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Claim on Seized Hemp Shipment Barred, Showing Trickiness of Coverage
Look: Personal Auto Driving P/C Insurers to 2024 Underwriting Profit
Ask the Insurance Recruiter: 10 Ideas to Keep Recruiting Activity High When Hiring Slows Down
The Competitive Advantage: Sales Culture Versus Business Culture
Is It Covered?: What Are ‘Weasel Words’ and What Is ‘Tergiversation’?
The Marketing Connection: The Role of Benchmarking & Competitive Analysis in Insurance Marketing
Closing Quote: Cyber Security and Risk Mitigation
Opening Note
Agents Say Outlook Positive: Survey
Despite challenges posed by inflation, market volatility and rapidly changing technologies, independent agents remain positive about their businesses and report more optimistic perceptions of national business conditions this year than they did last year.
That’s according to the recent Nationwide Economic Impact Survey Report: Independent Insurance Agents Findings report found that 62% of agents gave a positive rating to the current business conditions in the U.S. overall, up from 41% in 2023. The outlook was very positive for individual businesses and agencies, with agents giving a 79% positive rating for 2024, up from 73% in 2023.
Overall, 65% of agents said they expect revenue to increase in the next six months, while only 10% expect a decrease.
Looking ahead, agents were “very/extremely concerned” about the impacts of inflation (63%), artificial intelligence (AI) technology (51%), and U.S. (49%) and global market volatility (50%). Forty-six percent cited concerns about a potential recession or economic downturn in the U.S., while high interest rates (45%) and the upcoming U.S. presidential election (45%) were also named top concerns.
For principal agents, inflation topped their list (31%); however, concerns about rising living costs were down 15% from 2023. Principal agents had increasing concerns about reaching new customers (29% cited, up 11% over 2023), taxes and government regulations (22% cited, up 10%) and financial market volatility (21%, up 7%).
As a result of these adverse conditions, many principal agents are looking for ways to reduce business expenses (53%). Some have applied for a personal loan (35%) or a business loan (34%) within the past six months. Additionally, most report delaying or deferring updating their business’s technologies (61%) and investing in their business’s processes (51%) over the past year.
Economic conditions are also impacting customer behavior. Agents report that rates are rising for 84% of customers, and 84% of agents have noticed an uptick in customers renegotiating their policies. Customers are changing coverage (81%), and 55% of agents have seen policy demand drop over the past six months.
62% of agents gave a positive rating to the current business conditions in the U.S. overall, up from 41% in 2023.
To boost business and get ahead of looming challenges, nearly 40% of principal agents have invested in generative artificial intelligence and automation tools in the past six months to grow business and reduce expenses. About 62% of the independent agents (IA) polled said they had already invested in artificial intelligence technology for their business. Insurance professionals are finding AI opportunities in customer service, underwriting, pricing and sales. According to Nationwide, the benefits are so prominent that an additional 41% of agents surveyed plan to adopt AI for their business in the next six months. More agents (77%) are considering using AI technology to help their clients, a 15-point jump from 2023.
Wells V.P. of Content
Chairman of the Board
Chief
Wells | mwells@wellsmedia.com
Carlson | jcarlson@insurancejournal.com
ADMINISTRATION / CIRCULATION
Chief Financial Officer Terry Freeburg | tfreeburg@wellsmedia.com
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EDITORIAL
V.P. of Content Andrea Wells | awells@insurancejournal.com
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National Editor Chad Hemenway | chemenway@insurancejournal.com
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South Central Editor/Midwest Editor Ezra Amacher | eamacher@insurancejournal.com
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News & Markets
Global Q2 Commercial Insurance Rates Remain Flat, Ending 7 Years of Price Hikes: Marsh
Global commercial insurance rates remained flat during the second quarter of 2024 (down from a 1% increase in Q1 2024), according to Marsh’s Global Insurance Market Index.
The findings mark the first time since the third quarter of 2017 that the global composite rate has not increased, Marsh said, noting that the continued moderation of rates was largely driven by increasing competition among insurers in the global property market. On average, Q2 rates decreased by 5% in Canada and the Pacific, and by 3% in the UK and in Asia regions. Rates increased in the US and Europe by 1%, and by 4% in the Latin America and the Caribbean and India, Middle East and Africa (IMEA) regions.
Other findings in the report included:
• Property insurance rates globally were flat compared to 3% and 6% average increases in Q1 2024 and Q4 2023, and either declined or moderated in every region except IMEA, said Marsh, noting that property insurers are closely watching the Atlantic hurricane season to see if any substantial storm activity might significantly affect their business.
• In the US, property insurance rates rose 2%, compared to an average increase of 8% in Q1 2024.
• Casualty lines rates increased 3% globally, the same level as the previous six quarters. Canada and Asia showed decreases while the UK and IMEA were flat. Marsh said that insurers remain concerned about large jury awards in US courts.
• In the US, casualty rates increased 4% during Q2; excluding workers’ compensation, the increase was 7%.
• Global financial and professional lines (FinPro) rates decreased for the eighth consecutive quarter – by 5% globally, compared with a drop of 8% in Q1 2022. While rate decreases were recorded in every region, in the US, UK, Canada, and Europe, the rates decelerated as compared to Q1 2024 and accelerated in other regions.
• In the US, Q2 FinPro rates dropped by 3%, compared to a drop of 5% in Q1 2024 and 6% in Q4 2023. Directors and officers liability rates continued
to decline, though the pace of Q2 decreases moderated to 5% compared to 8% in Q1 2024.
• Cyber insurance rates decreased 6% globally – repeating the 6% decrease recorded in the prior quarter – with decreases in every region. Insurers continued to focus on cybersecurity controls, typically looking for yearover-year improvements in cyber resilience.
• In the US, cyber rates decreased by 5% — marking the fifth consecutive quarter when prices declined. All references to rate and rate movements in this report are averages, unless otherwise noted. For ease of reporting, Marsh has rounded all percentages regarding rate movements to the nearest whole number.
Insurance broker Marsh is a subsidiary of Marsh McLennan.
AM Best: Migration to Cat-Prone States Fuels Record HO Underwriting Losses in 2023
The U.S. homeowners insurance segment suffered a $15.2 billion underwriting loss in 2023, more than double the loss in the previous year and the line’s worst underwriting results since at least 2000, according to a new AM Best report.
The report, “Migration to CAT-Prone Areas Adds to US Homeowners Insurers’ Performance Volatility,” states the 2023 loss was also the worst this century.
period,” said David Blades, an associate director at AM Best. “Population trends show residents increasingly moving toward regions that are more prone to hurricanes, severe convective storms or even wildfires.”
It also increases the risk of wildfires in areas prone to them due to human activity, as well as utility companies.”
To explain the rise in underwriting losses, AM Best highlighted population migration into areas where weather-related events are increasingly more frequent.
According to the U.S. census, six states — California, Florida, Georgia, North Carolina, Texas and Washington — accounted for 53% of the country’s population growth between 2010 and 2020; all six states are prone to severe weather-related events.
“The U.S. population overall grew 7.4% between 2010-2020 but rose 10.2% in the South and 9.2% in the West during the
On a direct basis, insurers writing homeowner’s coverage in the New England region recorded an average combined ratio of 79.3 for the 10-year period ending with 2023, the report found, compared with combined ratios above breakeven in the Pacific, Southwestern and Rocky Mountain regions.
The South Atlantic region, which includes Florida, and the Southern region, which includes the Gulf Coast states, posted combined ratios over 92 during this timeframe, AM Best analysts added.
“A growing population means an even larger rise in real property development and thus in insured values,” said Christopher Graham, a senior industry analyst at AM Best. “Construction in catastrophe-prone areas adds to flood risk.
In 2023, the direct combined ratio in 17 states surpassed the breakeven threshold of 100. Since 2017, the combined ratio has been in double digits every year except 2019 and 2021, the report added. Consistently in the single digits before 2017, analysts say the increase is evidence of the impact of climate risks and population migration has had on the homeowners segment’s results.
“Higher loss costs have been further complicated by restrictive regulatory environments in several large, catastrophe-prone states,” the report states.
Insurers must decide whether to de-emphasize writing in or exiting certain markets over rate adequacy concerns. Hampering primary carriers is the tightening capacity of the reinsurance market, the result of the homeowners segment’s unfavorable underwriting results.
AM Best believes loss ratios will remain pressured for these carriers, and that a return to underwriting profitability for the segment over the near term is unlikely.
Guy Carpenter: ‘Kitty Cat’ CrowdStrike Outage to Cause
$300M-$1B in
Insured Losses
By Chad Hemenway
Due to the limited amount of impacted companies with insurance and the deployment of a quick fix to mitigate losses, Guy Carpenter said the insured losses from the CrowdStrike outage is likely between $300 million and $1 billion.
financial services and hospitality were among the industries impacted but less than 1% of companies with cyber insurance were affected, Guy Carpenter said.
The reinsurance broker’s analysis considered that the global IT outage earlier this month affected a small percentage of devices—though those that were hit caused widespread global operational disruptions. Aviation, healthcare, retail,
In addition, many organizations were able to fix the problem caused by Crowdstrike’s endpoint-detection-and-response (EDR) product update on Microsoft devices before the clock started on business interruption losses. Many cyber insurance policies have a waiting period built in. Guy Carpenter said these waiting periods typically range from 4 to 12 hours. The company said its findings “align with
the conclusion that this event would not result in a material loss for most insurers, although this could change based on the wordings adopted by carriers, concentration of underwriting within affected industry sectors, and uptake of system failure coverage.”
Guy Carpenter pegs the cyber insurance industry as a $15.8 billion market, based on gross premiums. Its insured-loss estimate is fairly in line with others released since the incident. CyberCube said insured losses could range from $400 million to $1.5 billion. Modeling and insurance services firm Parametrix estimated insurers will pick up between $540 million and $1.08 billion.
$66 Million
The amount a lawsuit by Florida’s Jacksonville Jaguars seeks in damages from a former employee who is serving prison time after pleading guilty to stealing $22 million from the NFL team’s virtual credit card program. Amit Patel, 31, was sentenced to more than six years in federal prison in March after pleading guilty to one count of wire fraud and one count of making an illegal monetary transaction. He was also ordered to pay the Jaguars restitution for the thefts.
5%
The percent by which insurer Nationwide said it will reduce its staff over the next year. The Columbus, Ohio-based insurer said its “modernization journey” includes periodic business-strategy updates that can include shifts in staffing, with some areas increasing and others decreasing in headcount. Calling staff reductions a “last resort,” Nationwide said impacted employees will get 60-days notice and a severance package.
$160 Million
The amount Monsanto will pay to settle a lawsuit by the city of Seattle that accused the unit of Germany’s Bayer of polluting the city’s drainage system and the local Lower Duwamish River with toxic chemicals known as PCBs. In a statement, Monsanto said it will pay $35 million for PCB remediation, and $125 million to address other Seattle claims. The company did not admit liability or wrongdoing. PCBs were outlawed by the U.S. government in 1979, and have been linked to cancer, immune system and other health problems. Monsanto was the only U.S. maker of PCBs.
$1.4 Billion
The amount Meta Platforms has agreed to pay to Texas to resolve the state’s lawsuit accusing the Facebook parent of illegally using facial-recognition technology to collect biometric data of millions of Texans without their consent. The lawsuit, filed in 2022, was the first major case to be brought under Texas’ 2009 biometric privacy law, according to law firms tracking the litigation. A provision of the law provides damages of up to $25,000 per violation.
Declarations
‘Deeply
Dedicated’ to DEI
“Wells Fargo is deeply dedicated to diversity, equity and inclusion and does not tolerate discrimination in any part of our business.”
— Wells Fargo said in a statement after U.S. District Judge Trina Thompson in San Francisco ordered the company to face a lawsuit alleging it defrauded shareholders by proclaiming its commitment to hiring diversity, even as it conducted sham job interviews of non-white and female applicants it had no plans to hire. In its statement, Wells Fargo said it would defend against the lawsuit and noted that the Department of Justice and Securities and Exchange Commission had closed investigations into its hiring practices without taking action.
Marijuana Impaired Driving
“There’s a perception that in states where it’s legal that it’s safe and legal to drive impaired on marijuana.”
— U.S. National Transportation Safety Board Chairwoman Jennifer Homendy said after the NTSB released its final report on a March 22, 2022, collision in Oklahoma, in which six high school girls were killed. The board determined the crash was caused by the 16-year-old driver, who likely was impaired by recent marijuana use and distracted by having five teen passengers in the car. In its report, the NTSB cited studies showing that marijuana decreases motor coordination, slows reaction time and impairs judgment of time and distance, all critical functions for driving.
‘Shameless Cover-Up’
“This shameless cover-up spanned decades and allowed various clergy and other employees to access and sexually abuse numerous children.”
— State lawsuits filed in Missouri by people who allege that they were abused as children by dozens of Catholic priests, nuns and others. Five separate lawsuits seeking unspecified damages were filed in St. Louis and neighboring counties. All told, the lawsuits name 56 alleged abusers. The suits, which seek unspecified damages, allege abuse dating as far back as the 1940s, and as recent as 2015.
Flood Hazard Penalties
“Please review your eligibility for the NFIP (the National Flood Insurance Program). … Penalties in the form of reductions in Federal Emergency Management Agency (FEMA) relief funds are possible for entities that fail to purchase adequate flood insurance on all property located in identified flood zones.”
— Reads a bulletin from West Virginia Insurance Commissioner Allan McVay reminding state and local governments and non-profit organizations that they could face penalties if they fail to obtain flood insurance on properties in flood hazard areas.
Amazon Worker Safety
“The judge’s decision reinforces what we’ve said all along: There’s nothing more important than our employees’ health and safety.”
— Amazon said in a statement responding to the dismissal of a case brought by the Washington state Department of Labor and Industries alleging that Amazon.com Inc. exposed warehouse workers to injuries. The department had cited the e-commerce giant for setting rapid productivity targets that risked hurting employees working at multiple company facilities. According to Amazon, Judge Stephen Pfeifer found the state lacked sufficient evidence to support its allegations that the pace of work in Amazon warehouses is hazardous.
NYC Subway Scanners
“Would I rather that we don’t have to be scanned? Yes. … But if you would speak to the average subway rider, they would state that they don’t want guns on their subway system, and if it means using scanners, then bring the scanners on.”
— New York City Mayor Eric Adams, a self-described “tech geek,” said after the city launched a pilot program on its subway system that uses AI-powered scanners to search riders for guns and knives. Adams said the scanners will be deployed to a small number of stations and only a fraction of riders will be asked to step through them.
News & Markets
Travelers: Costliest Claims Driven by Most Common Workplace Accidents
Analysis of 1.2 million workers' compensation claims reveals the costliest claims are driven by the most common workplace accidents, according to Travelers 2024 Injury Impact Report.
