frequent and larger claims, for which pricing remains attractive on a risk-adjusted basis.”
Casualty Business
Beyond property coverages, Moody’s said, pricing for casualty business was mixed and largely dependent on the performance of individual treaties.
European casualty was flat to down 10% for loss-free accounts and flat to up 10% for loss-impacted accounts, said Moody’s quoting reinsurance broker Gallagher Re. “In the US, general liability was down 5% to up 5% for loss-free accounts and flat to up 10% for loss-impacted accounts.”
The report noted that ceding commissions were broadly stable at the January renewals “as reinsurers held the line on payments to ceding companies given the increase in loss-cost trends due to social inflation in recent years.”
This satellite image provided by CSU/CIRA & NOAA taken 1:10 GMT on Feb. 25, 2025, shows three cyclones, from left, Alfred, Seru and Rae east of Australia in the South Pacific. (CSU/CIRA & NOAA via AP, File)
1
2
3
News & Markets
JD Power: Customers Not Happy With Carrier Property Claims Service
By Jahna Jacobson
Higher premiums and longer wait times make property owners less satisfied with their insurers.
These not-very-surprising results from J.D. Power’s 2025 U.S. Property Claims Satisfaction Study align with today’s climate of increasingly longer claim cycle times and higher costs for homeowners’ insurance.
“Customers are, in essence, paying higher prices for slower service,” said Mark Garrett, director of insurance intelligence at J.D. Power. “The average claimant does not receive final payment on a claim until 44 days after the first notice of loss, and unless insurers communicate frequently and clearly along the way, customer satisfaction suffers.”
Overall, the customer satisfaction score came in at 682 (on a 1,000 point scale).
Chubb ranks highest in property insurance claims experience with a score of 773. Amica (745) ranks second and The Hartford (725) ranks third.
Impact of Longer Waits, Higher Premiums
The average claim cycle time from filing the claim to finished repairs is now 32.4 days, and the average cycle time from first notice of loss to final payment is now more than 44 days—the longest time since 2008. Claims completed within 10 days score 762, while repairs taking more than 31 days score 595.
Half the customers surveyed experienced insurer-initiated premium increases in the past 12 months. Overall satisfaction scores are 101 points lower (629 vs 730) when insurers initiate a premium increase unrelated to having a claim than those who did not experience a premium increase.
“There were 27 catastrophic events in 2024 and 28 the year before,” Garrett said. “Homeowners insurers are currently losing roughly one nickel on every dollar of premium they collect, and with total cost of events like the California wildfires still being assessed, there seems to be no end in sight.”
How Can Insurers Improve Satisfaction Scores?
Communication can be
key to mitigating insureds’ aggravation, J.D. Power said. Overall satisfaction scores are more than twice as high (777) when customers feel it is very easy to communicate with their insurer than when it is very difficult or somewhat difficult to communicate (337). Common communication failure points include often needing to leave voicemails, needing to call with questions repeatedly, and not receiving timely follow-up emails and text messages.
Overall satisfaction is also higher among customers who use digital tools when filing a claim, submitting photos that are used in the estimate and receiving proactive updates. Among digital channels, app usage results in the highest levels of satisfaction. Eighty-seven percent of Gen Z and Millennials indicate they are comfortable managing the entire claims process digitally. Only 60% of Baby Boomers and Pre-Boomers say they are comfortable managing claims online.
Study Parameters
J.D. Power’s U.S. Property Claims Satisfaction Study was redesigned for 2025, so scores are not comparable with previous-year studies. The study measures satisfaction with the property claims experience among 5,178 homeowner insurance customers who filed a claim within the previous nine months. The study was fielded from January 2024 through December 2024.
Open more doors with Foremost ®
Foremost Insurance makes writing preferred Homeowners & Auto easy with customizable coverage, discounts, and excellent claim service. Our innovative Foremost Signature® products offers all this and more. And don’t forget about our well-rounded suite of Foremost Choice® specialty products. Let Foremost help you open more doors and close more sales.
84.8%
The percentage of surveyed cannabis users reporting they drive the same day they consume cannabis versus waiting eight or more hours. A survey of 2,000 cannabis users across eight states found nearly 1 in 5 believed their driving was worse after cannabis use; 49.6% said their driving was the same; 14.7% said a little better; and 19.4% said much better. Just 29.2% believed a police officer could detect the influence of cannabis; 46.7% did not think they could detect it; and 24.1% were unsure.
$70,000
The approximate amount former Michigan agent Brian Lietzau must pay in restitution to the estate of a now-deceased elderly client from whom Lietzau was charged with embezzling. Lietzau, the former owner of Farm Bureau-Lietzau Insurance, was also sentenced to 36 months’ probation—with six months under house arrest.
204
The number of mergers and acquisitions in the insurance industry in 2024, down from 346 in 2023. Global insurance carrier M&As slumped to a 16-year low in 2024 amid a wave of uncertainty and volatility throughout the year, Clyde & Co.’s annual Insurance Growth Report revealed. The U.S. market saw the most M&A activity during 2024 with 69 deals completed, due to increased activity in the life sector. The UK and Europe saw the largest slump in M&A activity, with a 48% drop.
$50 Million
The amount awarded to a delivery driver injured when a Starbucks drink spilled in his lap at a California drive-through. A Los Angeles County jury found for Michael Garcia, who underwent skin grafts and other procedures on his genitals after a venti-sized tea drink spilled moments after he collected it on Feb. 8, 2020. He has suffered permanent and life-changing disfigurement, according to his attorneys.
Declarations
‘Monster’
Event Inevitable
“Climate change may have been announcing its arrival. However, no ‘monster’ event occurred during 2024. Someday, any day, a truly staggering insurance loss will occur—and there is no guarantee that there will be only one per annum.”
— Warren Buffett in Berkshire Hathaway’s 2024 annual report to shareholders.
Filling the Talent Pool
“The concerns that I have tie into that birth rate discussion, but more broadly around companies as they think about succession planning and building a talent pool for the future... This perhaps paints a bit of a bleak story for the ability for the industry to create those roles going into the future.”
— Jeff Rieder, partner and head of Strategy and Technology Group Performance Benchmarking at Aon, during a jobs outlook webinar. This year saw a significant drop in the percentage of expected entry-level hires for underwriting activities—14% in January 2025, down from 21% in January 2024 and 38% in January 2023. This year, carriers say only 15% of the actuarial roles filled in the next 12 months will go to job seekers new to the actuarial profession.
Community Coverage
“Ultimately, local governments will need to reduce risk through appropriate land use, zoning, and building controls. Without this, parametric insurance might not even be available in the future.”
— Jesse Keenan, a professor at Tulane University who studies cities and climate risk, responding to the idea of high-risk California communities obtaining parametric insurance. Without proactive planning, he said, cities would basically be kicking the can down the road.
AI Underwriting
“One of the key governance controls and duties with AI technology is that it does require human oversight, so while AI could perform some underwriting stages, you would hope that there is still a human reviewing its output and sense-checking that.”
— Claire Davey, head of product innovation at Relm Insurance, headquartered in Hamilton, Bermuda, on the evolution of AI in insurance underwriting. However, she said, major AI shifts are already happening in other areas of insurance that involve more administrative tasks.
Investing in Storm Safeguards
“Unfortunately, it’s not if but when another powerful storm will take aim at Florida. This legislation is a proactive step toward safeguarding our communities from hurricanes and keeping insurance costs in check.”
— Florida CFO Jimmy Patronis said in a statement about the state’s new My Safe Florida Home Trust Fund, which he said would “funnel necessary funds into our local economies but also incentivize homeowners to fortify their residences.”
Earth, Wind, and Fire
“Whoa, is this coming? Oh, it’s here. It’s here… Look at all that debris. Ohhh. My God, we are in a torn…”
— Tad Peters, in a video, as a tornado bore down on him and his father, Richard Peters. The two had pulled over to fuel up their pickup truck in Rolla, Missouri, on March 14 when they heard tornado sirens and saw other motorists fleeing the interstate to park. They were headed to Indiana for a weightlifting competition but decided to head back home to Norman, Oklahoma, about six hours away, where they encountered wildfires.
Business Moves
National
The Doctors Company, ProAssurance
The Doctors Company said it has entered an agreement to acquire ProAssurance Corp. for $1.3 billion, taking the company private.
Birmingham, Alabama-headquartered ProAssurance is a specialty insurer with expertise in medical liability, products liability for medical technology and life sciences, and workers' compensation insurance. The Doctors Co. of Napa, California is the nation's largest physician-owned medical malpractice insurer.
The transaction is expected to close in the first half of 2026. Upon completion, ProAssurance's common stock will no longer be listed on the New York Stock Exchange, and ProAssurance will become a wholly owned subsidiary of The Doctors Co., creating a combined company with assets of approximately $12 billion.
Rating agency AM Best said The Doctors Company Insurance Group is the second-largest writer of medical professional liability (MPL) insurance in the U.S. based on 2023 direct premiums written (AM Best said it is in the process of collecting 2024 data). ProAssurance is the fourth largest. Berkshire Hathaway is first with more than 18% market share. Together with ProAssurance, Doctors Co. would have nearly 16% of the MPL market.
Munich Re, Next Insurance
Munich Re said it has acquired Next Insurance, which will become part of the reinsurer's major primary insurance
business, Ergo.
The agreement in place values Next Insurance at $2.6 billion. Ergo already owned nearly 30% of the digital insurance company's shares. Munich Re was an early investor in Next Insurance.
Closing is expected during the third quarter pending regulatory approvals. Munich Re has said it expects $23.1 billion in general insurance revenue from Ergo in 2025.
East
World Insurance Associates, Archambault Insurance Associates
World Insurance Associates LLC, headquartered in Iselin, New Jersey, acquired the business of Archambault Insurance Associates of Putnam, Connecticut. Terms of the transaction were not disclosed.
Archambault was founded in 1928 by Joseph A. Archambault. The third-generation, family-owned, full-service agency serves individuals, families and businesses in Connecticut, Rhode Island and Massachusetts. Archambault provides personal, commercial, life and health, and surety insurance.
King Risk Partners, The Insurance Center
King Risk Partners, headquartered in Gainesville, Florida, acquired The Insurance Center, an independent agency in Warwick, Rhode Island. Terms were not disclosed.
Founded in 1973, The Insurance Center serves individuals, families, and busi-
nesses in Warwick and throughout Rhode Island.
This acquisition is Florida-based King’s first agency in Rhode Island, reflecting the firm’s commitment to expanding its service to the Eastern and Southeastern regions of the country.
In addition to 15 offices in Florida, and now one in Rhode Island, King Insurance has locations in Alabama, Connecticut, Florida, Georgia, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, South Carolina, Tennessee, Virginia, and West Virginia.
NFP, Lyons Insurance Agency Inc.
Property/casualty middle-market insurance broker NFP, an Aon company, recently announced its acquisition of Lyons Insurance Agency Inc., a multiline insurance broker located in Wilmington, Delaware.
David Lyons and Tim Lyons, vice presidents of Lyons, will join NFP as senior vice presidents and report to Meg McSherry, managing director of Property and Casualty in NFP’s Atlantic region.
Founded more than 40 years ago by David F. Lyons, Sr., Lyons provides middle-market businesses with commercial, personal lines and employee benefits solutions.
Aon closed on its $13 billion acquisition of NFP last April. NFP has more than 7,700 colleagues in the U.S., Puerto Rico, Canada, UK and Ireland.
Midwest
Alacrity Solutions Group, InspectionConnection
Alacrity Solutions Group announced the acquisition of InspectionConnection from Latitude Subrogation Services LLC. The transaction marks Alacrity’s 16th acquisition since 2015.
InspectionConnection, founded in 2018 and based in Columbus, Ohio, is a full-service appraisal and desktop review company specializing in autos, specialty vehicles, and heavy equipment, including construction vehicles, tractor-trailers, and farm machinery.
Alacrity Solutions, based in Fishers,
Indiana, is one of the largest independent providers of insurance claims management services in North America.
South Central
Sierra Financial Holdings LLC, Preferred Security Life Insurance Company
Sierra Financial Holdings LLC, headquartered in Houston, received final regulatory approval from the Texas Department of Insurance to acquire Preferred Security Life Insurance Company, a TexasDomiciled Life Insurance carrier. Closing is expected to occur on April 1, 2025.
Sierra Financial Holdings LLC is a privately held company focused on the financial services industry. The companies include Sierra Mortgage Capital LLC, Sierra Lending Group LLC, Sierra Lending Corporation and Sierra Insurance Services LLC.
Founded in 1994, Preferred Security Life Insurance Company is a Stipulated Premium Life insurance company with operational headquarters in Colorado Springs, Colorado.
CRC Group, Risk Transfer Partners
CRC Group, an independent wholesale specialty insurance distributor in North America, announced the acquisition of Risk Transfer Partners (RTP), a casualty-focused wholesale brokerage business. This strategic acquisition enhances CRC’s capabilities and market reach, particularly in the construction, energy, environmental, and manufacturing sectors.
Founded in 2013 and based in Dallas, Texas, RTP has established a national platform with a track record of organic growth. RTP, under its existing leadership team, including Dave Barrett, RTP President, will join the CRC Specialty division and report to Brokerage President Brent Tredway. Keystone Agency Partners, Ascent Insurance Group
Keystone Agency Partners (KAP), headquartered in Harrisburg, Pennsylvania, acquired Ascent Insurance Group, a prominent Oklahoma-based insurance agency. The deal includes Cole, Paine & Carlin Insurance Agency, Inc., which will join Ascent Insurance Group.
Aaron Bogie will serve as CEO of Ascent Insurance Group. Ascent’s Oklahoma City home office will be joined by branch locations in Tulsa and Tonkawa.
This partnership bolsters KAP’s commercial and personal lines insurance capabilities, empowering Ascent and CPC to leverage KAP’s extensive resources, specialized expertise, and national network to drive growth, innovation, and enhanced client experiences.
The River Company, Rogers Insurance
Two Arkansas independent agencies
The River Company and Rogers Insurance merged to create ANKR. The new entity, which employs 80 professionals across Arkansas and Texas, will operate under the ANKR brand, with full integration expected by January 1, 2026. Together, ANKR will offer a full suite of personal and commercial insurance, bonds, payroll and tax solutions.
The River Company, based in central Arkansas, has grown steadily over the past decade, completing five acquisitions and expanding its services to include payroll and tax solutions alongside its core insurance offerings.
Rogers Insurance is a century-old firm with locations in both central and northwest Arkansas.
Southeast
Atlas Insurance Agency,
Atlas Employee Benefits
Atlas Insurance Agency, based in Sarasota, Florida, acquired its sister company, Atlas Employee Benefits. The firms will now operate under a single brand name. Atlas Employee Benefits will operate under the Atlas Insurance brand, offering a wider range and streamlined services.
