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ACORD’s 2022 U.S. Property & Casualty Value Creation Study Highlights Key Drivers of High Performance Among Top Insurers

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ACORD’s 2022 U.S. Property & Casualty Value Creation Study Highlights Key Drivers of High Performance Among Top Insurers

ACORD, the global standards-setting body for the insurance industry, today released its 2022 U.S. Property & Casualty Value Creation Study, which measures and analyzes value creation among the top 100 U.S. P&C insurance carriers over a twenty-year period. The study leveraged in-depth financial analysis, data-driven research, and interviews with industry leaders to assess carrier performance and the strategies that support success.

ACORD analyzed the 100 largest U.S. P&C insurers and the value they created or destroyed through both underwriting and investment, with the total value created by the top 100 over the study period totaling $182 billion. Carriers were then segmented into three categories based on their performance: Sustainable Value Creators exceeded the benchmark of required returns through both underwriting and investment activities; Hollow Value Creators met required returns through their investments but failed to generate value through underwriting; and Value Destroyers failed to generate sufficient value over the study period. Each group was further assessed to identify the strategies, tactics, and capabilities that lead to high performance.

“We see an increased emphasis on modernization, with the critical role of digitalization clearly understood across the industry,” said ACORD President & CEO Bill Pieroni. “The COVID pandemic, and the resulting necessity for digitally mediated interactions, made even the most ardent digital skeptics accept the importance of digital capabilities. However, this also means that the bar is continually being raised for digitally mature carriers to stay ahead in performance metrics.”

The updated study contains data and insights current as of this year. Key insights from the 2022 edition of the U.S. Property & Casualty Value Creation Study include:

  • Advantages of scale: While scale and scope economies tend to be elusive across the global insurance market in general, ACORD’s research did find that the largest carriers tended to generate more sustainable value in the U.S. P&C market. This is likely the result of being able to devote resources to consistent development and renewal of digital capabilities over the long term.
  • Importance of talent: Sustainable Value Creators are clearly winning the “war for talent,” a critical issue facing our industry. Insurers classified as Sustainable Value Creators, on average, had the highest levels of employee retention and satisfaction in the study. Moreover, colleagues at Sustainable Value Creators had the highest levels of productivity and corresponding value creation.
  • Unsustainability of relying on investment: Lower investment returns over the past several months, compared to the average over the twenty-year period studied, impacted value generation across the industry. In a reversal over previous years, Sustainable Value Creators generated more value through underwriting than through investment. Many previous Hollow Value Creators failed to generate adequate value, and sank into the Value Destroyer category.

“These results highlight the risk of relying on investment returns to offset underwriting losses,” Pieroni continued. “In this year’s study, we saw the vulnerability of Hollow Value Creators to market fluctuations. This inevitable volatility of investment returns illustrates the peril of relying solely on investment-based value creation — it is not sustainable. It is necessary to generate value through underwriting as well.”

The full 2022 U.S. Property & Casualty Value Creation Study is free to download for ACORD members. For more information or to download the white paper, please visit www.acord.org/research.

Ryan Specialty Signs Definitive Agreement to Acquire Griffin Underwriting Services

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Ryan Specialty Signs Definitive Agreement to Acquire Griffin Underwriting Services

Ryan Specialty, a leading international specialty insurance firm, is pleased to announce that today it signed a definitive agreement to acquire certain assets of Griffin Underwriting Services (“Griffin”), a binding authority specialist and wholesale insurance broker headquartered in Bellevue, WA.

Griffin, founded in 1928, has deep relationships with retail insurance brokers both in the Pacific Northwest and across the country. Griffin offers a broad array of solutions across various specialty insurance lines, including earthquake and transportation. Griffin’s technical acumen and consistent underwriting results have attracted the support of numerous leading carriers.

Tim Turner, President of Ryan Specialty and Chairman and CEO of RT Specialty, commented, “We are excited to embrace the exceptional professionals at Griffin into Ryan Specialty. Griffin deepens our offerings in the Pacific Northwest, broadening our geographic scope and capabilities. Additionally, Griffin is a critical piece to our continual buildout of our national binding authority offering. We look forward to welcoming the Griffin team to Ryan Specialty.”

Jason Griffin and Van Griffin, Co-Presidents of Griffin Underwriting Services, remarked, “We are very familiar with RT Specialty and are thrilled to be joining the team. At Griffin, we pride ourselves in developing top talent and offering a culture that empowers the individual. It is clear that Ryan Specialty is built on this same philosophy. We’re excited about the opportunities that this new phase will create for our employees, and we look forward to the future as a part of the Ryan Specialty family.”