The data also shows first-year employees are still among those most vulnerable to injury.
The largest workers compensation insurer in the U.S. examined more than 1.2 million workers' comp claims from 2017 to 2021.
The findings revealed that the most common workplace accidents make up the majority of claim costs. The report found that the most frequent causes of injury were:
• Overexertion (29% of claims analyzed)
• Slips, trips and falls (23%)
• Being struck by an object (12%)
• Motor vehicle accidents (5%)
• Caught-in or caught-between hazards (5%)
The top five drivers of severe claims ($250,000 or more), beginning with the costliest:
• Slips, trips and falls
• Overexertion
• Being struck by an object
• Motor vehicle accidents
• Caught-in or caught-between hazards
“Factors such as inexperience, workforce shortages and maintenance issues are all contributing to these unfortunate and often avoidable accidents,” said Rich Ives, senior vice president of Business Insurance Claim at Travelers.
“While the number of injuries overall has been trending downward in recent years, our analysis shows that there’s never been a better time for businesses to invest in workplace safety and injury prevention.”
workdays, up from 77).
Injured small-business employees missed an average of 82 workdays, up from 79.
The 2024 report found that employees in their first year on the job continue to be the most vulnerable to workplace injuries, accounting for 35% of all workers compensation claims.
This year’s analysis also uncovered increases in missed workdays due to injuries.
On average, injured employees missed 72 workdays, up one day from last year’s report.
The construction industry continued to have the highest average number of lost workdays per injury (103 workdays, up from 99), followed by transportation (83
“There are tangible consequences to any injury, and many include long-term, sometimes permanent, effects,” said Chris Hayes, assistant vice president of Workers Compensation and Transportation, Risk Control, at Travelers. “By understanding where the risks were in the past, businesses can better identify what to look for and tailor their risk management and employee safety strategies accordingly to help prevent injuries from happening.”
Findings were based solely on indemnity claims, where the injured employees could not immediately return to work and incurred medical costs.
Public D&O Price Decreased 5.2% in Second Quarter, Says Aon
The average price for directors & officers liability insurance decreased 5.2% per $1 million in limits in the second quarter, according to Aon Commercial Risk Solutions.
Aon said the decrease compared to the same quarter in 2023 was the ninth straight quarter of year-overyear price decreases for D&O insurance purchased by publicly traded companies,
and programs that renewed in the second quarters of 2024 and 2023 saw prices decline 6.2%.
Aon’s quarterly pricing index looked at primary policies that renewed with the same limit and
deductible as the year prior. Of these, 68% got a price decrease, 21% renewed flat, and 11% received a price increase. The average price decrease for like-for-like renewals
was 9.7%. The average increase was 7.2%.
Nearly all primary D&O policies in the second quarter (96%) were renewed with the same limit. The same deductible was renewed on 90% of policies. Just 1.4% of policies were renewed with a different carrier in the second quarter.
Focusing on each of the three months of the second quarter, Aon said 17% of renewals saw primary prices increase in April.
Increases fell to 12% in May and 6% in June. However, the largest average price increase was in may, at 10.3%.
News & Markets
Defense Institute Aims to Educate, End ‘Skyrocketing’ Nuclear Verdicts
By Allen Laman
Robert Tyson believes the defense bar’s lawsuit approach is overdue for an overhaul.
The U.S. Chamber of Commerce Institute for Legal Reform reported in May that nuclear verdicts are on the rise, noting that there were a record number of “mega nuclear verdicts” — verdicts of $100 million or more — in 2022. Preliminary data indicates that record was again broken in 2023.
So, for the third straight year, Tyson and leaders of the Nuclear Verdicts Defense Institute (NVDI) recently hosted a four-day program aimed at teaching insurance defense and claims professionals how to end the “surge of skyrocketing jury verdicts across the country.”
“Nuclear verdicts are proliferating because the defense industry has been slow to change,” said Tyson, a noted trial attorney and author of Nuclear Verdicts: Defending Justice for All. “There is a pattern to what is driving nuclear verdicts across the country.”
He explained that the NVDI is designed to break that pattern by teaching the defense bar “proven methods that have saved the insurance industry nearly $3 billion in the past four years.” Per a press release, nuclear verdicts are defined as large, unsubstantiated jury awards that typically exceed $10 million.
These huge verdicts are at the forefront of the property and casualty insurance industry’s collective mind. Tyson sees value in working toward tort reform, legislative changes and damage caps — but he also recognizes that achieving lasting change in those arenas is challenging. He likes to focus on what’s happening in courtrooms.
“There is a pattern to nuclear verdicts,” Tyson said. “And the good news is you can break that pattern in the courtroom. And you don’t have to write [to] your congressman. You don’t have to go out and march for justice. You just have to change the way you try lawsuits.”
This is the direct focus of the NVDI.
Approximately 20 experienced defense trial lawyers from across the United States attended this year’s event. During the retreat-like gathering, a clinical psychologist demonstrated how psychology is used on jurors in nuclear verdict trials. This included a workshop experiment that evoked anger in the participants, followed by a guide to defusing juror anger.
After these anti-nuclear verdict methods were shared for each stage of a trial, attendees were split into small groups and tasked with demonstrating that they could implement what they learned.
In the press release, Rachel Beauchamp, partner at Cousineau Malone, said the institute provided “both psychological evidence and practical application of proven methods to use in trial.” Bill Daw, partner at Texas-based Daw and Ray, said the “most significant and unanticipated benefit was the incredible exchange of ideas and collaboration.”
Previous attendees have reached out to Tyson to tell him the methods they learned led to victories.
“The feedback has just been overwhelming,” Tyson said. “We’ve been told by many of the attendees over the years that it’s career changing. Our clients are asking us to do this. Insurance companies are saying, ‘Hey, we want the defense bar to share with each other.’ But we don’t really do that as a defense bar, in general.”
Meanwhile, the plaintiffs’ bar shares “everything” with each other, Tyson said. That’s what makes the Nuclear Verdicts Defense Institute unique: It provides an avenue for communication among competitors across the defense community.
Tyson is also the chief business development officer at Schaefer City Technologies, an insurance technology company that has developed software solutions to help insurance companies and their defense counsel spot and defend against nuclear verdicts. His research has shown that nuclear verdicts “are not happening to new attorneys,” he said. “They’re happening to very experienced attorneys.”
Attendees learned how to pick a jury, give opening and closing statements and conduct direct and cross examinations — all specifically to prevent nuclear verdicts.
Something has changed in courtrooms, he said. Whatever experienced defense lawyers used to do isn’t working any more. Plaintiffs’ lawyers have changed their approach, “and the defense needs to adapt,” he said.
Robert Tyson
Business Moves
National
FM Global, FM
FM Global announced it will now be known simply as FM.
The commercial property insurer on July 17 unveiled its new name and “titanium” logo at the company’s midyear meeting.
The company said FM, with the new tagline “Protect Your Purpose,” will serve as the parent brand for its flagship mutual insurance company and commercial property insurer AFM, now known as FM Affiliated.
The company’s cargo insurance business, boiler and machinery reinsurance business, and a new renewable energy unit will also incorporate the new FM brand name.
Applied Systems, Planck
Insurance software firm Applied Systems acquired Planck, an artificial intelligence (AI) company for the insurance industry.
Planck provides an AI-based data platform for commercial insurance. It works with U.S. insurance companies, helping them streamline the commercial underwriting process for the small-medium business market and enabling them to instantly underwrite any policy.
Applied is a provider of cloud-based insurance management systems serving agents and brokers throughout the U.S., Canada, Ireland, and the United Kingdom. Planck was launched in 2016. It is based in New York and Tel-Aviv and has about 80 employees.
Over the past 18 months, Applied has released its first versions of AI-powered features in select Applied and EZLynx products, while also experimenting with various AI capabilities through its Applied AI Lab in collaboration with some of the industry’s largest agents and carriers. The company said these use cases have highlighted significant opportunities for reducing inefficiencies and unlocking the value of data.
Applied said it aims to enhance the speed and quality of critical business processes, including marketing, sales, underwriting, renewals, servicing, and advisory services acquisition.
Illinois-based specialty insurance broker Origin Specialty Underwriters Agency has acquired Agricultural Insurance Management Services (AIMS), an agribusiness insurance-focused managing general underwriter based in Bow, New Hampshire.
AIMS does most of its business in the Mid-Atlantic and East Coast regions and is currently licensed in more than 30 states. It helps agents place insurance for farms, ranches, equine operations, estate farms, and commercial growers of agricultural products.
AIMS offers a variety of farm-related coverages, including homes, barns,
farm equipment, auto, and liability from national carriers.
Industry veteran Clark Lindley founded AIMS in 2000 and serves as president. Clark and the firm’s underwriting manager, Tammy Hooker, have more than 50 years of underwriting and carrier experience in the agriculture sector.
Origin Specialty is an MGU that targets small and mid-sized risks including restaurant, hospitality, excavation, and worker’s compensation risks. Origin is a partner company of Beyond Risk, an independent risk management services provider.
World Insurance Associates, Affiliated Insurance Managers
Insurance broker World Insurance Associates acquired the business of Affiliated Insurance Managers (AIM) of Warwick, Rhode Island.
AIM was founded in 1937. Today the agency is primarily focused on commercial lines, while also providing insurance to individuals and families, in southern New England.
Sean P. Daly, CPCU, president and CEO of AIM, said that joining World means AIM will have additional products and services to offer customers.
World is headquartered in Iselin, New Jersey. World is ranked #15 on the Top 100 P&C Agencies by Insurance Journal and #19 on the Top 50 Personal Lines Agencies and #19 on the Top 50 Commercial Lines Agencies by Insurance Journal.
Independent insurance agency Deland, Gibson Insurance Associates in Wellesley, Massachusetts, has acquired Atchue Insurance Agency, located about 35 miles away in Worcester.
Founded by Earl V. Atchue, Jr. in 1982, Atchue Insurance Agency has grown from an operation Atchue ran out of his home to a well-established Park Avenue firm offering commercial, personal and life insurance and employee benefits across Worcester County.
Both agencies are family-run. Chip Gibson and Ted Gibson are fourth-generation leaders of Deland Gibson, while the
next generation of leadership from within the Atchue family is represented by A.J. (Andrew J.) Atchue, who has been named managing director.
A.J. worked at the agency during high school and college, joining the agency full-time in 2015 after three years working in commercial lines at Harleysville/ Nationwide Insurance Company in Worcester, and a stint with the American Hockey League in Springfield, Massachusetts.
The Atchue team will remain at the current Worcester office at 190 Park Ave. Deland, Gibson has offices in Wellesley, Franklin, Dennis Port, Duxbury, and Worcester.
Midwest
Novatae Risk Group, Denali Specialty Group
Novatae Risk Group has acquired the assets of Denali Specialty Group LLC of St. Louis, Missouri.
Founded in 2019, Denali is a full-service insurance intermediary that is backed by decades of experience accumulated by its leadership.
Denali has a primary niche in investment properties and an additional focus on cannabis, excess worker compensation, and student housing.
The organization is led by Michael Eichhorn, Kerri Senger, and Paul Krutek.
OpenRoad
New classic and modern collector vehicle insurer, Dallas-based OpenRoad, has begun offering coverage across select U.S. states.
OpenRoad will be centered around Midwest states with coverage becoming available across Wisconsin, Illinois, Indiana, and Ohio. The collector vehicle insurer aims to add an additional 12 states before the fall and ultimately plans to offer coverage countrywide.
OpenRoad’s insurance program includes specialized coverages tailored to the unique needs of classic and modern collector vehicle owners, with many protections not available through standard auto insurance programs.
OpenRoad said its pricing models also accounts for the reduced accident frequency often associated with collector vehicles, resulting in lower insurance rates for their owners.
OpenRoad CEO Richard Hutchinson is an insurance industry veteran with over three decades of experience including executive leadership roles at Progressive, Hagerty, and Forge. He was president at Hagerty for nearly six years.
South Central
Hub International, Swanson Insurance Agency
Chicago-based Hub International Limited announced it acquired the assets of Swanson Insurance Agency Inc. and Swanson & Associates Inc. (collectively, Swanson Insurance Agency).
Located in New Orleans, Louisiana, Swanson Insurance Agency is a locally owned, independent insurance agency serving the New Orleans community and its surrounding areas. The Swanson Insurance Agency team will join Hub Gulf South.
Swanson Insurance Agency will be referred to as Swanson Insurance Agency, a Hub International company.
NFP,
Southern Insurance Agency
NFP, an Aon company and property/ casualty broker, benefits consultant, wealth manager and retirement plan advisor, announced the acquisition of Southern Insurance Agency LLC (SIA), a commercial property and casualty broker located in New Orleans.
Louis Faust, founder and president of SIA, will join NFP as a senior vice president and report to Meg McSherry, managing director and property/casualty leader in NFP’s Atlantic region. SIA offers a variety of P/C solutions and services for middle-market companies, including general liability, commercial property, business auto and cyber liability coverages.
Southeast
Hub International, Wade Associates Hub International Ltd. has acquired
Wade Associates, an independent agency with offices in North Carolina.
Wade specializes in property/casualty insurance for construction, manufacturing, health care and technology sectors. Cheryl Nabell is president of the agency. Nabell and the Wade team will now be part of Hub Carolinas and the agency will be known as Wade Associates LLC, a Hub International company.
Wade has offices in Davidson, New Bern, Raleigh and Wilmington, North Carolina.
Heffernan Insurance Brokers has acquired Costello Insurance Associates in Tempe, Arizona.
Pat Costello and his team of five employees will continue to service their new and existing customers
Costello services clients throughout the U.S. in obtaining coverage for corporate and pleasure aircraft, including jets, gliders, and drones, as well as operations such as flying clubs, flight schools, and airports.
Heffernan is an independent insurance brokerage headquartered in Walnut Creek, California. Heffernan has offices in San Francisco, Petaluma, Menlo Park, Truckee, Bakersfield, Woodland Hills, Los Angeles and Irvine, California, as well as in Phoenix, Arizona; Portland, Oregon; Seattle and Olympia, Washington; St. Louis, Missouri; and in London.
Jewelers Mutual Group, Union Life & Casualty Insurance Agency
Jewelers Mutual Group acquired Union Life & Casualty Insurance Agency in Phoenix, Arizona.
JM Insurance Agency Partners Inc., a Jewelers Mutual Group company, will join with UL&C.
UL&C has been in the insurance business since 1965, specializing in pawn and related industries.
Policyholders of Jewelers Mutual are members of Jewelers Mutual Holding Co. Jewelers Mutual is headquartered in Neenah, Wisconsin, with other offices in Dallas, Texas and Miami, Florida.
National
Chubb has promoted Ana Robic and Ben Rockwell to senior vice presidents of Chubb Group.