Atlas Insurance, founded in 1953, serves clients in 45 states, providing business and personal lines coverage through local and national carriers. The company has more than 60 professionals on staff. Rob Brown is president.
Hub International, C&L Marine Insurance
Chicago-based Hub International
acquired the assets of C&L Marine Insurance, based in Boca Raton, Florida. President Scott Costolo and his team will join Hub Florida, which will be known as C&L Marine, a Hub International company. It’s the latest acquisition for Hub, which has grown to more than 19,000 employees across the continent.
Chris Gardner is CEO of Hub Florida. C&L has more than 30 years of experience working with major insurance carriers. The firm has focused on boat builders, dealers, marinas, marine contractors, yachts and more.
West
PrestigePEO, Concurrent HRO
PrestigePEO, headquartered in Melville, New York, acquired Concurrent HRO, a Colorado-based professional employer organization. Concurrent HRO’s team will remain in place.
The acquisition is PrestigePEO’s fifth, and it expands PrestigePEO’s presence in the Midwest and Mountain regions. Concurrent HRO provides human resources, payroll and employee benefits services for businesses of all sizes.
PrestigePEO provides HR services that include payroll management, employee benefits, compliance support and risk management services.
Chicago-based Hub International has acquired the assets of Malloy Imrie & Vasconi Insurance Services LLC in California’s Napa Valley.
Partners Timothy Malloy, David Capponi, Ted Bystrowski, Kevin Dickenson, and the MIV Insurance team will join Hub Central & Northern California.
MIV Insurance will be referred to as MIV Insurance, a Hub International company. MIV Insurance, which has offices in Saint Helena and Napa, is an independent firm that provides commercial, employee benefits, and personal insurance to clients throughout California. The firm specializes in agribusiness, particularly in the wine industry.
News & Markets
Maryland Could Have Reduced Risk of Key Bridge Collapse: NTSB
By Andrew G. Simpson
The National Transportation Safety Board (NTSB) is harshly criticizing Maryland officials for failing to conduct a risk assessment of the Francis Scott Key Bridge before it collapsed a year ago and is recommending that 30 owners of 68 bridges across 19 states conduct a vulnerability assessment to determine the risk of bridge collapse from a vessel collision.
The agency indicated that had Maryland conducted such an assessment, it could have taken steps to reduce the risk of and possibly prevented last year’s tragic Key Bridge collapse in Baltimore. In its own assessment, NTSB found that the Key Bridge was considerably above the acceptable risk threshold for essential bridges.
The federal agency warned that many of the nation’s bridges may be above the acceptable level of risk, although it stopped short of suggesting they are in
danger of imminent collapse.
The report is part of the ongoing investigation into the Key Bridge collapse. The NTSB found that the Key Bridge, which collapsed after being struck by the containership Dali on March 26, 2024, was almost 30 times above the acceptable risk threshold for critical or essential bridges, according to guidance established by the American Association of State Highway and Transportation Officials (AASHTO).
Over the last year, the NTSB said it identified 68 bridges including the Key Bridge that were designed before 1991 when the AASHTO guidance was established and do not have a current vulnerability assessment using AASHTO’s calculation.
The NTSB is recommending that the 30 owners of these bridges evaluate whether their bridges are above the AASHTO acceptable level of risk and implement a risk reduction plan if needed.
Since 1994, the Federal Highway Administration (FHWA) has required new
bridges be designed to minimize the risk of a catastrophic bridge collapse from a vessel collision, given the size, speed, and other characteristics of vessels navigating the channel under the bridge. The Key Bridge was built before vulnerability assessments were required by FHWA.
Neither the FHWA nor AASHTO can require a bridge owner to complete a vulnerability assessment for a bridge designed before the release of the 1991 guidelines.
Maryland Assessment
The Maryland Transportation Authority (MDTA) had not performed, nor was it required to perform, a vulnerability analysis on the Key Bridge, NTSB noted.
However, the NTSB concluded that had the MDTA conducted a vulnerability assessment based on recent vessel traffic, it would have learned that the Key Bridge was above the AASHTO threshold of risk for catastrophic collapse from a vessel collision before the Dali collision occurred
and MDTA would have had information to “proactively reduce the bridge’s risk of a collapse and loss of lives associated with a vessel collision with the bridge.”
NTSB chair Jennifer Homendy said during its investigation her agency asked Maryland for the data needed to conduct an assessment based on current traffic volume but MDTA was unable to provide the data. NTSB had to develop the data itself. She said MDTA had still not done a vulnerability assessment based on current data as of October.
“Bridge owners need to know the risk and determine what action they need to take,” she told reporters.
MDTA said that an evaluation using AASHTO methodology was underway when the NTSB requested its results last fall and is still underway.
The MDTA said it is reviewing the NTSB recommendations but maintains the catastrophe and the tragic loss of life was the “sole fault of the DALI and the gross negligence of her owners and operators who put profits above safety.” It noted that the Key Bridge was approved and permitted by the federal government and in compliance with those permits.
MDTA said it will provide an update to the NTSB within 30 days.
NTSB has alerted officials in California, Delaware, Florida, Georgia, Illinois, Louisiana, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, Texas, Washington, and Wisconsin. Baltimore’s Bay Bridge is among those on the NTSB list.
The NTSB is also recommending that FHWA, the U.S. Coast Guard, and the U.S. Army Corps of Engineers establish an inter-
disciplinary team to assist bridge owners on evaluating and reducing the risk, which could mean infrastructure improvements or operational changes.
The Collision
The 984-foot Singapore-flagged cargo vessel Dali was transiting out of Baltimore Harbor when it experienced a loss of electrical power and propulsion and struck the southern pier supporting the central truss spans of the Key Bridge, which subsequently collapsed. Six construction crewmembers were killed and another was injured, as well as one person onboard the vessel.
The Key Bridge and its pier protection systems were subject to regular safety inspections by nationally certified bridge inspectors. The Key Bridge’s most recent inspections in March 2021 and May 2023 found the condition of the deck, the superstructure, and the substructure as being in satisfactory condition, and the pier protection was rated as in place and functioning properly.
Researchers at Johns Hopkins University in Baltimore are working on a project assessing the country’s bridges to determine the likelihood of another disaster like the one that collapsed the Key Bridge.
A spokesperson for the research team told Insurance Journal that preliminary findings would be released soon.
The state of Maryland is suing the owner and operator of the Dali cargo ship that caused the collapse of the bridge, as have the families of six workers killed in the tragedy, the city of Baltimore, small businesses, and others.
The owner and manager of the Dali have denied responsibility and cast blame on the state for not better protecting the bridge against ship strikes.
The U.S. Department of Justice settled claims against the cargo ship Dali’s owner Grace Ocean Private Limited and operator Synergy Marine for $103 million last October.
The National Transportation Safety Board’s Marine Investigation Report is available online at: www.ntsb.gov/investigations/AccidentReports/Reports/MIR2510. pdf.
National
WSIA members elected Phillip McCrorie to serve as 2025-2026 WSIA Chair. McCrorie serves as CEO and chairman of RSUI. He joined the WSIA Board in 2021 and the executive committee in 2024. Others elected for one-year terms as officers include Vice Chair Patrick Albrecht, Associated Insurance Administrators, Inc., Montgomery, Alabama; Secretary Wendy Houser, Markel Specialty, Dallas, Texas; Treasurer Coryn Thalmann, Jimcor Agencies, Montvale, New Jersey; Immediate Past Chair Brenda (Ballard) Austenfeld, RT Specialty, Naples, Florida. Members elected to three-year terms as directors include Steve Boyd, Bridge Specialty Group, San Diego, California; Gerald Dupre, Core Specialty, Atlanta, Georgia; Danny Kaufman, Burns & Wilcox, Farmington Hills, Michigan; Neil Kessler, CRC Group, Dallas, Texas; Lou Levinson, Lexington Insurance Company, New York, New York; and Danielle Wade, Jackson Sumner & Associates, Boone, North Carolina. Outgoing directors include Annie Dawson, XS Brokers, Louisville, Kentucky (20242025) and Dave Obenauer, CRC Group, Charlotte, North Carolina (2015-2025).
Coalition, headquartered in San Francisco, hired Maha Virudhagiri as the company’s first chief technology officer (CTO). Virudhagiri will lead engineering, IT, infosec, data, Maha Virudhagiri
and artificial intelligence (AI) efforts. Virudhagiri spent nearly seven years at Tesla. Before Tesla, Virudhagiri held leadership roles at Ancestry® and Walmart Labs.
Porch Group Inc., headquartered in Seattle, named four new members to its leadership team. Porch Group named Eric Lemieur as head of insurance sales and distribution. Previously, Lemieur held sales leadership roles at Farmers Insurance and Foremost. Chad Mirock was named senior director, insurance product and strategy. He previously held product management leadership positions at Country Financial, The Hartford, and Travelers.
in Northbrook, Illinois, hired Andréa Carter as executive vice president and chief human resources officer, effective May 12. With nearly 30 years of experience, Carter joins Allstate from Global Payments Inc. Carter has also held human resources leadership roles at Habitat for Humanity, Ralph Lauren, Newell Rubbermaid and The Home Depot.
Tokio Marine HCC President Mike Schell will retire on March 31. Barry Cook, CEO of Tokio Marine HCC International, will additionally assume the newly created position of deputy CEO, effective April 1. Schell joined Houston-based Tokio Marine HCC in 2002 and retires after more than 50 years in the insurance industry.
Markel Group named Simon Wilson as CEO of Markel Insurance, which includes Markel Specialty, Markel International and Markel Global Reinsurance. Wilson was president of Markel International. Wilson joined the group in 2010 to lead international business development.
Anthony F. (Tony) Markel, currently vice chairman of the board, will retire as a company director in May and assume the honorary position of chairman emeritus of the board. Jon Michael was appointed to Markel’s board of directors.
Andréa Ferrari was named director, underwriting. Ferrari has over 20 years of industry experience and previously led underwriting at Kin and Hippo Emmanuel Bellegarde was named head of reinsurance. Bellegarde previously led North America Casualty Facultative reinsurance at McGill and Partners, and held reinsurance leadership roles at Aon Benfield, with additional insurance experience at Willis Towers Watson.
The Allstate Corp., based
Nationwide, headquartered in Columbus, Ohio, appointed Tonya Courtney to lead its new excess and surplus (E&S) brokerage property unit to open in the second half of the year. She joined Nationwide in December with more than 30 years of experience in commercial lines insurance.
Beazley, headquartered in London, England, appointed Lindsay Shipper as head of commercial property, North America. Based in Atlanta, Shipper has close to two decades of experience in the property market. She joins from Marsh, where in her 16-year career, she held several senior positions, most recently managing director and southeast zone property leader.
RateFast, headquartered in Santa Rosa, California, hired Joyce Reitman as its new CEO. She has over 30 years of industry experience, recently serving as CEO of Motionloft. The company also hired Michael Bongiovanni as its chief information officer. Bongiovanni has over 30 years of industry experience, most recently serving as vice president of sales at Sage Software. Marsha Bluto is RateFast’s new executive vice president of sales. She most recently served as vice
Eric Lemieur
Chad Mirock
Emmanuel Bellegarde
Tonya Courtney
Simon Wilson
Anthony Markel
Joyce Reitman
Marsha Bluto
president of medical management at PPMSI.
Ryan Specialty, headquartered in Chicago, promoted Matt Havey to president of its alternative risk underwriting business, Ryan Alternative Risk. Havey joined Ryan Specialty in 2024 as senior vice president of underwriting. With this promotion, CEO Kieran Dempsey separates president from his title.
East
Satellite Agency Network Group, Inc. (SAN), headquartered in Hampton, New Hampshire, appointed Michael Sakraida as regional vice president for Massachusetts, New Hampshire and Maine. Sakraida most recently served as senior project manager for Comparion Insurance Agency.
Executive Vice President and Head of Claim Paul Brady as CEO, effective June 1. Brady has been with Arbella for nearly 15 years, serving as chief information officer and senior vice president of operations. He succeeds John Donohue, who will continue as chairman of the board and CEO of the Arbella Insurance Foundation.
underwriting officer and chief claims officer.
Midwest
Southeast
Pro-Praxis, a Starwind Specialty Insurance Services program headquartered in New York City, appointed Joseph Washington as vice president of underwriting. With 30 years of underwriting experience, he previsouly served as an underwriting manager at Beazley, vice president at Berkshire Hathaway Specialty Insurance and assistant vice president at Zurich North America.
Arbella Insurance Group, headquartered in Quincy, Massachusetts, named
NJM Insurance Group’s President and Chief Executive Officer Mitch Livingston will retire on July 31 after 19 years at the company, including the past seven as its leader. The company’s board of directors has selected Carol Voorhees, NJM’s executive vice president and chief operating officer, to succeed Livingston. Voorhees joined NJM, based in Trenton, New Jersey, in 1996 and was named executive vice president & chief operating officer in 2024.
The Great Bay Insurance Group, headquartered in West Atlantic City, New Jersey, named Timothy J. Byrne, Jr., president of the group and Ronald R. Lovatt as president of Great Bay Insurance Company, a wholly owned affiliate of the group. Byrne Jr. previously served as the group’s chief operating officer. Lovatt, Lovatt, a founding member of the company, has 40 years of broad insurance industry experience. He currently serves as chief
NFP, an Aon company based in New York City, hired Priya Nathan as senior vice president, sales, in its Central region. Based in Austin, Texas, Nathan has over 25 years of multinational insurance experience and was a client executive in the tech practice at Marsh, vice president, insurance technology sales, for the Midwest region of Ventiv Technology (now Riskonnect), and director, sales operations, breach response, at AllClear ID (now Experian, Inc.).
Alera Group, headquartered in Deerfield, Illinois, appointed Talicia Bashford as managing director of the Midwest region. Bashford joined Alera Group in 2024 as the Mid-Atlantic property and casualty practice leader. With over 20 years of leadership experience, she most recently served as president of AssuredPartners of Chicago.
Brown & Riding, headquartered in Dallas, hired Nick Calabro as senior vice president of its national casualty practice. Based in Florida, Calabro has over 13 years of industry experience, previously serving as a casualty broker at CRC Insurance Services.
West
California Insurance Commissioner Ricardo Lara reappointed members Mitch Steiger and C. Bryan Little to the California Workers’ Compensation Insurance Rating Bureau (WCIRB) Governing Committee Lara also reappointed member Dr. Fabiola Cobarrubias to the Insurance Diversity Task Force.
Concert Group, headquartered in Chicago, appointed Thomas G. Sweeney as chief credit officer. Sweeney oversees all aspects of credit risk for Concert Group, including its admitted carrier, Concert Insurance Company, its non-admitted carrier, Concert Specialty Insurance Company, and its risk retention vehicle, Harmony Re. Sweeney has over 20 years of experience in finance and corporate development in the property and casualty re/insurance industry.
