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Opening Note
Six-Month Review
An early look by AM Best at the financial results of the U.S. property/casualty industry revealed insurers recorded an estimated $11.2 billion in net underwriting income in the first half of 2025.
That’s a significant jump from last year when the P/C industry booked $2.9 billion in the first six months, according to a report from the rating agency.
In a separate report, the American Property Casualty Insurance Association and Verisk reported the U.S. property/casualty insurance industry recorded a net underwriting gain of $11.5 billion and net income of $49.1 billion for the first half of 2025. “The lack of any significant natural catastrophes in the second quarter helped offset the record-breaking catastrophe losses related to the California wildfires and severe convective storms impacting Texas and Georgia earlier in the year,” said Robert Gordon, senior vice president, policy, research, and international at the APCIA and Verisk, when discussing the results.
AM Best noted that the P/C industry’s combined ratio improved to 96.4 in first-half 2025 from 97.8 in the same period of 2024.
APCIA/Verisk estimated first-half 2025’s combined ratio to be 96.4 compared to 97.6 for last year’s first half, and 104.2 for first-half 2023.
The combined ratio “edged down slightly from this time last year, reflecting underwriting discipline, but escalating catastrophe losses—most notably January’s unprecedented California wildfires—underscore the volatility ahead,” said Saurabh Khemka, co-president of underwriting solutions at Verisk. “While some lines are showing signs of improvement, the broader industry continues to walk a fine line,” Khemka said.
‘While some lines are showing signs of improvement, the broader industry continues to walk a fine line.’
AM Best reported that catastrophe losses accounted for 10.9 points on the six-month 2025 combined ratio, up from an estimated 8.8 points the previous year.
However, excluding prior-year reserve development of nearly $13 billion, the combined ratio was 99.2, according to AM Best.
Growth of 7.5% in net earned premiums in the six-month period offset increases in incurred losses and loss adjustment expenses (LAE), largely attributable to the January wildfires in California and other underwriting expenses. Plus, an increase in net investment income aided the underwriting gain.
A substantial reduction in net realized capital gains, driven primarily by a $47.5 billion decline at Berkshire Hathaway’s National Indemnity Company, contributed to the industry’s net income being cut nearly in half from the same prior-year period to $50.3 billion.
Based on information from annual statements submitted to insurance regulators by insurers representing roughly 97% of the private U.S. property/casualty market, Verisk and APCIA reported that net written premiums grew just 1.9% to $472.5 billion compared to a 10.6% increase in net written premiums recorded for first-half 2024 over the prior-year six-month period.
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News & Markets
Industry Reps Back Reauthorization of Federal Terrorism Backstop
By Chad Hemenway
Michelle
Sartain,
president Marsh U.S. and Canada, who has worked at Marsh for more than 28 years, encouraged lawmakers on Capitol Hill last month to reauthorize the Terrorism Risk Insurance Act. More than two decades after Marsh McLennan lost 358 employees in the terrorist attack on the World Trade Center on Sept. 11, 2001, the backstop remains a necessary component to a stable insurance market, she said.
“By all accounts, the program has been a model public-private partnership,” said Sartain. “The backstop remains a critical component to a stable terror insurance market, particularly for nuclear, biological, chemical, and radiological (NBCR) events, and has enabled insurance to be placed and investments to be made.”
The federal backstop for terrorism risk was first initiated late in 2002 to respond to insurers’ forced exclusion of terrorism risks from commercial property/casualty insurance policies following losses from the terrorist attacks. The change put construction projects on hold since financers required the insurance. Meanwhile, a crisis began in workers’ compensation due to the high levels of exposure faced in the line of business since state laws prohibited a terrorism exclusion.
The legislation requires insurers to offer terrorism coverage while the industry has the assurance that if losses from an event reach certain thresholds (the event needs to exceed $5 million in damages to be certified as an act of terrorism and cost insurers $200 million in industry losses to trigger coverage), the government will step in. TRIA has been reauthorized several times, the latest at the end of 2019. It is due to expire again on Dec. 31, 2027.
Sartain offered 17 pages of testimony covering TRIA’s history and features, and outlined how certain industries such as healthcare and higher education rely on
TRIA. On Sept. 17 she told the U.S. House Financial Services Subcommittee on Housing and Insurance that the terrorism backstop allows for insurers and reinsurers to quantify exposures and provide capacity into the market.
Although the expiration is two years away, “insurers and rating agencies closely monitor legislative activity related to [TRIA],” Sartain explained. “Any uncertainty regarding the future of the federal backstop as the deadline approaches will have an impact on the availability and nature of insurance coverage. That, in turn, could send ripple effects through the economy and potentially affect companies’ decision-making processes about hiring and investing.”
If the backstop expires without a replacement, “insurers that are still able to offer terrorism coverage will likely only write coverage for buyers with operations in preferred locations, and could consider increasing prices for other locations,” Sartain wrote. “This would lead to capacity shortfalls for central business districts, at-risk industries, and employers with significant workers’ compensation accumulations, such as office workers, manufacturing facilities, and healthcare and education facilities,” she continued. Elizabeth Heck, former chair of the National Association of Mutual Insurance Companies (NAMIC), also testified before the subcommittee. She said TRIA provides certainty and has allowed insurers
to offer coverage.
“Thankfully, the program has yet to be tested, and as we look back nearly 25 years after the attacks, it is important to recognize how much construction and economic development TRIA has supported, all at no cost to the taxpayers,” she said.
Heck, president and CEO of Greater New York Insurance Company, said she has experience as a “major writer of terror-exposed property in New York City.”
“While insuring against the financial devastation that could accompany a catastrophic terrorist attack might sound like a reasonable protective measure for markets to take on, a large-scale terrorist attack—like an act of war—is not insurable,” Heck submitted to the committee.
About 79% of commercial multiperil policies in the U.S. include some level of terrorism coverage, and insurer appetite for the risk has increased. While NAMIC generally opposes federal backstop programs, Heck said TRIA “represents the rare situation where a clearly defined problem can only be solved by a federal partnership to facilitate insurability in a way that does not harm markets or market participants and ultimately reduces risk against scenarios where other solutions have been exhausted.”
NAMIC proposed a 10-year reauthorization with no significant changes to the program’s structure.
The American Property Casualty Insurance Association (APCIA) did not testify at the hearing but called on Congress to reauthorize TRIA with no change to financial thresholds. In a statement, Sam Whitfield, senior vice president of federal government relations, added: “TRIA is a fiscally sound program that has operated for 23 years with minimal cost to taxpayers. Its continued existence is vital to maintaining confidence in the marketplace and ensuring the availability of terrorism coverage that businesses and communities rely on.”
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4.9%
The amount the average annual insurance payment for a mortgaged single-family home in the U.S. rose in the first half of 2025, increasing the average yearly payment to almost $2,370, according to a recent Mortgage Monitor report from Intercontinental Exchange Inc. In Los Angeles, where sprawling wildfires obliterated entire neighborhoods, homeowners’ insurance bills rose by 9% in the first six months of this year, or almost 20% from mid-2024.
The amount James and Levi Garrett of South Dakota have been ordered to pay to resolve violations of the False Claims Act, according to the U.S. Attorney’s Office, District of South Dakota. In 2018, the father and son falsely certified to a crop insurance company that they planted 2,200 total acres of sunflowers, and in 2019, James Garrett falsely certified that he planted 47.5 acres of corn. They allegedly did not plant any sunflowers or corn but wrongfully received a total $1.3 million indemnity from the insurance company.
7
Years Over $4 Million
The length of the double-digit growth streak for the U.S. excess and surplus lines market. Excluding $20.8 billion from the Lloyd’s market, the top 25 groups accounted for less than half (49.7%) of surplus lines premium, down from 51.3% in 2023 and 53.5% in 2022.
174,000
The number of 2021 Tesla TSLA.O Model Y cars being looked at by the U.S. National Highway Traffic Safety Administration (NHTSA) over reports that electronic door handles can become inoperative. NHTSA said it had received reports citing an inability to open doors from the outside.
Declarations
Fighting for TRIA
“The backstop remains a critical component to a stable terror insurance market, particularly for nuclear, biological, chemical, and radiological (NBCR) events, and has enabled insurance to be placed and investments to be made.”
— Michelle Sartain, president, Marsh U.S. and Canada, encouraging federal lawmakers to reauthorize the Terrorism Risk Insurance Act (TRIA). Marsh McLennan lost 358 employees in the terrorist attack on the World Trade Center on Sept. 11, 2001. The program has been a model public-private partnership, said Sartain, who has worked at Marsh for over 28 years. She offered 17 pages of testimony covering TRIA’s history and features—and outlined how industries such as healthcare and higher education rely on TRIA.
Safety Snaps Stalled
“You have to be a little crazy to do this job.”
— Kellen Cloud, longtime employee at Green Mountain Flagging, a company that stations traffic controllers at construction sites across Vermont. Data shows more people are injured or killed in work zones today than a decade ago. A pilot program surveilling work zones using automated cameras was slated to begin July 1, 2025, but the Vermont Agency of Transportation leaders said no law enforcement agency has signed on to help out. While police officers typically park near construction sites with their cruisers’ lights flashing, they’re encouraged to remain at their posts rather than leave to chase down a speeder, several state officials said.
Where’s The Beef?
“This law has nothing to do with protecting public health and safety and everything to do with protecting conventional agriculture from innovative out-of-state competition. That is not a legitimate use of government power.”
— Paul Sherman, a senior attorney at the Institute for Justice, a nonprofit law firm representing UPSIDE Foods and Wildtype, cultivated meat companies that filed a lawsuit against Texas officials over a new law banning the sale of lab-grown meat in Texas for two years. During the Senate committee hearing on the bill, lawmakers expressed concerns that cultured meat will disrupt traditional family farms, as well as concerns over product labelling and safety.
Post-disaster Scholastics
“People think, natural disaster—mental health. They don’t think about the academic component to it. You put that aside when you have a little kiddo crying because they don’t have a house to live in. You’re not going to say, ‘OK, snap out of it. We’ve got math to do.’”
— Carrie Dawes, health and wellness coordinator for Paradise Unified. After the Paradise, California, area was devastated by the 2018 Camp Fire, officials found continuing challenges in getting kids on track academically. After the fire, schools set academics aside and focused on mental health. Today, student testing shows that even once the immediate effects of the fire subsided, scores still lagged.
Vax Attacks
“We don’t need to do any projections. We handle outbreaks all the time. So, there’s nothing special that we would need to do.”
— Florida Surgeon General Joseph Ladapo, when asked about studying the impacts of halting immunization requirements for children, on CNN’s State of the Union. Florida Governor Ron DeSantis is pushing to make his state the first one to dismiss immunization requirements. Florida’s current plan would lift mandates on school vaccines for hepatitis B, chickenpox, Hib influenza, and pneumococcal diseases such as meningitis, according to the state’s health department.
Seeking Federal Flood Funds
“I will continue to urge the Trump administration to approve the remainder of my request, and I will keep fighting to make sure Wisconsin receives every resource that is needed and available.”
— Democratic Wisconsin Gov. Tony Evers, who requested federal flood aid for residents in six counties, but Trump approved it for three. More than 1,500 Wisconsin residential structures were destroyed or damaged in August floods at a cost of more than $33 million, along with more than $43 million in public sector damage. Trump’s latest declarations approved public assistance for local governments and nonprofits in all affected states except Wisconsin, where assistance for individuals was approved.
News & Markets
AM Best: Commercial Auto Liability Drags Down Segment, and It Could Get Worse
Commercial auto has been a dark cloud hanging over the U.S. property/casualty industry for more than a dozen years—and things are getting worse.
Commercial auto has posted an underwriting loss for the 14th consecutive year and has accumulated more than $10 billion in net underwriting losses over the last two years, according to insurance industry rating agency AM Best. In addition, rate increases have not kept up with increases in loss costs.
In its new report, “Stuck in Reverse: Commercial Auto Losses Keep Mounting,” AM Best said underwriting losses in 2024 totaled about $4.9 billion. Losses the prior year were about $5.5 billion.
Commercial auto physical damage posted an underwriting profit of about $1.5 billion in 2024 and has been profitable five of the last six years. The problem, said AM Best, is with commercial auto liability— having posted the largest underwriting loss in 2024 of about $6.4 billion.
Commercial physical damage and liability are diverting on paths farther away from each other. While physical damage posted a combined ratio of 88.6 in 2024 and hasn’t eclipsed 100 since 2017, liability posted a 2024 combined ratio of 113, similar to the 113.3 posted the prior year. Liability has posted a combined ratio above 100 in each year since 2014 and has reached 113 five times. Were it not for the adoption of technology to improve
efficiency at some underwriters, expenses may have been worse.
AM Best warned that the divergence could hurt insurers. Liability is a compulsory buy, but physical damage is optional. Insureds may determine PD is not worth the extra cost, and even if they do want the coverage, they may choose higher deductibles to offset the cost.
“This would cut into insurers benefiting from the great profitability of the physical damage coverage, potentially worsening
the overall results for the commercial auto lines,” AM Best said in the report.
Inflation and rising replacement and labor costs have long been headwinds in the space. Now, claims are taking longer to resolve. The longer claims remain open, the higher the exposure to a potential nuclear verdict. This has swung open the door for adverse development, and AM Best estimated commercial auto liability is underreserved by $4 billion to $5 billion—“setting up another year of poor results.”
AM Best’s list of top commercial auto insurers still has Progressive at the top, but Nationwide, a longtime top 10 member, has fallen outside the top 20. Its decline in commercial auto premiums is the result of strategic decisions to concentrate on profit over growth. Fourteen of the top 20 writers posted a combined ratio over 100 in 2024.
Leading the way was Sentry, Chubb, and State Farm with combined ratios of 130, 126.2, and 123.6, respectively. The rating agency said continued losses in commercial auto “may have insurers rethinking” whether the line is worth accepting losses for access to other commercial lines.
News & Markets
Customers Look to Alternatives as Home Insurance Premiums Rise
Homeowners’ insurance rates are rising at a pace not seen in more than a decade, so more customers are asking why they should stay loyal if they perceive their insurer isn’t reciprocating.
According to a recent survey from J.D. Power, 47% of homeowners have seen at least one rate increase over the previous year. The consumer-data provider found that increases are even more pronounced in what it calls “high-lifetime-value” customers—those with higher annual premiums and a higher proportion of product and services with one insurer. Among these policyholders, 49% have been handed rate increases.
“In a year marked by inflation, severe weather, and tightening reinsurance markets, home insurance premiums have risen sharply in many parts of the country. While
these increases often reflect real cost pressures, they’re also eroding trust and driving customers to shop for alternatives,” said Craig Martin, executive director, global insurance intelligence at J.D. Power.
High-lifetime-value customers may be profitable for insurers, but they are also the most likely to start shopping, according to J.D. Power. Among customers who are unlikely to renew with their insurer, 45% of high-value customers blame price increases, while 30% of low-lifetime-value customers who probably won’t renew cite the repeated price increases.