Griffin generated approximately $23 million of revenue for the 12 months ended November 30, 2022. [1]

Terms of the transaction were not disclosed. The acquisition is expected to close in January 2023.

Dowling Hales served as exclusive financial advisor to Griffin.

Learn more about Ryan Specialty on its website.

Two Amerisure Employees Named 2023 Emerging Leaders by Top Industry Organizations and AM Best

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Two Amerisure Employees Named 2023 Emerging Leaders by Top Industry Organizations and AM Best

Amerisure is pleased to announce two employees have been selected as 2023 emerging leaders by the American Property Casualty Insurance Association™ (APCIA), AM Best®, and the Insurance Careers Movement.

Amerisure’s Blaze Rodriguez, business development manager, and Colette Turner, director of Workers’ Compensation field claims, have been awarded the prestigious honor, which is designed to recognize outstanding rising talents in the insurance industry. With their selection as emerging leaders, the employees are invited to attend the Emerging Leaders conference in Charleston, South Carolina, in February of 2023.

“Amerisure is proud to have Blaze and Colette represent our organization in the 2023 class of emerging leaders,” said Erin Buddie, Amerisure’s vice president of human resources. “These individuals regularly surpass our expectations through notable performance outcomes within their job responsibilities, and lead by example in their display of Amerisure’s values and demonstrated passion for providing superior service.”

Those selected for the recognition represent a wide range of job functions. Nominees must have more than eight years of experience and show they are making a positive impact on their companies and the industry.

Since the APCIA, Insurance Careers Movement and AM Best began selecting emerging leaders, Amerisure has made a strong showing. Earlier in 2022, Amerisure’s Kalin Coon, business development manager; Anastasia Gale, director of corporate & regulatory counsel; and RaFeael Smith, claims unit manager, were named emerging leaders. In 2021, John Calloway, director of field underwriting, was selected an emerging leader. Jessica Soufrine, vice president of field marketing & underwriting, was selected as an emerging leader in the 2019 inaugural class.

To learn more about the Emerging Leaders Conference and other events, visit the APCIA website.

Homeowners Unsure How to Protect Property from Wildfires

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Homeowners Unsure How to Protect Property from Wildfires

Nearly two-thirds of homeowners in fire-risk states are worried about wildfires harming them and their property; yet few are taking action to protect their homes, and fewer still are confident in their insurance coverage. That’s according to a recent survey by the National Association of Mutual Insurance Companies. Among the highlights from the survey of nearly 600 homeowners in 10 states with an increased risk of fire:

According to National Interagency Fire Center (NIFC) statistics, as of Nov. 18, 2022, more than 62,000 fires have already burned more than 7.3 million acres in the U.S.

  • 59% of homeowners believe wildfires pose a moderate to extreme risk for them and their property,
  • 63% fear their home will be damaged in the next three years due to extreme weather or natural disaster,
  • Only 19% are certain they have enough insurance to cover any damage,
  • When asked about fire prevention activities, 20% of respondents had not considered any of the activities, while an additional 13-15% had decided to not pursue these preventative actions, citing expense, belief that preventive steps would not offer protection, difficulty, and lack of knowledge as their top reasons for not taking action.

These findings are troubling given the increase in wildfire damage in recent years. According to National Interagency Fire Center statistics, as of Nov. 18, 2022, more than 62,000 fires have already burned more than 7.3 million acres in the U.S., more than the 10-year average of 51,000 fires and the average acreage of just under 7 million.

“As we come to the end of another devastating year of wildfires, it’s more imperative than ever that homeowners consider actions to reduce their fire risks, including reviewing their insurance needs,” said Neil Alldredge, NAMIC President & CEO. “Homeowners don’t have to wait for government or others, they can act to protect themselves. There are many inexpensive fire mitigation activities that can be done over a weekend that will help reduce losses and lessen the potential for a crippling financial impact on their family.”

NAMIC commissioned The Risk Institute at The Ohio State University Max M. Fisher College of Business to conduct the survey to better understand homeowners’ perceptions of extreme weather, fire risk, and fire remediation efforts. The states identified as being at increased risk for wildfires included Arizona, California, Colorado, Florida, New Mexico, North Carolina, Oklahoma, Oregon, South Carolina, and Washington.