EPIC Insurance Brokers & Consultants, headquartered in San Francisco, named Matt Allen principal of its private client team. With over 18 years of experience in the insurance industry, Allen has dedicated his career to providing sports professionals with specialized risk management, disability insurance and asset protection solutions. He founded The Professional Athlete Insurance Group, a boutique agency designed to manage the unique lifestyles and insurance risks of individuals in sports. Most recently, Allen served as director of sports and entertainment at Gregory & Appel.
Michael Sakraida
Joseph Washington
Mitch Livingston
Carol Voorhees
Matt Allen
Nick Calabro
Thomas Sweeney
News & Markets
Claims Service, Tech, Communication Top Independent Agent Concerns
By Denise Johnson
Claims, communication, and technology are the top three concerns for independent agents when placing new business with a carrier, according to insurtech Vertafore.
The findings were the result of a survey of nearly 1,300 insurance professionals including account managers, agency owners and principals, producers (and others with sales titles), customer service representatives (CSRs), and operations professionals. A smaller segment of responses came from administrative, human resources (HR), data, or accounting professionals.
The report highlights the wants, needs, and challenges agents encounter in their daily interactions with carriers and the technology carriers can use to strengthen relationships.
The largest segment (33.2%) work with 11-20 carriers regularly.
The sur vey’s most well-rep-
resented respondents can be summarized as: Gen X, women, having 20 or more years of experience in insurance, being in an account manager role, at independent agencies with 7 to 25 employees, and working on behalf of 11 to 20 carrier partners.
Agents’ Top Factors When Placing Business With a Carrier
When asked how carriers could get more of their business, 84% respondents indicated that besides offering competitive products and pricing, responsiveness of underwriting ranked as the most important consideration. Claims ser vice emerged as a very significant factor influencing independent agents when plac ing business with a particular carrier. Delving into the impact of specific factors on placing business, producers and account managers ranked claims service as their most important criteria, with 75% of respondents deeming it a must-have. The second-ranked specific factor
considered when placing business is personal relationships—a must-have for 60%.
More than three-quarters (77%) of independent agent respondents agreed carriers should invest in better onboarding and licensing tools and processes. Only 33% of all respondents felt their primary carrier partners offered great service in their onboarding, licensing, and compliance practices.
Sixty-four percent said a must-have for a better onboarding and licensing experience is being able to easily view authorization, appointment, and renewal status.
Further insights into onboarding and licensing are summarized in the graphic on page 23.
Continuing on the theme of recommended carrier investments, 77% of producers and account managers also said that efficient, effective, and navigable carrier portals is a top area to improve. Fifty percent said participation in commercial lines raters is also
an important area for carriers to invest in. That contrasts with just 42% who cited the high importance of the ability to bind within a comparative rater for personal lines.
Roughly two-thirds of respondents (67%) indicated clear and accurate compensation statements as the top compensation-related factor for working with carriers, while competitive commissions came in second among various compensation factors that respondents ranked as important (64%).
Weighing the importance of various carrier technologies, 69% of independent agents said digital personal lines rating and submission was a must-have—the most for any technology.
Under writing service is an area where carriers could improve, according to the survey. A little over a quarter of respondents (28%) indicated top carriers provided great under writing service. Almost half (46%) described their carrier partners’ service as average, and 26% of respon-
dents said they typically experienced below-average service.
The top three underwriting capabilities sought by independent agents included responsiveness, competitive products, and pricing.
In the ser vicing category, 83% of independent agents listed the ability to check policyholder billing status online as the most important area for carriers to invest in. Nearly as many—80% of customer service representatives—also shared that the ability to view and make changes to policies online remains an important area for carrier investment.
On the claims front, survey analysis revealed that only 23% considered their primary carrier’s claims service to be excellent.
Seventy-eight percent of survey takers ranked ease of communication as a way for carriers to get more of their business, while 77% said the availability of efficient, effective, and navigable carrier portals is a critical area for investment.
Increasing Carrier-Agent Bond With Better Technology
Overall, responses show that a key differentiator in the agent experience is whether carriers use modern technology.
Customer service representatives (CSRs) said the ability to both check policyholder billing status (83%) and view and make changes to policies online (80%) should be the top priorities for carrier investment.
At the top of the rankings, survey respondents cited the necessity of digital rating and submission in personal lines as the most important technology capability, with 69% rating it a must-have. For digital rating and submission in commercial lines, 51% called this a must-have.
Digital document and policy delivery demonstrated its widespread utility, too, with 59% of respondents agreeing it was a must-have technology. Direct bill and commissions download (57%) and digital appetite and eligibility solutions (53%) ranked highly, as well.
Carriers that invest in
integrated, easy-to-navigate systems reduce the time agents spend on manual tasks, allowing them to increase the volume and quality of business the independent agent channel generates, the survey noted.
Not unexpectedly, carrier chatbots were viewed negatively.
Areas Where Carriers Can Place Less Emphasis
Respondents also provided insights on areas where carriers could reduce spending. These included mobile tools, with 23% of respondents indicating mobile tools are only of minor value in terms of how carriers could get more of their business.
Vertafore suggests this could be due to agents primarily working on their laptops while relying on their mobile devices for on-the-go or ancillary support.
As expected, there were some generational differences when it came to mobile app preferences.
Younger agents were significantly more likely to consider mobile apps to be
more than a convenience: 37% of respondents aged 18 to 27 and 32% of those aged 28 to 43 labeled carrier mobile apps a must-have technology.
Likewise, contests, incentives, or preferred producer programs were of relatively minor importance to 25% of respondents, mainly with those who have worked in the industry longest. However for new agents, 53% felt contests and incentives were a musthave when choosing a carrier.
Marketing materials were deemed the least important factor and, as such, an area where carriers could reduce investment.
“Efficient, streamlined processes are the foundation of the agent-carrier relationship and a positive agent experience,” said Kelly Maheu, vice president of partnerships and industry relations at Vertafore.
“This report highlights how carriers and agents rely on technology to make agents’ work easier while bringing the human element into the process to strengthen relationships across the distribution channel,” Maheu said.
Spotlight: Trucks & Fleets
Why Some Transportation Risks Could Find Options With Captives: Risky Future Webinar
By Allen Laman
Standard market woes, captive growth, and the increased importance of navigating relationships with third-party administrators—insurance experts in the commercial trucking arena have helped their clients traverse a challenging road in recent years.
Earlier this month, a panel of transportation insurance experts dissected these issues and more during an Insurance Journal webinar.
Traditional Insurance Market Overview
Kenny Planeta, the senior vice president and transportation practice leader at Heffernan Insurance Brokers, explained that 5-10% premium increases in the standard market are considered wins for trucking clients.
Flat renewals and decreases are “unheard of,” Planeta said,
pointing to carrier losses in the commercial trucking line.
“The good performers are kind of subsidizing the bad performers,” he said. “Everybody’s heard the term ‘nuclear verdicts.’ I think the biggest impact we see on trucking companies is not necessarily fleets that are getting hit with that nuclear verdict … it’s the fear of that big verdict and not wanting anything to go to trial.”
Planeta continued: “Darn near any loss does not go to trial anymore. Everything gets settled outside of court, goes to mediation, and these settlements just keep growing. These attorneys rack up these bills, and in turn, it causes the premiums to go up.”
Cheri McGonagill-Spann, national sales and account manager for transportation and cargo at claims management and outsourcing provider Crawford and Company, echoed Planeta’s comments. She said claims have increased
and that “nuclear verdicts are especially troublesome” in commercial transportation.
“Companies are … increasingly frustrated with the traditional landscape,” said David Hoag, AVP and business development manager at Crawford. Hoag said the hard insurance market makes it a “difficult market to place business sometimes.”
“The value added for [companies] in a captive is they have more control,” he added.
Alternative Market Options: Member-Owned Captives
Garrett Yates, vice president at Heffernan, said a knowledge gap exists between insurance agencies and the captive insurance arena.
Member-owned captive insurance programs are designed to give companies more control over premiums. Successful captive managers communicate with members and assemble teams of CPAs to
handle finances and work with third-party administrators, reinsurers, loss control, and brokers.
The product is essentially an insurance company; the key difference is that trucking companies have “a lot more skin in the game” than they would with a traditional insurance policy, Planeta said. Transparency, accountability, and predictability are also increased.
Upfront costs notwithstanding, costs are lower, Hoag explained, and captives can be designed to fit a business model or need.
“Obviously, there is an initial cost, and that varies depending upon what the risk is and what have you,” Hoag said, later adding that the positive results of that are “that you’re forming a captive, designing it, and you can control your costs as long as you have that dedicated team working that captive on a daily basis.”
Structural elements of captives like claim-funding models and collateralization vary. TPAs like Crawford play a key role in handling and administering claims. In some cases, insurance companies serving as reinsurance for the captive will handle claims with their claims team.
“That model can be really good if it’s a good partner on the claims handling with the reinsurance,” Planeta said. “But a lot of the member-owned group captives have gone to kind of like an à la carte type situation … and the reason why you would want to split those up potentially is because the members get to look at it and say, ‘Are we happy with the claims handling that we’re getting? Is this TPA doing a good job getting on top of these claims [and] keeping us informed?’”
Heffernan has worked with multiple captives who have fired multiple TPAs because members don’t believe they’re doing a good job and voted them out. Similarly, Planeta explained they’ve also seen insurance companies lose reinsurance and claims handling responsibilities.
Hoag added that while group captives are a fit for more businesses, when it comes to a single captive, “that’s something for a Fortune 500 company. That’s a high consideration for a Fortune 500 company.”
Who Is Best Suited for a Captive?
In a nutshell, joining a captive makes sense for trucking clients who believe they are performing better than their peers claim-wise and still see their premium increasing annually, Planeta explained.
“In a group captive … you’re individually underwritten,” he said. “You know when your insurance premium is going to go up because your five years [of] loss history is worse than it was when you joined the group.”
From a high-level perspective, Planeta said that trucking companies need to have their house in order, from a safety standpoint, “because you’re going to be taking on more risk. You’re no longer transferring it all to the insurance company.”
Those who don’t are gambling and won’t win, he added. Most member-owned group captives have entry barriers like safety scores and claims history. Planeta said the captives that Heffernan works with make requirements and collateral entry and exit timelines clear.
Future Captive Growth and Opportunities
A decade or so ago, businesses would talk about group captives and large deductibles when their fleets had 50 trucks. That’s how many it
would take for premiums to hit $250,000, Planeta explained, but as premium dollars have increased, that starting point now looks like a 25-unit fleet.
And if they have their risk management and safety in order and have a predictable, good claims history, “now it makes sense for them,” he continued. “And 10 years ago, when they were paying $100,000 for 25 trucks, they just weren’t large enough to have it make sense.”
Heffernan has watched most of the trucking captives the brokerage has worked with double in size in the last five years. They continue to spin off new groups, Planeta said, because the market is there.
Plucking the best risks in the market and formulating and creating a rating structure based on individual performance present “a tremendous opportunity for a lot of companies,” Yates said.
“There’s a couple of major players in the captive arena,” Yates shared later. “The new captives that do continue to pop up are still within the same captive managers, which I think is really important, because you’ve got the history, the longevity, [and] the performance.”
He also explained that some direct markets are seeing that there is money to be made in the captive arena, “because there are a lot of really good
risks out there.”
His advice to clients: Pick experienced partners when choosing or building a captive that has a history of doing a good job. This is important not just from a captive, claims, and reinsurance management perspective but also for the money managers overseeing the captive’s investment fund.
“There’s a large amount of income for the clients that could be achieved through that process as well,” Yates said.
Go Deeper
This webinar marked the first in a series leading into Insurance Journal’s Risky Future Summit on Nov. 4. Attendees of that online event will learn from risk managers with a proven track record in safeguarding companies and clients as they showcase the benefits of robust risk management and highlight the consequences of oversight. Visit RiskyFuture.com to learn more and save your seat.
To watch a recording of the transportation panel discussion outlined in this story, visit the Insurance Journal Research and Trends website.
To view the full webinar, A Risky Future Webinar: Transportation, Captives, and Alternative Markets, visit https://www.insurancejournal. com/research/
Garrett Yates Kenny Planeta
Cheri McGonagill-Spann
David Hoag
Spotlight: Architects & Engineers
Inflation, Rising Claim Costs, Riskier Business Reasons Cited for Rate Increases in A&E Market: Survey
Architects and engineers
professional liability insurers report concerns about the persistent effects of inflation on claim expenses, uncertainty about the U.S. economy, higher risk project types and professional design disciplines, as well as new exposures from artificial intelligence (AI), according to a recent industry survey by specialty broker Ames & Gough.
The survey, which polled 17 insurance companies that represent a significant percentage of the overall marketplace providing professional liability insurance to architects and engineers in the U.S., revealed that most insurers plan to raise rates this year.
According to the survey, 71% of A&E insurers are planning rate increases in 2025, 24% plan to keep rates flat, and only one insurer expects to reduce rates. Among the insurers raising rates, all but one are planning modest increases (up to 5%), with the other planning a rate increase of 6-10%.
Inflation and Claims Costs
Of the insurers surveyed, 53% experienced higher claim severity in 2024 compared with 41% the prior year. Meanwhile, only 12% reported lower claim severity year-over-year.
Even with overall inflation reportedly easing in 2024, most (83%) insurers cited inflation as having an impact on their decision to raise rates. Higher costs for construction materials, supplies, and labor was cited as leading to higher damages and settlements. But most insurers pointed to social
inflation, particularly jury awards and litigation trends, as contributing to higher claim payouts as well. One insurer estimated claim costs are rising 3-5% annually.
Nearly all insurers surveyed reported paying multi-milliondollar claims in 2024, with 82% paying a claim between $1 million and $4.9 million, and one insurer reported playing a claim of $5 million or more; that claim exceeded $20 million.
When asked to rank the top three disciplines for claim severity, 70% of the insurers surveyed cited structural engineering; the same percentage identified architecture, followed by civil engineering (59%).
Added Capacity
Although the insurers surveyed reported no change in the availability of professional liability limits, some now appear willing to offer more capacity. This year, 53% indicated they can provide limits exceeding $5 million (up from 40% in 2024). In addition, 29%
indicated they can offer limits of up to $10 million; 6%, up to $15 million; 6%, up to $20 million; and 12%, $25 million or above.
“Even though some insurers can offer higher limits, they still apply greater underwriting scrutiny to these requests,” said Jared Maxwell, vice president and partner, Ames & Gough and author of the survey. “When faced with these requirements, design firms should try negotiating with owners to ascertain that higher limits are warranted. If so, they might consider alternative structures, such as specific additional limits endorsements/project excess or try building layers with multiple insurers.”