Rate increases also tend to erode customer-insurer trust and decrease the likelihood customers will say their insurer is easy to work with.
Survey results appear to indicate that communication is key. Policyholders who felt they
understood the reasoning behind rate increases and were presented with options gave much higher overall satisfaction scores—721 on average compared to 537 among customers who do not understand the reasons or were not given options. In fact, the score for customers who received rate increases and options was even 33 points higher than customers who had not seen premium increases at all, J.D. Power said.
Turning to rankings, Amica,
Chubb, and Erie took the top three spots in overall customer satisfaction.
75% of Buyers Are Concerned About Rising Homeowners Insurance Costs: Survey
Nearly 75% of recent and prospective buyers believe that homeowners’ insurance could become unaffordable, according to a new survey by Realtor.com.
Eighty-eight percent of those surveyed believe they will pay more for homeowners’ insurance in the future, and 42% have already confirmed they have experienced a rise in home insurance costs.
Even more alarming is that half face or expect to face trouble obtaining and renewing insurance, with
some (58%) indicating they could forgo homeowners’ insurance altogether.
This increases to 76% among Gen Z buyers, even though many of these young buyers are using a mortgage and are required to have homeowners’ insurance.
Of the 1,000 surveyed, 65% are worried about obtaining and maintaining their homeowners’ insurance.
“Homeowners’
insurance offers financial protection for consumers that may help cover damage to
homes and personal property from an extreme weather event or fire, while also providing
Fitch Ratings: U.S. E&S Growth Slows but Remains Strong
Direct written premiums saw double-digit growth for the seventh straight year for U.S. excess and surplus (E&S) insurers, according to Fitch Ratings’ latest annual property/ casualty market review.
Per a Fitch press release, U.S. E&S direct written premiums grew by 11% in 2024—down from 15% the prior year but higher than the 8% increase for U.S. P/C insurers overall.
This represented the 14th consecutive year of E&S premium growth and the seventh straight year of exceeding double-digit growth.
low single-digit growth. Prior to 2023, E&S premium growth was consistently strong across all major product lines for several years, the press release said.
Fitch reported that the current growth spurt, which began in earnest in 2018, places E&S lines at 9% of total
personal property and liability coverage,” said Realtor.com Chief Economist Danielle Hale. “But these benefits come with an upfront cost that has risen as weather events have become more frequent and impactful, and rebuilding costs climb. Homeowners are looking for strategies to lower costs, including adjusting their home searches and potentially shortcharging or forgoing coverage altogether.”
According to the survey’s findings, insurance challenges have forced one-third (33.7%) of home searchers to completely change the geographic area where they are looking for a home, and another 30% have cast a wider net and expanded their initial target geography.
P/C insurance. That is nearly double the segment share it held in 2017 but unchanged from last year, the press release said.
Premium growth was positive across all lines, Fitch
Nearly a quarter of home searchers have completely changed strategies due to insurance challenges.
Additionally, just 30% have looked into the natural disaster risk data for their home or
shared, with other liability-occurrence, allied and fire lines, commercial auto, and medical professional liability reporting double-digit increases. Other liability-claims made and commercial multiperil reported
prospective homes, though 44% plan to do so in the future.
Gen Z home searchers are more likely to have taken action in their search to potentially mitigate homeowners’ insurance challenges compared
E&S underwriting results were reportedly considerably better at an 88 direct combined ratio for 2024, compared to a 95 combined ratio for the total P/C market. While E&S results deteriorated slightly from 86 in 2023, they remain significantly better than the five-year average of 97, Fitch reported.
This marked the third consecutive year that E&S reported better underwriting results than the broader P/C industry.
to other generations, especially Baby Boomers, who said that only 6% had completely changed their home buying strategy and only 15% had expanded their initial search.
Business Moves
National
Lincoln International, MarshBerry
Lincoln International, a global investment banking advisory firm, said it has a definitive agreement to acquire MarshBerry, an advisory firm serving the insurance brokerage, insurance distribution, and wealth management sectors for over 40 years.
MarshBerry operates across six U.S. cities and three international locations in Europe, serving a dedicated client base of private, independent brokers and wealth management firms.
Terms of the deal were not disclosed. The acquisition closing is subject to standard regulatory approvals.
Tropolis Acquires Eight Michigan, Texas and Louisiana Agencies
Tropolis Insurance Services, headquartered in Ann Arbor, Michigan, acquired eight agencies across the United States. Each agency will operate under the Tropolis brand moving forward.
Employees from all eight agencies will participate in the company’s employee purpose plan, an equity incentive program that ensures every team member benefits from Tropolis’ future growth and value creation. Terms of the transactions were not disclosed.
Tropolis acquisitions in Michigan include Warrendale Insurance Agency in Livonia, U.P. Insurance Agency in Iron Mountain, Entrust Insurance and Financial Services in St. Clair Shores, and Canopy Insurance Group in Birmingham.
Texas acquisitions include Infiniti Insurance Services in Spring and King Phillips Insurance in Houston.
Louisiana acquisitions include Beasley Keith Insurance and Safe Harbor Insurance, both in Bossier City.
East
World Insurance Associates, William P. Smart Associates
World Insurance Associates LLC acquired the business of William P. Smart Associates of Fairfield, New Jersey. Terms of the transaction were not disclosed.
William P. Smart’s niche is the entertainment industry. The agency focuses primarily on commercial insurance, with some personal and employee benefits business.
World Insurance, based in Iselin, New Jersey, serves clients from more than 300 offices across the U.S. and U.K.
Duffy Insurance, Satori Insurance
Duffy Insurance Agencies in Lynn, Massachusetts, acquired Sartori Insurance, a family-run agency that has served the Lexington, Massachusetts, community for more than 50 years.
The Sartori team will continue to operate from the agency’s Lexington office, offering personal and commercial lines insurance.
Duffy Insurance was founded in 1996 by the late Paul Duffy and is currently led by his son, Marc Duffy. Sartori is Duffy’s 16th agency acquisition, and it now has Massachusetts offices in Lynn, Gloucester,
Peabody, Lowell, Chelmsford, Georgetown, Marblehead, Salem, Beverly, West Newbury, and now Lexington, as well as in Plaistow, New Hampshire.
Penn-America Underwriters, Sayata
Global Indemnity Group’s subsidiary
Penn-America Underwriters has completed the acquisition of Sayata, an AI-enabled digital distribution marketplace and agency operations platform for commercial insurance with headquarters in Boston, Massachusetts. The company also has operations in Tel Aviv, Israel, and offices in Houston, Texas, and San Francisco, California.
Penn-America Underwriters consists of three agencies: Penn-America Insurance Services; J.H. Ferguson and Associates, which includes the Vacant Express division; and Collectibles Insurance Services. It also now includes three insurance product and service businesses: Sayata, Liberty Insurance Adjustment Agency Inc. and Kaleidoscope Insurance Technologies Inc.
Midwest
World Insurance Associates, Dunaway Insurance Agency, Hoosier Agency
World Insurance Associates acquired the business of Dunaway Insurance Agency of New Palestine, Indiana, and Hoosier Insurance Agency of Bloomfield, Indiana. Terms of the transaction were not disclosed.
Dunaway, founded in 1979, is led by Doug Todd, who works with commercial, agricultural and commercial-affiliated personal lines accounts, and Tina Todd, who manages the personal lines side of the business. Hoosier was founded in 1990 and purchased by Doug Todd in 2005.
Arthur J Gallagher & Co., Bremer Insurance Agencies Inc.
Arthur J. Gallagher & Co. acquired St. Paul, Minnesota-based Bremer Insurance Agencies Inc. Terms of the transaction were not disclosed.
Bremer Insurance Agencies is a subsidiary of Old National Bancorp following the completion of Old National’s acquisition
of Bremer Bank. The agency is a property/ casualty insurance broker serving commercial, agricultural and personal lines clients in Minnesota, North Dakota and Wisconsin. Travis Hoaglund and his team will operate under the direction of Sean Gallagher, head of Gallagher’s Great Lakes region retail property/casualty brokerage operations.
Steadfast Group, Novum Underwriting Partners LLC
Steadfast Group acquired a majority stake in U.S.-based specialty managing general agency and wholesale brokerage, Novum Underwriting Partners LLC.
Founded in 2019 and based in Ohio, Novum is underpinned by a proprietary technology platform, Novum Online, which incorporates a marketplace, submission and underwriting functions that enable quoting, servicing and renewals, as well as policy management for agents and distribution partners.
Novum will serve as Steadfast’s program development and management platform in the United States, offering specialist managing general agency and wholesale solutions to its U.S. agent network, ISU Steadfast, and the broader U.S. market.
The transaction is expected to close during the fourth quarter of 2025.
Gallagher Re, the global reinsurance broker and subsidiary of Arthur J. Gallagher, recently announced an agreement to acquire Steadfast’s reinsurance arm, Steadfast Re Pty Ltd.
Relation Insurance Services,
Joseph M. Wiedemann & Sons Inc.
Relation Insurance Services acquired the assets of Joseph M. Wiedemann & Sons Inc. (JMWS).
Terms of the transaction were not disclosed.
JMWS, a fourth-generation family-owned business based in the Chicago suburb of Arlington Heights, has been serving customers since 1930. They offer a mix of both personal and commercial lines of insurance products and services, focusing on P&C and employee benefits. Their offices will continue to be led by partners John Wiedemann and Ned Cooke.
Southeast
EverPeak Insurance, Method Insurance
Pinnacol Assurance subsidiary EverPeak Insurance has acquired Method Insurance, a workers’ compensation managing general agent based in Nashville, Tennessee. The move will complement EverPeak’s subsidiary Attune, designed to make it easier for brokers to write workers’ comp and commercial insurance.
Method is led by Chairman Richard Rehm and CEO Christopher Rehm, both of whom are physicians.
EverPeak, a workers’ comp specialist with offices in Denver, Colorado, recently announced it had expanded into 11 new states: Alabama, Florida, Illinois, Indiana, Maryland, Michigan, Missouri, Mississippi, Oklahoma, Pennsylvania and Virginia.
SageSure, Olympus, Auros and Interboro Insurance.
In a three-way deal involving carriers, underwriters, holding companies and more, catastrophe-focused managing general underwriter SageSure announced it will acquire the managing general agent for Florida-based Olympus Insurance Co. Olympus CEO Time Stroble and the entire Olympus team are expected to remain in their current positions after the deal is completed. SageSure, with offices in Jersey City, New Jersey, said it now operates in 16 states.
As part of the acquisition move, Valence Insurance Holdings, the parent of Auros and Interboro, will acquire Olympus’ captive reinsurer, Radiant Ltd. SageSure will acquire Gemini Financial Holdings Corp. and its subsidiaries, including Olympus MGA. The same parent company, Slaine Holdings, owns Valence and SageSure.
Terms of the deal were not disclosed.
Brightway Insurance, GlobalGreen Insurance Agency
Jacksonville, Florida-based Brightway Insurance acquired GlobalGreen Insurance Agency, a multi-state network. GlobalGreen is headquartered in Chesterfield, Missouri, and has affiliate operations across the country. Jeffrey Wilson is CEO, and Ray Spears is chairman.
Brightway was founded in 2008 and now has franchise agencies in 45 states. The company promises a distribution platform that helps member agents grow rapidly.
Terms of the deal were not disclosed.
South Central
River Valley Underwriters Inc., Patriot National Underwriters
River Valley Underwriters Inc. will acquire the book of business from Patriot National Underwriters Inc., as well as the current employees. RVU is a family-owned, multi-line MGA based out of Little Rock, Arkansas, specializing in transactional binding authority business as well as wholesale brokerage. RVU will add its carriers and products to the expertise of the current Patriot National staff to continue to deliver the exceptional service that retail agents have come to expect from both parties.
West
Howden, Gravitas Insurance Agency LLC
Howden is acquiring Gravitas Insurance Agency LLC, a Los Angeles-based retail brokerage specializing in contingency insurance for music, sports and live events.
The deal, which is subject to customary closing conditions, follows Howden's other recent sport and entertainment acquisitions, including U.K. performing arts insurance broker Hencilla Canworth, German film and entertainment insurance broker Franz Gossler and Boni Aldaya, an entertainment broking house in Spain.
Gravitas designs and delivers insurance programs for the entertainment sector, representing performing artists and touring acts, live event organizers, talent agencies and record labels. It was founded in 2022 by John Tomlinson as a brokerage exclusively focused on delivering contingency insurance services for the music, sport and live event communities.
Howden is a global insurance intermediary group that operates in 56 countries in Europe, Africa, Asia, the Middle East, Latin America, the U.S., Australia and New Zealand.
National
Chubb Limited, headquartered in Warren, New Jersey, named Steve Haney as president and chief underwriting officer (CUO) of global surety.
Haney previously served as vice president, Chubb Group and division president of North America surety and chief underwriting officer of global surety. He previously served as executive vice president for ACE’s surety business worldwide (now Chubb). He joined the company in 1997 as a surety underwriter.
she most recently served as senior vice president, head of property claims.
Hare succeeds Tim Barziza, who retires in April 2026, after over 30 years in the industry, spending the last 22 years at Chubb.
WTW, headquartered in London, appointed leadership to its North America insurance consulting and technology (ICT) business.
officer. Hallworth, based in New York City, joins AIG from HewlettPackard Inc. He has served as chief data officer at HP Inc. and Capital One and as senior vice president and chief actuary at Travelers.
Patton Kline succeeds Glod as regional aviation and space practice leader, U.S. He has over 21 years of experience in the aviation and space insurance sector.
Teresa Black, executive vice president and chief operating officer of North America surety, was promoted to division president of North America surety. Black has 28 years of insurance industry experience, previously serving as senior vice president of distribution management, vice president and national segment leader for New York and assistant vice president of Chubb’s financial lines business.
Nicolas Carbo, based in Florida, joins as senior director, bringing extensive experience from Corebridge Financial and Oliver Wyman.
Poojan Shah, previously with PwC, was named director and is based in Chicago, Illinois.
Erika Dochney, based in Philadelphia, Pennsylvania, joins as associate director. She was previously with Lincoln Financial Group and Haven Technologies.
HDI Global Insurance Company, headquartered in Chicago, Illinois, appointed Fellipe Aguiar as head of energy and power underwriting in the U.S. for its cross-division energy and power unit.
CNA Financial Corporation, headquartered in Chicago, Illinois, appointed David Haas as president, global specialty, overseeing financial lines, healthcare, affinity and warranty. Haas most recently served as senior vice president, national accounts, casualty.
Michael Nardiello was appointed as the president of global property & casualty. He continues to lead global property and marine and casualty. Nardiello previously served as senior vice president, global property unit business head.
Song Kim was appointed president of global commercial industry segments, including construction, alongside middle market and small business. Kim now leads all global commercial industries.