NAMIC encourages homeowners to consider the weekend wildfire preparedness activities outlined by the Insurance Institute for Business and Home Safety.

  • Create defensible space – To maintain a defensible space, homeowners should remove dead vegetation, trim branches overhanging roof, and remove combustible materials within 5 feet of the home. Only 22% of survey respondents say they have created a 5-foot vegetation barrier around their homes, with Arizona homeowners being the most likely to have done it (44%), and South Carolina being the least likely to have considered it (65%).
  • Clear roof and gutters – Homeowners don’t have to completely replace their roofs to better protect from wildfires. Simply removing debris such as leaves and pine needles that can be easily ignited by wind-blown embers can make a difference.
  • Maintain decks – Homeowners should remove debris and vegetation from decks and move patio furniture, umbrella, and other combustibles inside. Wood should not be stored on or underneath decks. 42% haven’t considered using ignition-resistant lawn furniture made with aluminum instead of wood.
  • Assess wildfire risks – Homeowners need to review their insurance policies to make sure they’re covered in the event of a wildfire. In addition, they should create a home inventory to assist in the claims process. The survey found that only 25% reevaluate their insurance policies annually.

In conducting the survey, The Risk Institute recruited a sample of 1,102 homeowners from Aug.11-17,2022, from Amazon MTurk using Cloud Research, with a subset sample of 592 from the 10 fire-risk states listed. The margin of error for the state subset is +/-4 percent. Homeowners ranged in age from 20 to 70 and were equally split between genders.

The National Association of Mutual Insurance Companies consists of more than 1,500 member companies, including seven of the top 10 property/casualty insurers in the United States. The association supports local and regional mutual insurance companies on main streets across America as well as many of the country’s largest national insurers. NAMIC member companies write $357 billion in annual premiums and represent 69% of homeowners, 56% of automobile, and 31% of the business insurance markets.

The Risk Institute at The Ohio State University Max M. Fisher College of Business is a consortium of forward-thinking companies and academics with the mission of advancing enterprise risk management through cross-industry collaboration, academic research, thought leadership and talent development.

Workers Compensation Insurance

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Workers Compensation Insurance

Workplace accidents happen. When they do itʼs important to make sure your employees and your business are protected. EMC Insurance Companies is a leader in providing workers compensation insurance to businesses like yours.

Read more at https://www.emcins.com/workerscomp/

Marisue Elias-Newman Elected Chairperson for the NWCRA

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Marisue Elias-Newman Elected Chairperson for the NWCRA

Marisue Elias-Newman, Esq. was recently elected Chairperson for the National Workers’ Compensation Reinsurance Association (NWCRA) Board of Directors at its 2022 annual meeting. The NWCRA is a contractual reinsurance pooling mechanism among participating carriers that provides an arrangement to comply with the state statutes and the Workers’ Compensation insurance plans for assigned risk business.

Elias-Newman, who was elected to the NWCRA board in 2019, is the Assistant Vice President of Regulatory Affairs at Berkshire Hathaway GUARD Insurance Companies, where she oversees the company’s residual market activities, licensing, and governmental relations. She is the past chair and current member of the New Jersey Compensation Rating and Inspection Bureau (NJCRIB), the past chair and current member of the Delaware Compensation Rating Bureau (DCRB), and a member of the North Carolina Workers’ Compensation Bureau (NCRB) Workers’ Compensation Committee.

Elias-Newman earned a BA, summa cum laude, from King’s College and a JD from the Dickinson School of Law. She resides in Wilkes-Barre, Pennsylvania with her family.

Agents, Brokers Shatter Single-Digit Growth Ceiling

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Agents, Brokers Shatter Single-Digit Growth Ceiling

Good news doesn’t get old. Independent insurance agents and brokers have posted a fifth consecutive record-setting quarter of organic growth, according to a survey by Reagan Consulting. At 10.2% in the second quarter of 2022, their median organic growth reached double digits for the first time in the nearly 15-year history of the firm’s Growth & Profitability Survey.

Ever realists, however, agents and brokers have tempered their expectations for the year ahead, the survey found. “It appears that the industry is already feeling the impacts of the macroeconomic factors,” says Brian McNeely, executive vice president and partner of Reagan Consulting.

Agents and brokers anticipate organic growth of 8.5% through the end of 2022, but also see their operating profits decrease. “Expenses are now growing faster than revenues,” says McNeely, due to increased payroll costs and the loss of pandemic-related savings, including reduced travel expenses.