2025 Rates
This year, 67% of the insurers surveyed plan to target rate increases on accounts with adverse loss experience; 42% will target firms with what they consider higher-risk projects, such as condominiums and other residential construction, and
infrastructure. Some 42% reported targeting higher-risk disciplines, including structural engineering, geotech, civil, and mechanical engineering. One-third (33%) reported planning increases across their entire book of business.
M&A and AI
Insurers also had concerns about the jump in merger and acquisition activity among design firms, noting the involvement of private equity firms may hasten the speed of the transactions and cause principals to overlook effective integration of risk management.
With more design firms integrating AI into their processes, 76% of the insurers surveyed indicated they are carefully monitoring these developments and their potential effects on claim activity. A potential scenario: A/E firms incorporating outdated or incorrect designs from internal AI libraries may be vulnerable to repetitive design errors and violations of technical standards or codes of conduct.
News & Markets
California Cites Contractor $157K Following Fatal Trench Accident
Aconstruction company was fined $157,500 by California for multiple violations of workplace safety regulations following a fatal trench collapse.
W.A. Rasic Construction was fined by the California Division of Occupational Safety and Health incident over the death of an employee working in an unprotected excavation on Aug. 28, 2024, according to
Cal/OSHA.
The worker was reportedly inside a 17-foot-deep trench when a portion of it collapsed and caused a concrete pipe to be displaced, pinning and killing the employee.
Cal/OSHA’s investigation identified serious violations of workplace safety regulations related to excavation and trench safety.
Reported Cal/OSHA include:
• Failure to implement an effective injury and illness prevention program. W. A. Rasic Construction did not implement an effective injury and illness prevention program to identify, evaluate, and correct workplace hazards, and provide training. The failure exposed employees to the hazards associated with working in an unshored trench.
• The employer failed to conduct a proper site inspection and failed to identify conditions that could lead to dangerous cave-in hazards or the lack of necessary protective systems, such as trench boxes or shoring.
• The employer did not provide the necessary cave-in protection for employees working in an excavation roughly 17 feet deep. This safety failure exposed workers to the risk of fatal injury, as evidenced by the incident.
Employers have the right to appeal any Cal/OSHA citation and notification of penalty by filing an appeal with the Occupational Safety and Health Appeals Board within 15 working days from the receipt of notification.
Nearly a Quarter of Homes in New Mexico Uninsured, Report Shows
New Mexico has the highest rate of uninsured homes in a report that also shows nearly one-in-seven U.S. homes are uninsured, and 11.3 million out of 82.9 million owner-occupied homes (13.6%) are uninsured.
A rerport from LendingTree that used Federal Emergency Management Agency data and U.S. Census data to calculate uninsured rates. It also used FEMA data to examine uninsured rates in the 25 most at-risk counties, which it categorized uninsured homes as owner-occupied homes with annual home insurance costs of less than $100.
The report found New Mexico had the highest rate of uninsured homes at 23.3%. West Virginia (23.0%) and Mississippi (22.9%) were two and three on the list.
Other findings show:
• Among the largest U.S. metros, McAllen,
Texas, has the highest uninsured rate at 43.3%. El Paso (23.0%), and Miami (21.0%) followed.
• The counties with the highest National Risk Index scores most at risk are Miami-Dade County, which tops the list at 23.5%. Florida counties of Broward (22.7%) and Lee (17.9%) followed.
• The District of Columbia has the lowest rate of uninsured homes (8.9%). New Hampshire (9.2%), Oregon (9.6%), Massachusetts (9.7%) and Utah (9.7%) are metros others below 10.0%
LendingTree home insurance expert surmised that homeowners in states with high rates of uninsured homes may overlook crucial risks.
“Wind and hail damage is the most common homeowners insurance claim,” he stated. “Of the top three states, this is especially true in Mississippi. Wind and hail damage is covered by standard homeowners insurance in most parts of the country. However, you have to buy windstorm coverage separately in some of Mississippi’s coastal areas.”
My New Markets
Service Contractor Surety Bond
Market Detail: RevBond writes an extensive line of surety products on A.M. Best Rated A- (Excellent) paper and is licensed in all 50 states. RevBond can support service contract needs by focusing on the small to mid-size surety market (Single bonds up to $10,000,000 and Aggregations up to $10,000,000). Has pen and writes the following: environmental spill response, guard services, waste hauling/recycling, janitorial service contractors, student bus transportation services, landscaping, highway maintenance/mowing, aggregate supply, railroad repair and road maintenance.
Available Limits: Not disclosed.
Carrier: Not disclosed.
States: All 50 states and the District of Columbia
Contact: Chris Dobbs; chris.dobbs@ revbond.com; 623-469-5821.
Builder’s Risk Insurance
Market Detail: Insight Risk offers comprehensive Builder’s Risk insurance coverage to protect vertical construction projects against property losses and delay, including ground-up and renovation risks. As a technology-driven MGA, Insight Risk Technologies is reinventing Builder’s Risk insurance through a unique combination of granular, fact-based underwriting, proactive risk management, and proven risk mitigation IoT technologies deployed on each project. Superior financial and operational results for all stakeholders: contractors, developers, risk managers, brokers, and carriers. Target Class: Fire-resistive and non-combustible construction. Referral Classes: Wood frame and joisted-masonry construction. Target
Occupancies: Offices, Educational (K-12 & Post-Secondary), Healthcare, Institutional, Apartments, and Hotels. Construction Size: $25M to $250M in TIV. Capabilities: 100% and lead Q/S lines with limited follow-line Q/S capacity -- Project Specific, Master Builder’s Risk, or Multi-building Available Limits: Not disclosed. Carrier: Not disclosed.
States: All 50 states and the District of Columbia Contact: Lisa Behning; lisa.behning@ insightrisktec.com; 475-259-2837.
Short-Term Liability - Auto Physical Damage (DST)
Market Detail: This coverage is available when moving a unit from one location to another. Has pen.
72-Hour Coverage: One additional 72-hour policy may be purchased. Premium: $156.00, including taxes and fees per policy, per unit. Liability: $60,000 combined single limit (bodily injury and property damage) or applicable statutory minimum limits. Auto Physical Damage: The lesser of $100,000 or ACV per covered vehicle is subject to a deductible of $1,000 per occurrence. Application must reflect the value.
30-day Coverage: Satisfies a lienholder’s minimum of 30 days of proof of coverage to drive the unit off a dealership lot. Premium: $537, including taxes and fees per policy, per unit. Liability: $60,000 combined single limit (bodily injury and property damage) or applicable statutory minimum limits. Physical Damage: The lesser of $100,000 or ACV per covered vehicle is subject to a deductible of $1,000 per occurrence. Application must reflect the value. Newly acquired is defined as a vehicle acquired by the insured within the last 14 days.
National Drivers Association
Membership: Each insured is automatically enrolled in the NDA Basic Membership, costing $2/ month. All policies with delegated underwriting authority are issued under a master policy via NDA. www.nationaldriversassociation. com
Available Limits: As described.
Carrier: Certain underwriters at Lloyd's, London
States: Most states and the District of Columbia. Not available in Alaska, Hawaii and New York.
Amateur Sports: Teams, Leagues, Venues, Events and Facilities
Market Detail: Although the sports and recreation industry provides people with fun experiences that put smiles on their faces, it also comes with plenty of risks. Given the physical nature of the industry, the chances of a customer suffering a bodily injury are high. Sports and Recreation insurance protects businesses from the costs of a lawsuit because of a bodily injury. LIO’s proprietary platform allows quote, bind and issue of policies in minutes, unlike any other carrier in the marketplace today. Legacy supplementals and ACORD forms are no longer needed. Gone are the days of the 2-week quote turnaround, 30-day policy and endorsement issuance. Includes: general liability, non-owned & hired auto, property, inland marine, professional liability, sexual abuse & molestation, excess, participant accident and nonprofit management liability. Has pen.
Available Limits: Not disclosed. Carrier: LIO Insurance Company States: Most states and the District of Columbia. Not available in Colorado, Connecticut, Louisiana, Maine, Minnesota, New York, Tennessee and Vermont. Contact: Ryan Burger; ryan.burger@ lioinsurance.com; 916-759-3886.
section brought to you by
Special Report: Commercial Property
Today’s Commercial Property Market in ‘Better Place’
Brokers Assess 4 Current Trends: Vacancies, Alternatives, Valuations, Wildfires
By Andrea Wells
Commercial property insurance rates continue to fall for most accounts after most property insurers saw profitable books in 2024. That’s good news for insureds, commercial property brokers say, as clients begin to see rate reductions at renewals for most non-cat-exposed accounts with minimal claims.
While the property market remains sensitive on what’s to come for the rest of 2025’s catastrophe loss events, increased capital flow into the property market has led to more competition.
According to USI’s 2025 P&C Market Outlook published in January 2025, “shared/layered” property placements are seeing
average rate decreases at 5-15% or more, and top-tier accounts could see rate decreases of 10-20% at renewal.
There are a few areas within the commercial property world where brokers expect to continue to see challenging rate conditions and tougher underwriting this year, including vacant properties, wildfire-exposed properties, senior housing, affordable housing, wood-frame, and any accounts with a claims history. “These renewals continued to see pressure on rate and terms, with most of these risks being placed in the excess and surplus market, which saw property premiums increase 33% over the previous year,” the USI report revealed. But the dog days of hefty
pressure on rate in the single digits, he said, but not at the same pace. “We are seeing some rate decreases there now too,” he added. “Six months ago, we weren’t seeing a lot of that.” The trend is good news for commercial property insureds, he said. “It’s welcomed greatly after what we dealt with the last five or six years.”
“The property market right now is the best market from a client perspective that it’s been in the last seven years,” said Michael Rouse, managing director, U.S. Property Practice Leader, Marsh. “There’s an oversupply of capacity resulting in a continued deterioration or reduction in pricing.”
Rouse said Marsh is seeing broader terms in property coverage, as well, driven by that oversupply trend in the market. “And while there’s been significant losses over the last 12 months … the market is healthy,” he said.
rate increases in commercial property insurance have mostly faded, brokers say.
“What we’re starting to see now is the market definitely has softened, and we are seeing rate decreases, certainly more commonplace across the entire book,” said Jeff Buyze, National Property Practice Leader at USI. Buyze said the rate decreases are more prominent in the “shared and layered space,” which is an area of commercial property that also saw the largest increases during the hard market. “We’re starting to see a lot of that pricing come down, a lot more capacity that is out in the marketplace right now.”
Those accounts that are insured by a single insured carrier program are still seeing
“Whether you’re buying coverage on vacant properties, operational properties, properties in Florida, properties in California, it’s a better place, a better market today than it has been in the last seven years.”
Insurance Journal asked a handful of property insurance specialists about four trends in the commercial property world in 2025: insuring vacant commercial buildings, growing concerns over wildfire risk to commercial properties, how valuation is impacting property insurance today, and alternative options to consider. Here’s what they had to say.
Alternative Risk Solutions
Large commercial property insurance buyers sought alternatives in the depths of
the hard market deploying self-insured options such as higher retentions, forming captives, and buying parametric products.
While property insurance conditions have improved, there’s still a lot of interest in alternative risk strategies for clients looking to take more control over the traditional “ebbs and flows” of the insurance market, USI’s Buyze said.
Marsh’s Rouse said commercial property clients are retaining more risk than ever before in the form of higher deductibles and alternative markets such as captives. “We do have clients that A, have captives today, B, are looking to form captives, or C, are looking for a large retention,” he said. Alternative risk options are not for everybody, Buyze added.
“Typically, you have to retain, in most cases, at least $5 million as a deductible or as a layer before it starts to really pay for itself.” He said there’s potential collateral issues to consider, as well. Insurance collateral requirements are a way to safeguard the insurer against additional risk.
Buyze agrees there was a lot of interest in alternative risk solutions during the depths of the hard market. “We saw a lot of interest because people just couldn’t afford to buy the insurance that they were being required to buy, whether it be for lenders or other stakeholders,” he said. Even as the market softens, he expects the trend to continue. “We have clients today that they had surplus all along in their captive and maybe they weren’t using it.” So, when the hard market came along, they were able to deploy their captive’s surplus
to use it on their own program. “We saw a lot of that during the hard market.”
‘The property market right now is the best market from a client perspective that it’s been in the last seven years.’
Whether that trend will continue is a “risk-reward decision” for the insured, he added. If rates come down enough, then the question to ask is if it still makes sense to retain that same amount of risk in a captive or focus on another area, such as retaining “something on auto or another line of coverage.”
Another alternative market that saw growth and interest during the past several years in property coverage has been parametric products.
Carl Smith, national property practice leader, Risk Strategies, said parametric insurance has become a hot topic because there’s plenty of capacity in the market for those products. But there’s still a lot of unknowns when it comes to parametric insurance on the client side, he
added. Insureds have questions about what alternatives to traditional insurance products really are. “They don’t really know what’s a captive, what’s a parametric product, and they’re asking those questions.”
Between rate increases and the industry’s focus on proper valuation, insureds have been hit really hard by the cost of property insurance, he explained. “You compound a rate increase with a values increase because values hadn’t really been heavily scrutinized for a while, and you can really end up with a really significant increase,” he said. He noted the hard market has been a time to educate clients on what insurance is and what it is not, and how alternative property insurance products are materially different than conventional indemnity-based property insurance policies.
Parametric insurance is a highly customized product that meets only a very specific need, Smith said. “You can theoretically build a parametric product around an infinite number of scenarios,” he said. “But what it is not is a way to beat the conventional property insurance market to secure cheaper catastrophe
cover or whatever. Of course, you could have a physical loss at a site and not trigger your parametric.”
That’s a critical difference for insureds to understand, he added. Coverage relies solely on the trigger. “It’s all around the wind speed trigger, the hail size trigger, whatever the product is that you’re buying.”
Buyze added while there are some “really good products” in the parametric insurance space, they don’t always make sense for some clients. “Some risks are very well suited for parametric, and others, it may not make a lot of sense,” he said.
“For instance, we have a lot of country clubs that might be exposed to wind. … Tee-togreen coverage and things of that nature may be excluded or have a very, very small sublimit in their property policy,” Buyze said. “So, having a parametric with a broader definition of what actually is a loss allows you to actually pay for things that are typically excluded in the property policy with a parametric product.”
But the important thing to consider is how the product is structured, he noted. “Is it a single peril? Is it multi-peril? What are you really trying to achieve? At what point do you want that policy to trigger? Setting up those triggers in the policy itself is very important whether it’s wind, flood, quake, a number of [different] perils.”
Wildfire Risk Models
The combined effects of climate change and increased development in fire-prone areas are driving greater exposure to potential losses from continued on page 30
Special Report: Commercial Property
wildfires. The wildland-urban interface (WUI)—areas where homes and businesses meet wildland vegetation—has also expanded. Losses from wildfires pose great risks to commercial properties at the same time businesses face operational risks such as damaged assets, supply chain disruptions, business interruption, and increased liability.