Ryan Specialty Underwriting Managers (RSUM), the underwriting management division of Ryan Specialty, headquartered in Chicago, Illinois, appointed Alan Ferguson as CEO of US Assure.
Ferguson continues to serve as president of US Assure, a role he assumed in 2019. Ferguson joined Ryan Specialty in 1993 and previously served as chief underwriting officer. He succeeds Ty Petway, who is retiring after over 30 years of service.
FM, headquartered in Johnston, Rhode Island, named Tara Long as senior vice president, chief information officer (CIO).
Chubb also appointed Kim Hare as senior vice president, head of North America property claims. Hare has over 30 years of experience, joining Chubb from Farmers Insurance, where
Aguiar joined the company in August 2024 and has over 26 years of experience in the insurance industry, with a focus on the energy and power sectors across Latin America and the United States.
American International Group Inc., headquartered in New York City, named Scott Hallworth as chief digital
Marsh, headquartered in New York City, appointed Brian Glod, based in New York, as global head of aviation and space and Tony Ambrose, based in London, as global chairman of aviation and space.
Glod joins Marsh’s global specialty executive committee with over 35 years of experience, joining Marsh in 1996. Ambrose joined Marsh in 2020 and has over 30 years of experience working in the global aviation insurance sector.
Long joins FM from MassMutual, most recently serving as chief technology officer and head of enterprise infrastructure services. She previously held roles at Gerber Scientific Inc. and PricewaterhouseCoopers.
Long succeeds Srini Krishnamurthy, who was recently named senior vice president, FM India.
East
The Hanover Insurance
Steve Haney
Teresa Black
Kim Hare
Tim Barziza
Scott Hallworth
Alan Ferguson
Tara Long
Group, Inc., headquartered in Worcester, Massachusetts, appointed Toni E. Mitchell president of its technology and life sciences business.
Mitchell previously served as regional executive for the company’s Pacific Region.
She joined The Hanover in 2010 as regional chief underwriting officer for middle market and previously held leadership roles at One Beacon and Atlantic Mutual.
The MEMIC Group, headquartered in Portland, Maine, promoted Katrice Kelley to director of business analysis, underwriting. Kelley joined MEMIC in 2013. She will continue to lead MEMIC’s underwriting business analysts.
and Allan Egbert to the company’s senior leadership team as chief technology officer and chief platform officer, respectively.
Albert and Egbert, the co-founders of Ask Kodiak, have advised Coterie since early 2025. Ask Kodiak was acquired by Applied Systems in 2021. Albert and Egbert’s also led product strategy at AgencyPort and co-founded Insurtech Boston. Albert will focus on advancing engineering excellence, technical architecture, and Coterie’s innovation roadmap. Egbert leads platform infrastructure, operations, devops, and performance.
Dominic Weber was promoted to senior vice president and chief actuary. With over 42 years of experience, Weber previously served as vice president and chief actuary at Society Insurance.
Doug Duncan was hired in the newly created role of senior vice president and chief information officer. Duncan has over 25 years of technology leadership experience, previously serving as chief information officer at Columbia Insurance Group and senior vice president at Swiss Re.
Southeast
XPT Specialty, headquartered in New Haven, Connecticut, expanded operations into Atlanta, Georgia and North Carolina.
Lindon, Utah, promoted Leslie Greve to senior vice president of marketing. Greve joined Trucordia in 2024 and previously served as vice president of marketing. Before joining Trucordia, she served as CMO at BGZ Brands.
Alliant Human Capital, headquartered in Irvine, California, appointed Mike Chalmers as senior vice president and director of total rewards consulting.
The Mechanic Group, a division of Specialty Program Group LLC, headquartered in Pearl River, New York, appointed Candace Chieppo as practice leader. Chieppo has 27 years of insurance industry experience, joining the firm from Hudson Insurance Group, where she served as assistant director. Previous roles include vice president/senior underwriter at Victor Insurance and roles at Travelers Insurance, Marsh and Lockton.
Midwest
Coterie Insurance, headquartered in Appleton, Wisconsin, named Mike Albert
NI Holdings Inc., headquartered in Fargo, North Dakota, promoted Kevin Elfstrand to senior vice president and chief accounting officer. Elfstrand has over 20 years of P&C experience, including 17 years at Travelers Companies, Inc., most recently as assistant vice president of corporate audit. Brandon Nicol was promoted to senior vice president of reinsurance and chief underwriting officer. He has 19 years of experience, including roles at AmericanAg, XL Catlin, COUNTRY Financial and State Farm.
Chris Oen was promoted to senior vice president and chief claims officer. Oen has over 30 years of experience and will continue to lead the claims department.
Will Pinson, senior underwriter and lead for the North Carolina region, is based in Wilmington, North Carolina. He has over 12 years of experience in specialty and surplus lines underwriting, specializing in placing hard-tobind accounts.
Janet Christenberry, lead underwriter for the Atlanta region, has over 20 years of commercial underwriting experience, previously serving as underwriting supervisor at Jencap and at Genesee General for over 20 years.
Charles Bethishou, commercial lines underwriter for the Atlanta region, has over a decade of experience in underwriting, business development and client retention. Fluent in English, Spanish, and Portuguese, he previously served at Jencap Insurance Services.
West
Trucordia, headquartered in
Chalmers most recently served as senior vice president, compensation and total rewards practice at Lockton and previously served as principal, career practice leader/ Midwest region leader at Buck.
The Liberty Company Insurance Brokers, headquartered in Gainesville, Florida, named Brittany Montoya as vice president and producer at Liberty Naranjo.
Based in Las Vegas, Montoya began her career managing HOAs, ascending from community manager to regional director and vice president. Before joining Liberty, she served as vice president, producer at USI Insurance Services. She previously served as regional vice president at Terra West Management Services.
Toni E. Mitchell
Candance Chieppo
Mike Albert
Allan Egbert
Leslie Greve
Mike Chalmers
Brittany Montoya
Closer Look: Litigation Funding
5-Year Cost of Litigation Funding to Commercial Insurers Could Top $25B
By Susanne Sclafane
“Are you being serious?”
Christopher Swift, chair and chief executive officer of The Hartford, was taken aback by a question from an analyst during the company’s second-quarter earnings call about the impact of litigation finance on the insurer’s results.
“It’s showing up in our loss trend [and] our allocated loss expenses. We’re spending more
time and money on something that turned our judicial system into a gambling system. Are you serious?”
The analyst restated the question, explaining to Swift that he is aware that a variety of issues come together to create social inflation. What he wanted the CEO to pin down was the isolated impact of third-party litigation funding (TPLF), apart from factors such as negative public sentiment and eroding tort reforms. Swift didn’t have figures to share. But two months earlier, an actuary speaking at the Casualty Actuarial Society’s Seminar on Reinsurance, said
the top end of a range of estimates of direct costs that will be paid to funders by casualty insurers is $25 billion over a five-year period (2024-2028).
Mike McComis, a senior manager for EY and a Fellow of the Casualty Actuarial Society, revealed the results of a model developed by his firm last year to measure the impact of litigation funders, using some information from funders’ reports about annual returns and a variety of assumptions to develop the figure. McComis gave an overview of the steps involved in constructing the model and flagged some of the most tenuous assumptions—
including a somewhat shaky guess that insurers will pay about 90% of funders’ returns. He also provided a range of estimates based on 720 scenarios tested with the model, revealing that the five-year cost is most likely to fall between $13 billion and $18 billion (the 25th to 75th percentile), with a mid-range average coming in at around $15.6 billion for the five years from 2024-2028.
(Editor’s Note: McComis revealed that the EY study was performed late last summer, which explains why the estimates begin with the year 2024.)
The figures, he said, repre-
sent direct costs—the portion of TPLF returns that come out of the coffers of P/C insurers. But then there are indirect costs to consider.
“That’s just how much the funders are making. The other element to this is where is that funding going,” he said, suggesting that when funding goes to law firms, they may be able to advertise more, bring in more cases, and fight claims longer. “They have this capital backing, which means they don’t have to settle for cash flow reasons,” he said.
This adds an indirect cost to insurers, McComis said, noting that when cases go on longer, insurers have to pay more legal fees.
“There’s also the potential ability of this to drive up actual results for the plaintiffs, the injured parties themselves,” he said, referring to rising verdict and settlement trends presented by co-panelist Jonathan B. Hayes, managing director and reinsurance actuary at Aon.
the next five years, with the most likely scenario (50th percentile) falling between 4.5 and 5.5 loss ratio points. (McComis estimated the loss ratio boost using 2023 earned premiums for commercial auto liability, other liability occurrence, and medical professional liability.)
“Presumably more of that should be going to the injured parties,” he said.
While McComis and his colleagues didn’t unearth evidence of that as they undertook a massive research project to develop inputs for the model, he did say there is one study that puts total costs, including indirect costs, at roughly double the amount of direct costs. Without identifying the source, McComis noted that if this were true, the high end of the range—now $50 billion—could add 7.8 points to the commercial liability industry loss ratios for each of
Returning to the direct costs modeled by EY, McComis displayed line graphs plotting the most likely (25th and 75th percentile) modeled estimates, as well as the minimum and maximum modeled estimates for each year from 2019 through 2028. The most likely estimates shown on the graphs started at about $1 billion in 2019, growing to $2.5 billion in 2019, and then climbing to around $3.5 billion by 2028. The lines plotting each year’s minimums and maximum estimates showed similar trajectories. Summing up the results in terms of two five-year periods, McComis observed that the model forecasts “basically a doubling effect”—with direct costs of TPLF to the P/C industry increasing by 75%-100% for the early five-year period to the subsequent five-year period.
McComis referred to the conclusion of a separate EY analysis of Schedule P data, which showed no let-up in social inflation post pandemic—with continued commercial auto calendar-year paid claim severity trending at 9.6% on average, and other liability at about 15%. Putting that together with this model’s results, McComis said social inflation trends will persist at a heightened level for longer.
“We haven’t even seen the full impact of this [TPLF] industry because it’s growing, it’s lagged three-and-a-half or four years (the assumed model time frame between TPLF investment and settlement, based on funders’ reports), and they’re making massive returns (around 25%-30%, another model assumption).”
‘We haven’t even seen the full impact of this [third-party litigation funding] industry because it’s growing, it’s lagged three-and-a-half or four years … and they’re making massive returns.’
The model, he said, has “solidified our belief” that TPLF “is going to be one of the key drivers, if not the key driver, of the heightened social inflation-impacted trends going forward, and probably has been in the last several years.”
Building a Model
When actuaries in attendance were polled about the likely cost of TPLF to commercial insurers over the next five years, they mainly guessed $10-$20 billion, not foreseeing the $50 billion potential high-end figure, including indirect costs.
Estimating the cost is not straightforward, McComis noted as he explained his firm’s effort to build a model. It is challenging to identify cases helped by TPLF because there have historically been few requirements to disclose litigation funding (something that is changing now in some states).
That means actuaries can’t tackle the TPLF cost question with a bottom-up approach of extrapolating from historical data. EY chose a top-down approach instead, estimating the portion of returns earned by funders based on returns that some funders have reported in their financial reports, and allocating a share to P/C insurers.
McComis and colleague Abbi Brucea, also a Fellow of the Casualty Actuarial Society, started the modeling with 80-plus hours of research, thoroughly poring over publicly available data and industry reports from firms like Swiss Re and Aon, to derive several key insights:
• Average annual returns from TPLF activities are in the 25%30% range, based on funders’ reports that have posted earnings anywhere from 22% to an outlier of 77% in the past 5-7 years.
• 85%-90% of funded cases succeed, reflecting the selectivity of funders, which some sources said only accepted 5% of commercial cases submitted to them. (The acceptance range extended from 5%-20% based on documents reviewed by EY.)
• Commercial litigation funders’ assets under management (AUM) are growing at a rate of 8.7% per year.
McComis said the last assumption, which came from a past Swiss Re report, would have produced an estimate of $16.5 billion for 2024, noting that this is close to an estimate EY derived by fitting a curve to actual AUM amounts reported in a separate industry report for 2019-2023 ($16.1 billion).
McComis went on to continued on page 22
Closer Look: Litigation Funding
continued from page 21
describe how EY used this information to derive key assumptions for three building blocks of the EY model:
• The amount of capital invested by the TPLF in new cases by calendar year.
• TPLF dollar returns on investment by calendar year.
• The dollar impact to the P/C insurance industry.
For each block, EY selected a range of reasonable assumptions from its research and modeled 720 scenarios, McComis said, before delving into some of the details of modeling building block No. 1: How much money gets invested in new cases each year. Beyond AUM and growth rates, the model needed a range of assumptions about the level of commitment, he said, displaying the assumptions of one scenario that assumed 20% of AUMs were committed to new cases. Likening the concept of commitment to a home equity line of credit, he explained that funders don’t actually earn
anything until the “lifeline of funds,” or amounts they’ve promised to invest in a case, are actually used. According to one of the reports EY read as part of its research, funders deployed 78% of their commitments, on average, when cases were resolved, he said.
Moving from the deployed amounts to the second building block—TPLF earnings on their investments in commercial cases—McComis noted that while EY generally assumed 25%-30% returns per year, the model included scenarios assuming that that will decrease over time. “As this market [becomes] more saturated, maybe [TPLFs] won’t be as successful and so they have more losses,” he said.
The model also required assumptions about the time to resolve cases. “That determines the stopping point of how much interest or return they’ve earned,” he explained, noting that the model assumed three-and-a-half to four years as the midpoint of a fitted distribution.
‘Honestly, there’s not any really good public information out there’ to pinpoint a number… ‘But our belief was that a large proportion of this will be paid by the insurance industry in some fashion,
whether it’s the primary insurers, excess, or reinsurers.’
Finally, the model moved from the sum of the modeled calendar-year projected returns for the TPLF industry to answer the ultimate question for actuaries and insurance executives: How much is the P/C insurance industry going to have to pay for that?
“Some of this is not going to be paid for by the [P/C] industry but [instead] will be absorbed by consumers and corporations,” McComis said, noting the presence of
deductibles or self-insured retentions and increasing commercial insurance costs that may prompt some insureds to increase retentions and reduce towers. EY selected 90% as its best estimate of the portion of TPLF returns that would be paid by insurers, putting a range of scenarios around that in the model.
“Honestly, there’s not any really good public information out there” to pinpoint a number, McComis said. “But our belief was that a large proportion of this will be paid by the insurance industry in some fashion, whether it’s the primary insurers, excess, or reinsurers,” he said. “These are generally cases that are pushing things up into the excess and umbrella layers,” he reasoned.
Takeaways for Actuaries and Executives
“We believe that TPLF is the most significant and measurable driver of social inflation,” said the caption on a slide that graphed the modeled outputs
of minimum, maximum, and most likely direct costs of TPLF to the P/C industry by year.
