Category Archives: Industry Awards & Events

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JIF 2025: Litigation Trends, Artificial Intelligence Take Center Stage

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By Lewis Nibbelin, Contributing Writer, Triple-I

Identifying key risk trends amid an increasingly complex risk landscape was a dominant theme throughout Triple-I’s 2025 Joint Industry Forum – particularly during the panel spotlighting some of the insurance industry’s C-suite leaders.

Moderated by CNBC correspondent Contessa Brewer, the panel consisted of:

  • J. Powell Brown, president and CEO of Brown & Brown Inc.;
  • John J. Marchioni, chairman, president, and CEO of Selective Insurance Group;
  • Susan Rivera, CEO of Tokio Marine HCC (TMHCC); and
  • Rohit Verma, president and CEO of Crawford & Co.

Their discussion provided insight into how insurers can transform these uncertainties into opportunities for business development and for cultivating deeper connections with consumers.

Recouping policyholder trust

Given the volatility of the current risk environment – exacerbated by various ongoing geopolitical conflicts and the rising frequency and severity of natural catastrophes – it is more imperative than ever to reaffirm the intrinsic human element of insurance, the panelists agreed.

“That’s one of the most underappreciated aspects of our industry,” Marchioni said. “We make communities safer and put people’s lives and businesses back together after an unexpected loss. Being the calming force when you have unsettling events like this happen around the world is a big part of what we do.”

Yet prevailing public perception continues to indicate otherwise, even as insurers report repeated losses or nominal profits compared to other industries.

“The insurance industry may be the only industry where record profits are a problem,” CNBC’s Brewer added, because consumers tend to “not care whether it’s coming from your investments, or whether it’s coming from your underwriting business or your reinsurance. They just hear that you’re making record profits.”

Brown noted that consumer mistrust derives, in part, from “a very active plaintiffs’ bar,” which the American Tort Reform Association estimates spent over $2.5 billion for nearly 27 million ads across the United States last year. He further discussed how, though the average homeowners’ insurance premium rate in Florida will increase this year, his home state has enjoyed far more stable rates after tort reforms eased litigation costs on insurers.

Previous research by the Insurance Research Council (IRC) – like Triple-I, an affiliate of the Institutes – showed that most consumers perceive the link between attorney advertising and higher insurance costs. Crawford’s Verma, however, emphasized that this awareness does not necessarily translate into consumers understanding their own agency.

“It’s easier for homeowners to understand how the weather impacts potential losses and the fact that weather patterns have changed,” Verma said. “But when it comes to [legal system abuse], I don’t think that connection is as well understood.”

Reflecting on a record high in nuclear verdicts last year, Rivera suggested insurers must reconfigure how they communicate legal system abuse to consumers.

“Where are those hospital professional liability verdicts going to go?” he said. “They’re going to go back into the cost of health care at the end of the day.”

Leading the AI charge

Maintaining consumer centricity while implementing or experimenting with technological innovations – especially generative AI – was a unifying objective for all the panelists.

“We look at AI as an enabler,” Brown said, “so we can put teammates in a position to spend more time with customers, which is the most important thing.”

For Tokio Marine’s Rivera, AI “ultimately helps all of our insureds” by boosting operational efficiency while reducing operational costs, as well as facilitating more proactive risk management than ever before. A growing percentage of insurance executives appear to agree, as generative AI models continue to expedite data processing across the insurance value chain, reshaping underwriting, pricing, claims, and customer service.

Such efficiency, paired with the potential for improved decision-making, is crucial “in our dramatically changing environment,” Marchioni stressed.

“We have thousands of claims every day,” he said. “Thinking about lawsuit abuse as a backdrop – a claims adjuster, every day, has to make decisions regarding, ‘Do I settle this claim based on injuries or venue? What’s the value of the injury and of the claim? Who’s the plaintiffs’ attorney?’ These tools give more refined information so your knowledge workers can make better, more timely decisions.”

Generative AI fails, however, when base datasets are insufficient, outdated, or inaccurate, Brown pointed out. Training AI models uncritically can lead to outputs containing false and/or nonsensical information, commonly known as “hallucinations”.

At their current capacity, at least, AI models cannot draw the kinds of salient conclusions that adjustors and underwriters can, meaning AI could “change the way we work, but it’s not going to replace the jobs,” Verma said.

Though they do not currently exist in the United States at the federal level, AI regulations have already been introduced in some states, following a comprehensive AI Act enacted last year in Europe. With more legislation on the horizon, insurers must help lead these conversations to ensure that AI regulations suit the complex needs of insurance, without hindering the industry’s commitments to equity and security.

A 2024 report by Triple-I and SAS, a global leader in data and AI, centers the insurance industry’s role in guiding conversations around ethical AI implementation on a global, multi-sector scale, given insurers’ unique expertise in analyzing and preserving data integrity.

Learn More:

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Tariff Uncertainty May Strain Insurance Markets, Challenge Affordability

Reining in Third-Party Litigation Funding Gains Traction Nationwide

Claims Volume Up 36% in 2024; Climate, Costs, Litigation Drive Trend

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FBI: Elder Fraud Up; Bolsters Case for Personal Cyber Insurance

Triple-I Issues Brief: Cyber Insurance (Members Only)

Triple-I Issues Brief: Legal System Abuse (Members Only)

Auto Insurance, Catastrophes, Disaster Preparedness, Disaster Resilience, Emerging Risks, Flood Insurance, Homeowners Insurance, Hurricane, Industry Awards & Events, Insurers and the Economy, Legal Environment, Market Conditions, Regulation, Risk Management, Severe Convective Storm, Tornado, Wildfire, Wind

Insurance Affordability, Availability Demand Collaboration, Innovation

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By Lewis Nibbelin, Contributing Writer, Triple-I

Insurance industry executives and thought leaders gathered yesterday for Triple-I’s Joint Industry Forum (JIF) in Chicago to discuss the trends, economics, geopolitics, and policy influencing the market today, as well as ways to navigate these complexities while focusing on making their products affordable and available for consumers.