“Wildfire exposure continues to complicate placements and cause concern for insurers,” USI wrote in its January report. With insurers reducing capacity offered or refusing to write locations in high-risk wildfire areas, “insureds find themselves more reliant on the state-sponsored plans like the California FAIR Plan, the excess and surplus market, or wildfire parametric products.”
The USI report said that none of these alternatives come without risk, “including named peril coverage in programs like the FAIR Plan, premiums that could be multiples of the existing premium in the excess and surplus market, or problematic language within parametric policies that can exclude coverage for wildfires that start within the perimeter of the property.”
While the industry is advancing efforts to better predict wildfire risk through modeling tools, there can be serious discrepancies in the results or risk score, Buyze said. Brokers need to “dig deeper” than the risk score or risk map detailing wildfire risk, he said.
“The risk score itself is not enough,” Buyze explained. “You have to look at, OK, how much defensible space do we have? What’s the precipitation
in that area? Are they in a specific katabolic wind region? What are the previous burns? How far were the previous burns? All of those things,” he said.
“Unfortunately, some of the underwriters will decline risks right off the bat if the risk just hits a certain risk score,” he said. “My recommendation and what we do here is use multiple systems. You have to dig into the data and really understand what’s happening on the ground there.”
Jeff Borre, U.S. Property Leader, Marsh Advisory, said “wildfire modeling is very young compared to the other [risk] models.” That means it’s important to partner with advisors who can help when a risk score might show a discrepancy in real wildfire risk.
“So, if you think about windstorms where we’ve been running that [modeling] for 20, 30 plus years, we’ve got great historical data,” he said.
going to help us in those risk situations. So, it’s important to engage with someone to make sure that we’re explaining that to the markets, making sure they understand that our clients are doing everything they can” to mitigate the risk.
Vacant Commercial Property
Wildfire models are not yet there. “Wildfire models are more in their infancy,” he said. “We’ve got these primary and secondary characteristics [for flood, wind risk] that can help us tell how buildings are going to respond,” he said. But wildfire isn’t there yet. “Number one, because it’s young, and number two, because it’s a little less predictable because of the lack of some of that historic data.”
Marsh’s Rouse, agrees. “The tools and resources to help evaluate wildfire risk are still evolving,” Rouse said. But at this point, he thinks the tools are mostly “undeveloped.”
“I think when you get into those situations where you think you’ve got a discrepancy [in wildfire risk scoring], it’s important to partner with someone that can investigate that discrepancy,” Borre added. “We’re not often giving credit for defensible spaces or positive roof construction or building materials that are
National vacancy rates for office buildings hit a record 19.8% at the end of 2024, an increase over the previous 12 months, according to a U.S. office market report by Commercial Edge powered by Yardi, a technology and data firm for the commercial real estate world. Despite high-profile return-to-office mandates from major corporations, the report’s authors say they do not anticipate office vacancies to fall this year. Other reports predict the office vacancy rate to rise to 24% by early 2026.
USI’s Outlook report said: “While Class A office space remains in high demand in desirable locations with amenities, Class B and C offices have lower prospects of being repurposed. As these properties remain empty, insurers view them as higher risks due to potential losses from vandalism, leaking pipes, theft, glass breakage, and arson.”
USI’s Buyze said the most problematic issue with covering these vacant office buildings involves coverage restrictions and exclusions. It’s also important to know how an insurer defines vacancy. “What defines a vacant property in the policy form? Because you could pick up three different policies and all of them treat vacancy a different way,” he said.
“For those that do have vacant properties on their schedule, I think getting a
copy of the specimen policy form that’s been quoted is absolutely essential to see how that’s treated, because each of these property policies handle it differently,” Buyze said.
For example, “you could have a permission for vacancy for a certain number of days—30, 60, maybe 90 days. And then after that, you could start seeing exclusions in place for certain perils … things like vandalism, malicious mischief, water damage, theft of copper pipes, all of those things start to get loaded into the policy form.”
Beyond the policy’s possible exclusions, Buyze recommends reviewing protective safeguards and warranties for things such as maintaining heat in the building. “You could see maintenance for maintaining
sprinkler systems, the alarm systems, and depending on the situation, that may not be possible for some insureds.” That could present challenges for the insured. “My advice when dealing with vacant properties is definitely get a copy of the policy form and review it, ask questions, and confirm what’s actually being covered and what isn’t.”
‘The property market right now is the best market from a client perspective that it’s been in the last seven years.’
Property Values
After several years of inflation and cost increases, construction and equipment
costs remained relatively stable in 2024, Marsh said in a February Property Valuation US Market Update. “While carrier challenges to reported property values have not disappeared, the nominal rate of cost increase has certainly been welcomed during renewals and is expected to continue.”
“The most critical thing you need to understand, or anyone needs to understand, is what is the exposure, and that all starts with the values,” Marsh’s Rouse said.
“It’s the property values from a building perspective, content, what’s in the building, and then obviously from a revenue business interruption standpoint. For us, we think that that process is incredibly important for our clients and for us to provide our clients with the right advice to make buying decisions,” he said.
“If my values are 40% undervalued and I’m buying to an output based on a vendor model for named windstorm or earthquake and so on, well, if my values are 40% off then my P&L is probably going to be 40% off just using very simple easy math,” he explained. “So, there’s a high probability I’d be under-buying an appropriate level of insurance. … It’s all about making the right risk decisions, and it’s so critical that our clients have a good handle with respects to their valuation to be able to make those risk decisions.”
From a valuation standpoint, insurers were “super focused” on valuation from 2021 to 2024, Rouse said. “If a client didn’t have an appropriate explanation for what their values are with a lot of detail, oftentimes we’d see coverage
limiting language,” he said. “But in general, the market and clients have done a really good job in recent years to address appropriate valuation.”
But Rouse cautions that a valuation is only as good as the time it’s been completed. Other factors that may come into play when it comes to valuation in 2025 could include the potential impact that tariffs will have on materials such as steel and lumber, he added.
Derek Hall, president of Intact Insurance’s U.S. Specialty Property group, said that as an excess property insurance underwriter, valuation is top of mind.
“The industry has made a lot of adjustments over the last few years, but chronic undervaluation has always been a concern, and as an excess market, it’s something that’s always been at the forefront of our minds,” Hall said. That’s because excess property underwriters are potentially risking a couple hundred million dollars on excess limits.
Intact Insurance Specialty Solutions offers up to $250 million in capacity for excess property placements, for example. The coverage is designed for a broad range of commercial properties requiring substantial limits beyond traditional primary layers.
Hall said a primary commercial property market might be on the hook for $5 million. But an excess property market has much more to lose if valuations are not proper.
“So, the primary’s concern is legitimate, but not as legitimate as ours because we have much more at stake,” he said. “Valuation is certainly something that we always take into consideration.”
Special Report: California's Wildfires
An Insurance Journalist’s Perspective on Southern California’s Wildfires
PART ONE OF A TWO-PART SERIES
At 4:58 a.m. on Jan. 8, the Watch Duty app buzzed: Evacuate.
By Russ Banham
It was pitch black in the house and the power was off. The Santa Ana winds were howling. As planned, my wife, Jenny, gathered our two dogs and cat and scurried them into her car as I shuttled our important documents, medications, pet food, cash, and clothes into mine. The bright orange sky illuminated our neighbors quietly performing the same choreography. To the east burned the
Eaton Fire, to the west burned the Palisades Fire, and to the north were the San Gabriel Mountains, where the Lidia and Hurst Fires were looming.
The city’s air raid sirens suddenly blared—the first time we’d ever heard them or knew of their existence. No one panicked and, in a queue, the residents of La Cañada Flintridge, where we live three miles due west of Altadena, slalomed past broken tree limbs in the street, driving the only direction we could: southward.
The next four days were torture as we followed the fluctuating reports on what had become a hellscape across Los Angeles County. Armageddon was Jan. 9, when six wildfires simultaneously raged across
Los Angeles County. Over the next two weeks, 14 destructive wildfires in all affected the entire region. The winds blew southwest for the most part, jeopardizing parts of Pasadena and Glendale. If the wind turned westward for a sustained period of time, La Cañada Flintridge, one of 50 Tree Cities USA, could easily ignite.
We set up house in a La Quinta Inn that took in pets in a small city called Hawaiian Gardens, a municipality named not for tropical splendor but a decades-old casino. Dozens of fellow evacuees crowded the hotel. Those who had lost their
homes to the Eaton Fire or the Palisades Fire surrounded the outdoor ashtrays, smoking possibly for the first time in years and talking obsessively on their cellphones with family, friends, and insurance agents. I didn’t want to call our independent agent until we had a reason. I later learned that more than a hundred of her clients’ homes were destroyed.
The first day, we watched television broadcasts of the wildfires. All was doom and gloom. The lowest point was when a reporter shoved a microphone into the faces of an elderly couple standing outside the charred remains of their home. “How are you holding up? What are your plans?” the reporter intruded. I turned off the TV.
Hope was offered by a single neighbor who defied the mandatory evacuation order and texted me about the local fire conditions and prospects. For her privacy, I will call her Catherine.
Catherine was plugged into a network of friends at city agencies and officials and had previously disregarded a mandatory evacuation during the devastating 2010 Station Fire. She owns the most fire-resistant house on the block, with a metal roof, cement composite siding, steel fencing, defensible space, and a pool with a pump and a generator.
When I tell people this story, they imagine some crazy
person with a garden hose on the roof. But Catherine is no fool. “When I evacuate, that’s when we all need to worry,” she texted me.
We returned to our home the day after the evacuation order in our part of the city was lifted on Jan. 10. There was no power, and the house was freezing. The winds were significantly calmer, with just enough gust to blow off the ash blanketing the house. Workers dispatched by the city already were tossing debris from century-old cedar trees into woodchippers. Trees that had fallen and were circled with yellow tape disappeared within days.
On Jan. 31, after burning for 24 days, the Eaton Fire was finally contained.
Risk and Insurance
Life went on, but we were changed. The terror of the evacuation merged with our survivor’s guilt of having
escaped the worst. Three people we know had lost their homes and possessions in Altadena and Malibu. Our texts to them were brief, expressing our sincere concerns and offers of support. Jenny donated to their respective GoFundMe campaigns. It was the least we could do.
In the aftermath of the devastation, having presciently written about the risk of fire to our home for Carrier Management in August 2023, I emailed several insurers, agents, state insurance regulators, trade groups, consumer groups, and the Insurance Institute for Business and Home Safety (IBHS) to discuss the wildfires’ impact on the industry and policyholders. Selfishly, I also wanted to know what we could do to fortify our home in preparation for the next wildfire.
Jenny and I are among the 451,000 California residents
Insurance journalist Russ Banham and his wife, Jenny, in front of their California home. After evacuating from the fires in January 2025, the couple has decided to fortify their home to prepare for future events.
whose homeowners insurance is provided by the state’s FAIR Plan. In 2020, fewer than half that number were in the plan. According to the most recent figures, more than 4,500 homeowners filed insurance claims with the plan after the recent wildfires. Due to an estimated $4 billion in losses from the Eaton and Palisades fires, the state insurance department has approved a $1 billion levy on the plan’s member insurers.
Prior to a new insurance regulation that took effect before the wildfires, carriers recouped the cost of paying the assessments by raising premiums. The current regulation requires insurance customers to bear 50% of the assessment via a temporary fee added to their insurance premium. At
present, the average annual cost of home dwelling coverage in the FAIR Plan is $3,200. We pay more than $4,000. Tacking on another 50% will lift our premium to over $6,000.
Although consumer groups have threatened to sue the state over the matter, the bottom line is clear: Homeowners insurance will cost a lot more in California. New state regulations permitting insurers to use wildfire catastrophe models in setting their rates and to treat reinsurance like other carrier expenses are expected to result in more accurate rates going forward. In return, carriers must increase the number of property insurance policies in wildfire-prone regions in California by 5% every two
continued on page 34
Special Report: California's Wildfires
continued from page 33
years, until attaining the equivalent of 85% of their statewide market share. As this occurs, we and other homeowners may be able to exit the FAIR Plan.
Our immediate concerns are less about insurance and more about the future risk of our house burning down. In California, wildfires are nothing new. Alternating periods of drought and substantial rainfall—a causal factor in wildfires—are nothing new. Climate change has increased wildfire frequency and severity in recent times, but the trigger in most cases is pulled by people. Lightning did not cause the Eaton and Palisades fires. Possible ignition sources include fireworks, faulty electric transmission lines, the reignition of a previous small fire, and a homeless encampment (the assertion of the region’s major electric utility).
Wildfires in the pre-European settlement period were common occurrences. Aware of the hazard, Indigenous peoples settled away from the hillsides and in the prairies. To reduce the brush, they set small fires that limited the potential for an inferno. The difference between then and now is the region’s development. In the 1920s, the population of Los Angeles County was under one million; last year, it topped 9.6 million. People come here because the weather is sublime, the city is a global entertainment capital, job opportunities are plentiful, and access to the outdoors is unlimited.
Homes like ours built 75 years ago in what is now called the wildland-urban interface offered people in the 1950s a rural-like experience surrounded by nature, yet only a few
minutes by car to museums, theaters, and other big city charms. Much of La Cañada Flintridge was constructed in the 1920s, well before Los Angeles County strengthened the building codes following the Bel-Air Fire of 1961. That wildfire burned more than 6,000 acres and destroyed 484 homes. Like the Palisades Fire, many houses were owned by celebrities. The cause of the fire has never been determined but is believed to be accidental—in a word, us.
‘Armageddon
was Jan. 9, when six wildfires simultaneously raged across Los Angeles County. Over
the next two weeks, 14 destructive wildfires in all affected the entire region.’
Los Angeles is a sprawling county of valleys surrounded by hills and mountains. Drive more than a couple miles and the highlands arise—the Santa Monica Mountains, San Gabriel Mountains, and Verdugo Mountains, as well as the San Rafael Hills, Simi Hills, South Hills, Baldwin Hills, and San Jose Hills. Places are named Hollywood Hills, Beverly Hills, and Pacific Palisades for a reason.
Since embers the size of a fist can fly one mile per minute in the Santa Ana winds, hundreds of thousands of houses and other structures in Los Angeles County are susceptible to a wildfire. Gusts exceeding 70 mph and 80 mph, respectively, were recorded in the Eaton Fire and Palisades fire, but even that is nothing new. In
January 1984, the Santa Ana winds clocked in at 100 mph as a fire swept through parts of La Cañada Flintridge, destroying 10 homes.
In the pre-settlement period, wildfires that erupted in the foothills consumed fallen trees and parched shrubs and bushes called chaparral. Once burned, scant fuel remained for the fire to grow in size and intensity. The density of today’s building stock—our homes and everything inside and outside them—provides abundant fuel assuring ever larger, more powerful and longer-lasting conflagrations.