McNeely says a leading indicator of future organic growth ― sales velocity ― has already dropped this year, from 12.6% in Q1 to 11.8% in Q2. Sales velocity is a proprietary Reagan metric that benchmarks agency new business results. It is calculated by dividing new business written in the current year by the total of the previous year’s commissions and fees.

Unexpected results

Commercial property-casualty (p-c) sales continued to outperform other lines in Q2, posting organic growth of 12.2%. McNeely attributes the growth primarily to premium rate increases, but says that “a great economic environment including continued government spending,” has buoyed commercial p-c business.

McNeely says that “perhaps the biggest surprise was personal lines,” which posted a Q2 record high of 5.5% organic growth. Pricing increases were a factor, but agencies’ emphasis on selling personal insurance to high net worth prospects appears to be paying off, he explains.

Sales in group health insurance have not benefited from rate increases and continue to suffer from a pandemic hangover. Still, at 5.6% organic growth, group health sales reached their “highest Q2 growth since 2018,” says McNeely. COVID-related difficulties appear to be resolving, and “more opportunities are presenting themselves,” he explains.

For further observations and commentary on the Q1 results, contact McNeely at Reagan Consulting, 404.869.2523 or bmcneely@ReaganConsulting.com.

The Reagan GPS was formerly known as the Organic Growth & Profitability (OGP) Survey. Each participating agency in the GPS receives a customized, confidential report of its performance compared with the overall survey results, along with Reagan’s quarterly commentary of industry trends affecting agents and brokers. For information on participating in the survey, contact Michelle Appelbaum at 404.869.2541 or michelle@ReaganConsulting.com

Reagan Consulting is a management consulting firm providing strategic consulting, valuation, capital raising, and merger-and-acquisition (M&A) services to the independent insurance distribution system. The firm’s services for insurance agents and brokers, bank-owned agencies and other participants in the insurance distribution marketplace include: appraisals of fair market value, capital raise advisory, mergers and acquisitions advisory, ownership perpetuation planning, strategic planning facilitation, key employee compensation and equity plan design, and agency performance benchmarking. Reagan Consulting co-developed the well-known Best Practices Study and produces the quarterly Growth & Profitability Survey

FCCI Insurance Group Launches New Risk Control Video

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FCCI Insurance Group Launches New Risk Control Video

FCCI Insurance Group launched its third video in a series of six – “FCCI Risk Control.” In this newest release, FCCI helps business owners better understand the risks they face every day by protecting businesses, employees, property, automobiles and customers from losses due to accidents.

Expect three more videos this summer with a focus on the Business Owner experience, FCCI’s partnership-driven TeamWorksSM approach, and recruiting top talent. These videos will enable current and prospective agents and policyholders to learn more about the Company, its values, and why they should partner with FCCI for their commercial insurance needs.

VIDEO LINK: FCCI Risk Control Video

For more about FCCI’s prompt and fair claim handling, go to www.fcci-group.com/claims-services or call (800) 226-3224.

Triple-I: Florida’s Homeowners Insurers Are Facing Multiple Crises

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Triple-I: Florida’s Homeowners Insurers Are Facing Multiple Crises

The turmoil in Florida’s homeowners insurance market is being caused primarily by the state’s outsized number of lawsuits and its commonplace fraud schemes, according to an Issues Brief published by the Insurance Information Institute (Triple-I).

“Floridians are seeing homeowners’ insurance become costlier and scarcer because for years the state has been the home of too much litigation and too many fraudulent roof-replacement schemes,” said Sean Kevelighan, CEO, Triple-I. “These two factors contributed enormously to the net underwriting losses Florida’s homeowners’ insurers cumulatively incurred between 2017 and 2021.” Florida homeowners pay the highest average property insurance premium in the U.S. at $4,231, nearly three times the U.S. average of $1,544, according to Triple-I’s analysis.

The net underwriting losses for Florida domestic property companies exceeded $1 billion in both 2020 and 2021, Triple-I’s Issues Brief noted, leading to insurer insolvencies and rating downgrades. Some insurers who were able to withstand these negative financial trends have reduced their exposure to Florida’s homeowners market by issuing non-renewal notices to existing policyholders or restricting the writing of new business in the state.