From an actuarial perspective, for pricing and reserving, “the trends are going to stay high in our opinion,” McComis said, referring to the upward trajectories of the curved line graphs from 2024 through 2028. “So, you shouldn’t be backing off on those,” taking down earlier assumptions. “If you are, we think you’re ignoring the impact of third-party litigation funding continuing to persist in these trends.”
A slide displayed as McComis concluded his presentation included various bullet points referring to the increased duration of litigated claims and incentives for plaintiffs to extract the highest possible values—two considerations that should be included in actuarial analyses going forward.
McComis also offered some advice for claims managers of direct writers.
Start tracking the cases backed by third-party litigation funding, he said, alluding to emerging disclosure requirements. From such data, insurers could potentially build their own models of where TPLF is most likely to be involved.
“Maybe, over time, as you track when you’re fighting those and the outcomes, you can adjust your strategies,” he said, suggesting that the best lawyers and top-performing adjusters might be assigned to cases most likely to be funded by the TPLF firms to get better outcomes.
This story was originally published in Carrier Management, Insurance Journal’s sister publication.
APCIA: Commonsense Reforms Needed for ‘Dark Money’ Third-Party Litigation Lending
By Chad Hemenway
In support of recent efforts at the state and federal levels of government to curtail third-party litigation funding, the American Property Casualty Insurance Association has asked the House Committee on Oversight and Accountability to consider disclosures.
“As insurance protecting civil defendant consumers and businesses must be disclosed in nearly all jurisdictions and in the U.S. District Courts, it is indeed peculiar that those backing litigation financially are not similarly obligated to disclose their involvement,” wrote Nat Wienecke, APCIA’s senior vice president of federal government relations, in a letter to the committee who met on the matter on September 13.
Litigation funding, largely unregulated but for some states’ disclosure laws, is turning civil justice into a commodities market that serves investors—not plaintiffs, Wienecke said.
“Third-party litigation funding is a dark money lending practice that allows unknown investors with no ties to the injured person to invest in lawsuits, and in some cases falsely inflate medical costs, for their own profit,” he added in a statement from the trade association.
Citing the U.S. Chamber Institute for Legal Reform, APCIA said the average household pays a “tort tax” of more than $3,600 due to unnecessary and abusive litigation.
“The committee’s examination is an important step forward as our nation begins to reckon with the consequences of encouraging ever more and often frivolous litigation and damages,” Wienecke said. “We strongly endorse your examination and greatly appreciate your leadership in doing so.”
An oft-cited study from litigation finance advisory firm Westfleet Advisors from early this year said there were more than 40 funders in the U.S. market in 2022 with a combined $13.5 billion in assets under management. They committed $3.2 billion to litigation funding in 2022—a 16% increase from the previous year. Meanwhile, the casualty insurance industry has noticed marked increases in so-called “nuclear verdicts”—exceptionally high jury verdicts of more than $10 million.
In an address in May at Riskworld, the Risk & Insurance Management Society’s annual conference, Chubb CEO Evan Greenberg said it was time to question the societal benefits of the growing practice in litigation. He said casualty insurance rates in most classes will need to continue to rise to keep up with loss costs, driven in part by an “aggressive trial bar… turbo-charged by litigation funding.”
There are some, however, who believe litigation allows plaintiffs to survive as they pursue legal recourse. During a panel discussion hosted by the Coalition Against Insurance Fraud this summer, Eric Schuller, president of the Alliance for Responsible Consumer Legal Funding, said that because litigation financers are spending their money, they become “screening devices” on the merits of a claim.
Wienecke in his letter to the House committee said litigation funders’ “only interest is increasing the return on their investment,” and they reduce the recovery for claimants.
Spotlight: Reinsurance
Exclusive Member of Reinsurance Class of 2025: Duperreault’s Cedar Trace
By L.S. Howard
There are certain traits of hard reinsurance market cycles: prices rise, terms and conditions tighten, and new Bermuda reinsurers are formed to help fill capacity needs—known in the past by the market as the “class of 1992,” “class of 2001,” or the “class of 2005.”
At least that was previously the pattern. During the current hard market, however, there hasn’t been a spate of new entrants—in Bermuda or elsewhere. Only several new reinsurers have been able to find investors with the appetite to provide sufficient financial support that would be needed for underwriting a substantial property/casualty business.
The class of 2025 is mainly limited to Cedar Trace’s Mereo Insurance and Lloyd’s reinsurer OAK Reinsurance.
Mereo Advisors—a Bermuda holding company that was renamed Cedar Trace Ltd.—began reinsurance underwriting as Mereo Insurance in January 2025. The company is led by industry veteran Brian Duperreault, the former executive chairman of American International Group (AIG).
At last month’s reinsurance Rendez-Vous de Septembre, there were rumors (once again) that reinsurance executives were at the meeting seeking investors to help them form three more reinsurers to create a “class of 2026.” But as always, the devil is in the detail as well as the amount of money that
can be raised from investors. (The domiciles of the startups were said to be Bermuda and London.)
Similar rumors about Mereo, OAK Re, and Alpine Re were heard at last year’s RVS—but only Mereo and OAK Re had successful fundraising and were able to launch. Alpine Re wasn’t able to get the funding to launch a $1 billion startup, so it threw in the towel—at least temporarily. (OAK Re’s parent, OAK Global, announced last month it will launch a new syndicate to write retrocession business with an appetite for property and specialty classes in January 2026.)
Some attendees at this year’s RVS meeting questioned the timing of possible 2026 startups, given the softening
pricing seen during this year’s renewals.
But Cedar Trace’s Executive Chairman Duperreault said the timing of the formation of Cedar Trace and Mereo Insurance has worked well because the market continues to be strong across a lot of lines of business. “It’s good to be an underwriter in specialty, casualty, and property right now. So, having this across-the-board strategy is helpful,” he said.
In an interview with Insurance Journal, Duperreault described the reinsurer’s strategy as broad-based and multi-class. “We are writing 25 different classes of insurance business, such as marine, aviation, energy, and property, on a risk-weighted basis,” which creates a portfolio balancing
effect and provides “a pretty steady result.”
“Each one of the 25 is going to go up and down, particularly if they’re in the more volatile portions of the business,” Duperreault continued.
“However, if you put them together with good risks, it balances out, and your loss ratios are actually quite steady over a long period of time,” he said, explaining that there will be a lot of growth in some lines and not much growth in other lines, which balances out to create growth at industry levels.
Cedar Trace’s growth will probably be a little bit above GDP in the early days, but for the long term, Duperreault expects “a steady, profitable business.”
“Over time, if you put a good set of risks together in a balanced portfolio, you’re going to have an average loss ratio and it’s not going to vary very much. It’s like an index fund, an investor index fund.”
Not Reliant on Hard Market
He explained that Cedar Trace’s strategy is not a hard market strategy, so it’s not like the company needs the hard market to continue. “The important thing was would we be able to launch and get a broad-based business in a relatively short period of time, and this market is allowing us to do that.”
He emphasized that it’s impossible to call anything in this world with 100% certainty,
“so having that portfolio balance protects us. And as long as we’re launched—and we are—I’m very comfortable riding out this wave, whichever way it goes.”
Underwriters only have a couple of tools, he said. “One is risk selection, and another is portfolio construction and spread. So, we turn away risks that aren’t priced right, and the pricing takes care of itself.”
The company’s initial plans were to write what Duperreault calls an “aspirational” $520 million during the first year, which he said could be possible if the company writes a full year that includes the January 2026 renewals. “But we’ll see. The important thing is the business is good, sustainable, profitable—and size isn’t as important as that.”
The other positive aspect of the current market for reinsurers is that there is a lot of demand from ceding companies because risk is exploding, he added.
Limited Investor Appetite for Startups
Duperreault attributed the general lack of interest by investors to support reinsurance startups (to create a class of 2023 or 2024) to the sector’s inability to attract long-term capital. (Traditionally, the “class of XXX” terminology has referred to Bermudian reinsurance startups, but it is now being used by many pundits for global formations.)
“Most of the investors don’t want to take long-term balance sheet risks,” he said, noting ILS investments are “hot” because
Brian Duperreault
investors want to know at the end of the year if they had a good year or a bad year.
Indeed, AM Best Ratings has indicated that investors have many additional avenues available to deploy their capital, which didn’t exist in the past.
‘I do think our story itself helped attract our investors in a great way. I think our management expertise helped. Putting those two together, we were able to find enough investors to launch our company. And we’re the only ones.’
The existence of a robust ILS market has “diminished the franchise value of property-catastrophe business to investors,” AM Best said in a July 2024 report titled “The 2023 Reinsurer Class – The Class That Never Was.” (See related article: What Happened to Reinsurance ‘Class of 2023’? Hard Market Defies Age-Old Patterns.)
“Investors today appear much keener to allocate funds to shorter-term ILS instruments
to capitalize on the hardened underwriting conditions, rather than a rated balance sheet,” said the report.
There’s only a very small group of investors who want to take on longer-term risk, Duperreault said, noting that Cedar Trace was able to find a few investors “who understood what we were trying to achieve.” He said that “what we presented was a portfolio approach with the balance that has internal protections.”
Duperreault said that those investors who listened to the pitch understood it and really liked the company’s strategic plan.
He said the company’s portfolio balance was an attractive story to a few wise Cedar Trace investors, which he described as “a nice group who are there for the long haul,” which is a “wonderful thing to have for an investor.”
“They’re not in-and-out types,” Duperreault noted.
At inception, Cedar Trace raised nearly $700 million from several investors and also launched an ILS fund in 2024 with $250-$300 million of capital. Investors include Ares Management Corp. (an alternative asset manager), Susquehanna International Group (a quantitative trading firm), and Andover Cos. (a mutual insurance firm).
“I do think our story itself helped attract our investors in a great way,” he said. “I think our management expertise helped. Putting those two together, we were able to find enough investors to launch our company. And we’re the only ones.”
AM Best has assigned a Financial Strength Rating continued on page 26
Spotlight: Reinsurance
of “A-” (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to Mereo Insurance with a stable outlook.
“Initial capitalization in 2024 and retained earnings through the forecast period are expected to support Mereo’s premium growth, which is expected to be rapid in its early years, based on projections,” AM Best said in a Feb. 10, 2025 ratings announcement. “The company’s capital is anticipated to be managed through the use of reinsurance and potentially third-party capital.
Investment risk is projected to be low given its conservative investment portfolio, which will remain matched closely
to the evolution of the liability profile, supporting stability in future balance sheet metrics.”
AM Best went on to say that “Mereo’s senior management team is composed of individuals with extensive experience and strong track records in the industry.”
And, of course, one of those individuals is Duperreault, who previously served as executive chairman for AIG’s Board of Directors and as CEO of AIG from 2017 to 2021. Before joining AIG, he had a 30-year career working in senior executive roles at Hamilton Insurance Group, March & McLennan Companies, and ACE Ltd.
Other veteran executives with Cedar Trace include:
• Lawrence Minicone, chief
executive officer of Cedar Trace. Minicone previously served as the head of Research at Tekmerion Capital Partners, a systematic global macro hedge fund.
• David Croom Johnson, non-executive director, who was formerly CEO of AEGIS London, a successful Lloyd’s managing agency.
• Neil Strong, president of Cedar Trace and CEO of Cedar Trace ILS, who most recently was the CEO of IQUW ILS Ltd.
• Richard Holden, chief underwriting officer of Cedar Trace ILS, who was previously CUO of Fidelis Insurance Bermuda and global CEO of Reinsurance and Capital Management.
• Derek Walsh, chief legal officer and chief operating officer
of Cedar Trace. Previously, Walsh was COO, general counsel, and co-founder of Acacia Holdings, a Bermudabased investment business specializing in insurance-linked securities, focusing on investing collateral for reinsurance contracts.
• Federico Waisman, chief analytics and risk officer of Cedar Trace, who most recently served as head of Underwriting Management at IQUW where he led the portfolio optimization, pricing, exposure management, and underwriting support divisions.
• Jonathan Reiss, interim chief financial officer of all Cedar Trace entities. He also is a managing director at Strategic Risk Solutions (SRS).
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Risk Point Vehicle Inventory Program
Market Detail: Dealer open lot physical damage insurance for car, RV, heavy truck and motorcycle/powersports dealers. Risk Point Mobility Underwriters DOL Program. Features: Program is available for franchised and non-franchised auto dealers, RV dealers, truck dealers and motorcycle/ powersports dealers; Risk Point Alert Weather app sends push notifications to a mobile device when severe weather is within 30 miles, 20 miles, and 5 miles of a target auto dealership; weather loss aggregate deductibles available; economic loss covered to a maximum of $2,500 as a result of collision damage to a new vehicle and $2,500 for additional miles added to the odometer of a new vehicle as a result of a theft loss to a new vehicle; a high sublimit ($200,000 per year) for false pretense (trick, scheme or device) loss; coverage available for stored “off lease” vehicles. An aggregate deductible on collision losses. This is unique in the industry.
Dealer “holdback” covered on total losses to new vehicles – this too is a coverage not often offered by other carriers. The “margin clause” provides coverage equal to 125% of the limit shown in the event that a loss exceeds the limit of insurance shown on the policy. The average monthly value is the limit of insurance shown on the declaration page that will be used as the rating basis. The “margin clause” does not apply to flood or earthquake coverage. Convenient payment plan with 10% down and 11 monthly payments. Monthly Reporter option available. Superior customer service. Claims service is provided by Risk Point and managed from our Dallas, Texas headquarters. Program commission is 12%. Has pen. Available Limits: Not disclosed.
Carrier: Non-admitted.
States: All 50 states and the District of Columbia.
Market Detail: Crypto Shield is the first regulated insurance product for retail crypto investors, covering theft of
crypto while in the custody of qualified exchanges. There have been over 60 exchange hacks, resulting in over $60B in stolen crypto to date. We designed Crypto Shield specifically to protect policyholders from these unfortunate events. Coverages: cyber, directors & officers (D&O), errors & omission (E&O), general liability and wallet risk assessment.
Crypto Shield is backed by an insurance carrier that has earned a Financial Strength Rating of “A-” (Excellent) by AM Best, the largest credit rating agency specializing in assessing the insurance industry.
Breach Insurance is a global insurance underwriter addressing the significant insurance gap in the crypto space by creating regulated insurance solutions for the crypto economy. With a Bermudadomiciled insurance company, U.S.licensed MGA and TPA operations, Breach is able to address the various needs of crypto economy participants.
Why partner with Breach? Licensed & fully regulated, regulated by the Bermuda Monetary Authority as a class IIGB insurer, accepts payment and pays claims denominated in crypto; countrywide licensed as MGA and TPA in the U.S. Has pen.
Available Limits: Not disclosed.
Carrier: Not disclosed. Rated A- (Excellent) by AM Best.
States: All 50 states and the District of Columbia.
Exclusive Workers’ Compensation for Home Health Care
Market Detail: This program was established to reward HHC Agencies that have excellent loss history, with the lowest premiums & upfront dividends & incentives. With an A+ AM Best rating and industry-leading healthcare expertise, our
clients enjoy this well-deserved best-in-industry premium.