Flight or Fight
There’s nothing homeowners across Los Angeles County can do in the near term about climate change, the ferocity of the Santa Ana winds, or the area’s population boom. What we can do is decrease the risk
of our homes burning in a wildfire. When confronted with danger, humans resort to the fight or flight response. We love it here and are not leaving. We decided to fight.
Following several discussions with our insurance agent and investment adviser, Jenny and I decided to take out a home equity line of credit to fortify our house to withstand fire-related damage. IBHS was enormously helpful. I was put in touch with Dr. Ian Giammanco, the institute’s lead meteorologist. He said we were lucky to have a Class A fire-rated roof and a garden of mostly fire-resistant shrubs surrounded by defensible space. Unfortunately, the luck ended there. Among our biggest fire risks were the legacy windows, fences, gates, and siding of the 75-year-old house, all made of combustible wood.
Most of the money pulled
from the HELOC is earmarked for 19 new windows and three sets of French doors with double-paned, tempered glass framed in fire-resistant composites. Additional capital has been allocated to install fire-rated corrugated steel panels and posts as perimeter fences and gates. Initially, we intended to envelop the house in fire-rated Hardie Board siding made from cement, sand, and cellulose fibers, but the cost was beyond our means. An alternative is Class A fire-rated intumescent paint, a coating that expands up to 100 times its thickness when exposed to heat, forming a char barrier insulating the underlying wood from fire.
Dr. Giammanco identified the close proximity of our house to our neighbors’ homes as the “weakest link” in our risk mitigation plans. The neighbors’ garages flank our home and are used for
storage. The structures are scant inches within the 5-foot noncombustible zone to meet IBHS’s Wildfire Prepared Home mitigation requirements. The fence contractor will install fire-resistant corrugated steel panels serving as barriers between our home and the bordering structures.
The vents in the eaves of the house were also identified as a fire hazard. The screening material does not conform to current building codes, an inexpensive repair requiring the installation of new fire-safe venting.
Last but not least, we may mount a sprinkler system on top of the house that draws water from our pool via a pump attached to a gas-powered generator. A couple posts on Instagram showed houses with sprinklers that survived the recent fires intact. I asked Dr. Giammanco for his opinion.
“It concerns us since there is no performance standard for commercial sprinkler systems regarding how they should perform,” he said. “Without such standards, people may place too much confidence in them, investing in sprinklers instead of the risk mitigations we know to work.”
We’ll cross that bridge when we get there.
All Together Now
Friends think we are pursuing these expensive renovations to be able to exit the FAIR Plan and find more affordable insurance. That would be nice, but the truth is I keep thinking about wildfires. I’ve been having trouble sleeping, worried first that our house was destined to burn to the ground and then, when it miraculously didn’t, focusing on how to never let that happen. As I began paying contractors tens of thousands of dollars to increase our chances, I fretted that it might all go to waste. The house could still go up in flames.
One afternoon in our early fire-mitigation research period, Jenny and I went to a century-old lumberyard in Pasadena known for exemplary customer service. I recognized a young man who had helped me previously. As we traveled through the lumberyard looking at different fire-resistant composites, I inquired where he lived. He paused, as if in thought. “Altadena,” he softly replied. He confided that he and his wife, also named Jenny, had lost their house in the Eaton Fire.
As the three of us continued chatting, he mentioned that his wife was having trouble dealing with what happened.
They were staying at a friend’s house when she decided she needed to get as far away as possible. She drove with their pets to her mother’s house for the time being. He stayed to hold onto his job.
The terrible irony struck me that he was helping us research fire-resistant composites to avoid the horrific fate that befell his family. I lost it. It had been building up inside me for weeks. So many people—tens of thousands—had it far worse than we did. My eyes instantly welled with tears, and I had trouble catching my breath. My emotions embarrassed me, but he gestured that it was OK. Like guys do these days, we hugged. Jenny asked if he and his wife had a GoFundMe campaign. Back in the car, we donated what we could.
This article was first published in March 2025 by Carrier Management, a sister publication to Insurance Journal. In Part Two, Banham interviews California’s former insurance commissioner on the critical importance of building fire-safe houses in fire-prone regions, and his independent insurance agent, who reveals the emotional cost of being the first person called by policyholders who’ve just lost their homes and possessions to fire. He introduces the folly of “going bare” in a state where 10.5% of homeowners are uninsured. Several of Banham’s neighbors who have experienced two and three mandatory evacuations also provide ideas on how insurance carriers can improve their standing with customers.
Banham is a veteran insurance reporter, business journalist and best-selling author.
Closer Look: Association D&O
Understanding the Risks and Coverages in Condo Association D&O
Directors and officers
(D&O) coverage is critical for any organization that is governed by a board of directors. It provides coverage for those decisions that the board makes in good faith for the benefit of the organization. They need this coverage because sometimes people make decisions based on the information they have—and sometimes those decisions turn out wrong.
By Patrick Wraight
in the case of a condominium association, by volunteer homeowners. The board members of a condominium association may not have any experience in serving on a board. This isn’t necessarily a bad thing, but it can increase the possibility of the board making decisions that could come back and cause them problems later.
landscaping, monitored alarm systems, and more.
Risks for Condo Boards
This is an important coverage for any organization, especially when that organization is run by volunteers, or
A condominium association board is responsible for making financial decisions for the association. Condo associations receive fees from unit owners, and the board must use that money for the operations necessary to the association. These operations include the purchase of insurance, the care and maintenance of the property,
Like any other business, a condo association should retain a certain amount of earnings. They might need money in the bank in case of an emergency. If the HVAC unit in building three goes out, they need money available to call someone in to get that unit repaired or replaced because in Florida (and other states), no one wants to live without air conditioning and/or heat. If there is a fire, the association should have money in the bank to cover the insurance deductible and have some additional money available to get contractors out to repair the fire damage.
The problems come up for the board when an unforeseen event happens that breaks their budget or exceeds their retained earnings. That’s when the board needs to make a critical decision: Do they find the money or put off the work?
One way that an association board can find money is to assess the residents. They simply determine how much money they need for the project and divide it up equally between the residents. Then they send everyone a letter stating how much money each one needs to pay to the association, when it is due, and why they need it. This is normally met by angry residents who may not have fully read the notice, attended the public meeting, or haven’t
taken an interest in the association governance until it hit their wallets.
Another way they might raise that money is over a period of time where they use the money that comes in from fees, cut a few expenses, and potentially by making certain investments. This could be an option if the work doesn’t need to be done immediately and there’s a low risk that the issues will get worse over time. As for investing, like any other investor, an association board could decide to invest reserve money and make a risky decision.
All of these risks could potentially turn into a lawsuit or claim filed by a resident stating that the board made a bad decision.
To learn more about the Academy of Insurance, visit: www.ijacademy.com.
• If the board levies an assessment, someone could claim misuse of funds, because there “should” be more money available for projects—especially capital projects.
• If the board chooses to invest money, and that investment doesn’t produce the kind of revenue that the association needs, the claim could be for poor investment decisions.
• If the board chooses to attempt to wait and save as much money as possible
in hopes that the building doesn’t get worse before the repairs can be made, the claim could be that they knew of a problem and didn’t take appropriate action to fix it.
All of these potential claims are in the realm of the D&O policy. It is designed to protect the board of directors against claims that they made the wrong decision. It can also protect individual board members from individual claims against them for their decisions.
Understanding Association Directors & Officers Liability
There are two significant issues with association D&O policies that must be addressed. First, every D&O policy is different and must be handled as such. In many states, it will be the board’s responsibility
to read their own policies, understand them, and be aware of any exclusions or limitations that might be included in the policy. However, most condo association boards aren’t staffed by insurance professionals who read and understand these policies. They are staffed by homeowners who may not even fully understand their homeowners’ policies.
That’s why the board truly needs an agent or broker who can help them to understand what is covered by their policies and what is not covered. The exclusions and limitations are not standardized, and because of that, there should be someone on their side who can help them to be aware of these policy details if not help them to negotiate with the insurance company to get certain exclusions removed or mitigated in some way.
Another issue that may come up has to do with budget issues. If the board looks at their budget and decides they need to make cuts in their insurance program, certain policies might fall to the wayside, including potentially the D&O policy. Not only is that the sort of decision that could give rise to a D&O claim, but it’s the kind of decision that (without insurance) could cost the board members significantly.
Wraight, CIC, CRM, AU, is director of Insurance Journal’s Academy of Insurance. He has written numerous articles for Insurance Journal and My New Markets and is the co-author of Risk-Proof Your Business - The Complete Guide to Smart Insurance Choices. As a sought-after speaker, he’s shared his insights multiple times at various insurance industry events nationwide. He can be reached at pwraight@ijacademy.com.
Idea Exchange: Employment Practices
Illegal vs Legal DEI
Navigating DEI Legally: Emphasizing Equity Without Legal Pitfalls
The debate over what constitutes “illegal DEI” has intensified following recent executive orders from the U.S. president. The orders instruct federal agencies to identify organizations engaging in potentially unlawful diversity, equity, and inclusion (DEI) activities, targeting them for compliance investigations. Additionally, federal contractors and grant recipients must certify that their DEI initiatives align with legal requirements. While this order is currently subject to legal scrutiny, its potential implications make it critical for organizations to reassess their DEI strategies.
The absence of a clear definition of “illegal DEI” has been met with legal challenge and the Equal Employment Opportunity Commission’s (EEOC) official statement leaves room for much interpretation. It is as we say on my InclusionScore Podcast, “If you ask 100 what DEI means, you’ll get 100 answers.” There is a correct answer, and it is actually a number: ISO-30415.
Still, legal precedents—particularly the U.S. Supreme Court’s decision in Students for Fair Admissions v. Harvard—suggest that DEI initiatives become legally questionable when they grant preferential treatment to protected groups based on race, gender, or other characteristics.
The legal landscape indicates that DEI is not inherently unlawful but must be structured to ensure compliance with merit-based principles and equal opportunity regulations.
Elevating DEI vs Capitalizing DEI
DEI is capitalism. The key to legally sound DEI practices lies in distinguishing
between “elevating” DEI, where certain groups receive preferential advantages, and “capitalizing” DEI, which seeks to remove systemic barriers without offering direct preferences. Firms need to establish how they do this via their explicit process statements. A notable example of capitalizing DEI is the use of blind auditions in symphony orchestras, which led to a significant increase in the representation of women without explicitly favoring any group.
Organizations employing elevated DEI strategies, such as hiring set-asides, diversity-based tiebreakers, or compensation incentives tied to “diversity goals,” face higher legal risks. These approaches are more susceptible to legal challenges and scrutiny from the U.S. Justice Department.
In contrast, capitalizing DEI, which includes structured hiring practices, inclusive mentorship programs, bias mitigation strategies, adequate feedback mechanisms from protected classes (often called employee resource groups), and equitable work allocation, provides a more sustainable and legally compliant path forward.
ISO-30415: A Framework for Reducing Legal Risks in DEI Implementation
One effective way for organizations to ensure that their DEI initiatives comply with legal and regulatory standards is by aligning them with ISO-30415, the international standard for DEI. It’s a business process that offers structured guidelines to help organizations deploy a portfolio of DEI services in a way that minimizes legal exposure while promoting inclusivity. ISO-30415 encourages business operations to focus on embedding inclusion through the communication of policy rather than applying Ad Hoc projects mistaken for preference. It emphasizes practices such as:
• Unbiased recruitment and promotion processes to ensure equal opportunity for all candidates.
• Systematic bias detection and mitigation in workplace policies and decision-making.
• Inclusive leadership training to foster an environment where diverse perspectives contribute to organizational success.
• Stakeholder engagement strategies that prioritize transparency and fairness in DEI efforts.
Dawn Bennett-Alexander
By James Felton Keith and
By integrating ISO-30415 into DEI strategies, organizations can create inclusive workplaces that comply with legal frameworks while maintaining their commitment to diversity and equity. This approach not only mitigates the risk of litigation but also fosters a more equitable and productive workforce.
The Future of DEI: A Legally Sustainable Approach
Dr. Dawn D. Bennett-Alexander regularly reminds us that there is no such thing as “reverse discrimination” under the law. We are all protected by the 14th Amendment. Despite political and legal challenges, organizations do not need to abandon DEI. Instead, they should refine their approaches to focus on inclusion without engaging in noted preferential treatment. The distinction between elevating and capitalizing DEI serves as a practical guide for businesses seeking to balance inclusivity with compliance. It is important to note that the international standard segments DEI service offerings in 4 types:
• Training, which companies have the first amendment right to deploy.
• Data Collection, which is a catalyst to validate a market of action on a particular protected class.
• Internal Infrastructure, which are feedback mechanisms designed to validate the previous two.
• External Infrastructure, which are efforts to engage specialists in protected classes, like chambers of commerce and trade associations.
Americans oppose taking race and ethnicity into account in hiring and promotion decisions, yet there is wide support for “opening doors” so that “people who have traditionally had less access to opportunities get the chance to be considered.”
Ultimately, organizations should prioritize policies that remove systemic biases and create equal opportunities without violating anti-discrimination laws. By adopting evidence-based DEI strategies and adhering to international
standards like ISO-30415, businesses can navigate this evolving legal landscape while fostering an inclusive and equitable work environment for all.
Felton Keith is an award winning engineer and economist turned labor leader who was the first Black LGBTQ person to run for federal office in America, via U.S. Congress in 2017. He is CEO at InclusionScore Companies and currently lectures on Inclusion at the University of Georgia. As an entrepreneur, he established the first international diversity & inclusion certification based on the ISO-30415:2021 standard.
Bennett-Alexander, emerita tenured associate professor of Employment Law & Legal Studies at the University of Georgia’s Terry College of Business, is a cum laude graduate of the Howard University School of Law and a magna cum laude graduate of the Federal City College (now the University of the District of Columbia). “Dr. B-A” is licensed to practice law in the District of Columbia and six federal jurisdictions.
Federal Agencies Issue Guidance on Discrimination Related to DEI Programs
On March 19, the U.S. Equal Employment Opportunity Commission (EEOC) and the U.S. Department of Justice (DOJ), jointly issued technical assistance documents “focused on educating the public about unlawful discrimination related to ‘diversity, equity, and inclusion’ (DEI) in the workplace.”
The first document, issued jointly by the DOJ and EEOC, “What To Do If You Experience Discrimination Related to DEI at Work,” aims to educate the public about how civil rights rules apply to employment policies, programs, and practices—including those labeled or framed as “DEI.” The second document, issued solely by the EEOC, “What You Should Know About DEI-Related Discrimination at Work,” is a FAQ-style technical assistance document explaining how Title VII of the Civil Rights Act of 1964 applies to DEI-related discrimination, according to the EEOC.