Two major hurricanes made landfall in the state in 2017 (Category 4 Irma) and 2018 (Category 5 Michael). The past three hurricane seasons (2019-2021), however, have been relatively quiet ones for Florida. Insurers are experiencing net underwriting losses in large part because Florida is the site of 79 percent of all homeowners insurance lawsuits over claims filed nationwide while Florida’s homeowners insurers receive only 9 percent of all U.S. homeowners property insurance claims, according to the National Association of Insurance Commissioners. Floridians For Lawsuit Reform estimates 130,000 property claim lawsuits will be filed in 2022, largely due to Florida’s favorable litigation environment.

“Florida has one of the most generous attorney-fee mechanisms in the country—sometimes resulting in insurer payment of plaintiff attorney fees far greater than the damage awards given to the policyholders who are the plaintiffs themselves,” the Triple-I’s Issues Brief explained. “A 2017 state Supreme Court decision allows courts to award plaintiffs’ attorneys 2-2.5 times their hourly billing rate when courts rule in favor of policyholders. These “contingency fee multipliers” can result in attorneys receiving several hundred thousand dollars for a simple lawsuit.” The homeowners insurer pays the plaintiff’s attorney fees as well as damages to the plaintiff, the insurer’s policyholder, in the event of a court ruling in favor of the policyholder.

Triple-I’s Issues Brief also highlights the steps taken by unethical roofing contractors, who ask homeowners insurance policyholders to sign assignment of benefits (AOB) forms or direction to pay agreements, giving the contractor the right to collect claim payments directly from the insurer and file a lawsuit without the knowledge or consent of the policyholder. These lawsuits require insurers to allocate resources to defend themselves in court, with the policyholder often unaware the signed AOB form has set into motion potential litigation.

“As insurers fail or leave, Citizens Property Insurance Corp. – the state-run home insurer of last resort – is swelling with business. Citizens had 931,357 policies in force as of June 30, 2022, up from 638,263 policies in June 2021 and 474,630 policies in June 2020. Citizens could spend as much as $100 million this year on litigation expenses,” Triple-I’s Issues Brief reported.

Two Trusted Business Names Join Forces to Help Protect Against Critical Risks

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Two Trusted Business Names Join Forces to Help Protect Against Critical Risks

The Minnesota Chamber and Western National Insurance announced a new partnership, offering high quality, customizable business insurance to Chamber members.

“Our two companies have had a trusted working relationship since the 1970s,” said Vicki Stute, Vice President, Programs and Business Services at the Minnesota Chamber of Commerce. “We’re excited that this new partnership will bring Chamber members cost-effective business insurance to help them protect against risk, so they can focus on growing their workforce and their bottom line.”

“Western National is honored and excited to partner with the Minnesota Chamber Business Services as a sponsored carrier. This partnership will further the mutual growth of both Western National and the Minnesota Chamber members,” said Jeff Couchman, Executive Vice President of Underwriting & Sales at Western National Insurance. “The experience and stability that Western National brings, combined with the unique ability of the Chamber to bring together businesses across the state, will enhance the overall strength of our greater business community.”

Western National Insurance is a private mutual insurance company with more than 120 years of experience serving policyholders’ property-and-casualty insurance needs. This partnership expands Minnesota Chamber Business Service’s current insurance offerings and includes:

  • Businessowners Policy (BOP)
  • Commercial Auto
  • Commercial Package Policy
  • Contractors E&O
  • Cyber Liability
  • Employer’s Practices Liability (EPL)
  • Fire and Allied Lines
  • Inland Marine
  • Manufacturers E&O
  • Commercial Umbrella
  • Workers’ Compensation

For more information about these and other products from Western National, please visit: www.wnins.com/MCBS/MNChamber-Partnership.shtml.

Minnesota Chamber Business Services (MCBS) is a subsidiary of the Minnesota Chamber of Commerce offering business products and services to meet their specific needs and save them time and money. MCBS services include employee benefits, business insurance, business products and services, consulting, and more. To find out additional information on the offerings of MCBS, visit mnchamber.com/BusinessServices.

Western National Insurance, headquartered in Edina, Minn., is a super-regional group of property-and-casualty insurance companies. The Group writes business through five active insurance companies—Western National Mutual Insurance Company, Western National Assurance Company, Pioneer Specialty Insurance Company, Umialik Insurance Company, and American Freedom Insurance Company — and is affiliated with Michigan Millers Mutual Insurance Company. Together, the affiliated Group writes over $800 million in personal and commercial direct premium in 19 states across the Northern, Midwestern, and Western U.S. as well as in Alaska; and surety bonds in 41 states. All of the companies’ products are sold exclusively through professional Independent Insurance Agents.

 

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