Robic currently is division president, North America personal risk services, and Rockwell is division president, North America middle market. Each will retain their current responsibilities.
Robic was named to her current position in 2021 and previously served as chief operating officer of the business, which she assumed in 2017. Prior to that, Robic was executive vice president, national commercial insurance leader, for Chubb in Canada. She joined Chubb in 1999.
Rockwell was appointed division president, North America middle market, in 2019 after his time as chief underwriting officer of North America commercial insurance. Rockwell began his career with Chubb in 1997 as a casualty claims representative and in 1999 became an underwriter.
Jason Ranucci has been named head of North America lower middle market and will have overall responsibilities for the strategy, underwriting, and P&L for the lower middle market segment. Ranucci was global chief underwriting officer of small commercial and will continue these underwriting responsibilities.
Ranucci succeeds Jeffrey Updyke, who was named to the newly created position of
executive vice president, North America commercial insurance and digital distribution.
Updyke will be charged with expanding Chubb’s reach and influence in the lower middle market and small commercial segments through the insurer’s broker distribution partners.
John DePeters has been appointed chief underwriting officer, small commercial. He joined Chubb (then ACE) in 2013 as a casualty underwriter.
Gallagher appointed Jonathan Eaton to executive director, responsible for overseeing wholesale to other non-specialist brokers and working with Gallagher offices in the U.S. to support cargo client retention and new business growth.
Eaton joins Gallagher from Howden with more than 30 years of experience. He has also worked for broker RKH Specialty and insurers XL Catlin, Aviva, and AIG.
The Hartford, headquartered in Hartford, Connecticut, appointed Michael Fish as head of group benefits, succeeding Jonathan Bennett, who will retire at the end of 2024 after 25 years with the company.
Currently chief operating officer for group benefits, Fish joined The Hartford in 2004 and previously served as head of group benefits product and strategy. He also led the Group Benefits underwriting organization. Before joining The Hartford, Fish worked in various leadership positions for Unum Group.
The Hartford also named H. Clay Bassett Jr. global chief underwriting officer and head of reinsurance. Bassett currently serves as deputy global chief underwriting officer and head of Navigators Reinsurance, a brand of The Hartford. He joined the company in 2019 with the acquisition of The Navigators Group Inc., where he was the chief underwriting officer.
Hill Insurance Services of New York added Richard Edsall as senior vice president. Edsall was most recently senior vice president of commercial management liability at Argo Pro. Prior to Argo he managed D&O products for financial institutions at Chubb.
At Tara Hill, owned by Ambac Financial
Bassett succeeds M. Ross Fisher, who will retire at the end of 2024 after more than two decades with the company.
Fish and Bassett will transition to their new roles by Oct. 1.
East
AXA XL, headquartered in Stamford, Connecticut, appointed Joseph Madigan as chief underwriting officer for its North American environmental insurance business for the middle market.
Group, Edsall will be responsible for developing an excess and surplus portfolio focused on private management liability and miscellaneous professional liability coverages for small to medium-sized risks.
Midwest
Madigan joined AXA XL’s environmental insurance business as an environmental underwriter in 1998 and previously served as head of environmental for the east region for AXA XL, Americas and environmental executive underwriter and environmental regional manager, Canada and Central U.S. He is based in AXA XL’s Exton, Pennsylvania, office and reports to Matthew Waters, head of middle market, Americas.
Program administrator Tara
Leif Assurance, headquartered in St. Louis, promoted Robert Worden to sales manager. Worden will also serve as the commercial lines sales manager for Leif’s sister company, Powers Insurance & Risk Management. Worden has 30 years of experience in the insurance industry. He previously worked as the company’s construction risk advisor. Before joining Leif Assurance, he worked as senior vice president of insurance sales at Bremer Bank.
Valley Insurance Agency Alliance (VIAA), headquartered in St. Louis, hired Carly Sherman as a book management coach. Sherman is focused on improving personal
Ana Robic
Ben Rockwell
Michael Fish
Clay Bassett
Joseph Madigan
Richard Edsall
Robert Worden
lines production profitability with strategic and regional partner carriers.
Sherman previously worked as an agency manager with DAS Insurance Company, an insurance broker with Weiss Insurance Agency, and an inside sales representative with Graybar. She is also the current owner of Create by Carly, a custom gift company.
as senior vice president, small business, commercial lines, and Carrie Lowe as vice president, package lines underwriting.
Shaver most recently was a small business leader for Chubb Insurance. She also previously served as head of home office underwriting, chief underwriting officer at Farmers Insurance Co.
Lowe previously served as vice president, commercial lines project and program management at Westfield Insurance.
Pittsburgh, Pennsylvania.
The agency is independent and offers a range of coverage products, including coverage for high net worth individuals; boats and yachts; commercial marine and commercial auto; and commercial building insurance and wedding insurance.
West
Ohio Bar Liability Insurance Company announced that John R. Tribble is joining the company as president and CEO.
Tribble has held a variety of positions during the past eight years with Church Mutual Insurance Co.
His accomplishments include establishing a diversity and inclusion program at Church Mutual, resulting in greater customer engagement, expansion into markets driving additional growth and profitability, exceeding combined ratio and premium goals at CM Regent, and increasing the number of agents and the customer base for the Company.
South Central
Brandon Rice joined Alliant Insurance Services, headquartered in Irvine, California, as a vice president for its employee benefits group.
Rice is based in Dallas.
He most recently served as vice president at Lockton Companies, where he worked for over 18 years in roles including assistant vice president and senior account executive.
Southeast
Tribble has also served in vice president positions with the Hertz Corporation and Liberty Mutual/America First Insurance Co., and in associate vice president and claim officer roles at Nationwide Mutual Insurance Co.
Encova Insurance, headquartered in Columbus, Ohio, named Michelle Shaver
Stacks Insurance Brokerage in Lighthouse Point, Florida, has named Kenny Bordman partner and president of commercial insurance.
Bordman has more than a decade in commercial insurance, preceded by years in the U.S. Army and law enforcement.
Taylor Stack is agency principal at Stacks, which has offices in the Tampa Bay area; Charleston, South Carolina; Nashville, Tennessee; Austin and Houston, Texas; and in
Intact Insurance Specialty Solutions, the brand for Intact Financial Corporation’s U.S. insurance company subsidiaries, headquartered in Plymouth, Minnesota, hired Erik Janssens as senior vice president of West Coast Commercial Surety.
Janssens is responsible for underwriting, strategy, and the profitable growth of Intact’s commercial surety business in the west coast region.
Janssens has more than 25 years of experience in the commercial surety industry. He previously served as senior vice president of commercial surety for North America at Swiss Re and held key roles at Berkley Surety Group and Travelers.
Jim Odiorne will return to the Washinton Office of the Insurance Commissioner to serve as the chief deputy commissioner under Insurance Commissioner Mike Kreidler.
Odiorne retired in 2018 after serving as Kreidler’s chief deputy for five years. Prior to that he was deputy commissioner for company supervision from 1996 to 2013. Odiorne replaces Chief Deputy Commissioner Michael Wood, who is joining the Civil Rights Division of the Oregon Bureau of Labor and Industries.
Altamont Capital Partners, based in Palo Alto, California,
hired Brad Fischtrom as an operating partner.
Fischtrom has more than 20 years of insurance industry experience. He most recently served as chief operating officer at Ledger Investing and previously served as chief risk officer, global commercial and North America general insurance at AIG. At Altamont, he will advise on investments in P/C insurance.
Ali Williamson joined Alliant Insurance Services as senior vice president within the Alliant Americas division.
Based in Denver, Williamson has more than 35 years of experience in the insurance brokerage industry. Before joining Alliant, she most recently served as a global client advocate and executive vice president at WTW. She previously served as account executive/property and casualty team leader at Willis, account executive/office leader at Hobbs Group/HRH and vice president at J&H/Marsh.
MGIS, headquartered in Salt Lake City, named Jim Wrage vice president of sales and distribution.
Wrage will develop and operationalize the organization’s sales strategy and manage a team of regional sales directors and internal sales specialists. Wrage worked for more than three decades at Principal Financial Group, most recently as national vice president, benefits and protection.
Kurt Meyer will retire from his role as MGIS chief sales officer at the end of the year. Meyer previously served as vice president of underwriting and operations, group benefits.
Brandon Rice
Carly Sherman
John Tribble
Spotlight: Claims Claim on Seized Hemp Shipment Barred, Showing Trickiness of Coverage
By William Rabb
International treaties preempt state-based legal actions, giving an air transport company an escape from claims on what a hemp producer said was botched paperwork for an overseas hemp shipment, a federal appeals court said.
The ruling by the U.S. 4th Circuit Court of Appeals in late July highlights the trickiness of running – and insuring –cannabis- and hemp-related businesses, even as the industry continues to grow around the world.
“This is why people are nervous about hemp: because there’s a lot of variability and a fair amount of risk,” said Erich Schutz, an underwriter and cannabis national practice leader at Jencap, a wholesale brokerage. “There are a lack of controls, lack of regulations, lack of consistency. And with that comes all the nastiness that comes with businesses that don’t have a lot of controls.”
The appellate judges upheld a lower federal court’s ruling that the Montreal Convention of 1999 precludes a lawsuit by a Portland hemp company, which claimed that the air carrier’s actions resulted in the seizure and destruction of the hemp product by federal authorities in 2020.
of the Land,’” Judge Robert King wrote for the three-judge appeals court panel.
“Our rulings must be guided by the Montreal Convention which, under the Constitution, is part of ‘the supreme Law
The court documents do not indicate if the producer or the air transport company were covered by insurance policies, and lawyers for both sides could not be reached for comment. But Schutz and other insurance experts said it’s likely that any policies would have contained exclusions that barred coverage for federally illegal or “hot” higher-THC products. And coverage for international shipments of hemp, even if it’s fully legal, is hard to come by, anyway.
“There’s not a robust international coverage for hemp,
when there should be because there are a number of operations that are multinational,” Schutz said.
‘This
is why people
are nervous about hemp: because there’s a lot of variability and a fair amount of
risk.’
The legal action began four years ago when Portland-based We CBD, a producer and distributor of legal hemp products, contracted with Planet Nine, a charter flight and cargo carrier, to transport 3,300 pounds of hemp to Switzerland. The transport cost topped $147,000. The value of the product could be as much
as $1.3 million, according to a news report by The Charlotte Observer.
When the plane made a refueling stop in Charlotte, North Carolina, U.S. Customs authorities seized the 93 bags and later destroyed the contents. Testing showed that much of the hemp was above the 0.3% THC, or tetrahydrocannabinol, content allowed by federal law, the court opinion explained. While many U.S. states have legalized some form of higher-THC marijuana, federal law still prohibits it and other countries have differing regulations on THC levels in hemp.
We CBD argued that Planet Nine had failed to file the proper paperwork with aviation authorities, paperwork that would have indicated continued on page 48
Closer Look: Property/Casualty
Personal Auto Driving P/C Insurers to 2024 Underwriting Profit
By Susanne Sclafane
S&P Global Market Intelligence is forecasting a combined ratio of 99.2 for the U.S. P/C insurance industry overall in 2024, signifying a return to underwriting profitability for the first time since 2021.
According to the analysis, private passenger auto insurance is expected “to make a dramatic return to underwriting profitability,” with S&P GMI projecting a personal auto 2024 combined ratio of 98.4, down from 104.9 in 2023 and 112.2 in 2022. With personal auto representing almost 35% of overall P/C insurance industry premiums written, that turnaround is what will drive the overall underwriting profit for the industry, according to S&P GMI projections presented in the “S&P Global Market Intelligence 2024 U.S. P&C Insurance Market Report.”
The combined ratio for the industry overall will drop 2.5 points to 99.2 from a level of 101.7 in 2023, and improve a bit more to 99.0 in 2025, the report shows.
S&P GMI’s forecast that industrywide underwriting results will be back in the black this year contrasts projections from analysts at the Insurance Information
Institute and Milliman. They indicate that the industry will record another overall underwriting loss — and an underwriting loss in the personal auto line — in 2024, with recovery not anticipated until 2025.
With homeowners results lagging behind personal auto, S&P GMI is not anticipating that the personal lines segment overall will record an underwriting profit this year or next year. The personal lines combined ratio will come close to breakeven in 2026, according to the five-year projections provided by line and segment in the report. The projected personal lines combined ratios are 101.2 for 2024 and 100.2 for 2025, compared to 106.7 in 2023.
Weather catastrophes continue to weigh on the homeowners business, and although the report notes (in a section outlining the methodology) that S&P GMI assumes a normal catastrophe load for exposed business lines, for homeowners, the combined ratio is still pegged at an unfavorable 107.3 for 2024. That’s down from 110.9 in 2023, which had been the worst result in a dozen years.
For personal lines insurers, results will also continue to be uneven as mutuals and reciprocals need more than rate hikes
to recover from challenges to auto and homeowners lines in recent years, the report says. (Discussed further below.)
The commercial lines segment will remain profitable throughout the five-year projection period, although charts in the report reveal that the projected 2024 commercial lines combined ratio of 96.0 will creep up to 98.2 by 2028.
The highest combined ratio projection for the U.S. P/C insurance industry overall is also indicated for the last year of the forecast period — 99.9 for 2028 — with underwriting results remaining in the black throughout the five-year time frame.
The report calls out a “faster-than-expected erosion” in workers’ compensation results as the most significant risk to S&P GMI’s commercial lines outlook for continued underwriting profitability.
Commenting on drivers of earnings beyond underwriting profit, the S&P GMI report notes that “the industry stands to benefit materially from higher interest rates” after years and years of net yields
continued on page
Closer Look: Property/Casualty
continued from page 21
on invested assets coming in at record low levels.
“The industry’s ongoing effort to rotate into high-quality, higher-yielding assets will serve as a catalyst for growth in net income even to the extent that underwriting margins remain relatively modest,” the report says.
“A key variable will be the industry’s continued adherence to disciplined underwriting in a more forgiving investment landscape,” the report says.
Top Line Growth Set to Drop
On the top line, S&P GMI projects a final year of double-digit industrywide growth in 2024, with premiums across all lines jumping 10 percent for full-year 2024 but then falling to 5.9% or lower in 2025-2028.
“A substantial decline in the pace of increases in private auto premium volumes serves as the primary contributor
to our projection that the rate of growth in U.S. P/C industry direct premiums written will recede to the mid-single digits on an annual basis from 2025 through 2028,” said Tim Zawacki, insurance sector strategist at S&P Global Market Intelligence in a statement accompanying the report. Zawacki explained that the magnitude of the improvement in underwriting results is likely to prompt “fairly rapid retreats in the scope and scale” of the significant personal auto rate increases pursued by most market participants over the last three years.