According to a recent analysis by Olaoluwaposi O. Oshinowo, Savanna L. Shuntich, and Kahlil H. Epps, all from the Washington, D.C.-based law firm Wiley, the documents provide the federal agencies’ position concerning numerous employer actions that might create DEI-related discrimination claims, including:
• Exclusion from mentorship, fellowship, or internship programs based on protected traits.
• Limiting who can join employee resource or affinity groups based on protected traits.
• Segregated presentation of trainings, even where the offerings or benefits provided to all participant groups are the same.
• DEI trainings that create a hostile work environment based on content, design, or execution of the training.
• Retaliating against workers who oppose DEI programs or trainings.
• Selection for interviews, including placement or exclusion from a candidate slate or pool based on protected traits (e.g., the “Rooney Rule”).
To view the guidance documents, visit www.eeoc.gov.
Idea Exchange: Is It Covered?
Logic & Language and Forms & Facts Triple Net Leases
Historically, triple net leases have been used for long-term leasing of larger properties, but increasingly they have been prescribed for smaller and/or short-term leasing arrangements, including rentals of individual offices or sections of buildings, along with window plate glass, HVAC units, built-in fixtures, mechanicals, etc.
By Bill Wilson
Over the years, I’ve written extensively about the coverage gaps that can arise when real property is insured under a triple net lease. In a triple net lease, the tenant typically agrees to pay, in addition to the rent, for (1) operating costs such as
maintenance and utilities, (2) property taxes, and (3) property insurance.
For the insurance portion, the important part is how the tenant pays for the insurance coverage. Including this and other triple net expenses within a monthly payment is fine, but problems can arise when a landlord places the responsibility for actually procuring insurance for the property on the tenant. How does the landlord ensure that his or her interest is properly protected?
Recently, I received an inquiry from a consultant about the best way to insure a tenant’s exposure when the lease does not make the tenant responsible for insuring the entire building or even a finite section of the building. In this case, the landlord is insuring the exterior structural walls,
roof, and concrete slab and the tenant is responsible for insuring the rest of the building on a repair or replacement cost basis. The lease doesn’t specify what “the rest of the building” means.
In situations like this, I believe the landlord is asking for trouble at claim time in determining exactly who is responsible for what damage and the tenant incurs the responsibility of determining and properly insuring the values of a vaguely described exposure. Unfortunately, in this specific case, the landlord and his attorney refuse to budge on the lease requirements.
To come close to meeting the requirements in most of these leases, direct insurance is typically necessary. A limit of coverage can usually be added in a CGL policy for “fire damage legal liability,” but
the covered perils are limited. ISO also has a form CP 00 40 – Legal Liability Coverage Form to which causes of loss forms can be added, but this form excludes damages (other than those arising from burglary or robbery) for which liability is established solely by the lease. Damages often, even usually, occur without any negligence on the part of the tenant (e.g., weather-related claims, vandalism, etc.).
This leaves the only option being coverage under something like the ISO CP 00 10 – Building and Personal Property Coverage Form or a businessowners policy (BOP) form. In a case like the one described above, one concern is the potential for a coinsurance penalty since only part of the building is being insured by the tenant. However, the CP 00 10, for example, defines Covered Property to mean the property “described” in the policy and not necessarily the entire building, though this still presents an issue in defining and valuing exactly what needs to be insured under the lease. If you’re talking about the entire building, the description isn’t overly complicated. But if you’re only insuring part of a building, it is easy to see how a description might be incomplete or vague.
In 2017, ISO introduced the CP 14 02 – Unscheduled Building Property Tenant’s Policy in an effort to simplify identification of coverage property without a specific, detailed schedule. This was an improvement, but we still have the issue of adequate valuation when we don’t know exactly what property is required to be covered.
In addition to these valuation issues in determining coverage limits and apportionment of coverage for damage at claim time, another issue is the tenant’s choice of insurer and policy forms. Why would the landlord entrust insuring a multi-million-dollar property to a tenant they may know little or nothing about? Why would the landlord concede the selection of the insurer and the policy forms to someone other than himself or his agent?
And, how is the landlord’s interest in the insurance purchased by the tenant addressed in the policy forms? Is the landlord covered as a named insured? Additional insured? Additional interest? In
some claim scenarios, it likely doesn’t matter because the landlord and tenant both could have no coverage for a loss. This can happen even if the coverage is broad and the insurer’s claims service is outstanding.
For example, what if the tenant has financial problems and commits arson? This happened in one case I consulted on when the tenant torched the building mainly to recover on over $1 million of merchandise they claimed was in the building, though apparently the fire was so hot it vaporized the contents because not even a nonstructural ash was found inside the building, indicating that none of the property on the loss report was actually in the building.
‘Why would the landlord entrust insuring a multimillion-dollar property to a tenant they may know little or nothing about?’
In this case, the tenant had insured the building and contents on an ISO commercial package policy which included ISO form CP 00 90 – Commercial Property Conditions. The “Concealment, Misrepresentation Or Fraud” provision in that form said, “This Coverage Part is void in any case of fraud by you as it relates to this Coverage Part at any time.”
It goes on to extend voidance if “any other insured” conceals or misrepresents
facts concerning coverage. So, in the case of arson by the tenant (or landlord), it doesn’t matter what the landlord’s insured status is. There is no coverage for anyone except possibly a mortgagee under that clause.
Over the years, I’ve addressed these issues in seminars, always with the challenge to anyone in the audience who can convince me that a triple net lease where the tenant purchases all or part of the real property insurance is a good idea when weighed against the possibility that something could go wrong and coverage could be inadequate for the landlord. So far, no one has been able to meet that challenge.
I’ve heard a financial rationale regarding the alleged positive impact of such lease arrangements on taxes, cash flow, or other factors, but none of these explanations, to me, counter the risk of a potentially huge uncovered property loss. If I owned a multi-million-dollar building, I would want to insure every nut and bolt myself and pass that cost along to the tenant within the lease payments.
What do you think?
Wilson, CPCU, ARM, AIM, AAM, is the founder and CEO of InsuranceCommentary.com and the author of six books, including the Amazon 4.8 stars-rated “When Words Collide…Resolving Insurance Coverage and Claims Disputes,” which BookAuthority ranks as the #1 insurance book of all time. Email: Bill@ InsuranceCommentary.com.
Idea Exchange: The Competitive Advantage
Finding Alternatives
In recent months, the Wall Street Journal has published long articles regarding how expensive—to the point of not being affordable— homeowners and auto insurance have become. Insurance companies should not be so confident that raising rates significantly is a one-sided positive approach to increasing profitability as if there are no offsetting costs.
By Chris Burand
The first question to ask is whether such significant rate increases are even required and then, if so, why. Property and casualty insurance companies made a record $89 billion in 2023.
(Editor’s Note: As of press time, the U.S. property/casualty insurance industry reported a 2024 net income of $170 billion, according to a joint report from Verisk and The American Property Casualty Insurance Association.)
On the surface, record profits do not indicate the need to raise rates by double digits year after year after year.
For example, a homeowners policy that has increased 300% in four years indicates a level of incompetency that should result in multiple executive firings. Let’s assume that the carrier’s homeowners combined ratio over the last five years in the state is 110% (which it is). Over five years, on $100 million in premium, they have lost $100 million—not a small amount. On that level alone, someone needs to be fired.
Before jumping to the conclusion that no one should be fired for losses out of their control, the point of insurance executive management is to price, forecast, and manage for losses out of their control. Modern insurance was invented to primarily manage for Acts of God on the High Seas in the days of sails and no communication, no rescue, and no knowledge of why some ship never made its destination. They made money, even without fancy computer models, much less expensive weather models.
Global warming is not to blame either. It’s a human failure.
Bad Decisions
I’ll use my home state of Colorado as an example. In 1992, the Denver metro area had its largest hailstorm in history and the property insurance market froze. The losses and damage were enormous. I did a study at that time of all the hailstorms recorded since 1900 in Colorado. Nearly 100% of all damaging hailstorms occurred east of the Rocky Mountains running from the Front Range to the Kansas border, from Wyoming to New Mexico. In other words, damaging hail has always been a problem in the Denver metro area. It’s just that not
very many people used to live there. Additionally, the actuaries and the insurance executives made really bad analyses and decisions. Going back to 1900, hailstorms are inevitable. Actuarial models are not even necessary to know that hail losses are inevitable in Denver, Colorado. However, following that massive hailstorm, Denver didn’t really have any major hailstorms for the next 15 years or so. I witnessed several carriers who never previously wrote in Colorado come to the state because it was economically booming. And for some reason, actuaries made the almost fatal mistake of introducing recency bias into their pricing models. There had not been a major hail event
for a long time, and none of the new carriers employed people with memories of what happened. Give or take, archeological evidence and psychological studies prove people lose applicable knowledge of catastrophic losses in 15 to 25 years. In other words, they rebuild in a flood plain after a massive flood if another flood does not happen for 20 years. It’s a recency bias. Pricing assuming the future would have minimal hailstorms because the last 15 years had no major hailstorms even though the prior 100 years showed regular hailstorms is a recency bias. I don’t recall anyone doing any detailed studies of permanent weather pattern changes. Instead, they did poor work.
It could be that adequate historic data did not exist in very specific ZIP codes because 20 years ago, virtually no one
lived in those ZIP codes, but that suggests the lack of common sense.
Or maybe the executives overrode the actuaries’ recommendations. I have seen that happen. Regardless, someone screwed up, but climate change is a convenient excuse—especially if the person who should be fired is the one offering the excuses.
Or maybe someone simply forgot the importance of geographic dispersion. This is so easy to achieve with technology, but greed almost certainly took precedence with underwriting managers not paying attention given the lack of recent hailstorms.
‘Global warming is not to blame either. It’s a human failure.’
Or maybe the product development people should have realized that pricing a 25-year-old roof in a hail zone should carry a higher price/higher deductible much earlier than they did. It’s not rocket science, and such a failure suggests another person to be fired.
Or maybe the convoluted and oxymoronic logic of, “But if we charged the right rate, we would never have written any business in Colorado!” might be the driver. Executives with this logic should not leave the mail room.
Today, almost no one wants to write homeowners insurance along the Front Range of Colorado and rates are at the breaking point for consumers.
But going back to the initial example. Take $100 million and triple the premium to $300 million. If the combined ratio is 110% at $100 million, then at $300 million, the combined ratio is 37%. Tripling of the premiums is not justified.
If a carrier claims it is justified, ask for proof and don’t let them slide. Because if it really is justified, odds are pretty high they have deeper problems such as maybe a severe under-reserving issue. This particular carrier has a long history of under-reserving by 5% annually and about 30% over the lifetime. In other words, their incompetency has created
a reserving hole, and they need all that extra money to fill their deficiency.
Or maybe the carrier is out of operational surplus and really what they want to achieve is to cause accounts to leave so their surplus increases as a percentage of premiums. This carrier has achieved this goal over the last five years with minimal premium growth but material surplus growth.
Executive Incompetency
Allowing executive incompetency is not a good strategy. And the repercussions will last a long time. As I’ve recently shown in other articles, standard admitted carriers mostly write adverse commercial business as it is because they’re only writing about 20-25% of all premiums. Commercial clients are already self-insuring a huge portion of their risks whether directly or through alternative vehicles such as captives. They had left a lot of their property exposures in the traditional market, but carriers are driving them out.
The more everyone learns about alternative markets or simply decides to self-insure—and I’m seeing people self-insure their homes (and the Wall Street Journal reported on this same trend)—the more people will not return to the market. While state regulators seem to have bought into carriers needing higher rates, these actions just give politicians more reasons to hate insurance companies, making life even more difficult. This is one reason the surplus lines market is growing so quickly.
With rates so high in the traditional market, people will find alternatives—and they’re not coming back. This means too many regular insurance companies will exist and probably at least 25% need to be eliminated. The ones that should be eliminated first are the ones run by executives that should have already been fired. Because the problem is not hail or global warming—its executive-level incompetence resulting in price gouging with premiums tripling in five years.
Burand is the founder and owner of Burand & Associates LLC based in Pueblo, Colo. Phone: 719-485-3868. E-mail: chris@burand-associates.com.
Idea Exchange: High-Limit Disability
Why Key Person Disability and Accidental Death Coverage Matters in Mergers & Acquisitions
In the world of mergers and acquisitions (M&A), key person life insurance is often a given; most deals account for it to protect against the unexpected loss of a key executive. But what about the “what ifs”?
continuity, even when unforeseen obstacles arise.
By Chris Lack
What if the bigger threat isn’t death but disability? What if life insurance can’t be secured due to underwriting challenges? What if the policy is delayed and the deal can’t afford to wait?
These are real risks that can disrupt a transaction and jeopardize its value. That’s why high-limit key person disability insurance and accidental death insurance are essential considerations in M&A planning. These solutions help mitigate exposure by ensuring financial protection and business
As the M&A landscape evolves in 2025 with shifting regulations and economic factors, insurance advisors have a critical opportunity to guide their clients in navigating these challenges proactively. By incorporating key person disability and accidental death coverage into the conversation, advisors can help safeguard deal value and provide strategic risk management solutions that go beyond the expected.
The Resurgence of M&A Activity
Regulatory hurdles that previously stalled major deals are beginning to ease. High-profile transactions that faced federal roadblocks in recent years, such as the Albertsons-Kroger and JetBlue-Spirit mergers, may now have a clearer path forward. As deal flow accelerates, private
equity firms and corporations alike are looking to secure their investments by protecting the key individuals who drive business success.
According to KPMG’s annual year-end survey, 76% of corporate and private equity dealmakers expect the election results to boost M&A activity, and 80% reported an increased appetite for deals. Similarly, a recent Teneo survey found that 83% of CEOs and 87% of investors anticipate a major resurgence in M&A transactions in 2025. With market optimism high, protecting human capital is more critical than ever.
The Need for High-Limit Key Person Disability Insurance
In any M&A transaction, a company’s most valuable asset isn’t just its intellectual property or customer base—it’s the leadership team responsible for ensuring a
smooth transition and ongoing success. If a key executive becomes disabled during the integration process, it can derail operations, delay strategic plans, and impact financial stability.
Traditional key person disability insurance policies often provide insufficient coverage, with domestic benefits typically capped at $750,000. For high-stakes deals, solutions from the excess and surplus lines market—such as those available through Lloyd’s of London—can provide significantly higher limits, ensuring businesses have the necessary financial protection to weather the unexpected loss of a key leader.
Here’s an example: A private equity firm routinely purchased key person life insurance when acquiring new companies but had overlooked key person disability coverage. That changed when one of their CEOs suffered a debilitating stroke, rendering them unable to lead and drive the success of their investment.
This experience reshaped the firm’s perspective on key person disability insurance. For an upcoming acquisition, they expanded their key person requirements to include disability coverage. A $6 million key person disability policy was structured to provide a lump-sum payout after 12 months if the CEO of the newly acquired company became incapacitated.