Workers’ Compensation Program Highlights: Flexibility to work with you directly or your existing insurance broker; workers’ compensation coverage with bundled risk control, claims, and managed care services; and risk and claims management programs included with all proposals, at no cost.
Risk management solutions meet the specialized needs of healthcare agencies to keep losses at a minimum. Risk control healthcare team – staffed by highly credentialed specialists who can develop customized risk control solutions to address common loss leaders, such as strains, slip/fall, and struck-by injuries. Data analytics – industry-specific performance assessments, peer-to-peer benchmarking, customized reporting, and collaborative analysis reviews. Claims and managed care services – aimed to effectively manage claims, drive positive solutions, and support employees through injury and recovery to achieve a safe return to work. Tailored solutions for workforce challenges – aging workforce, safe return to work, employee health and wellness initiatives. Submission requirements must include the following: Acord form with FEIN #; all available MOD worksheets; 3-5 years of payroll history; 3-5 years of currently valued loss runs; and large loss detail (over $50K).
Available Limits: Not disclosed.
Carrier: Admitted, rated A+ (Excellent) by AM Best.
States: All 50 states and the District of Columbia.
Gold Kulchin Ross Insurance Services, Tarzana, California
Silver Morris & Garritano, San Luis Obispo, California
Bronze Rancho Mesa Insurance Services Inc., San Diego, California
The votes are in for the 2025 Best Independent Insurance Agency to Work For survey by Insurance Journal.
Employees in 2025 highlighted the importance of competitive salaries, employee benefits, training and education, resources, and other employee perks as drivers of satisfaction in the workplace.
But it’s not all about compensation and benefits. Happiness in the workplace has a lot to do with people, relationships, and the agency’s culture. Employees of the winning agencies cite high personal job satisfaction; rate their relationships with their immediate boss or supervisor as positive; and express a high opinion of their agency’s owner or principals and their agency’s reputation in the community. Many employees are grateful
the best agency owners support local charities and the community in which they live. Employees are grateful for the opportunities their agencies provide for them to participate in community service. Employees take pride in working for agencies that are respected and hold strong values and ethics. Employees appreciate the generosity of their agency owners in sharing revenues in the form of bonuses and trips.
The best agencies also provide ways to help their employees grow—by giving them the tools and technology they need, and supporting them with education, training, annual and performance reviews, and, in some cases, mentors. The survey results clearly show employees value this support.
As expected, the winning
agencies score high for overall employee benefits including wellness programs and for working conditions including remote work options, flextime, and other alternative schedules that allow employees to embrace work-life balance.
The best agencies to work for also provide employees with a strong sense of purpose in their profession and deliver a workplace environment where employees feel supported wholeheartedly by management and their peers. Many of the employees say they feel like family in their agencies.
Insurance Journal wishes to thank the thousands of customer service representatives, account managers, producers, managers, and other agency staff who took the time to nominate their independent insurance agency in this year’s survey.
Special Report: Best Agency to Work For
Overall
Robertson Ryan Insurance Milwaukee, Wisconsin
Be a Leader by Listening to Employees and Clients
By Andrea Wells
During the past 60 years, Milwaukee-based Robertson Ryan Insurance has grown from a small, local independent agency into a Top 100 firm employing some 150 agents and 385 associates. But employees say that despite its growth over the years, the agency hasn’t lost its family-style culture in which employees feel valued, heard, and supported.
This year, Robertson Ryan won Insurance Journal’s Overall Best Agency to Work For, an annual awards program where thousands of independent agency employees nominate their organizations, nationwide.
“Robertson Ryan gives you a voice. They listen, encourage, and are there for all of their employees,” said one person when nominating the agency.
Another employee added: “I have worked here for over nine years, and it’s the best place I have ever worked at. Management is very good, you feel heard, and additional education is always available if wanted.”
The recognition as a “Best Place to Work” is not new for RRI. The privately owned agency has been recognized as a top workplace for years, including as Insurance Journal’s Gold Award BATWF winner for the Midwest in 2024.
“We are a national agency, meaning we are big, yet operate like a smaller company, meaning we have the resources to take care of our team, but done in a way that is genuine with personal touches,” said Allan
Degner, senior vice president of marketing and communications. “We support a flexible work culture, offering remote, hybrid, and office work, generous PTO and holidays, health benefits, profit sharing, and an environment where people are encouraged to grow professionally and personally.”
Degner said that people stay with the agency because they see meaning in their work, and the leadership shows their employees just how much they are valued and supported.
There are several reasons RRI is unique from other agencies, Degner said. First, each agent owns their book. “That means they have a personal stake in their clients, direct responsibility, and ownership of their professional path,” he said. “This model brings commitment, accountability, and entrepreneurial spirit.”
Employees and agents don’t just sell policies. Everyone plays a part as the clients’ trusted advisor, Degner added.
“Our guidance, resources, and year-round partnership set us apart as accessible, long-term partners who care.”
And even as the firm has grown, agency leadership maintains a focus on culture and values.
“At Robertson Ryan, we’ve been intentional about building a culture that thrives on flexibility, engagement, recognition, and support,” Degner said. “From our Employee Engagement Committee to our Charitable Foundation, and from career development to overall well-being, these commitments are woven
into our identity and daily operations and are not treated as afterthoughts.”
One employee told Insurance Journal: “One of the things I’m most proud of at our agency is the way leadership consistently backs up their words with action when it comes to supporting employees and clients,” they said. “For example, when our team faced an unusually heavy renewal season last year, management stepped in with extra resources, flexible scheduling, and direct involvement to make sure no one felt overwhelmed and every client received top-tier service.”
That balance of care for both employees and clients captures what makes this agency special, another employee said.
“One major thing that separates us is we have a floater department. They can jump in and assist you if you are falling behind, or they can cover your book while you are out on leave, or just vacation. That service allows us to feel like we can actually take time off,” they said.
Being a “Best Agency to Work For” starts with leadership and listening, Degner said.
“Leadership isn’t about having all the answers; it’s about asking the right questions, clearing obstacles, and helping others succeed,” he said.
“It’s about creating an environment where people feel valued, respected, and empowered.”
His advice to other agency owners today:
• Empower people and give them ownership. An ownership mindset builds investment.
• Be flexible and deliver an environment where work-life balance matters.
• Make connections by holding regular employee gatherings— virtual or in person.
• Give back to the community.
• Always support employee growth and learning.
Allan Degner at Robertson Ryan Insurance's headquarters.
Special Report: Best Agency to Work For
East: Gold Award
Cleary Insurance: Supportive, Family Atmosphere That Puts Employees and Clients First
By Jahna Jacobson
Cleary Insurance Inc. is an insurance company with a great team, a winning atmosphere, and a “family vibe.”
That’s according to employees who nominated Cleary Insurance Inc., Insurance Journal’s Best Agency to Work For Gold Award winner for the East region.
“It is the best place to work because it fosters both professional growth and personal fulfillment,” one employee said. “A strong team means collaboration, support, and shared successes. Employees lift each other up and celebrate wins together. A winning atmosphere drives motivation and pride, encouraging everyone to strive for excellence while feeling valued.”
The family atmosphere and positive, supportive company culture developed through years of intentional hard work and listening to the needs of employees.
“It gives me an incredible sense of pride to know that our staff nominated Cleary Insurance for this award,” said agency owner and President Bill Cleary.
When COVID hit, he worried that moving the team to remote work would erode that culture.
“Fortunately, we have a mature and selfless group of people here, and they have continued to keep that culture alive and thriving,” Cleary said. “I think they nominated us because they enjoy working
with each other. Working alongside people you respect and enjoy is what makes this a great place to work.”
Employees said they appreciate the absence of micro-management and a feeling of autonomy.
The agency gives everyone the authority to make decisions on their own, to “do the right thing” without needing to consult a manual or a superior, Cleary said. “I believe our structure is a truly defining characteristic: we have a very flat organization, with virtually no middle management.”
No matter what position a person holds, they are always willing to pitch in, said another employee. “They have created a true team environment where everyone is respected.”
Cleary’s employees also said there is a genuine emphasis on work-life balance in the family-run agency.
“One of our co-workers had heart surgery and took extended leave from work,” one employee said. “She has commented on how well she was helped with disability benefits and has been kept on part-time because she is not yet able to return full-time.”
Another employee found ample support through a recent cancer diagnosis.
“My job was a concern for me, not knowing what would happen,” they said. “Well, as it turned out, there was absolutely nothing to worry about. Bill Cleary made sure I felt comfortable, not pressured to get back to work, always checking on my
progress without pushing…It makes working on my recovery time less stressful, and I knew he and everyone at Cleary had my back.”
When it comes to compensation, employees note cost-ofliving increases, fair pay based on merit and accomplishment, bonuses, and exceptional profit-sharing and retirement programs.
And no one works harder than Cleary and Vice President and Chief Operations Officer John Bernardin, several employees commented.
“Both of them keep an open-door policy, and I can confidently say everyone loves to go to work at Cleary,” one said. “I have never worked at an agency with such a healthy working environment that also strives to continue to do better for employees and clients.”
The growing agency added eight people in the last year,
an employee said in their nomination, adding, “Our new employees recommend our company to their friends.”
Finding new team members through current employees works well for the agency, Cleary said.
“The employees feel invested in our culture, respect each other, and thus they are usually the source of where we find our new employees,” he said. “They work hard to find new staff that will fit in and appreciate the culture they have established.”
“Don’t hire by technical skill sets,” he added. “Hire good people, then get out of their way and let them do their thing!”
Cleary Insurance Inc. Boston, Massachusetts
Cleary Insurance employees volunteering
Special Report: Best Agency to Work For
Midwest: Gold Award
DSP Insurance Services Schaumburg, Illinois
DSP Doubles Down on Independence by Developing From Within
By Ezra Amacher
As president of DSP Insurance Services, Taylor Virgil is proud to say that the Schaumburg, Illinois-based agency has taken the road less traveled.
At a time when many agencies of its size are being bought out by larger firms, DSP has doubled down on its independence and invested its resources into perpetuating the agency internally.
“We’re really focused on the long-term and developing talent from within as well, so I think that’s another thing that is a differentiator,” said Virgil.
The process of perpetuating an independent agency takes a lot of time and energy, Virgil acknowledged, adding that DSP has been able to still maintain steady growth to the top line and hire good people.
“We have a lot of internal promotions for an agency of our size and very clear paths to moving up, which is what we spent a lot of time building out over the last two years since I was fortunate enough to get the nod to lead the agency,” said Virgil.
DSP’s commitment to developing talent from within is paying off.
This year DSP received the Gold Award for Best Agency to Work For in the Midwest region. In nominating the firm for the award, DSP employees said they look forward to coming to work at an agency that prioritizes teamwork, integrity, and employee well-being.
Virgil got a late start to working in insurance after beginning his career as an engineer. As Virgil developed professionally, he paid close attention to what qualities create good leaders and productive workplaces.
“The teams that were the most kind of functional and worked really well and jelled and grew were the ones that had the best communication and everybody really understood what was happening,” said Virgil. “I’ve tried to bring a lot of that to the agency.”
DSP holds biannual, all-agency meetings where they share “way more numbers than we ever shared (before),” said Virgil. DSP also instituted a profit sharing based on the performance of the agency for all the staff.
“We’re a people business and our only asset is our people,” said Virgil. “We have to invest in that, otherwise we can’t do what we say we want to do.”
Employees who wrote in to nominate DSP said they appreciate that the agency has created a culture of open communication, which helps team members serve their mission of providing clients with excellent service.
“In the last few years the agency has worked very hard to set itself up for continued success,” one employee wrote. “This includes rebuilding departments, including job descriptions, titles, and salaries, to allow for continued development of the staff and growth opportunities from within the organization.”
The same employee added that the agency has provided additional financial contributions to the staff in recent years, including a 401(k) match increase, a profit sharing plan addition, and continued contributions to the company’s medical plans.
Another area where DSP excels is encouraging employees to practice a healthy work-life balance. Several employees said they appreciate that DSP allows team members to work remotely and affords them time to attend to personal matters.
“I know employees that have needed time off for personal reasons, even if little notice has been given,” an employee wrote. “It gives me great comfort seeing how the agency has always made an effort to make sure employees
are able to meet their personal work-life balance as opposed to enforcing a ‘hardline’ policy.”
Employees who nominated the agency were unanimous in sharing that DSP lives out its mission to be independent.
“DSP Insurance Services is committed to being an independent agency,” one employee wrote. “The people that work here are committed to excellence and serving clients with timely and expert advice. I’m proud to be a part of this organization.”
“We’re
a people business and our only asset is our people.” - Taylor Virgil
Special Report: Best Agency to Work For
South Central: Gold Award
Higginbotham Fort Worth, Texas
Higginbotham’s Extraordinary Growth Fueled by Recognizing Talent at Every Level
By Ezra Amacher
It’s not by accident that Higginbotham continually finds itself on the shortlist of best independent insurance agencies to work for. The Fort Worth, Texas-based firm is intentional about every aspect of its business, from being accountable to clients to creating an ownership-driven culture among team members. Higginbotham’s intentionality starts with the kinds of people the agency brings on board.
Higginbotham hires employees based on whether they pass the “Thanksgiving Test.” Would employees want to share a Thanksgiving meal with this person?
“That’s how we’ve built not just a team but a Higginbotham family,” said Rusty Reid, president and CEO of Higginbotham.
The family atmosphere at Higginbotham can be felt in
the enthusiasm team members have for the agency. Employees voted the firm as the Best Agency to Work For in the South Central region, noting the superb work culture, top-notch leadership, and commitment to recognizing talent and potential across all levels.
Higginbotham’s practice of helping employees grow has fueled the company’s long-term success. The agency is celebrating 35 straight years of 21% average growth—what Reid calls “an extraordinary run in our industry.”
“We’ve proven you can grow aggressively without losing your identity,” Reid said. “At Higginbotham, we don’t chase growth at all costs; we grow by staying true to our roots. That balance of ambition with values is what sets us apart and what keeps people invested in building a career here.”
Higginbotham’s business
philosophy of strategy is supported by the leadership team’s experience of working on the front lines. As Reid puts it, Higginbotham’s leaders are brokers first.
me to develop the confidence necessary to excel in my role.”
“We’re practicing producers, not executives sitting on the sidelines, so we understand client challenges and producer wants and needs firsthand,” Reid said. “That perspective gives us credibility with our people and with the market.”
A core tenet for Higginbotham leaders is ensuring the next generation of team members is set up for success. The agency is getting younger by design by actively recruiting and developing talent who bring fresh energy, new ideas, and the ambition to lead this industry forward, Reid said.
“We’ve
proven you can grow aggressively without losing your identity.” - Rusty Reid, president and CEO of Higginbotham
Another employee commended the firm for working with team members to ensure they’re in the right line of work. “We had an employee that was underperforming in their role. Any other agency probably would have let this employee go, but what our agency did instead was work to find a more suitable position within the agency,” the employee wrote. “So rather than being let go, this employee was allowed to make a horizontal move and keep their job. Again, living up to the value of ‘family to our employees.’”