According to the report, S&P GMI’s RateWatch application showed aggregate approved rate changes through the first half of 2024 dropping to 5.9%, down from an “outsized full-year 2023 tally” of 15.2%. Still, the rate hikes taking effect in the second half of 2023 have yet to fully impact income statements through 2024, the report notes, adding that rate momentum has persisted in the other major personal
line: homeowners.
While the report shows direct premium growth for all personal lines hovering around 14% for 2023 and 2024, and dropping to the 4-7% range in the subsequent five years, commercial lines growth rates have already fallen below double-digit levels of 2021 and 2022. The projected commercial lines direct premium growth rate is 6.2% for 2024, with growth rates thereafter in the 5-6% range.
Overall, the 10% growth in direct premiums written across all lines marks the fourth straight year for growth of 9.5% or more.
“The duration of the expansion is without precedent in at least a generation as the previous comparable hard-market cycle in the early part of the 21st Century had only three years with annual growth rates of 9.5% or more,” the report notes.
Relative Performance
The report includes line-by-line details for historical combined ratio and growth rates going back to 2014 and projected forward to 2028, along with aggregations for the personal and commercial lines sector and the U.S. P/C insurance industry. For each line analyzed and for the segments, the report also presents charts displaying combined ratios and premiums for the top 15 players.
In private passenger auto, for example, the report shows that only Erie (ranked 12th by 2023 premium) and CSAA (ranked 14th) posted worse combined ratios than the biggest personal auto insurer, State Farm, in 2023. State Farm’s 115.3 combined ratio towered over the ratios recorded for the second- and third-largest writers — Progressive and GEICO, coming in at 94.2 and 92.1, respectively. Erie Insurance posted a 123.3 ratio and CSAA’s result was 117.1, according to S&P GMI.
The report includes a section devoted to S&P GMI’s performance rankings — determined by S&P GMI analysts using 13 financial metrics from 2023 statutory filings to measure rates of return, balance sheet expansion, investment performance and prior-accident-year reserve development, in addition to underwriting profitability and premium growth. Commercial lines
players dominate those rankings, but balance could return, with tailwinds benefiting personal lines carriers while headwinds are already emerging in certain parts of the commercial lines, Zawacki observed in a recent article he wrote about the rankings for Carrier Management.
Analyzing relative premium growth rates for individual carriers, S&P GMI shows that Tesla Insurance was the biggest sprinter with a triple-digit growth rate of nearly 768 percent putting direct and net written premiums at roughly $110 million.
Personal v. Commercial; Stock vs. Mutual
The S&P GMI report reveals clear contrasts in underwriting results for commercial vs. personal lines insurers. Except for 2020, personal lines underwriting results haven’t bested commercial lines since 2012.
In 2023, the commercial segment combined ratio was more than 15 points better than personal lines, with the difference
projected to narrow to about 11 points '24.
Bifurcating the industry another way — by ownership structure — S&P GMI calculates a 107.9 cumulative combined ratio for the 2021-2023 period for mutuals, stock insurers that are part of mutual insurance holding company structures, and reciprocal exchanges (excluding policyholder dividends). That result was 11.3 percentage points higher than the rest of the industry.
“Mutuals tend to be more concentrated in the embattled home and auto business than stock insurers, conferring upon them the misfortune of experiencing the worst of the current cycle. But rate alone may be insufficient for them to overcome the depths of the challenges they face,” the report says.
Going forward, S&P GMI’s outlook anticipates greater market-share concentration among the largest private auto writers in the coming years, reasoning that “data, analytics and economies of scale remain
critically important in a commoditized business.”
For homeowners, in contrast, S&P expects more market fragmentation as national carriers trim back exposure to loss-prone markets.
The report also includes analysis of growth in the E&S market, including premium rankings of E&S writers for homeowners and commercial property lines, drawing from a discussion of market trends included in an earlier report, The 2024 US Excess & Surplus Market.
This article first appeared in Carrier Management, a sister publication to Insurance Journal.
Sclafane is executive editor of Carrier Management, a publication of Wells Media Group serving property/casualty insurance carrier executives. She is a media professional with deep background in the P/C insurance industry including 25 years as an editor and reporter, and 14 years as a casualty actuary.
Spotlight: Nonprofits Houses of Worship and the State of Insurance
By Patrick Wraight
Arecent Insurance Journal article decried the state of insurance for churches and it’s mostly about their property insurance issues and we all know that the property insurance space has struggled in recent years, especially in storm-prone areas. But why would churches in particular have property insurance issues, and is there anything that can be done about it?
Insuring churches is generally done by people who identify themselves as churchgoers, believers, or insert religious affiliation here. Many of the larger countrywide insurers will write churches, often on modified commercial policies, with extensions of coverage and exclusions that the insurance companies deem necessary for the risks posed by a church.
Many churches tend to avoid those policies in favor of companies that market directly to churches, including Church Mutual and GuideOne. Other companies focus specifically on the churches and ministries of a specific denomination or religious group and there are of course, other solutions, but let’s deal with the central theme of the article, property insurance for churches is getting harder to obtain, keep, and afford.
The Role of Governance
The article makes the point that churches are generally unregulated and unregulated entities are difficult to insure. I’m going to disagree with that assessment. It’s not a lack of regulation that makes churches difficult to insure. What makes a church difficult to insure is the church’s governance structure. Maybe that seems like I’m parsing here, but let me explain.
Some churches are a part of an organized denomination. Think about the United Methodist Church, the Assemblies of God, and the like. Their churches operate with a degree of autonomy, but they are also responsible for following their denominational rules, guidelines, and dictates.
Some churches are a part of an association. Think about the Southern Baptist (and other Baptist) Convention. They tend to have much more autonomy at the local church level with some guidance and recommendations from their convention. Many times, even the convention dictates aren’t binding on the local church.
There are a great many churches that are completely independent, which is to say that the church is not aligned with any denomination or association. These independent churches may be members of a fellowship, which provides some relationship support for the pastors and staff at the church. They do not answer to any organization or church about how they operate. They do what they believe is right and go from there.
Within a church, there may be different styles of governance. Some churches have committees that meet and make recommendations to the church, and the church votes corporately on their recommendations. Other churches have a leadership team, which may be called a board of deacons or elders. This leadership
team will often make decisions related to the business of the church with or without input from the congregation. Some churches operate under the leadership of a pastor (or team of pastors) who will conduct the business of the church with or without the input of the congregation.
All of that is to say that an insurance agent who works with a church may have to deal with different issues depending on the church. The church may have denominational constraints when it comes to its insurance purchases. The church may have recently had a leadership turnover for several reasons, including members who move on, board members who choose not to run for reelection, and pastors who leave and are replaced (or the church is in the process of replacing).
All of that adds up to uncertainty for the agent who is working with a church and the insurance companies who are writing the policies.
The Role of Organic Growth
Nope. This isn’t about the growth of the church (in people particularly). It’s (in
part) about how churches tend to grow their buildings organically, which is to say that when the building gets too small, they tend not to look for a bigger building or another property where they can build a bigger building. They tend to find ways that they can add on to their building, or buy nearby buildings to meet their needs. Going back to individual church governance, when a church feels a space crunch, they tend to try and figure out what the next thing to do is by asking internally. The idea is that the different experiences and common goals within the church should be enough to figure out what to do in any situation. That often leads to adding to the building.
I know of one church that needed a small expansion so they built a space on the back end of the building which provided for three things. The first was a hallway to access the space. The second was a series of rooms, which were used for Sunday School space. The third was to provide indoor access to the restrooms. Yes. The last time the building was expanded, they added restrooms that you had to go outside to get to.
Also, when you look at church buildings, some of those buildings were built last year, some of them were built for a different purpose than being a church, some of them were built 50+ years ago, and many of them need some kind of work, which the church congregation either is unaware of, or unable to afford. That maintenance work ends up being deferred or worse, half-done by someone in the congregation who watched their daddy do the same work 30 years ago.
The other role of organic growth comes from the truth that many churches do not carry much for cash reserves and because of that, and a desire to steward their resources well, they decide to handle much of their building work internally. Many churches, especially in generations past, have had members who knew how to work on things, even if they weren’t licensed contractors.
So you have the problem of buildings that get older, maintenance items that may be deferred due to time, money, and people issues, and work that often is done
by the congregation, and you begin to see the underwriting issues that can arise when writing a church’s property.
The Role of Reputation
This might be a surprise to many, but the insurance industry doesn’t have a great relationship with churches. It shouldn’t surprise anyone because the same people who have been told for years that insurance companies are trying to do you wrong are the people who make the insurance-buying decisions within churches.
Unless the church has a close relationship with their insurance agent, they don’t even have the reassurance that they are doing business with a company that is looking out for them. Even if their insurance agent is someone that they trust, many of these agents for the church-specific insurers are captive agents who may only have access to one market. Many churches don’t have anyone inside with insurance experience beyond being a customer, let alone a risk manager who
can guide them through the process.
What can we do?
This is where the insurance agent can and must come alongside the churches, as any good agent would for any of their other customers. Churches have specific exposures that are similar to and different from other commercial insureds. Agents may need to be brave enough to tell their church clients that they need to make some repairs or pay someone to do the work to make life easier when they are trying to buy insurance.
It’s also helpful, especially in a hard market to be proactive with both the church and the insurance company. How many market segments are having trouble in the current market cycle? Churches are going to be very much like other market segments.
Wraight, CIC, CRM, AU, is director of Insurance Journal’s Academy of Insurance. Email: at pwraight@ijacademy.com.
Spotlight: Nonprofits
3 Things to Know About the Nonprofit Insurance Market
By Allen Laman
Achallenging legal arena, a continuing talent shortage and alternatives to traditional insurance products are three areas impacting nonprofits today, according to industry reports that recently shed light on headwinds yielding a cloudy outlook for many organizations.
Highlights from several of those publications are detailed below.
“A shrinking number of carriers want to insure this sector,” Alera Group said in its 2024 Market Outlook. “Some are withdrawing from the market entirely; others are leaving certain states or reducing their product offerings.”
Legal Arena Shaping Negative Outlook
In its Spring 2024 Nonprofit Market Update, Gallagher highlighted several legal factors keeping nonprofits in what company leadership described as “deteriorating, unchartered waters in so many ways for many nonprofits.”
In that update, Peter Persuitti, director of Gallagher’s religious and nonprofit practices, pointed to a rollback of tort reform, social inflation, an increase in plaintiff attorney activity and changing jury view of fairness and duty of care as factors causing shaping the sector’s negative outlook.
As states remove the statute of limitations for abuse reporting, for example, reporting by alleged survivors of older claims “has led to a cascade of nonprofit bankruptcies due
to the inability to fund mass survivors,” Persuitti said in the report.
Meanwhile, Risk Strategies reported in its 2024 Initial Outlook that carriers are charging nonprofits higher premiums in anticipation of litigation losses, noting that third-party litigation funding and nuclear verdicts “make it impossible to predict total loss costs.”
The insurance brokerage and consulting firm reported that in 2023, claims increased related to molestation, wrongful termination and employment practices liability, as well as professional liability for occupational therapists and other care providers.
Alera Group reported that “despite the controls many nonprofits have implemented, claim costs continue to increase. Nonprofits that serve youth and other vulnerable populations face the greatest challenges in securing coverage.”
Talent Shortage Persists
According to HUB International’s 2024 Outlook, talent retention was the biggest
concern for 73% of HUB’s nonprofit survey respondents, followed by talent recruitment at 63% and compensation at 62%.
This workforce shortage crisis was explored last year by the National Council of Nonprofits. The sector-wide network of nonprofits reported that nearly three out of four nonprofits that completed a national survey reported job vacancies.
The NCN found that 51.7% of respondents reported they have more vacancies now compared to before the COVID-19 pandemic. Seventyfour percent of respondents reported vacancies in their program and service delivery positions, and 41.1% reported vacant entry-level positions.
“As nonprofits put more pressure on existing workers and are forced to rely on less-experienced employees, the risks of errors, accidents and compromised service delivery will increase,” Alera Group reported.
New Renewal Approaches
The NCN’s 2023 report found that funding remains a top
challenge for nonprofits, noting that 70% reported their charitable donations will decrease or remain flat in 2023 and nearly the same number expect their donor base will decrease or stay the same.
Meanwhile, HUB International reported in its annual outlook that “higher insurance costs are also hurting nonprofits,” adding that commercial auto and abuse and molestation coverage will have the greatest impact on nonprofits’ bottom line in 2024.
“Social inflation has resulted in carriers reducing umbrella limits, leaving often expensive and extremely limited options for protection,” HUB said of nonprofits in the company’s Mid-Year Rate Report.
“Workers’ comp, nonprofit D&O and cyber liability rates have stabilized, providing some relief to more challenging lines of business. Smaller, low-hazard nonprofits are experiencing 5% to 10% rate increases, while larger nonprofits with complex risk issues are seeing increases of 10% to 15%.”
For those entities unable to secure attractive insurance options, risk pooling may be a possibility. In a separate article, Brandon Cole, Area Vice President at Gallagher, shared that nonprofits are starting to look at joining insurance captives and forming risk pools.
“These types of arrangements haven’t been popular in the past, but with budget-busting increases, organizations have to get creative and look for other ways to manage their total cost of risk,” Cole wrote in the piece.
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Available Limits: Not disclosed. Carrier: AIG States: Available in all states plus District of Columbia.
Contact: financiallines@aig.com; 877-TOSERVE.
Non-Fleet Trucking
Market Detail: Truckers Insurance
Associates offers coverage options for all sizes of trucking risks, including OwnerOperator, Non-Fleet (1-10 power units), and Fleet (11+ power units). Keep your clients safely on the road with programs from the best markets available. Has pen. Available Limits: Not disclosed. Carrier: Multiple carriers; admitted; rated A- to A++.
States: Alabama, Arizona, Arkansas, Colorado, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Washington, Wisconsin, Wyoming. Contact: Mike Lieb; mlieb@truckers-insurance.com; 800-652-9515.
Standard Coverage Resources
Market Detail: The Hartford offers a wide range of multinational property insurance solutions designed to help meet all of a client’s commercial property needs. Let us help you customize a property solution for your midsize and large commercial clients. General liability: Placing package with one carrier is a win-win; we’ve expanded our liability appetite to help you solve for even catastrophic exposures; general liability agent guide; data breach; product recall expense. Commercial auto: We offer one of the most current and broadest auto products in the industry. Workers’ compensation: Count on The Hartford for broader workers’ compensation insurance coverage and cost-saving services that your clients need. Business income and extra expense worksheets: Tailored by industry, these worksheets automatically calculate as information is entered to help your clients estimate the appropriate limit of insurance.
Available Limits: Not disclosed.
Carrier: The Hartford.
States: Available in all states plus District of Columbia.