By introducing a comprehensive key person human capital program—encompassing both life and disability coverage—the advisor not only safeguarded the firm’s investments but also strengthened their relationship with the client, reinforcing their role as a strategic risk management partner.
Accidental Death Insurance as a Strategic Safeguard
M&A transactions often move quickly, and insurance is frequently an afterthought, leaving limited time for comprehensive life insurance underwriting. A sudden death or catastrophic event involving a key executive can disrupt a deal and create significant financial instability. Accidental death & dismemberment (AD&D) insurance offers an immediate, short-term solution to bridge the gap.
‘M&A clients need more than just transactional expertise—they need risk mitigation strategies that protect their most valuable assets.’
Unlike traditional life insurance, which can take 90 to 180 days to underwrite, AD&D insurance can be implemented rapidly to protect against unforeseen events—whether it’s a plane crash, a skiing accident, or even sudden illness, depending on the policy. This coverage ensures that financial relief is in place if a key executive can no longer fulfill their contractual obligations.
In another case, an advisor’s private equity client had been acquired by a global investment firm. As a condition of the majority investment, the firm required life insurance for its managing partners. Given the complexity of the acquisition and the speed at which it was executed, the advisor was unable to secure fully underwritten traditional life insurance within the required timeframe.
Recognizing the urgency, a $25 million accidental death insurance policy with a 60-day term was quickly implemented. This temporary coverage bridged the gap, ensuring financial protection until a comprehensive life insurance package could be secured from various domestic carriers.
With this immediate solution in place, the private equity firm had peace of mind knowing its significant financial commitment was protected in the event of an unforeseen tragedy. This case highlights the essential role of innovative risk management solutions in safeguarding major investments and reinforcing trust in the fast-moving world of private equity acquisitions.
Protecting the Investment Beyond the Deal Closing
Buyers often focus heavily on financial and operational due diligence but overlook a critical blind spot: the vulnerability of key decision-makers. The success of an acquisition depends not only on assets and revenue projections but also on retaining and protecting leadership talent.
Without proper safeguards, the full value of an acquisition may never be realized.
For insurance advisors, the message is clear: M&A clients need more than just transactional expertise—they need risk mitigation strategies that protect their most valuable assets. High-limit key person disability and accidental death insurance provide essential coverage, ensuring that deals move forward smoothly and that companies remain resilient in the face of unexpected events.
Strategies to Grow Your Practice in 2025
Insurance advisors can leverage these specialized products to expand their practice and strengthen client relationships in 2025. Here are three key strategies:
1. Leverage your centers of influence. Collaborate with attorneys, CPAs, and business brokers who facilitate high-value deals. Educate them on the importance of insuring key executives, positioning yourself as a critical risk management partner.
2. Showcase case studies and success stories. Demonstrate the impact of key person disability and AD&D insurance through real-world examples where these policies protected businesses from financial loss. Share these insights in client meetings, webinars, or marketing materials to build credibility and drive engagement.
3. Partner with industry experts. To excel in this space, a foundational understanding of available solutions is essential—but so is having a trusted specialist by your side.
As 2025 ushers in a new era of deal-making, these insurance solutions will be vital tools in safeguarding both investments and leadership continuity while providing insurance advisors with a lucrative opportunity to grow their practice.
Lack is a seasoned expert in high-limit disability insurance with over 20 years of experience in the industry. As managing partner at Exceptional Risk Advisors, he specializes in designing insurance solutions for high-profile risks that traditional life and disability carriers are unable to deliver. Email: Chris.Lack@ ExceptionalRiskAdvisors.com
Idea Exchange: Ask the Insurance Recruiter
When to Cut Ties With a Recruiter
Even if your concerns seem minor, don’t disregard your gut instinct. If you are worried about actions or behaviors from the recruiter you’re working with, remember that they are doing the same thing with candidates, which is problematic because candidates see recruiters as an extension of you. A recruiter that causes a negative perception of your company makes it incredibly difficult for you to attract high-quality candidates for months, and depending on the severity, years to come.
Red Flag #1 - Candidates Are Not Well Vetted
Have you received a referral and wondered, “Did the recruiter even talk to this person?” or “Does the recruiter understand what this job is all about?”
I like to draw parallels between recruiting and insurance. Imagine if you sent a partial submission to an underwriter but expected a complete quote. It wouldn’t happen, and the more you send incomplete paperwork, the more you jeopardize the carrier relationship.
If you set a high bar for your work on the insurance side, then you should set
a similarly high standard with insurance recruiters when it comes to their processes (candidate sourcing, screening, and due diligence).
Red Flag #2 - Job Seekers Lack Information About You
Have you concluded an interview with a candidate referred by a recruiter and thought, “That person didn’t seem to know anything about our company or the job opening?”
If the candidate chose not to prepare, that’s not the recruiter’s fault.
However, a more likely scenario is that the recruiter is doing the bare minimum, skipping key steps you expect from a quality consultant like interview preparation. Avoid working with these types of recruiters. It's important to set expectations for how you expect recruiters to be involved in your hiring process. Examples include educating candidates on your company and job opening, conducting interview debriefs, providing support on compensation and offers, coaching through resignations, and more.
Red Flag #3 - The Recruiter Has Poor
Communication
Have you been in the final stage of the interview process only to find out:
The candidate’s #1 job is not yours. They will fail a drug test. They have a criminal record.
By Mary Newgard
• They want significantly more money than the initial salary range given. They are susceptible to a counteroffer.
• They will leverage your offer with other companies.
They want to work remotely despite your position being hybrid.
• A family member doesn’t support their job change.
• They lack the experience they claim to have.
The hiring process is a series of small steps, and each one missed makes the next more difficult. Communication is the key to successful recruitment. Recruiters who do a poor job of communicating:
1. Do not conduct interview debriefs with candidates
2. Avoid difficult conversations about compensation, offers, and resignations
3. Are unaware of key details about the candidate that could lead to a bad hire
Information is power. Not everything you or I hear from a candidate means good news, but that doesn’t mean we avoid the questions that need to be asked. A recruiter should regularly speak with you and the candidate, thinking one step ahead about issues based on their experience that neither you nor the candidate have considered.
Newgard is partner and senior search consultant for Capstone Search Group, a national recruiting firm dedicated to the insurance industry. For questions and comments, email: asktherecruiter@csgrecruiting.com.
For many years, agents and brokers have advised clients about the benefits of telematics in reducing commercial auto risks. So, why haven’t market conditions improved, and why is distracted driving still so prevalent?
By Mike Zdrojewski
The answer comes down to followthrough.
Telematics are excellent tools to track and prevent distracted driving and other bad habits. However, when businesses implement telematics but fail to act on their data, they cannot achieve the desired results. Instead, fleet managers should combine telematics with ongoing driver training, and it’s up to agents and brokers to explain why this is a value-added approach.
Unpacking the Dilemma
The commercial auto segment continues to be chronically unprofitable, incurring a net loss of $5 billion in 2023 and deteriorating even further in the first part of 2024, according to AM Best. Simultaneously, distracted driving remains a leading cause of accidents, injuries, and fatalities, claiming an estimated 3,308 lives in 2022 per National Highway Transportation Safety Administration data.
Even worse, the number of distracted driving accidents is vastly underreported because it is difficult for investigators to prove a distraction caused an accident without data. Traditional distractions like eating, smoking, or adjusting the radio while driving aren’t trackable.
Finding the Right Tools
Telematics fills the gap by giving fleet managers data on hard braking, hard acceleration, speeding, and other unsafe driving practices. Some telematics devices also offer phone distraction reminders. However, telematics is only meaningful when fleet managers talk with their
drivers about the data.
When those conversations do not happen, the results can be catastrophic. Take the example of a driver with a history of hard braking issues. One day while on the job, his truck rear-ends a minivan carrying a family of five, resulting in fatalities. During the post-accident investigation, attorneys retrieve telematics data showing that the driver was a repeat offender, but they find no documented evidence that the company tried to correct his behaviors. Accordingly, the company’s executives and their insurer are all deemed liable, and the company is exposed to a potential nuclear verdict.
This unfortunate circumstance could have been avoided had the fleet manager proactively followed up with his driver.
Backing Up Data With Training
At Pennsylvania Lumbermens Mutual Insurance Company (PLM), we have seen clients achieve dramatic reductions in claims costs by combining telematics with driver education. Potential benefits include increased uptime, improved driver retention, fewer accidents, and fewer lost-time injuries. Plus, if a client does experience an accident, their premiums are more likely to remain steady, thanks to their effective use of telematics.
To help clients achieve these results, agents and brokers must offer thorough guidance. Providing tips on how to set up a telematics solution is just the start. Sometimes, fleet managers will be overwhelmed by the amount of data they receive through telematics, creating analysis paralysis. Other times, they may need guidance on how to translate their data into education.
Set your clients up for success with these tips:
• Offer constant driver feedback. Encourage fleet managers to review telematics data with their drivers continually. Ask them to inform their drivers about notifications for risky driving behaviors. This can be as simple as a quick email reminding drivers they are being
observed and nudging them to improve their behaviors.
• Implement a driver safety program. Ideally, telematics should be just one part of a comprehensive plan that also includes safety policies, a drug and alcohol policy, and behavioral expectations. Fleet managers should also conduct regular defensive driving training both at the time of hire and at least annually, along with refreshers based on new regulations or a marked decline in safe driving behaviors. Ask them to double down on the basics, such as drivers raising their line of sight as far down the road as possible, always leaving themselves an out, and making their vehicle visible to other motorists.
• Emphasize the positive. Effective use of
telematics isn’t only about changing unsafe driving behaviors; it is also about reinforcing the positive. Agents should make sure fleet managers give their best-performing drivers a pat on the back when data shows they are doing their job well.
• Recommend potential upgrades.
While one-on-one instruction is always best, some fleet managers may be too pressed for time to offer the kind of driver training needed to support their telematics systems. In these cases, consider recommending newer telematics tools that use AI to provide in-the-moment feedback (essentially telling drivers to “back off” every time they follow another vehicle too close, for example). AI-driven solutions will cost more to implement, but they may pay for themselves in terms of claims and cost reductions down the road.
• Consider ride-alongs for habitual
offenders. At their core, telematics devices are electronic manifestations of the Hawthorne Effect, in which individuals behave differently when they know they are being observed. Ask fleet managers to reinforce this principle with habitual offenders by using a time-tested technique—the ride-along. This will help them watch their driver in action and correct any hazardous driving behaviors on the spot.
• Evaluate other safe driving strategies. Ask insureds to investigate the merits of other tools that can prevent distracted driving and reduce fleet costs. Phone blocking and monitoring tools like LifeSaver Mobile, for example, prevent drivers from using their phones while their vehicles are in motion. Forward-facing and driver-facing cameras, meanwhile, give fleets evidence they can use in the event of a crash, which may help exonerate drivers
and free their companies from liability.
Ease Clients’ Auto Risks
Even the best telematics solutions, backed by comprehensive training, will not completely eliminate distracted driving risks. But when agents partner with their clients to institute data-driven driver training and ensure comprehensive follow-through, they can offer the maximum protection for their clients’ drivers, vehicles, and companies.
Zdrojewski is a loss control consultant with Pennsylvania Lumbermens Mutual Insurance Company, the oldest and largest mutual insurance company dedicated to the wood products and materials industry. Phone: 267-825-9152. Email: mzdrojewski@plmins.com. Website: www.plmins.com.
The above company has made application to the Division of Insurance to amend their Foreign Company License to transact Property and Casualty Insurance in the Commonwealth of Massachusetts.
Any person having any information regarding the company which relates to its suitability for the license or authority the applicant has requested is asked to notify the Division by personal letter to the Commissioner of Insurance, 1000 Washington Street, Suite 810, Boston, MA 021186200, Attn: Financial Surveillance and Company Licensing within 14 days of the date of this notice.
Closing Quote
What It Really Costs to Be Always Available
By Francisco Lopes
Independent insurance agency owners take pride in being there for their clients. It’s a badge of honor—being the one who always picks up the phone, always answers the email, always makes the time.
But in trying to be available for everyone—at all times— many agents are missing something else entirely: key moments with family, networking opportunities, and the space to grow their business strategically.
Availability has become an invisible weight. It’s the agent checking voicemails from the back of a conference room. The guilty feeling of knowing calls are going to voicemail. The CSR who stays behind while the rest of the team attends a networking event. Constant phone checking during what should be face-to-face time. Over time, this kind of constant accessibility doesn’t just wear down individuals, it quietly shapes the agency’s future, often in limiting ways.
A lot of agency owners worry that using AI means giving up the personal touch. But let’s be honest, that connection has been fading for a while now.
The pace, the calls, and the constant need to be reachable is leaving less and less room for the kind of conversations that actually build trust. It’s not the tech that’s pulling us away—it’s
the calendar, the inbox, the “just one more thing” that turns every day into a sprint. The real risk is continuing to confuse responsiveness with connection.
Automation and AI are becoming standard tools in the insurance industry. And while the benefits often spotlight things like faster call routing, quicker quote generation, and reduced costs—all valid and valuable—they’re just one side of the story. When used intentionally, technology doesn’t replace relationships; it protects them. It creates space for what really matters: giving a client your full attention, showing up at the local event, mentoring a new producer, or finally taking that overdue vacation.
Still, a question lingers for many agency owners: What’s left when the work no longer needs you every minute? If AI handles the routine, what will
you do with the hours it frees up for you and your team?
The role of the agent is evolving. As technology takes on more of the repetitive load, many are beginning to use that freed-up time more intentionally—on relationships, strategy, and the conversations that actually move the business forward. Your technology investments should open up new possibilities, not just cut costs.
The truth is, real leadership isn’t found in being always available. It’s found in knowing when to step back, delegate, and design a business that serves you—not one that consumes you. The best agencies aren’t just efficient; they’re intentional. They empower their people. They prioritize high-value interactions over high-volume distractions.
Independent agents have always built their businesses
on trust, community, and relationships. These values aren’t in conflict with technology; they’re exactly what the right tools are meant to support. But that starts with a shift in mindset—from being reactive to being present.
Because the question isn’t whether agents will use AI, it’s how they’ll use it. To reclaim their time, strengthen relationships, and build a business that works for them, or stay stuck in the routine work that crowds out the moments that matter most.
It’s a question worth asking, and sooner or later, every agency leader will have to make that call.
Lopes is the CEO of Sonant AI, a startup building AI receptionists for insurance agencies and brokers. With a background in physics and a passion for simplifying repetitive work, he is focused on streamlining workflows for independent agents.
49 results for ‘golf & country clubs’
Risk is everywhere. In everything. With Applied Underwriters by your side, the gears of commerce, innovation, and exploration keep turning. Experience the unrivaled heart and unwavering service that only Applied delivers.