In nominating the agency for the award, Higginbotham employees noted the effort the firm puts into training and evaluating workers.
“One of the practices that truly stands out to me is the employee training and mentoring program,” one employee wrote. “When I joined Higginbotham last year, I had little knowledge of the insurance industry. However, the comprehensive onboarding training, coupled with the mentoring program, enabled
Higginbotham lives up to its family culture by giving team members equity in the company as an employee-owned business. Reid encourages other agency owners to make employees feel like they own a stake in their company’s success. “My advice to owners is to build a culture where people feel invested in the outcome,” he said. “Shared ownership doesn’t just reward—it aligns. When wins belong to everyone, the victories feel bigger. Culture beats strategy if you want to be a place where people stay, grow, and thrive.”
The team at Higginbotham
Special Report: Best Agency to Work For
Southeast: Gold Award
Brightway Insurance Ponte Vedra Beach, Florida
Be a Leader by Listening to Employees and Clients
By William Rabb
For the second straight year, Brightway Insurance in Ponte Vedra Beach, Florida, has made the list of finalists for the Insurance Journal’s Best Agencies to Work For – Southeast. This year, the agency made it to the top and was named the Gold Award winner, based on surveys and extensive feedback from employees.
“Our office is more of a family than a place we work. It truly makes coming to work such a joy!” one agency worker said in the Insurance Journal survey.
The Gold award this year comes a month before the staff heads out on a cruise—the reward for hitting the goal of making 3,000 positive impacts in 2024, with co-workers, clients, and in the community, said Chris Huebener, equity partner at the 15-employee agency.
“We are embarking on our team cruise in November with all the employees and spouses, so we are super excited to reward them with that and spend some time together and disconnect from the job and really enjoy our time togeth er—with significant others, too, as they are just as important to our office success,” Huebener said.
He said the Insurance Journal Gold award is another measure of the agency’s success with workers and with policyholders.
“This is awesome to see and always a great feeling that our team actually likes to come to
work!” Huebener said.
The agency is one of many Brightway franchises in 45 U.S. states, and one of several in the bustling Jacksonville, Florida, area. The Ponte Vedra agency was founded in 2006. Billy Wagner is the agency owner.
Wagner was a restaurant manager for several years but left for a career in insurance.
Huebener also worked at the restaurant, and when it closed down a few years later, he joined Wagner as business partner at Brightway.
That was two decades ago. The agency has grown steadily since, inking some 5,000 new clients each year.
One secret to employee satisfaction and strong customer service seems to be the vetting and training that agency staffers must go through. Brightway Ponte Vedra has a rigorous, 21-step hiring process. Most hired crew members are then
agency, Huebener explained.
“The expectations are clear, and the reviews highlight exactly what we have excelled at and what we need to work on, and that is clearly conveyed to us in a constructive, motivating, and positive light,” one longtime agency employee said.
“I have worked for other insurance agencies in the past, and Brightway PVB is one above the rest. Billy and Chris do an amazing job running the agency,” said another.
Huebener’s advice to other agency owners: listen closely and respond creatively to your team. The agency created a position called the Executive of Belonging, whose role is to surprise and delight the team with fun initiatives that foster a sense of belonging.
“Continuously improve your benefits package—ours has improved for 18 straight years.
The firm also has developed a pathway for eight positions for growth, “ensuring our team members are rewarded for high performance and never feel capped in their earning potential,” Huebener said.
The agency helps the team create life plans, focusing on workers’ personal dreams and goals before even discussing business. “As leaders, our priority is making our team members successful,” he added.
Business development also is important, leaders said. Agency team members continue to travel to conferences and “road shows” to meet
The team at Brightway Insurance - Ponte Vedra Beach, Florida
Special Report: Best Agency to Work For
West: Gold Award
Kulchin Ross Insurance Services Tarzana, California
Being Pleasant Is Key to Success at Small but Growing Southern California Firm
By Don Jergler
Being pleasant may not sound like it’s part of a recipe for success at a firm operating in a space where people survive and thrive by making sales, but it’s among the core philosophies at Kulchin Ross Insurance Services LLC.
The small agency seems more focused on growing its own people—professionally and their personal well-being—than growing its book of business. However, Kulchin Ross has also grown its customer base considerably in recent years.
This year, Kulchin Ross won the Gold Award for the Best Agency to Work For in the West region. In nominating their firm, many employees noted the atmosphere and kindness that managers and employees show each other, as well as the opportunities for professional growth they receive.
Derek Ross, president and chief operations officer, said the agency’s commitment to making the workplace a pleasant one has been key to what most would agree is a stellar retention record.
“In the 15 years now that
we’ve been in business, we’ve only lost one employee. That’s it,” Ross said. “The majority of our folks stay, and they stay because of the concept of being pleasant and being heard and being in an environment that actually cares for who they are, not just while they’re in the office but outside of the office—their family, their children, all of that. It’s just really coming from a sense of being compassionate toward others.”
As Ross was talking about this firm, he was in the middle of planning a get-together at his home for everyone in the office. “They come because they enjoy spending time with me and my wife and my kids and my dog. They come and we hang out—we don’t talk work, we don’t talk office, we just talk life,” he said.
In nominating the firm for the award, one employee wrote that Kulchin Ross stands out among other firms because of their commitment to professional growth and having a supportive team culture.
“We foster an environment where all team members’ ideas are valued and collaboration is encouraged across all levels,” the employee wrote. “The owners invest in ongoing training and development, ensuring that employees have the resources and knowledge to excel in a constantly evolving insurance landscape.”
“We celebrate achievements and recognize hard work. Our agency also prioritizes work-life balance, offering flexibility and understanding to help employees thrive both
personally and professionally.”
Another employee called out the agency’s commitment to professional development, including an internship program with the local high school that brings interns into the office for a few days a week after school. One student started working for the firm after participating in the program and graduating from college.
The attributes of helpfulness, teamwork, and understanding were part of many employee comments. “This is a great place to work,” another employee wrote. “The people are awesome, everyone helps each other, and the agency really cares about us, which shows...Our bosses are very easy to talk to, get along with, and if we need anything to help with our jobs, they would do everything possible to provide what’s needed.”
Ross believes understanding people, and being pleasant, can take care of almost all work concerns. “It’s about being compassionate toward others and recognizing that we’re all traveling down this journey of life, and we’re all going to have to hit different detours, and as long as we recognize that while we’re here, working, focusing on what we need to get done, everything else will fall into place,” Ross said.
At the firm’s annual charity fundraiser in November 2024, they chose the L.A. County Fire Department’s Spark of Love charity toy drive to donate money and toys.
Some of the Kulchin Ross celebrate family day at the company’s headquarters.
Idea Exchange: Workers' Compensation
How We’re Harnessing AI for Proactive Risk Management in Workers’ Compensation
Over the past decade, the insurance industry has undergone an increasingly rapid transformation, driven by advancements in machine learning, artificial intelligence, and now generative AI technologies.
By Benjamin Burch
These advancements have enabled insurers to automate routine tasks such as data entry, document creation, and various aspects of underwriting and claims processes. Generative AI unlocks new potential by automating more complex tasks, allowing employees to focus on intricate aspects of risk assessment and claims management. This same technology allows insurers to rapidly discover insights from previously difficult-to-use sources of data, such as scanned documents and notes taken by claims adjusters. These insights can be used to identify previously
unknown areas of concern and inform risk assessment and management efforts.
An often overlooked and valuable source of insurance data comes from unstructured data sources, but it has historically been an untapped resource. Unstructured data, such as claim notes, accident descriptions, scanned documents, images, audio, and video, often contains the most essential information about a worker’s injury, legal proceedings, and medical treatment.
often leading to key insights much faster than traditional methods.
This data has traditionally been challenging to analyze, often requiring bespoke AI models tailor-made by expensive data scientists and insurtech vendors. Generative AI, including large language models (LLMs) from OpenAI, Google, and Anthropic, represents a significant leap forward in the capability to understand and generate human-like text. Generative AI models can process unstructured data quickly and cost-effectively,
The opportunities for harnessing AI in workers’ comp are immense. By effectively processing unstructured data, insurers can uncover patterns and trends that were previously hidden, reducing the time to insight and enhancing worker safety protocols. This capability not only improves the efficiency of claims analysis but also empowers insurers to anticipate and mitigate future risks, ultimately leading to safer workplaces and reduced claim costs.
Even though generative AI models are powerful and improving rapidly, they are not perfect, and they should not be used without acknowledging risks. Unstructured insurance data, especially in workers’ comp, often contains personally identifiable information and personal health information, as well as other sensitive subject matter. When working with this data, care must be taken to ensure all regulatory, data privacy, and information security policies are followed. Additionally, generative AI models are known to produce unpredictable inaccuracies known as “hallucinations.” While there are many techniques to reduce hallucinations from generative AI models, it is ultimately the responsibility of those using the technology to ensure the results of any AI-assisted analysis are accurate.
From Data Gaps to Clarity
To further illustrate the opportunities generative AI creates in transforming workers’ comp, we ran a series of experiments that showcase its practical application. This study leveraged secured generative AI and large LLMs to analyze unstructured data sources, such as claim notes and accident descriptions, to compare with the structured data (such as NCCI injury codes, diagnosis codes, and procedure codes). We
continued on page 38
Idea Exchange: Workers' Compensation
continued from page 37
had the goal of identifying root causes of injuries and safety concerns. The findings from the study offer a compelling look at how AI-driven analysis can empower insurers and employers to foster safer work environments and reduce claim costs.
The first experiment aimed to identify the true root causes of an injury. In a study of nearly 4 million claims across 70 workers’ comp claim source systems, we found that 15% of all causes of injury are missing or coded as miscellaneous. This does not include the significant number that are coded either incorrectly or less specifically than they should be. For example, an injury may be coded as a generic slip and fall instead of specifying that the slip was on ice or the fall was from a ladder. Missing, inaccurate, and generic coding makes it difficult for insurance carriers and risk managers to identify the best ways to improve safety programs and practices. The same issues can be seen in the unstructured data captured at the first notice of loss. The aforementioned study also identified that 7% of the descriptions of the injury captured by claims adjusters do not contain an adequate description of the event. Instead, they contain descriptions like “No description on file,” “Not Provided,” “Unknown,” or a generic
“Worker injured on site,” “Employee cut finger,” and “Needlestick.” The critical information about the specific circumstances that led to the injury is not present in the most easily analyzed text. It instead is often contained in notes taken by claims adjusters and stored in claims systems or documents scanned into imaging systems.
Prompting Precision in Claims
It will come as no surprise to anyone who has worked with multiple claims systems that the format in which this vital information is captured can vary widely. While some claims systems may utilize standardized templates for such details, for others the format may be at the discretion of individual adjusters.
Generative AI models excel at processing short passages of text and following simple instructions. In our experiment, we leveraged a secured LLM to “read” the claim notes for injuries related to several industries, including retail, academic, and public entities. By creating targeted prompts to identify root causes of injury and drill down on specific areas of interest, we were able to greatly reduce the number of claims with missing or inadequate injury coding. For a large university, we reduced the number of poorly coded injuries by 75% and identified the small handful of
injuries where it is unclear what caused the injury. Additionally, we identified corrections or further clarifications to the injury coding for 30% of the injuries. For example, our generative AI process correctly determined that the injury of an injured worker who was burned when a hot cup of coffee was thrown at him should be coded as a burn instead of being struck by an object.
‘The opportunities for harnessing AI in workers’ comp are immense. By effectively processing unstructured data, insurers can uncover patterns and trends that were previously hidden, reducing the time to insight and enhancing worker safety protocols.’
Improving the accuracy of the coded injury information across a population of claims enabled us to uncover additional insights that were not evident in the unenhanced data. For a retail account, we identified specific equipment that employees were repeatedly tripping over and shared this information with their risk management team. Additionally, we identified seasonality in a specific category of injuries that was previously unknown.
Before the release of robust LLMs such as ChatGPT in 2022, manually correcting injury coding by cross-referencing claim notes for 1,000 claims would have taken several days spread across weeks and required the expertise of experienced claims adjusters. By leveraging generative AI, we completed this task in a matter of hours for less than $100, engaging subject matter experts when needed. We have consistently found robust results by applying this technique to other claim attributes across various industries.
Illuminating Injury Context
In a subsequent experiment, we delved further into the nature of injuries to determine if they were avoidable or could
have been made less severe with improved safety measures. This information is critical for developing robust risk management programs, yet it is typically not captured in a manner that is easily reportable.
As in the previous experiment, we leveraged a secured generative AI model to examine the claim notes taken by claims adjusters to identify key attributes related to the injury. In this study, we sought any indication that an injury was avoidable and analyzed the details of such injuries. For example, when analyzing injuries for a retail store, we easily distinguished cuts occurring from routine work, such as opening boxes or preparing food in the deli, from instances where injuries occurred due to improper procedures, like cleaning equipment while it is still running or not wearing proper safety gear. As in the first experiment, utilizing generative AI allowed us to extract these insights in a fraction of the time required for manual review. Not only do we use these insights to discuss the safety programs in place with employers in a data-driven manner, but we can also conduct this same analysis across peer employers to produce actionable benchmarking.
In addition to understanding the nuances of the injury, it is crucial to accurately capture detailed information about the department and job function of the injured worker. This allows employers to determine if there are systemic issues that can be addressed through targeted training or process improvement. In the aforementioned study of nearly 4 million claims, we found that more than 30% of claims did not have valid job class coding, and 25% of claims lacked a free-text occupational description.
Even for claims where structured data is available, the information is often vague. For example, an employee’s occupation may be listed as “SCHOOLS-ALL OTHER” or “MUNICIPAL EMPLOYEE,” which does not indicate the specifics of the employee’s job function or where the risk of injury may reside in their role. By leveraging generative AI in the manner described, we were able to derive the occupation of the injured employee and further classify their occupation. For example, in a large uni-
versity, we quickly processed thousands of jobs labeled “SCHOOLS-ALL OTHER.” We identified which employees were teachers, janitorial staff, cafeteria workers, grounds crew, medical staff at the university hospital, or administrative staff. We are now able to analyze trends and derive insights specific to the particular job functions and compare them across multiple employers.
Human Oversight Remains Essential
The utilization of generative AI in claims processing is not just a technological advancement; it represents a fundamental shift in how insurers can approach risk management. By automating and refining the analysis of unstructured data, insurers can uncover insights that were previously obscured by vague or incomplete information. This information can be used for claims handling, underwriting, and risk management.
While the benefits of generative AI are evident, it is crucial to reiterate that these models are not perfect and can produce inaccurate results. In our experiments, all insights were manually reviewed for accuracy. Although we generally found generative AI models to be highly accurate for our use cases, they were not without
error. Insurers must exercise caution and ensure that AI-generated insights are carefully reviewed and validated. Relying solely on AI without human oversight may result in misguided conclusions and poor decisions.