1. Content Marketing. Use content marketing to stand out as an industry thought leader. Create informative and engaging content, such as blog posts, whitepapers, and e-books focused on industry trends and insurance tips. — Anita Nevins, Direct Connection Advertising & Marketing
2. Service Lanes. Business, home and car owners don’t want to wait. Have special “service lanes” online and in-office with experienced staff where they can get quick answers and fast turnaround.
before it happens, connecting with people during the event, and using the video online after the event.
10. Lead Readers. Are you at a loss for current blog or social media content? Go to Quora.com, set up an account then search “insurance.” You’ll find many questions asked by consumers to common insurance issues. Craft a short article or social media post to briefly answer those questions and lead your readers to your website. — Nancy Germond, IIABA
3. Personalized Client Engagement Through Data Analytics. Leverage data analytics to personalize marketing campaigns for insurance agencies. By analyzing client data, segmenting the audience, and tailoring communications to each group’s specific needs, you can enhance client engagement and satisfaction. Utilize marketing automation tools for consistent, relevant interactions, and continuously adjust strategies based on performance insights for optimal results. — Abhishek Peter, FECUND Software Services
4. Less Is More. Your customers and prospects are on social media platforms. Does your agency try to be on all of them? Which one matters most to your targets? Choose that one platform and focus your firm’s engagement around that. — Peter van Aartrijk, principal, Aartrijk.com
5. Social Media Calendar. It can be too easy to fall into the trap of posting on social media based on whenever things pop up. Instead, be purposeful. Plan blog posts and social media posts that relate to the changing needs of clients throughout the year. Does your agency participate in fundraising or 5Ks or food drives? Make sure those events get on the calendar before, during and after. Create the content in advance so it is ready to post. If changes occur, tweaks can be made on deadline.
6. Use Video. Develop video content, including explainer videos, client testimonials, and webinars. Use social media platforms to share content and engage
7. Don’t Underestimate Email Marketing. Segment email lists to send targeted messages based on client interests and behaviors, create automated email sequences for lead nurturing and client engagement, and use email campaigns to promote new products, services, and special offers. — Kristen Nevins, Direct Connection Advertising & Marketing
8. Demystify. Content marketing is crucial, especially when it comes to demystifying complex insurance topics for your audience. Understanding your audience and addressing these topics clearly and professionally is essential. To support our clients and prospects as trusted advisors, we’ve created ongoing “Hot Topics” email campaigns that link to relevant blog posts. — Allan Degner, Robertson Ryan Insurance 9. Zoom 101s. Put together a brief presentation for first time homebuyers or people with kids who are about to start driving or the insurance basics for small business. Opportunities lie in promoting the event
11. Repurpose Your Content. Did you give a presentation? Turn it into a blog post and a video. Did you write a blog post? Put it in your e-news and promote it through social media. Don’t reinvent the wheel if you can get three to five touchpoints out of one piece of content.
12. Proactive Client Outreach. Successful independent agencies should be regularly reaching out to their clients and increasing touchpoints to explain current market conditions, why rates are rising and how risk mitigation can help mitigate potential increases. We recommend at least annual, if not quarterly, in-person visits, in addition to frequent video conferencing and phone outreach. These meetings should focus on updating clients on their coverage, advising on the state of the market and noting any trends or pending legislative updates that could impact their coverage as well as how they operate their organizations from a risk management perspective. — Rajni Kapur, All Solutions Insurance
13. Local Media. Do some old-fashioned PR with your local media. “Free” publicity with trusted media positions you as an expert. Pick topics related to seasonal cycles (hurricane season, kids leaving for college, the holidays) or current events and pitch a Top 5 or Top 10 list of insurance tips to
with your target audience. — Anita Nevins, Direct Connection Advertising & Marketing
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continued from page 29 your local news outlets. Next time they are putting together a story related to insurance, you’ll be top of mind. Media outlets love to tap into local community sources.
14. Billboard. An often overlooked form of local advertising where you can have some fun with your messaging.
15. Quick Video. Currently I average 10-16 new business appts a month but using a cadence of a weekly touch and making customized 30-60-second videos using snap chat filters. — Dan McDevitt, AssuredPartners
16. List the Qs. Did a client call with a question? Chances are more people are out there asking the same thing. Keep a running list of client queries to use as content for blog and social media posts.
17. Information Matters. Keep insureds informed of insurance market conditions regularly prior to renewals. — Richard Petry, Retired Insurance Executive
18. Stay Up to Date.
The old adage says it’s less expensive to keep a client than to land a new one.
So, make sure your current clients are kept up to date on the information and changes that could impact their policies. Check in to see if they have had any life changes and could benefit from a reassessment of their insurance needs.
Don’t hide behind email. You are in a relationship business. Video is a great way to build your relationship with your client. When they see you, they will get to know you and will be more likely to trust you with their business. Replacing text-based email with a personalized video email is a great first step. And it will save you time. People are less likely to delete a video and click to watch. There are many solutions that make this process easy to implement. — Steve Anderson, Catalyit
21. Broadcast Video Emails. The next step is sending personalized video at scale. Think email broadcast but with a personalized video. With GenAI, the technology is getting better at allowing you to send personalized broadcast video emails. It might be a bit early, but you should start experimenting. Stop sending text emails and start sending personalized video emails. — Steve Anderson, Catalyit
19. Provide Communication Choices. Nothing is more frustrating to clients who want to speak with a human than being forced to go through multiple options in your automated voice mail system. Make it easy for them to opt out and speak with an agent or customer service rep. Your clients — especially senior clients — will be pleased and likely to stay with your agency longer. At the same time, other clients want to text or email. Make those options easy too. — Rosalie Donlon, Managing Editor, Aartrijk.com
20. Use Personalized Video Emails (vMail). Text emails are likely your default.
22. Consider the Target Audience. Too often, authors focus on the message without pausing to consider the target audience and their specific needs. A “one-size-fits-all” message can fail because it does not address particular concerns. For example, content about an umbrella liability policy will resonate better with parents of teenage drivers if it highlights that the 16-19 age group has the highest frequency of auto accidents. — Dave Evans, Aartrijk.com
23. Give Back. Partnering with socially conscious businesses is a core priority for the next generation of insurance workers. Reach out to local
nonprofits and organizations like the IICF, which is celebrating its 30th anniversary, to see how your business can support their work, talk to staff members to find causes they’re passionate about, and communicate with other industry businesses to find philanthropic partnerships that could amplify your impact. — Bill Ross, Insurance Industry Charitable Foundation (IICF) 24. Financial Education. Connect with organizations that provide financial literacy education. People who are learning how to manage their finances or better their financial situation can benefit from your insurance expertise. Volunteering is a great way to do good, and an opportunity to get involved in your community. Ask the organization about partnering on publicity and social media efforts.
25. Know Your Product Inside and Out. Confidence comes from knowledge. Make sure you understand every feature and benefit of what you’re selling. — Donna Gray, CPIA Program
26. Build Strong Relationships. People
buy from those they trust. Focus on building genuine connections with your clients. — Donna Gray, CPIA Program 27. Leverage Social Media. Use platforms like LinkedIn, Instagram, and Facebook to showcase your expertise and engage with potential customers. Create content that resonates with your target market and encourages them to interact with your brand. — Donna Gray, CPIA Program 28. Follow Up Consistently. Persistence pays off. A timely follow-up can make the difference between a lost opportunity and a closed deal. — Donna Gray, CPIA Program Branding
Branding Matters
29. Build Your Brand. Brand recognition is a powerful tool in the insurance industry. Create a strong brand by developing a recognizable look. Maintain a consistent message that connects with your audience. — Mary Ann Smith, Smart Choice
30. Know Your Brand. Your organization’s reputation and brand are often the first touchpoint an insured or potential insured will have with the business. As the first reference points, your brand needs to be welcoming and easy to understand. The success of resources like your website, social media channels and marketing materials all rely on the strength of your brand. Revisiting your organization’s brand strategy with leadership every three to five years is a good way to ensure it accurately reflects your goals, standards and the work you do. — Jestin Davis, DOXA Insurance
31. Brand Identity. Develop a strong brand identity that resonates with your target audience. Create brand guidelines (and stick to them), consistently communicate your brand’s message across all marketing channels, and actively participate in industry events and sponsorships to increase brand visibility and credibility. — Anita Nevins, Direct Connection Advertising & Marketing
32. Revamp Your Website. Consumers want to see modern, user-friendly and responsive websites that make it easy to find and access the information they need to purchase an insurance policy or seek assistance. Agency owners should consider redesigning or updating their websites every two to four years to ensure they continue to have intuitive and quality content available for insurance customers. — Doug Coombs, SIAA – The Agent Alliance
33. Market Your Agency. It’s time to ask yourself, “How am I generating leads? How am I marketing my agency?” With the increase in prices, there are many potential customers who are open to reviewing and shopping for new insurance policies. You want a steady stream of new customers coming in, so it’s crucial to double down on your marketing and lead generation efforts now. — Ashley Wingate, Smart Choice
34. Google My Business Profile. Double check to make sure your agency is – a) listed with a Google Business Profile (it is the largest gateway to the web in the world, with somewhere between 82% to
91% of all internet traffic), and b) that your information (phone, address, hours of operation, website URL, etc.) is listed correctly. This can drive many local searchers to your location.
— Doug Coombs, SIAA – The Agent Alliance
Finding the Right Niche
35. Segment and Target. Identify your target customers based on factors like community demographics, business types, and niche interests. Another term for this is “market segmentation,” meaning creating small groups to target. Tailor your marketing strategies to address the specific needs and preferences of each audience segment. — Carol Drake, Smart Choice
36. Mortgage Broker’s Best Friend. Get to know and be trusted by local mortgage brokers so they will refer buyers to you.
37. Find a Niche. Specializing will give you a way to narrow your outreach efforts and stand out in your chosen market segments. You can become a confident expert who is well-known and trusted within certain industries.
To find your niche consider the needs in your community as well as where your skillset and experience lies. —
David Wilson, Smart Choice
38. Promote Risk Mitigation. Serve as a trusted advisor to help your clients create a culture of risk mitigation and safety. Work with knowledgeable carrier partners to offer your clients consultative services and to help them develop focused training programs and risk mitigation practices that will protect their operations. — Dan Braiman, Pennsylvania Lumbermens Mutual Insurance Company (PLM)
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39. Auto Sales Pros. Get to know and be trusted by local car salespeople so they will refer buyers to you.
40. Lean into Specialty Insurance. Specialty needs among insureds are growing rapidly. These unusual risks offer independent agents the chance to specialize and differentiate themselves. Collaborating with specialty brokers or rolling up your sleeves to become an expert in niche markets that have unmet needs or too few resources to meet those needs will help you grow your book of business and give you added defensibility from the competition. Diversifying your client base with select, additional specialties can also prove beneficial if other aspects of your business are impacted by increased competition or adverse economic events. — Cam Serigne, vQuip
ically improves organic search rankings. Add new content consistently, consider running pay-per-click (PPC) campaigns targeting relevant keywords to drive traffic to the site, and utilize local SEO strategies to attract local clients. — Erin Dwyer, Direct Connection Advertising & Marketing
Explore Technology, Data & AI
41. Websites. Optimizing your website and blog content for search engines dramat-
42. Consider AI and Automation. As AI grows in popularity for enterprises, it is important for insurance agency leaders, who want to stay competitive, to get educated and adapt where they can. Research and understand the technology that is right for your agency. Talk to proven, vetted providers to identify solutions to automate important tasks such as fraud detection and reduce repetitive, nonproductive tasks like data management. Investing in tech and AI solutions is investing in your people – creating a more a more stimulated, inspired work environment and fostering retention. — Tim Kane, Across America Insurance Services Inc.
43. AI Beginnings. Start small with AI
while keeping big goals in mind. Begin with targeted pilot projects that have low barriers to entry, clear success criteria, and a dedicated team responsible for the results. Celebrate both successes and failures. Using the professional version of ChatGPT is an easy and accessible way to get started. — Chris Watkins, ReSource Pro 44. Dos and Don’ts of AI. Understanding AI’s strengths and limitations is crucial for streamlining agency operations. AI excels at automating routine tasks and analyzing data for accurate underwriting and personalized customer experiences. However, it can struggle with nuanced decision-making requiring emotional intelligence and ethical considerations, which are essential in insurance. AI systems also depend heavily on the quality of data; poor data, or data that is not well understood, can lead to flawed outcomes and regulatory compliance issues. The advice for insurance agents is to get to know what AI could mean for your business. Discern its strengths, flaws and measurable value while laying the foundation (your data and ecosystem) for its arrival. — Kevin Gaut, INSTANDA London, UK
45. CRMs. Implement a robust CRM system to streamline client management and sales processes. Use marketing automation tools to manage campaigns, track performance, optimize efforts, and leverage data analytics to measure KPIs and make data-driven decisions. — KT Tener, Direct Connection Advertising & Marketing
46. Work with Tech-Savvy Companies. Work with companies that use the latest technology so you can generate quotes for most products in minutes and email them
directly to clients for self-enrollment. This saves time and reduces the back-and-forth with underwriting, which can take days. Consumers today expect quick responses, so choose insurance carriers that can deliver. — Victoria Zidwick, Arch Insurance 47. Pick the Right Technology. Right now, AI is the big trend in insurtech – and it has its uses. But it is not the solution to every problem. When adopting technology, look for solutions that meet your specific needs. — Chris Watkins, ReSource Pro 48. Use Analytics to Drive Strategy. Track the performance of your marketing campaigns to gauge audience response. Analyze metrics such as impressions and leads generated to continually refine your strategies. Adapt to your audience’s preferences to drive better results over time. — Stephen Caldwell, Smart Choice 49. Carefully Consider AI. Take time to research the range of AI products available. Reach out to agency networks, business partners and other agency owners to understand the AI tools that are having a positive impact on the marketplace. This will help ensure you can make an informed decision on whether or not the AI tool you are considering is ready for primetime or could truly help you streamline operations and improve workflow. — Brendan Mulcahy, SIAA – The Agent Alliance
50. Work with Partners. While there is still a place for small mom and pop shops, most growing agencies work with consultants and technology partners to create the
competitive edge they need to grow and help their workforce. Take the time to find the partners that are the best fit for your business. — Brittany Boyer, ReSource Pro 51. Simplify Financial Workflows. Financial operations, including billing, collec- tions, disbursements and reconciliation can be time-consuming and prone to errors when managed manually. Automating these processes can significantly reduce agency administrative overhead by handling routine tasks. This not only frees agents to focus on core activities such as client engagement, relationship management, strategic planning and business development, but also ensures accuracy and efficiency while enhancing overall agency performance. — Andrew Wynn, Ascend 52. Be Nimble. The industry is rapidly adapting to changing customer needs, as well as environmental and regulatory changes. The businesses that keep themselves flexible will be in the best position to fill niches and respond with agility
to new opportunities. — Brittany Boyer, ReSource Pro
53. Customer Management. Use customer relationship management (CRM) systems to track interactions and streamline processes. Embrace digital marketing, engage clients on social media, and keep your website updated with useful content. —
Victoria Zidwick, Arch Insurance
The Right Talent
54. Market for People. Want to perpetuate your firm beyond your tenure? Now is the time to hire professionals in their 20s and 30s so they can sell to those same younger generations. Mind shift: Spend to market your firm as an excellent place to work at least as much as you do to tout your insurance products and “great service.” Be proud about why people should come to work at your firm. Use prominent videos, photos and copy on your website, in newsletters and on social media platforms. — Peter van Aartrijk, principal, Aartrijk.com
55. Invest in Your People. Employees are the heart of the organization, and as the insurance industry continues to face recruitment and retention issues, it is more important than ever to ensure your staff have the support they need. Investing in staff development not only helps retain good talent but will also benefit your organization as employees develop new abilities and strengthen existing skills. Those learnings can then be applied in their work on behalf of your business. — Harish Kapur, Across America Insurance Services Inc.
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56. Invaluable Teams. Include the right team members especially when making decisions about technology. Always remember, your team is the agency face your clients see. — Sankha Basu, ReSource Pro
57. Prioritize Talent Retention. Consider stronger initiatives designed to provide your team with a sense of belonging and career direction in the workplace. This could include mentorship programs, such as the IICF’s Mentorship Alliance, philanthropic initiatives tailored to team members interests, employee resource groups, and networking opportunities that map out a promising career trajectory.
— Elizabeth Myatt, Insurance Industry Charitable Foundation (IICF)
58. Hire Expertise with Experience. There is a global workforce with every imaginable type of training and experience. Look for the right balance that will set your business up for success. — Sankha Basu, ReSource Pro
59. Recruit New Talent. Unfortunately, we often fall short of recruiting new talent. I challenge everyone in the industry, whether you work for a network, agency, or carrier, to actively mentor young people. — Carol Drake, Smart Choice
Keeping the Human Touch
60. Educate Clients. These days, some customers are pulling back on their policies or dropping coverage because they do not understand why their rates are increasing. Agents should be sure to take the time to reach out to their clients and explain how inflation, rising replacement costs, natural disasters, and other factors are impacting insurance costs. Customers who do not feel a rate increase was thrust upon them without warning and who understand the economics behind a rate increase are more likely to remain clients.
— James Keane, SIAA – The Agent Alliance 61. Dog Park Prospecting. Visit dog parks and trails. Hand out poop bags or treats
with your business cards.
62. Testimonials. If you have a happy client, get a testimonial! Testimonials can be key to winning over skeptical potential clients. Feature testimonials on your website, social media, e-news or direct mail marketing. (Make clear to the client that you would like to use their testimonial as a promotion and ask how they would prefer to be identified.)
63. Start on the Outside. Struggling with ideas to reach new customer segments? Organize discussion groups of similar demographics — they could be friends, community members and customers. Buy them lunch or dinner and ask for ideas on how best to reach people like them. Where are they receiving information and advice?
You’ll get a ton of fresh ideas. — Peter van Aartrijk, Aartrijk.com
64. People Over Products. Stop listing products as if that means something to people. List your offerings by People categories: Homeowners, Boatowners, Motorcyclists, Home Businessowners, Parents of Teen Drivers, Gig Workers, Landlords/AirBnBers, Renters, Pet Owners, Store
etc.
65. In-Person. Leverage in-person networking opportunities by hosting educational seminars and workshops, sponsoring community events, and actively participating in industry tradeshows. Ensure your branding is prominently displayed at every event and have staff available to answer questions and provide information. Use the data collected to connect with new prospects and improve future events. — Kristen Nevins, Direct Connection Advertising & Marketing
Owner,
66. Check on Senior Clients. Do your senior clients still have all the coverage they need? Many homeowners who have paid off their mortgages drop coverage that lenders required, such as flood insurance. But the need for flood doesn’t go away, and you’ll be seen as a trusted adviser when you remind them about critical coverage. — Rosalie Donlon, Aartrijk.com
67. Know Your Neighbors. Chances are they and their friends and relatives are a lot like you.
68. Don’t Sell, Build Trust. My advice to agents who want to sell their agency or withdraw, now is not the time. Now is the time to double down instead. Actively reach out to your clients to review current coverage and ensure they stay informed. This approach builds trust and generates new business. — Mike Miller, Smart Choice
encourages people to reach out to me. In our office, we preach responsiveness, and I believe that has resulted in our success. —
Christy Stevenson, Smart Choice
69. Have a Human Touch. In a world that is increasingly leaning on AI and other forms of technology for customer relations, it is more important than ever to offer insureds a human touch. Insurance can often seem complicated and confusing to those outside the industry, and having a human voice on the other end of the line to help explain and clarify certain terms can go a long way in building their trust. Insurance organizations can strengthen their customer relationships by ensuring the voice they hear on the other side of the phone is a human as often as possible. — Jennifer Brownyard, Brownyard Group
72. Be a Guest. Reach out to local organizations that may be looking for guest speakers for luncheons and meetings. Demonstrate your expertise in front of an audience of potential clients or partners. Talk about it on social media.
73. Resist Race to Bottom. Seek ways to be more significant to your clients — on a human level. What are their pain points? How can you make their jobs easier? How can you make a difference in their careers? Think people, not product. If you’re all about providing quotes, it’s a competitive race to the bottom. And few can survive there. — Peter van Aartrijk, principal, Aartrijk.com
70. Network! Get out of the insurance bubble and attend other professional events that are open to the public. Get to know the real estate agents, builders, small business owners, aspiring leaders, philanthropists and other active groups in your community.
71. Keep Strong Relationships. I believe that my ability to establish strong relationships is crucial. Being responsive to emails and returning calls without delay
74. Be Empathetic. Many businesses and personal lines customers have sticker shock due to rising rates. Countless insureds are either shopping for better rates or leaving their insurance providers entirely. Agencies need to be understanding and empathetic when a frustrated client calls. Hear out their concerns regard-
ing rate increases and offer support and reassurance that your agency is working to secure them the best possible coverage. In some cases, it may be worth recommending the client shops around for coverage so they can see these rate increases are an issue industrywide. — Rajni Kapur, All Solutions Insurance
75. Tough Clients. Don’t let difficult clients bring you down: Respectful, mutual appreciation between clients and agents makes for good business. Releasing difficult clients, who take more from you than they give, can free up time to not only increase agency income, but also improve self-satisfaction in your work. — Tony Caldwell, One Agents Alliance
76. Get Out of the Office. Attend events where you can mingle and meet people.
77. Be Honest. It’s crucial to always prioritize honesty and maintain positive relationships with both carriers and clients. That’s the golden rule in this business. — Hank Stonesifer, Smart Choice
Team Effort
78. Get Help. Don’t be afraid to ask for help. It is not a sign of weakness to admit we don’t know everything. There will always be someone willing to lend a hand, then one day, you can do the same. — Julia Vogel, RT Specialty
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79. Lean on Industry Experience. Those who come from outside the insurance industry often have unique perspectives, fresh ideas and extensive experience in the industries where they worked. When building a specialty insurance agency, it is important to recruit talent with expertise in your selected specialty. That depth of insider experience in a relevant industry will help your organization better understand the practical, nuanced risks clients face and how to mitigate them — Francisco Magallon, Across America Insurance Services Inc.
80. Seek Guidance and Experience.
Currently, we are emerging from a hard market, and some regions are still facing difficulties. This is where the experience of an insurance network becomes invaluable.
— Carol Drake, Smart Choice
81. Knowledge is Precious. As veterans continue to retire out of the industry, expertise is becoming increasingly scarce. When working with a partner, find one with a wealth of knowledge that you can tap into.— Saima Shaukat, ReSource Pro
Stay Focused on Learning
82. Embrace Change. As the world changes around us, so too does the way we insure risk. It does not make sense to continue to operate your business the same way it was run five years ago. Embrace new ideas, seek out new perspectives and know that even though something has been done a certain way for years, it does not mean it cannot be done better. — Harish Kapur, Across America Insurance Services, Inc
83. Stay Informed. There is a wealth of data and research on current trends and the state of the insurance industry. In our current data-driven world, it never hurts to have a wealth of information at your disposal. — Chris Watkins, ReSource Pro 84. Be Aware. The insurance world is constantly changing. New rules, regulations and risks emerge every day. It is important for any business working in the insurance space to be aware of these changes and be prepared to evolve and adapt accordingly. Reading insurance trade publications is a great way to stay up to date on information
and changes in the industry. — Sarah Thomas Jones, Jones LLC
85. Be Like a Sponge. I love assisting individuals who may not have extensive knowledge about insurance but are eager to become insurance agents and start their own agencies. I find the most fulfillment in working with those who are like sponges, soaking up every piece of advice and assistance we offer. — Tony Davis, Smart Choice
86. Earn Educational Designations. There’s no better way to improve sales results than by investing in training. — Donna Gray, CPIA Program
Planning and Strategy
87. Always Prepare. Prepare before a phone call. Prepare before a meeting. Prepare before a convention. Prepare before a client lunch. It will be time well spent. — J.D. Babuder, RT Specialty 88. Business Plan. To be a successful, you need to have a plan. Simply obtaining a license and opening an office won’t lead to success. You need to establish referral sources, monitor your successes and failures, and learn from each experience. — Tony Davis, Smart Choice
89. Generate Leads. Develop a strategic plan for lead generation. Utilize data analytics to identify and target high-potential prospects, develop referral programs to encourage existing clients to refer new customers, implement social selling techniques on platforms like LinkedIn to connect with potential clients, and carry out automated follow-up systems to maintain contact with leads and clients.
— Brad Nevins, Direct Connection
Advertising & Marketing
90. Retain the Right Customers. Insurance firms obsess about customer retention rates — and for good reason. Ultimately, nobody turns a profit until the second or third policy year. But retention metrics aren’t always equal. Examine the book. It might be that nonrenewing or finding a different agency for some customer segments is a positive in the end. Examples: one-policy or high-maintenance customers. Focus instead on customers you truly want to keep, sell more coverage to them, and find more like them. — Peter van Aartrijk, Aartrijk.com
91. Be Real. For hard-to-place risks,
provide a realistic timeline for quotes and be transparent about pricing possibilities. Treat your markets with the same honesty, and you can out-execute your competition. Always strive to exceed your customers’ expectations. Never over-promise and under-deliver! — Patrick Carroll, RT Specialty – Transportation 92. Use Research. Customers already have an informed buying opinion, with 81% conducting online research before contacting you. You already have valuable data about their behaviors and preferences. Use this data as well as internal data to build stronger relationships and drive sales. — Saima Shaukat, ReSource Pro 93. Nurture Current Clients. Nurture your existing client relationships by developing a client onboarding process to ensure a smooth transition and a strong start. Schedule regular check-ins and reviews to assess client satisfaction and create loyalty programs to reward long-term clients and encourage repeat business. If you can use a system (like HubSpot) to automate, even better! — Brad Nevins, Co-CEO of Direct Connection Advertising & Marketing 94. Best Practices. In the competitive world of insurance, embracing robust sales, marketing, and agency management strategies is crucial. Implementing due diligence can significantly enhance risk management by ensuring partnerships with financially sound and high-quality carriers. Additionally, conducting regular agency management reviews can streamline operations, align team efforts, and boost client satisfaction. — Robert Sherman, Pro Global
95. Avoid Complacency. Long-term success requires a growth mindset – you need to be proactive. Every week, dedicate a portion of your time to activities that will generate new business such as asking for referrals from current clients or keeping social media up to date. — Oliver Travieso, Smart Choice
96. Essential Due Diligence. Basic information and data gathering are crucial for independent agents and brokers. Accurate building measurements, locations of structures, property details, and understanding the insured’s operations form the foundation of effective risk assessment. A boots-on-the-ground approach ensures thorough due diligence, preventing issues with property not covered and insufficient limits of insurance. Personal visits provide insights that remote methods might miss, strengthening agent-insured relationships and ensuring comprehensive coverage. — Larry Chasin, PAK Programs
97. Seek New Opportunity. It’s about working smart and identifying where agencies can find the most opportunities. In essence, agency success today lies in being well-informed and adapting to market trends. — Hank Stonesifer, Smart Choice
Maintaining Personal Care
98. Keep a Work Journal. Try to keep a journal of all of your work experiences, good and bad. Read over it, time and time again. There are so many lessons hidden in there that you can learn from and use on a daily basis. — J.D. Babuder, RT Specialty 99. Find the Right Partners. The essence of marketing is having the willingness to
endure rejection to find the right partners. — Andrew Kelly, Alexander J. Wayne and Associates Inc.
100. Block and Tackle. Oftentimes, our calendar dictates how much we’re able to get done in a day. And God willing, we’re all given the same 24 hours a day to do it. But those that are able to accomplish more are usually more successful than those that are not. How are they doing it? Possibly through blocking and tackling. … Consider blocking out time for Green, Yellow and Red Time activities. Green time is a block of time designated for revenue driving activities; Yellow time refers to those supportive or administrative tasks that support your revenue drivers; and Red time refers to your personal time – time to get away from it all and recharge. … The key is to defend those blocks of time from distraction like your business and success counted on it! Take control over your calendar before your calendar controls you. — Marc Barnes, Mutual Trust Life Solutions
101. Don’t Forget to Breathe. You can’t always be grinding. If you want to be successful, you must carve out time to reflect, rest and recover. — J.D. Babuder, RT Specialty
Spotlight: Private Client
HNW Market Update: What Went Wrong and How We Are Turning Things Around
The year was 2016. New high net worth (HNW) insurance carriers were entering the market. Established underwriting operations had become a consistent source of profits for investors and parent companies. Aging brokerage owners with sizable private client books of business were selling their companies for high revenue multiples and preparing to sail off into retirement (sometimes literally).
By Hayden Kopser
Anyone who began a career in HNW insurance after around 2020 may find that story hard to fathom. That is because recent years have been marked by widespread carrier appetite restrictions, dramatic rate increases, major non-renewal action, and inconsistent underwriting results despite these efforts.
What took place to cause a historic hard market in this segment? How did a long running profit center turn into a pariah? What is being done by carriers and brokers to correct the private client insurance industry’s course and avoid similar problems in the future?
Answering these questions will be the focus of the remainder of this article. As no single article can fully encapsulate an insurance segment as dynamic as HNW insurance, ongoing monitoring of the market’s progress will be required to gain a complete understanding of what is taking place. However, readers will be able to glean insight and walk away with a vision of what the future of the HNW space may look like.
What Went Wrong?
Major underwriting challenges for the HNW segment began to emerge toward the end of 2017. These headwinds, both literal and figurative, became relentless throughout the following year and have lessened little since.