A balanced approach that combines AI efficiency with expert judgment is essential for optimizing claims handling and risk management strategies.
As generative AI continues to evolve, its role in transforming the insurance industry will undoubtedly expand. Claims professionals who embrace this technology and integrate it thoughtfully into their operations will be better positioned to anticipate risks and improve their internal operations.
This article first appeared on ClaimsJournal. com, a sister publication to Insurance Journal.
Burch, Ph.D., is assistant vice president of data science at Midwest Employers Casualty, a member company of W. R. Berkley Corp. He has more than a decade of experience in data science within the workers’ comp industry. The views expressed in this article are those of the author, and do not necessarily reflect the views of his past or current employers.
Idea Exchange: The Competitive Advantage
Hurricane Katrina Impacts Then and Now
IBy Chris Burand
recently read several articles marking the 20th anniversary of Hurricane Katrina. The articles covered a plethora of changes, including ISO form changes, the quality of claims serviced, the enormous financial cost, the unreal people cost, the improvement in the design/maintenance/governance of the levees, and even the improved acknowledgement that risk management matters in insurance. After all, with two centuries of insurance, who would have guessed risk management really matters?
I performed a significant amount of errors and omissions (E&O) work in New Orleans and the surrounding area over the ensuing years after the hurricane. I was in New Orleans so often, my family suggested I get an apartment. On my first trip to New Orleans after Hurricane Katrina, the day after the airport reopened, a client gave me a tour. The flooded areas were like Mars. Everything was a monotonous shade of gray dirt. The trees, the abandoned cars, and the buildings, literally everything was the same color. Few commercial businesses were open, and the hotels that survived were jam-packed, often with FEMA personnel. The refrigerators set along the street for trash pickup in the neighborhoods that were otherwise untouched were a major surprise. It turns out that rotten food permeates a refrigerator’s casing over time, and those otherwise untouched neighborhoods did not have electricity for days and days.
The postmortem on the storm, which my client clearly conveyed to me on that first trip, was that this was a man-made disaster caused by incompetence in managing the levees. It is sad that people must suffer so much loss for actions to be taken that should have happened long ago.
In reflecting on my experiences and subsequent changes to property and property insurance, my thoughts include issues mostly surrounding agency E&O
and mandated building codes.
Errors & Omissions
The E&O claims were awful. Somewhere around 98% of my clients’ E&O claims were dismissed or won fairly quickly because the claims had no basis. In some cases, insureds were simply desperate. In other cases, they were greedy. In some cases, they claimed the agent, literally—and I am not exaggerating—should have been making all insurance coverage decisions for the insured without the insured’s consent. This means that ambulance-chasing attorneys were aiding and abetting in each of the hundreds, if not thousands, of E&O claims. Making the situation worse, these attorneys inflated the hopes of homeowners who had lost their homes.
I also discovered how deeply my clients cared for their customers. They were going through their own suffering, their staff was going through their own losses, and yet they were working long hours on behalf of their clients. In fact, in a few cases I experienced, I felt the deluge of E&O claims (again almost uniformly without much, if any, merit) caused agency owners to retire early, and maybe in a couple of cases, the stress led to early deaths. And to add insult to injury, some carriers sued their agents. Carriers often win E&O cases when they sue, and yet carriers are supposedly the agents’ partners.
Since then, I have completed some interesting work involving carriers and agents who should have been on the same side in political lobbying efforts, but they were not. Without question, the agents had the consumers’ interest more at heart than carriers, even though the agents would be the ones suffering growth losses because, in their position, rate increases would subside.
Building Codes
Governments have failed to create and enforce quality building codes. After Hurricane Andrew devastated South Florida, I recall hearing a story about why hurricanes caused more damage than
they had in the past. I don’t know if the following is true, but the story was that the undeveloped coastal areas had previously remained undeveloped because locals knew that was where hurricanes hit.
In New Orleans, the older areas were not significantly affected, other than some wind damage. There was almost no flooding. The most significant property loss was business income, particularly due to evacuation requirements where insureds had no covered cause of loss. Business income is likely the most essential property coverage, then and now.
‘Based on my E&O work then and now, only a tiny percentage of agents understand Ordinance & Law coverage.’
The damage hit developments that were lower in elevation. Let’s think about this. If I build in an area below sea level, it makes sense to build on slab, right? That is a human failure, not an Act of God disaster. And politicians all over have learned nothing from that failure. To make housing more affordable, they have made it more dangerous by allowing homes to be built too closely together, by not allowing vegetation to be cut, by now allowing for more egress, and by allowing multiple homes to be built on single-family lots without any expansion for vehicle traffic in an emergency.
About 10 years ago, I watched a video of a traffic jam of vehicles trying to flee from a horrific fire in Colorado Springs. The flames were large and close behind the exiting vehicles. And, there were not enough lanes. Now, more homes have been built without any traffic expansion. The people who lost their lives in the Hawaii fires could not get out. It was not due to oil companies and global warming. Someone should have unlocked the locked gate on one of the roads.
Some would say politicians have learned the importance of hardened homes. I’ll agree, and especially the way Alabama has
approached this should be applauded. However, complying with the updated building codes—codes that should have been in place when the homes were initially built—is, after all, expensive. No one thinks about the expense because the codes only apply to new construction, but when your home burns to the ground or is blown off the slab, construction will be new. It costs a lot of money to elevate a house 14 feet. It costs a lot more to build a roof and windows to sustain 150 mph winds.
Based on my E&O work then and now, only a tiny percentage of agents understand Ordinance & Law coverage. Most do not know they should be offering, if they care about their clients, the highest limits possible every time. The throw-in coverage, usually around 10%, is mostly useless in these situations.
The solution lies in being willing to make hard decisions, have hard conversations, and explain the trade-offs
involved. I believe agents who genuinely care enough to have upfront discussions have the most opportunity to make improvements. It starts with education about insuring homes correctly. Then follow with risk management because a key lesson from Hurricane Katrina that I have not read—and therefore maybe it is not a lesson but should be—is that homes well cared for did not have much wind damage. They might have been flooded due to the mismanagement of the levees, but they did not have wind damage. Wind damage can mostly be avoided with good construction and home maintenance.
Along those lines, I have a wishful hope that insurance companies would give proper credits for well-maintained homes. This includes proper credits for fire-safe homes, hail-proofed roofs, hardened construction, proper elevations, and so forth. Currently, carriers’ underwriting is to accept the home or not. It’s a zero or a 1, rather than on a scale as it should be. A
smart carrier would take advantage of their lesser competitors to underwrite and price on a grade. It is not hard to do.
Final Thoughts
Agents need to offer clients the coverages they need. Use a coverage checklist. Document the file. Consumers will buy some of the extra coverage they need, and in the event of a claim, they will have a better experience. If they don’t buy the extra coverage, you’ll have a far stronger defense, all else being equal.
My clients who took these basic steps made it through their E&O adventures with far less stress. If I could go back in time, I’d do everything I could to help mitigate the stress agents would soon be experiencing, and this is the best advice I can provide.
Burand is the founder and owner of Burand & Associates LLC based in Pueblo, Colo. Phone: 719-4853868. E-mail: chris@burand-associates.com.
Idea Exchange: Property
Katrina 2005-2025: How Property Policies Changed
Hurricane Katrina made landfall on August 29, 2005, with the eye of the Category 3 hurricane centered on Bay St. Louis, Mississippi, though the storm is remembered largely because of the devastation to New Orleans, Louisiana. Over 1,800 people died in seven states, with over 1,500 of those in Louisiana.
By Bill Wilson
The storm surge, a major loss cause, extended from the Florida Panhandle to western parts of Louisiana, and was 27 feet in Mississippi, flowing inland up to 6 miles and 12 miles up inlets and streams. One-third of Hancock County, Mississippi, was flooded. St. Bernard Parish in Louisiana only had five buildings that were not flooded.
Following 53 separate levee breaches in and around New Orleans, 80% of Orleans Parish flooded under 2 to 20 feet of water. Well over a quarter-million homes were destroyed with many more damaged, and tens of thousands of businesses were damaged or destroyed.
Over 1.7 million insurance company claims were reportedly filed with over $41 billion paid to policyholders. Over 163,000 NFIP flood insurance claims were filed and over $15 billion paid to policyholders, with the average payment being “just” $94,000. Total property damage was estimated to be $85 billion, resulting in an uninsured total of almost $29 billion.
These numbers were provided several years after Katrina by Jim Mahurin, CPCU, ARM, a risk management consultant who did years of expert witness and consulting work along the Gulf Coast following Katrina. Contrary to the numerous media reports of poor service by insurers, along with extensive litigation, according to Mahurin, only 2% of claims were disputed, tracking with the national average for non-disaster claims.
He also asserts that New Orleans area independent agents did an exemplary job
over many years in informing prospects and policyholders of the importance of purchasing flood insurance, including newly available excess flood coverage. As a result, almost 60% of property owners in the Greater New Orleans area had NFIP coverage, but very few, including many high-net-worth individuals, had excess coverage. Independent agents offered excess coverage, but few property owners accepted it. These agents documented their offers, something that proved invaluable when E&O claims were filed.
The purpose, though, of this Insurance Journal special feature is to focus on the ISO homeowners and commercial property coverage form language changes made largely in response to litigation involving whether water damage exclusions applied to damage resulting from storm surge and levee breaks. In addition, this article will address other changes and “lessons learned” that have impacted underwriting, rating, and loss control.
Commercial Property Policy Form Changes
In 2007, one of the first filings (CF-2007OFR07) made by Insurance Services Office (ISO) included changes to endorsement CP 03 21 – Windstorm Or Hail Percentage Deductible. Without elaborating, several Katrina lawsuits alleged that the language in this form implied that wind-related storm surge was subject to windstorm perils and not the water damage exclusion. According to the filing:
“Language is added to make it explicit that this endorsement does not affect the impact of the policy’s Water Exclusion or any other exclusion in the policy; and does not affect the application of a Flood Deductible if the policy (or another policy) provides coverage for Flood.”
The filing goes on to state, “There is no change in coverage.” This is an important point, as we’ll see later in the Katrinarelated changes made to the water damage exclusion. When ISO made those changes, a number of policyholder attorneys alleged that the more restrictive language related
to storm surge, levee breaks, etc., were proof that, without such language, there was coverage under forms in effect at the time of Katrina.
In 2008, ISO made a countrywide filing (CF-2008-OWEFO) that introduced new Water Exclusion Endorsements for both its countrywide Commercial Property (CP 10 32 08 08) and BusinessOwners Program (BP 01 59 08 08) lines, as well as two other lines of business. (Note: Some reference materials indicate that the new CP 10 32 form replaced a CP 10 31 form introduced in 2007, though I can find no reliable documentation of that.)
In the filing, ISO cites two Louisiana cases, one in federal district court and the other a ruling from the Louisiana Supreme Court, as the basis for introducing these endorsements. Both courts found that the
“flood” exclusions in the policy forms in question were not ambiguous. Plaintiffs had alleged that water damage was due to man-made causes (e.g., levee failures), but the existing exclusions implied that they applied only to natural causes of flooding and were, at the least, ambiguous.
‘Catastrophe damage is no longer just a coastal issue.’
In the filing, ISO explains that the purpose of the form language change was to reinforce the intent of the water damage exclusion to apply to damage caused by an act of nature or otherwise caused. In anticipation of other water-related claims or lawsuits in the future, ISO also specifically referenced the applicability of the exclusion to tsunamis and storm surges. These mandatory endorsements remained in effect until 2011 when ISO, in filing CF-2011-OFR11, incorporated the
language in the 2008 endorsements into the Causes of Loss forms and two other Commercial Fire and Allied Lines forms.
Residential Property Policy Form Changes
Two months after the aforementioned 2008 commercial form filing, ISO filed HO-2008-OFRWE, which introduced comparable language in new homeowners endorsements HO 16 09 01 09 and HO 16 10 01 09. ISO’s Water Backup And Sump Discharge or Overflow form HO 04 95 was also updated with the new language.
The HO 16 09 endorsement was filed for use with ISO’s HO 00 02, HO 00 04, HO 00 06, and HO 00 08 homeowners forms, while the HO 16 10 endorsement was filed for use with ISO’s HO 00 03 and HO 00 05 homeowners forms.
Both the HO 16 09 and HO 16 10 were withdrawn in a subsequent ISO filing (HO 2010-OFR10) when the language in each endorsement was incorporated into all HO
forms that referenced the endorsements.
Other Coverage Changes and Some Lessons Learned
The aforementioned coverage changes weren’t the only industry reactions in response to Katrina. In addition to structural changes in New Orleans (e.g., levee reconstruction), other developments include:
• NFIP Changes. The Biggert-Waters Act of 2012 attempted to ultimately eliminate subsidies and gradually introduce actuarially sound rates, though subsequent legislation has mitigated that.
• Private Flood Insurance Markets. As one might expect, excess flood coverage almost instantly vanished in coastal areas though this market rebounded significantly 10 years after Katrina and reportedly today comprises almost a third of flood premiums on a countrywide basis.
continued on page 44
Idea Exchange: Property
continued from page 43
• Hurricane and Windstorm Deductibles. Flat-dollar hurricane deductibles all but vanished and small percentage-based deductibles increased substantially. With increased focus on climate change or otherwise on perceived long-term weather changes, many property owners now expe-
rience percentage windstorm deductibles and/or coverage limitations to roofs or roof surfacing.
• Catastrophe Modeling. Formerly a product of reinsurers or broadly applied to entire books of business, CAT models were refined for application to individual risks or class or risks with greater emphasis on
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evolving weather pattern frequency and severity.
• Underinsurance. While solutions continue to evade the industry, hurricanes and other catastrophes (e.g., wildfires) continue to demonstrate that most properties in the country are underinsured, especially when subject to widespread damage.
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observations, May 2025.
Scan the QR code to discover more.
• Zoning and Codes. Stronger building codes and zoning enforcement have been introduced in some areas. New, innovative products have been introduced such as roofing systems that can withstand major windstorms and hail. As such products proliferate, by choice or code or underwriting mandates, expect unit prices to fall.
• Loss Control. As weather- and water-related losses make these perils increasingly uninsurable, insurers are likely to encourage or even mandate that policyholders implement risk-reducing loss control measures. This is already happening for some risk profiles with regard to underwriting requirements for water shut-off devices and electrical system monitoring devices.
According to Mahurin, agents in the area learned the sales and E&O value of offering flood coverage and documenting refusals. They also learned to look beyond Zone A in their flood insurance marketing efforts. He cautions agents to think about a 5-, 10-, 15-, or 20-foot tidal surge.
What’s next? Many advocates for change suggest that catastrophe exposures in general (hurricane, tornado, hail, earthquake, wildfire, etc.) may require extensive public and private cooperation.
Catastrophe damage is no longer just a coastal issue.
Weather-related catastrophes suggest to some that, from an insurance perspective, a wider spread of risk is required in the private sector perhaps on a mandatory basis, coupled with TRIA-like state and federal financial backstops, and built on a foundation of effective building codes and zoning ordinances that are rigorously enforced.
What do you think?
Wilson, CPCU, ARM, AIM, AAM is the founder and CEO of InsuranceCommentary.com and the author of six books. Email: Bill@InsuranceCommentary.com.
Idea Exchange: Agency Management
Keeping the Independent Agent Channel Prominent in a Volatile Market
To say the independent agent—one of the lynchpins of the insurance industry—is operating in challenging and sometimes unforgiving times would be an understatement.
By James Keane
Market volatility has remained a defining force for independent agents in 2025, carrying over from the instability seen in 2024.
Ongoing economic pressures, including inflation and tariffs/taxes, continue to disrupt the insurance landscape. Combined with rapid technological advancement, a shifting regulatory and compliance environment, and evolving customer expectations, these conditions have intensified the challenges that independent agents and the industry at
large are facing.
Insurance carriers are also dealing with a rise in both the frequency and intensity of natural disasters, with greater losses putting additional pressure on the ability of independent agents to write business.
This surge in environmental risks has sparked countless conversations about climate change and its implications for insurance, particularly concerning the accessibility and cost of coverage in areas vulnerable to severe weather.
Throw in the increased competition from insurtechs and the growth of cyber threats as client and customer data become increasingly vulnerable, and it’s clear that independent agents have their work cut out for them.
Still, agents have considerable influence and remain key players in this dynamic industry, as evidenced by their growing numbers.
Staying Ahead of the Game Through Metrics
Successful independent agents are nimble and adaptive. The following strategies and tactics will enable agents to stay on top of their game for the balance of 2025 and beyond.
Changing Needs. Review client policies regularly to identify the continuously changing needs of customers. This requires remaining aware of demographic changes, shifts in consumer behavior, and new trends. As younger generations like millennials and Gen Z become the primary consumers of insurance, it’s important to understand that they place a high value on personalized, flexible coverage and digital-centric interactions.
New Products. Expand service offerings by actively engaging with clients to address existing challenges, as well as anticipating continued on page 46
Idea Exchange: Agency Management
continued from page 45
future issues. Explore the possibility of providing new product offerings, like commercial insurance, and motivating customers to streamline their insurance. Consider further adding niche products like cyber liability and pet insurance to cater to these emerging markets. Collaborating with financial advisors to provide planning services can also enhance an agent’s appeal to clients. Retention Efforts. Enhance client retention through the implementation of loyalty programs, regular policy assessments, and the collection of client feedback. Agents can forge stronger community ties by participating in local events, forming partnerships with local
businesses such as car dealerships or real estate agencies, and sponsoring activities to boost their visibility.
Go Digital. Create a multichannel engagement approach that utilizes various digital platforms including email, social media, and client portals, in addition to traditional communication methods such as phone calls and direct mail. This will help agents connect with clients on their preferred channels.
Importantly, independent agents should regularly analyze performance metrics and gather client feedback to optimize an approach and ensure the strategy delivers personalized, cohesive, and effective engagement that will foster trust and strengthen relationships.
With respect to metrics, to effectively measure performance and growth, independent agents can focus on several areas, including premium growth rate, retention rate, new business acquisition, and commission income.
Other metrics can also help independent agents identify their successes and areas for improvement. Some of these include gathering customer feedback to assess client satisfaction and service quality and determining the average premium per policy to gauge market positioning.
Independent agents can also utilize loss ratios to understand potential for increasing revenue, track the percentage of new clients acquired through referrals to measure
loyalty, and evaluate the percentage of leads converted into actual sales to improve sales strategies.
Independent Agents Embracing Data Analytics
Our industry is experiencing significant transformation, influenced in no small part by advancements in data analytics.
There is currently an abundance of information, along with advanced analytical systems, which enables insurance companies and independent agents to make more informed and tailored choices—with greater speed and accuracy. This shift toward a data-centric approach is not merely focused on improving processes; it is reshaping the very mechanics of insurance, from the initial policy quote to the claims resolution phase.
Looking ahead, the insurance sector is expected to increasingly embrace artificial intelligence and machine learning, paving the way for real-time decisionmaking and personalized client engagement.
Utilizing data enhances the precision of underwriting, accelerates customer interactions, and improves fraud detection capabilities.
For independent agents, data analytics offers a strategic advantage by facilitating quicker quotes and more effective coverage suggestions when collaborating with data-driven insurers.
Another Arrow in the Independent Agent’s Quiver
Independent agents can greatly benefit from the support of an independent agency network. Such networks equip independent insurance
agents with essential tools and resources that boost income, enhance the value of the agency, and help them to compete effectively with larger firms.
Additionally, an independent agency network will develop partnerships with technology providers, enabling agents to stay at the leading edge of insurance agency management systems. This type of collaboration results in digital solutions aimed at improving service capabilities, optimizing operations, and, importantly, attracting a larger client base.
At SIAA, for example, we acquired the assets of DONNA. ai in March, enhancing our network’s data capabilities. This advanced data and analytics platform, now branded as Agency IQ - Powered by SIAA,
is both carrier and management system agnostic and offered to agencies as part of their membership.
At the end of the day, the role of the independent agent is—and will continue to be—significant and vital. Future success for independent agents will depend on adaptability in a market characterized by change, a strong emphasis on customer relationships, and a readiness to integrate new technologies.
Keane is vice president, national sales, for SIAA -The Agent Alliance, a network for starting, growing, and evolving independent insurance agencies. The organization has over 5,200 member agencies writing more than $17 billion in total written premium. Website: siaa.com.
Lately, it seems as though we’re surrounded by discussions about how best to grow the American industrial sector. A key component of this discussion hinges on how to supply and power these industries in both cost-effective and environmentally conscious ways. Meeting these needs will likely require fresh ideas and fresh eyes on some traditional practices.
By Lee Shavel
We’re already seeing some of these innovations unfold—from earthy alternatives homebuilders are using for the residential properties of the future to new ways different industries are powering and improving the American economic engine. While these advancements represent an intriguing evolution for the industrial sector, they may also introduce potential risks for insurers to monitor.
Bio Building on the Rise
As the environmental risks homeowners face continue to evolve—such as wind, fire, and other weather-related threats—so, too, does the mix of materials found in new residential homes. While builders are increasingly choosing alternative materials like concrete to erect and fortify their homes against such risks, researchers and some homebuilders are also turning to a variety of biogenic materials such as soy, hemp, and straw to insulate their residential properties.
Hempcrete, for example, utilizes a mixture of hemp stalks, lime binder, and water to insulate homes or hold weight in nonload-bearing walls, and homebuilders in states such
as Texas, Michigan, and Colorado have reportedly constructed homes using this material.
One of the most significant benefits of incorporating any biogenic material into a home is its carbon-absorbing capabilities. Hempcrete, for example, absorbs twice as much carbon as it emits, making it nearly “carbon negative.” This lightweight material can help regulate room temperatures, and unlike standard insulation materials, it can fend off mold development by absorbing moisture. The lime binder used in hempcrete is also non-combustible, making hempcrete fire-resistant. Hempcrete is not without its potential drawbacks. The material is not strong enough to hold structural loads and must be accompanied by separate framing material, an added expense. Supply chain and logistical questions may also impede the growth of hempcrete in homebuilding: The material, and builders with the knowhow to use it, remain in short supply in
the U.S. Hempcrete also can require long periods of time to dry, especially in cool or damp environments.
The use of hempcrete remains in its infancy in the U.S. as compared to the rest of the world, though there are some indicators that more rapid adoption is on the horizon.
America’s Modular, Mobile Nuclear Future
America’s energy appetite is increasing, according to U.S. energy officials, driven in large part by electricity demand from data centers and the industrial sector. And while solar power is forecast to supply the bulk of increased electricity consumption in the coming years, some analysts and industries are taking a fresh look at another carbon-neutral power source: nuclear. Small modular reactors (SMRs) are compact nuclear fission reactors with a reported capacity of up to 300 megawatts per unit, and are designed for factory
assembly and scalable deployment. Unlike traditional reactors—which are larger and custom-built on-site—SMRs are projected to offer lower upfront capital costs, enhanced safety, and installation flexibility, according to the International Atomic Energy Agency. Although their projected energy output is less than that of traditional reactors, some proponents believe that their modular design and mobility—with some models, known as microreactors, designed to be moved around on the back of flatbed trucks—will allow for versatile deployment, powering everything from data centers to disaster sites.
Critics have cast doubt, however, on the ability of governments and businesses to safely and effectively scale these advanced nuclear models, pointing to budgetary and timeline challenges encountered by existing SMR projects. Other questions remain—such as fuel availability, in addition to long-unsettled questions regarding the disposal of nuclear waste—that may present obstacles to future SMR projects. A variety of designs are nevertheless under development and construction across the globe, and the first U.S.-based SMR is projected to go online sometime around 2030.
The High-Tech Farm
The modern farm is increasingly home
October 6, 2025 Motors Insurance Corporation
500 Woodward Avenue, 14th Floor Detroit, MI 48226
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, 1 Federal Street, Suite 700, Boston, MA 02110, Attn: Financial Surveillance and Company Licensing within 14 days of the date of this notice.
to an electronic menagerie of drones, autonomous vehicles, robots, sensors, and AI-driven data analytics. The adoption of this suite of technologies isn’t uniform or linear across the nation’s agricultural markets, but the growing use of these technologies may help shape the future of farm risk exposures in potentially significant ways.
The process of using technological diagnostic tools to assess and maximize farm production—a practice commonly called precision agriculture—can be as relatively simple and low-tech as using variable-rate pesticide or fertilizer applicators, but it may also involve in-ground sensors, automated weeders, and a growing array of robot devices (collectively “AgTech”) that tend to both plants and livestock across their life cycles.
Approximately 27% of U.S. farms used precision farming techniques in 2023, according to the General Accountability Office, leveraging sensors, drones, autonomous vehicles, and robotics for a wide range of uses, from virtual livestock fencing to autonomous tractors.
While these technological flourishes might benefit U.S. farms, they may also create a variety of potential property, liability, and cyber risks, ranging from high upfront equipment costs to potential data privacy concerns presented by an
October 6, 2025
Founders Assurance Company 210 Park Avenue, Suite 1300 Oklahoma City, OK 73102
The above company has made application to the Division of Insurance to obtain a 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, 1 Federal Street, Suite 700, Boston, MA 02110, Attn: Financial Surveillance and Company Licensing within 14 days of the date of this notice.
increased reliance on robotics.
As farm insurers manage these evolving risk exposures, carriers will also have to keep an eye on the emergence of risks related to biogenic construction materials and small modular reactors as their usage increases.
Shavel is president and chief executive officer of Verisk, a data analytics and technology partner to the global insurance industry. He brings nearly 30 years of experience advising and leading publicly traded companies to Verisk.
October 6, 2025
Opportunity Life Insurance Company
4675 Cornell Rd., Suite 160 Cincinnati, OH 45241
The above company has made application to the Division of Insurance to obtain a certificate of Authority to transact Life, Accident, and Health 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, 1 Federal Street, Suite 700, Boston, MA 02110, Attn: Financial Surveillance and Company Licensing within 14 days of the date of this notice.
Closing Quote
Private Equity vs. Industry Bank Financing
By Scott Freiday
As mergers and acquisitions continue to reshape the insurance landscape, independent agency owners face increasingly complex decisions about financing growth. Among the most prominent capital sources are private equity (PE) and industry-focused bank lenders. Although both offer financial resources and strategic advantages, they carry significantly different implications for ownership, control, and longterm direction.
Private equity has attracted attention for its ability to inject large sums of capital, often accelerating growth through acquisitions or operational overhauls. However, PE also typically comes with ownership dilution, potential cultural disruption, and expectations
Private Equity
for aggressive returns.
Bank financing, especially from a lender that understands the insurance industry and the independent agency model, offers a more conservative alternative. This route preserves ownership, aligns with the agency’s vision, and usually comes at a lower cost of capital.
Working with an industry lender that provides informed guidance and sector-specific expertise is a win-win. The lender helps owners assess capital needs in light of their agency’s goals while offering a lower cost of capital and more operational flexibility.
PE firms typically:
• Raise capital from institutional investors and high-networth individuals.
• Acquire majority or controlling stakes in private companies.
• Restructure operations and implement growth strategies.
• Seek an exit—typically within 5 to 10 years—by selling to another investor or firm.
PE firms also aim to generate returns well above market aver-
• Large capital infusions for acquisitions
• Often takes majority control (51%-100%)
• Higher cost of capital; management
ages, often regardless of the broader economic or industry cycle. This investment model can misalign with the values, risk tolerance, and long-term strategy of many independent agencies, especially smaller firms not positioned for aggressive scaling.
Why Customized Lending
Independent agencies often have layered capital needs. An industry lender can construct a debt stack that might involve term financing for specific immediate purposes like acquisitions, upgrading or expanding the agency’s technology, or hiring talent.
For situations that require funding over time such as an acquisition with an earn-out or other growth purposes, multiple-draw term loans can be put in place. Working capital lines of credit are also available for short-term working capital needs.
Should the agency need a commercial mortgage to purchase a building, the lender can review the agency’s cash flow based on its book of
Industry Bank Financing
• Non-dilutive: no ownership taken
• Retains full agency ownership
• Lower cost of capital; interest is tax-deductible fees often apply
• May pressure agency into aggressive
• More flexible and conservatively structured growth or exits
• Cultural disruption possible
• PE firm typically exits in 5-10 years
• Investor returns take priority
• Preserves company culture and succession plans
• Long-term relationship based on business needs
• Lending aligned with agency strategy
business to do 100% financing for the purchase of the building even though the property may be owned by a different entity, usually an LLC.
The loans can involve different term lengths. An industry lender can do this because they understand the value in the agency’s book of business.
Agencies that intend to seek capital should make sure their financial house is in order, including being able to present financial statements in a straightforward manner. Industry-specific lenders will also ask to view the agency’s various carrier statements, which provide a clear picture of the agency’s cash flow, customer retention, and overall quality of the book of business.
Choosing the Right Path
Ultimately, the choice between PE and industry bank financing comes down to the agency’s growth objectives, capital requirements, desired level of control, cultural fit, and long-term business vision.
Private equity may suit agencies pursuing rapid expansion or looking to exit within a defined time frame. But industry bank financing may offer more stability, customization, and alignment with long-term ownership and perpetuation goals.
Freiday is senior vice president and division director of InsurBanc, a division of Connecticut Community Bank, N.A. Started in 2001 as a vision of the Big “I,” InsurBanc finances acquisitions and perpetuations, including ESOPs. InsurBanc also helps agencies become more efficient by providing cash-management solutions. Email: sfreiday@ insurbanc.com.
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