On Sept. 9, 2017 Hurricane Irma made
landfall in Florida and ravaged the state for two days.
The storm caused an estimated $50 billion in combined property damage and recovery costs and left dozens dead in her wake. This figure made Irma the costliest hurricane in the state’s long history of costly weather events.
A single event of Irma’s scale can throw the entire property and casualty industry’s underwriting profitability off for a quarter or even a year. For the HNW segment, though, the impact was outsized. This is due to wealthy clientele enjoying coastal living, a situation which leads not only to catastrophic weather risks for individual properties but also aggregation risks for carriers to monitor.
Unfortunately, hurricanes were not the only natural disasters causing losses in that year. California’s 2017 wildfire season became the state’s costliest on record at the time. The destruction it caused was
challenging for insurers (estimates place total economic damages at $18 billion), but it was only a warm up for 2018.
The following year saw over $26 billion in estimated wildfire damage and associated costs, as well as the deaths of over 100 people. Ultimately, roughly 2% of the state’s 100 million acres of land was scorched. Incredibly, these two wildfire seasons were surpassed by the state’s 2020 and 2021 conflagrations by some metrics, such as total acres burned.
Insurers always understood that California and Florida posed heightened risks. Hurricanes and wildfires often factored heavily into the calculation of property rates. Still, many carriers were far too aggressive for too long in writing coastal and historically wildfire exposed properties. On top of this geographic overexposure, there was widespread premium underpricing coupled with contract clauses such as “unlimited” loss of use
coverage language that caused runaway claims payouts. When the wealthy lose use of their primary mansion, similar living quarters can cost astronomical amounts to rent on short notice.
As California and Florida caused trouble, other environmental events were generating expected and unexpected damage. Even milder winters of recent years in the Northeast led to enormous water damage losses due to subsequent pipe bursts during spring thaws. Then, there was the sudden cold snap in Texas back in February of 2021. This caused large and unanticipated losses for HNW carriers who had been eager to expand their distribution to the growing wealth base there.
Although most of these risks were theoretically known, the timing, scale and relentlessness of loss events showed carriers were not, generally, adequately prepared or geographically diversified enough in their book makeup.
These were by no means the only things that placed HNW insurance in its current position and they impacted carriers to differing degrees. With that acknowledged,
the consistency and severity of catastrophe losses from 2017 - 2021 softened the ground for the difficulties the HNW industry continues dealing with today.
Challenges Beyond the High Net Worth Segment’s Control
HNW carriers and brokerages employ thousands of individuals who manage billions of premium dollars. In an industry as large as insurance, though, the segment represents a barely visible sliver of overall employee headcount and GWP. Therefore, it follows that broader industry and economic trends can impact the HNW market in ways that are out of its control.
Examples include massive reinsurance rate increases in 2023, inflated prices for building materials, manual labor shortages, automobile part scarcity, and increased legal costs related to casualty claims to name just a handful.
As this article is focused on the HNW space, we will not expand on every item noted other than to say that the impact each is having on this already battered industry segment cannot be understated.
What Actions Are Carriers Taking?
Times are tough, but all is not lost. Since at least 2018, HNW carriers have been tightening underwriting appetites in the Southeast and California. By 2024, this tightening had reached the northeast with New York’s Long Island and parts of Manhattan becoming more restrictive for private client account placements (due both to CAT and aggregation concerns). Even individuals and families in moderately CAT-exposed areas along
the Long Island Sound in Connecticut can find themselves fighting to find suitable coverage for their high-end dwellings.
As admitted appetites have shrunk, excess and surplus lines placements have become more commonplace. This is true even for accounts that may have had many potential admitted coverage options to choose between just a few years prior. The E&S market provides carriers with more flexibility to price coverage adequately, restrict common causes of loss, and non-renew policies more easily when desired. While E&S placements come with increased paperwork and tax filing requirements, carriers and brokers view the extra work involved as being better than having no coverage solutions available.
Ideally, carriers believe the move toward E&S growth will make underwriting results more predictable.
For policies remaining in the admitted market, rate increases are another vital tool being implemented. Unfortunately, due to the state-by-state nature of insurance regulation, getting approvals for said increases is bound to be a years-long process (if rate adequacy is even achievable).
In some states, regulators have proven unwilling to accept actuarial justification for rate filings. In California, in particular, denying or limiting rate increases (often in the name of consumer protection) has caused a carrier exodus from the state. This has overburdened the government administered FAIR Plan, which is California’s last resort coverage program, and caused an ongoing insurance crisis.
Other states, like Florida, have been far continued on page 49
Idea Exchange: Ask the Insurance Recruiter
10 Ideas to Keep Recruiting Activity High When Hiring Slows Down
The best time to recruit is when you don’t have job openings. That motto reminds me to constantly work ahead, focusing on building pipelines and connecting with passive candidates.
The hard part is making the switch from open jobs dictating your time to filling your plate with “real recruiting activity,” which is hard work but ultimately longer lasting. Here are my recommendations to get started.
1. Peek at Your Competitors: Pretend to be a job seeker. Search job boards to learn how other firms advertise jobs and what compensation ranges are being applied (by the company or the job board algorithm). Look at Career pages to gain insight on how competitors recruit the types of people you also target.
2. Test New Job Advertisements: Tap into the creativity of your team using platforms like Canva to design new job ads (print and video) for social media.
3. Do a Three-Year Look Back: History repeats itself, right? Review recruiting and hiring data to see where and why you missed opportunities to interview
candidates, secure offers, and what led to short tenure. This insight is a healthy way to learn from past failures to improve future success.
4. Review Data Analytics: The older I get the less interested I am in wasting time and money. Recruiting metrics like timeto-fill and cost-to-hire reveal how you can make your process more cost efficient.
5. Systems Upgrades: Successful recruiting starts with great technology. Configure your ATS/HRIS systems with meaningful skill codes, templates, and workflows that make job and candidate management easier. If you don’t like your system, use this downtime to migrate to a new platform.
6. Sponsor Employee Referral Competition: Employee referrals aren’t dependent on specific job openings, more so just positive word-of-mouth. If your employees are willing to say good things about working for you, incentivize them to do so with friendly competitions that reward them for great referrals.
7. Job Connection Partnerships: Recruiting non-traditional candidates falls by the wayside when you have skilled
openings that require specific experience. In slower times, get involved with local colleges, veteran’s organizations, and job fair partnerships to tap into diverse candidate pools.
By Mary Newgard
8. Trim Down Resources: If the slowdown is your new hiring norm, then reduce your job postings, LinkedIn recruiter seats, or InMail allotments. It’s always better to closely manage fewer resources than be sitting fat with underutilized tools.
9. Clean Up Old Candidate Files: I remember a time when Capstone stored thousands of paper copies of old jobs and resumes. What a waste; no one ever went back and looked through them. The same can be said for digital files. Determine what makes a record incomplete or obsolete. Archive or delete them in your ATS, so they never show up in search results that you must comb through on future hiring projects.
10. Organize a Recruiting Workshop: Many times, I’ve led Lunch & Learns and breakout sessions for insurance agency hiring leaders. An in-house event is so much more productive than the same content at an industry conference. It gives your hiring leaders the chance to discuss all things talent acquisition. Invite outside speakers to present on key topics, provide critical updates on legislatives rules and regulations, and handout hiring toolboxes, so managers and executives leave with an understanding of the company’s hiring standards.
Newgard is partner and senior search consultant for Capstone Search Group, a national recruiting firm dedicated to the insurance industry. For questions and comments, email: asktherecruiter@csgrecruiting.com.
Idea Exchange: The Competitive Advantage
Sales Culture Versus Business Culture
Can an agency built by a true salesperson transform into a firm with a business culture? Not with a salesperson still at the helm.
By Chris Burand
Here’s some pop psychology based on knowing a thousand executives who began as salespeople. A salesperson is a salesperson is a salesperson. A rose by any other name is a rose. Sew a title, whatever title
you want to choose, onto a salesperson and they are still a salesperson. Their eyes glaze over whenever business issues outside of generating revenue are discussed. Discuss accounting issues with them? In a pipedream. Discuss procedures with them? Unless they’re being sued, they won’t sit still long enough for a full paragraph to be covered. Needing to discuss staff efficiency? More sales will fix that.
In fact, their base foundational comfort zone involves two points: Sales solve everything and if there is a problem, if I
talk long enough, everyone will eventually agree with me.
When a person is just starting out, whether when building a business or building their income as a salesperson, the effort required is Herculean. The effort required to succeed is so hard that if they were not already hardwired to think sales solve everything, their experience in those initial years will cause them to think sales will solve everything.
To test my pop psychology theory, a proxy test might be to do a web search to
identify how many consultants, programs, training classes, books, seminars, etc. promise increased sales versus any of the business points I made earlier or choose your own business points. Generating revenue is a far more popular topic than managing an agency or company. For example, a Google search of “sales classes” yields 4.35 billion results; a Google search of “accounting classes” yields 1.79 billion.
Business Culture
More sales, more sales, and more sales is
not a business culture. A business culture must include managing costs, managing people, managing balance sheets, managing vendor relationships, managing everything! If a person is bored or simply not interested in these functions, they are not going to perform them at all, or at least not well.
A true salesperson can only transform an organization into a viable business culture by hiring other people to take charge, not only manage, but to lead in running the business. And these people must have authority or else they cannot change the culture.
The culture must be one of accountability toward making the business more valuable. More sales, in and of themselves, do not make a business more valuable except in a seller’s market, preferably a bubble seller’s market where rational acquisition decisions are lacking.
The hard truth is, all sales are not profitable.
More value also means a better balance sheet. I’ve completed extensive analytics of the balance sheets of carriers and agencies, and the market values of firms with better balance sheets are higher, all else being equal. This may be a key reason many of the private equity (PE) buyers of agencies have no hope of going public because their balance sheets are shambles. PE firms are much like salespeople, more and more acquisitions will solve everything. I have met few salespeople that have any appreciation of the importance of managing balance sheets well. Most don’t even look at their balance sheet.
More value also means more employee development and accountability. I’ve found that exceptional salespeople are usually either quite personally disciplined or have limited self-discipline, and either way, almost none want accountability for themselves. A good leader is going to develop employees and hold them accountable. In today’s age, some people view accountability as some kind of evil discriminatory practice and therefore development is often a wishy-washy process.
I am not being cynical. Employee development must simply involve
methodically training an employee while providing them with the required tools for their success, providing a supportive environment, and then measuring their success. An environment which enables their errors, incompetency, laziness and otherwise poor performance is not a supportive environment.
I find that people enjoy working in these kinds of supportive environments in which poor performers are weeded out in a constructive manner. Salespeople are generally superb at a lot of things, but they are rarely any good whatsoever in developing a methodical and accountable work environment. The thought of such an environment will make many run for the exits!
Leadership also does not mean getting all the employees to agree to whatever direction the leader chooses. Salespeople have an aversion to conflict, so they often agree with whomever is the last to leave their office. When a direction change is required, they want everyone to agree. This works well for sales, but not so much for leadership.
I recently witnessed a large organization ready to spend considerable treasure on getting all their employees to value their new direction and their new goals. Their effort is like herding cats and their leader is conflict averse. Needless to say, the effort is not going well.
Set the goals, explain and educate, and do it succinctly. Identify the new skill sets required at each position and then analyze whether the existing employees possess the required skills. If they don’t, give them a training program and your expectations. There is no point in waiting for them to come around. You owe this to them. Then see if they are up to the task. If not, find new employees. A salesperson cannot often handle this kind of stress.
To answer the original question more completely: A sales organization can be transformed into an organization with a business culture, but not likely transformed by the founding salesperson.
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: Is It Covered?
Logic & Language and Forms & Facts
What Are ‘Weasel Words’ and What Is ‘Tergiversation’?
In the 1990s, I co-wrote a seminar with the late, great John Eubank, CPCU, ARM called “How to Battle an Adjuster … and Win Every Time!” Later, I changed the name to “How to Win Friends and Influence Adjusters,” but that’s a story for another time.
answering a question directly.
By Bill Wilson
One segment of the seminar addressed what John referred to as “weasel words.” These are words or phrases in insurance policies that may be cited to deny a claim but the terms are not defined in the insurance contract and, in the eyes of many courts, could be considered ambiguous.
Examples of such words include “auto,” “arising out of,” “care, custody and control,” “equipment,” “firearm,” “infestation,” “household,” “in connection with,” “likely,” “on ways next to,” “ownership,” “permanent,” “personal,” “public or livery conveyance,” “reside,” “theft,” “use,” “vacant,” “vandalism,” “vermin,” and the list goes on and on and on.
I address these words and terms in depth in my book, “When Words Collide: Resolving Insurance Coverage and Claims Disputes,” a product that evolved from this series of seminars that John and I did for over a decade. A few examples are provided below.
Tergiversation
At one seminar, an attorney said that these words were examples of “tergiversation,” a term I had to look up at the time.
The definition he had in mind was from the Oxford Advanced Learner’s Dictionary:
• Tergiversation, noun
• the act of making statements that deliberately hide the truth or that avoid
In his opinion, insurers intentionally use ambiguous language in drafting insurance contracts to give them a way out on some claims.
Weasel Words
On another occasion, I was discussing a cyber policy with a consultant who was similarly convinced that insurers were purposely writing cyber coverages using “weasel words” in a way that the language could be interpreted in any way they chose.
According to Wikipedia, a “weasel word” is an informal term for a word or phrase “aimed at creating an impression that a specific or meaningful statement has been made, when instead only a vague or ambiguous claim has been communicated.”
In my “When Words Collide” book, I give examples of “weasel words” that represent a special class of lexical (semantical) words or phrases that are almost inarguably ambiguous. The examples I provide are from actual claims that were initially denied but then paid after being challenged.
For example, a nonstandard homeowners policy excluded damage to “farmlike” structures. A two-story storage building painted red with what looked like a hay loft window and a rooster weather vane on the roof burned to the ground.
The adjuster initially denied the claim, citing the “farm-like” language, despite the fact that the structure was not used in any way to store farm products or equipment or to house farm animals. So, what exactly made the structure “farm-like”? The adjuster couldn’t answer that question other than the building looked kind of like a barn. To his credit, he backed off the denial and paid the claim.
Another homeowners claim involved fire damage that was covered in part but not, according to the adjuster, the damage to a freezer. The adjuster based the denial on policy language that indicated that it only covered damage to personal property “usual to the occupancy as a dwelling.” What property do you usually find in a dwelling? One might argue that freezers aren’t common but what about other appliances?
[I]f a term is found to be ambiguous, the policyholder wins almost every time.
My brother owns an expensive telescope … is that not covered because you don’t usually find one in most dwellings? If someone in Florida owns a pair of snow skis, are they not covered because they are not “usual to” dwellings there, but would be usual if the home was in upper Michigan?
Returning to my aforementioned conversation with a consultant about a cyber policy, the one in question excluded coverage for system hacking if the insured’s security systems were not up to “industry standards,” a term not defined in the policy. What or which “industry standards?” Some policies cover theft “when it’s likely that theft has occurred.” What determines that a loss was likely theft?
Does residue from an abandoned meth lab constitute vandalism under a landlord’s policy? Does such damage have to be intentional?
How many bats must be in an attic before the damage they cause arises from an “infestation?”
Does an auto policy’s “public or livery conveyance” exclusion apply to pizza delivery?
So, does an insurer’s use of so-called “weasel words” constitute tergiversation? In other words, is the use of vague, undefined terms done on purpose? Some people believe so, but I find that highly doubtful. I’d like to think that, more often, poorly worded policy provisions simply represent the insurance contract drafters’ lack of skill or experience, or the terms used were chosen simply because the
drafter couldn’t think of anything better. After all, who wants a 100-page policy of which 88 pages constitute nothing but definitions. Even if that was the case, definitions themselves are often found to be ambiguous.
The Key Word
Ambiguous is the key word here. Litigating insurance contract verbiage is a crap-shoot for both parties. No one wants to spend potentially several years in the court system to find out if a word or term is ambiguous.
In addition, if a term is found to be ambiguous, the policyholder wins almost every time, and such decisions may impact hundreds or thousands of prior and future claims on accounts for which the premium possibly did not reflect the coverage found
by the court. That doesn’t provide much motivation for insurers to deliberately use ambiguous terms in policies.
All of this being said, it’s advisable that agents and policyholders read the insurance contracts they’re selling and buying, and ask interpretive questions in advance of claims, keeping in mind that what these terms mean may be dictated by the facts and circumstances of each individual claim.
As always, RTFP! and ask questions.
Wilson, CPCU, ARM, AIM, AAM is the founder and CEO of InsuranceCommentary.com and the author of six books, including “When Words Collide…Resolving Insurance Coverage and Claims Disputes” which is ranked #1 on BookAuthority.com’s list of “20 Best Insurance Books of All Time.” Email: Bill@InsuranceCommentary.com.
Idea Exchange: The Marketing Connection
The Role of Benchmarking & Competitive Analysis in Insurance Marketing
In the insurance industry, standing out is no longer just about having the best products. It involves a meticulous understanding of the market, continuous refinement of internal processes and marketing strategies, and a deep dive into competitors’ activities. This is where competitive analysis and benchmarking come into play — indispensable tools for any insurance marketer aiming to stay ahead of the curve.
By Kristen Nevins
Benchmarking involves comparing a company’s processes, performance metrics and products to industry best practices from other companies. Competitive analysis evaluates the strengths and weaknesses of current and potential competitors. The two can work hand-in-hand to provide a comprehensive framework for strategic decision-making and market positioning.
Understanding Benchmarking in Insurance Marketing
Benchmarking in the insurance sector allows companies to measure their performance against industry leaders. This process involves identifying key performance indicators (KPIs) such as customer satisfaction, claims processing time, policy renewal rates, and cost efficiency.
Analyzing these metrics can help organizations pinpoint areas that need improvement and adopt best practices from top-performing peers. For example, an insurance firm might discover through benchmarking that its claims processing time is significantly longer than the industry average. By studying how leading companies streamline their processes, the firm can implement similar strategies to reduce processing time and enhance customer satisfaction.
The Power of Competitive Analysis
Competitive analysis provides insurance companies with a clear picture of the
market landscape. Let’s say a competitor launches a new product that quickly gains market traction. A thorough competitive analysis would help an insurance marketer understand this product’s appeal. The company can then decide whether to develop a similar product, improve its existing offerings, or adopt new marketing techniques to retain its market share.
Consider performing a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) for your company and key competitors. This will help you understand your competitive position and identify strategic opportunities.
Synergy Between Benchmarking & Competitive Analysis
When used together, benchmarking and competitive analysis provide a robust framework for strategic planning. Benchmarking helps insurance organizations improve internal processes and performance metrics, while competitive analysis offers insights into external market conditions and competitor strategies. This dual approach ensures that insurance entities operate efficiently and stay competitive in a dynamic market.
Practical Applications
1. Product Development. Firms can enhance their offerings by benchmarking product features and performance against industry leaders to meet or exceed market standards. Simultaneously, competitive analysis helps identify gaps in the market, inspiring innovative product development that caters to unmet customer needs.
2. Customer Experience. Benchmarking customer service metrics (such as response times and satisfaction scores) against top-performers can help elevate the customer experience. Coupled with competitive analysis, which reveals competitors’ customer engagement strategies, insurance organizations can craft superior customer service frameworks.
3. Marketing Strategies. Benchmarking can assess the effectiveness of a marketing campaign relative to industry best practices. Competitive analysis provides insights into successful marketing tactics. Combining these approaches enables organizations to refine their marketing strategies, ensuring they are effective and distinctive.
4 . Staying Ahead with Technology. Technology is a key driver of change in the industry. Competitors adopting new technologies, such as AI-driven underwriting, blockchain for claims processing, or advanced data analytics for customer insights, can signal where the industry is headed. Keeping an eye on technological advancements allows you to stay ahead of the curve and integrate relevant technologies into your own operations.
Leveraging both benchmarking and competitive analysis is essential for sustained success. Benchmarking drives internal improvements by identifying and adopting best practices, while competitive analysis ensures that insurance firms remain agile and responsive to market dynamics. Together, these tools empower insurance marketers to keep pace with industry leaders and carve out a unique and compelling market position. Insurance firms can continuously refine their processes and strategies based on comprehensive internal and external insights to achieve lasting competitive advantage and market leadership.
Nevins is the director of Marketing & Operations at Direct Connection Advertising & Marketing. Website: directconnectionusa.com.
Spotlight: Claims
continued from page 20
that cargo was on board the business-class jet. Planet Nine’s website shows it flies a number of aircraft, none larger than the 15-passenger Gulfstream G650.
When local law enforcement officers in Portland saw the bags being loaded onto the plane, after some seats had been removed, they became suspicious and alerted federal Customs agents in Charlotte. At that airport, Customs officials could see the cargo, which was in duffle bags and trash bags, through the windows of the airplane.
This seemed odd because the flight’s paperwork did not mention any cargo being transported, the court explained. Agents moved in and removed the bags from the plane.
We CBD filed suit in North Carolina against Planet Nine, seeking compensation for the lost cargo. Planet Nine, a
Van Nuys, California-based company, asked the court to dismiss the case, arguing that the Montreal Convention takes precedence.
‘There’s not a robust international coverage for hemp, when there should be because there are a number of operations that are multinational.’
That convention, the appellate judges explained, essentially replaced the Warsaw Convention of 1929. It holds that air carriers flying international routes are liable for damage to cargo and baggage that is sustained “during carriage by air.” Claims must be made pursuant to the treaty.
But the convention also gives air carriers an escape clause, the court noted, if the air company can show that “the destruction, or loss of, or damage to, the cargo resulted from …an act of public authority carried out in connection with the entry, exit or transit of the cargo.”
The destroying of the hemp by Customs agents is considered an act by a public authority, the courts said.
We CBD, represented by attorney William Terpening, of Charlotte, had also argued that the convention did not apply because the paperwork was left out before the flight was underway, and the destruction of the hemp came later – meaning those actions fell outside the scope of “carriage by air.”
But the appeals court said that argument was splitting hairs. Court rulings have long eschewed segmenting the pre-
cise event as long as it is part of the shipping or transport process.
“To rule otherwise would greatly diminish the ambit of the Montreal Convention and would concomitantly ‘encourage artful pleading by plaintiffs seeking to opt out of the Convention’s liability scheme’ — a result that the Supreme Court has counseled us to avoid,” Judge King wrote in the 4th Circuit opinion.
Further, the court said: “Even assuming Planet Nine had an obligation to submit the U.S. Customs documentation and improperly did so, the Cargo could not have been destroyed unless it was in international carriage by air.”
The types of issues raised by this case will likely continue for years to come, thanks to the variation between federal, state and international laws.
Even when the hemp is found to be below the United States’ .03% THC threshold, international shipments can be tricky, Schutz said. Some insurance carriers will provide coverage that allows up to .04%, but most don’t.
And the European Union requires a THC level of less than .02%, but other countries may be different. Switzerland, where the hemp in the We CBD case was headed, allows up to 1% THC for hemp to be considered legal, according to news reports and cannabis attorneys.
“This is where a good agent-broker comes in,” Schutz added.
“You need to be able to overlay the regulations, the insurance contracts and what the heck your insured is actually doing. Make sure everything is inside the box.”
Spotlight: Private Client
more accommodating. Florida regulators have not only approved rate increases but the state’s legislature has also taken action to reduce claims litigation and questionable assignment of benefits practices involving roofing contractors. Though issues remain, these relatively recent actions are already beginning to bear fruit with new carriers filing to enter the Florida market in 2024.
Beyond rate hikes, some HNW carriers are making efforts to rewrite portions of their contracts to improve claims predictability. One example of this is to adjust loss of use limits to no longer be worded as “unlimited.”
bring stability to the market.
What Can Brokers Do?
Any experienced broker knows how to explain a rate increase or the need for E&S placement to a sophisticated client. The demands of this hard market, however, can require explanations that are just as narrative driven as they are driven by data and simple logic.
worth by being resources of advice and information even when rate relief proves elusive.
What the Future Holds
These industry storms will pass with concerted, consistent effort and time. In the long-term, there remain countless opportunities for this market segment to grow. Various analyses pre-pandemic estimated the total addressable HNW insurance market to be in the range of $40 billion GWP with just $5 billion having already been placed with formal HNW carriers. Due to home replacement cost inflation in recent years alone, the number of potential HNW accounts has only grown.
If even a minority of these millions of potential HNW insureds are open to enhanced coverage and a better broker relationship — industry history suggests this is likely — the future will be bright for carriers and brokerages.
Maintaining unity in messaging, sharing knowledge within and outside of the industry, and working even harder to keep clients happy now will ensure this brighter future can be created.
Kopser is co-founder and president of North Improvement LLC, a boutique brokerage specializes in serving the insurance needs of HNW families. Prior to co-founding North Improvement, Hayden served as a senior underwriter and cyber product expert at one of the largest HNW carriers. continued from page 39
Some of this can be done with current filings by simply amending what underwriters are willing to offer. When that is not possible, contract changes, like rate increases, must be filed and approved on a state-by-state basis, meaning no overnight fixes are on the way.
As HNW carriers do not operate in a vacuum and all have different risk appetites, geographical distributions, and risk management capabilities, some have performed and continue to perform better than others. Being ahead of the pricing and de-aggregation curve meant less adverse underwriting action was needed in recent years. While carriers who took a more conservative approach over the years deserve praise, none have gone unscathed and all must continue to make efforts to
Understanding things such as how building material prices, auto part scarcity, and labor shortages are causing inflation is crucial. It is also important to stay up to date on how reinsurance rate increases in recent years are continuing to have a downstream effect on property rates.
Being able to speak to the breadth of the problems causing difficulties for clients is invaluable. Getting more granular when reviewing individual accounts is also necessary. The same factors that cause rate increases in a soft or intermediate market can exacerbate unrelated increases and coverage placement struggles today. Claims, driving infractions and credit score changes can all play roles in premium calculations.
On a brighter note, brokers can theoretically benefit from rate increases thanks to higher associated commissions. Clients are feeling financially squeezed from all angles and this means the effort required to earn these commissions has grown, too. Thankfully, brokers can still prove their
Closing Quote
Cyber Security and Risk Mitigation
Security leaders should be exercising every available option to upgrade their security posture, and cyber insurance policies could make or break the resiliency for many organizations across nearly all industries –– K-12 education, retail, healthcare, manufacturing and more.
By Kevin Kiser
Just last month, thousands of organizations were shut out of their digital environment for hours as a defective software update from security company CrowdStrike took down computers running Microsoft Windows all over the world. The system outage that resulted is one of the largest ever and laid bare just how fragile the global IT infrastructure is even without any attacks from threat actors. But the threat landscape has also never been more fraught, with ransom demands rising 20% year-over-year as bad actors seek larger payouts from their targets.
For leaders who want to ensure they’re prepared, the time to act is now. High-risk industries need help, and effectively aligning their
security investments with a cyber insurance policy is a strong foundation in building resilience. Cyber insurance acts as a safeguard and lifeline if a business is hit by an attack or, in cases like the CrowdStrike and Microsoft Windows event, a significant IT outage, although not all policies will cover non-attack incidents. Essentially, whether an impacted organization has a cyber policy may be the difference between paying millions out-of-pocket to an attacker or resuming business as usual overnight.
But the attackers themselves have expanded their list of targets while also exploring other ways to extort their victims, like creative Business Email Compromise (BEC) attacks.
These types of attacks are essentially a type of emailborne phishing fraud in which an attacker attempts to trick members of an organization into transferring funds, sensitive data, or something else of value, like their credentials. Some 70% of organizations surveyed in the 2024 Arctic
Wolf Trends report reported that they were the targets of an attempted BEC attack within the last 12 months. The FBI’s most recent Internet Crime Report estimates the losses caused by BEC at $2.7 billion in 2022. This is 80 times greater than those caused by ransomware attacks.
Cybersecurity is about risk mitigation, and more active attackers means a higher risk for all industries, especially those who have been most impacted by attacks this year, including finance, manufacturing, government and the education and nonprofit sectors, according to Arctic Wolf Labs.
Insurers have also responded to the evolving threat landscape and stepped up their requirements for policyholders. However, there are several steps that businesses in any industry can take to set themselves up for the most favorable terms on their next cyber insurance policy, according to insurance underwriters.
First, implementing the essential basics of cybersecurity like strong Identity Access Management tools — Multifactor authentication, Virtual
Private Networks and strong password requirements, and log retention — will go a long way toward ensuring that a business is looked upon favorably by an insurer.
Second, Managed Detection and Response (MDR) and 24/7 monitoring are considered the most important controls that some insurance carriers look for due to its combination of threat detection and humanled response that improves threat detection accuracy, enhances remediation response and ultimately reduces incident severity. MDR also provides in-house IT teams with the opportunity to work with expert security teams around the clock, enhancing their protection in ways that would otherwise be impossible for resource-constrained organizations.
Additionally, organizations that demonstrate a strong “security culture” with regular security awareness training, patching and rewarding a “see something, say something” attitude may further separate themselves as favorable risks.
As public and private entities alike continue to build their cyber resiliency, we encourage them to work with a trusted insurance broker to effectively evaluate their cyber security and insurance portfolio. With proper guidance and implementation of security controls, organizations can maximize their risk management benefits and have confidence in the face of an ever-changing threat landscape.
Kiser is senior director of incident response strategy at Arctic Wolf