Triple-I CEO Sean Kevelighan in his opening remarks, noted that effective risk management depends on collaboration across stakeholder groups, as interconnected perils “present a community problem, not just an industry problem.”

JIF keynote speaker Louisiana Insurance Commissioner Tim Temple said facilitating community resilience planning is a top priority for the National Association of Insurance Commissioners (NAIC). The NAIC’s 2025 initiative  – “Securing Tomorrow: Advancing State-Based Regulation” – aims to improve disaster mitigation and recovery by consolidating “the collective expertise of experienced state regulators from across the country, who can share real-time insights and proven strategies,” Temple said.

Among the initiative’s goals is aggregating more data from insurers to better understand challenges to affordability and availability on state levels, which the NAIC can then translate into actionable policy proposals. Such data calls, Temple said, help regulators, legislators, and policyholders focus on improving the cost drivers of insurance rates.

Louisiana has consistently been among the least affordable states for homeowners and auto insurance, according to the Insurance Research Council (IRC), in part because of its reputation for being plaintiff-friendly in civil litigation. Significant tort legislation has been approved in the state, but resistance to reform remains a challenge.

Getting to the roots of high premiums

 After a recent data call in his home state, Temple told the JIF audience, “For the first time in Louisiana, we’re not talking about only premiums. We’re talking about why premiums are where they are.”

A critical lack of transparency surrounding cost drivers persists, however. Temple criticized the National Flood Insurance Program’s Risk Rating 2.0 reforms for not publicly disclosing more information “for individuals and communities to identify and address factors driving up their premiums,” such as “whether increased rates take into account levee systems, pump stations, and other things designed to help mitigate against floods.”

Conversely, government programs like Strengthen Alabama Homes – and the numerous programs it inspired, including in Louisiana – have demonstrated success in communicating the benefits of resilience investments for consumers and policymakers.

“We’re seeing major positive results after just a few short years,” Temple said, noting that, since early 2024, over 5,000 homeowners not chosen for Louisiana’s grant program still decided to invest in the same hazard mitigation, as they may still qualify for the corresponding state-mandated insurance discounts.

“As natural disasters become more frequent and severe, state regulators will continue to drive forward common-sense policies that protect consumers and ensure that insurance remains available and reliable for at-risk communities,” Temple concluded. Developing the database required for such policies is a necessary first step.

Keep an eye on the Triple-I Blog for further JIF coverage.

Learn More

Significant Tort Reform Advances in Louisiana

Louisiana Senator Seeks Resumption of Resilience Investment Program

Louisiana Reforms: Progress, But More Is Needed to Stem Legal System Abuse

Louisiana Is Least Affordable State for Personal Auto Coverage Across the South and U.S.

Who’s Financing Legal System Abuse? Louisianans Need to Know

Study Touts Payoffs From Alabama Wind Resilience Program

Outdated Building Codes Exacerbate Climate Risk

Resilience Investments Paid Off in Florida During Hurricane Milton

Catastrophes, Coastal Property, Disaster Preparedness, Disaster Resilience, Emerging Risks, Flood Insurance, Homeowners Insurance, Industry Awards & Events, Insurers and the Economy, Lightning, Market Conditions, Risk Management, Technology, Wildfire

ClimateTech Connect Confronts Climate Peril From Washington Stage

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The Institutes’ Pete Miller and Francis Bouchard of Marsh McLennan discuss how AI is transforming property/casualty insurance as the industry attacks the climate crisis.

“Climate” is not a popular word in Washington, D.C., today, so it would take a certain audacity to hold an event whose title prominently includes it in the heart of the U.S. Capitol.

And that’s exactly what ClimateTech Connect did last week.

For two days, expert panels at the Ronald Reagan Building and International Trade Center discussed climate-related risks – from flood, wind, and wildfire to extreme heat and cold – and the role of technology in mitigating and building resilience against them. Given the human and financial costs associated with climate risks, it was appropriate to see the property/casualty insurance industry strongly represented.

Peter Miller, CEO of The Institutes, was on hand to talk about the transformative power of AI for insurers, and Triple-I President and CEO Sean Kevelighan discussed – among other things – the collaborative work his organization and its insurance industry members are doing in partnership with governments, non-profits, and others to promote investment in climate resilience. Triple-I is an affiliate of the Institutes.

Sean Kevelighan of Triple-I and Denise Garth, Majesco’s chief strategy officer, discuss how to ensure equitable coverage against climate events.

You can get an idea of the scope and depth of these panels by looking at the agenda, which included titles like:

  • Building Climate-Resilient Futures: Innovations in Insurance, Finance, and Real Estate;
  • Fire, Flood, and Wind: Harnessing the Power of Advanced Data-Driven Technology for Climate Resilience;
  • The Role of Technology and Innovation to Advance Climate Resilience Across our Cities, States and Communities;
  • Pioneers of Parametric: Navigating Risks with Parametric Insurance Innovations;
  • Climate in the Crosshairs: How Reinsurers and Investors are Redefining Risk; and
  • Safeguarding Tomorrow: The Regulator’s Role in Climate Resilience.

As expected, the panels and “fireside chats” went deep into the role of technology; but the importance of partnership, collaboration, and investment across stakeholder groups was a dominant theme for all participants. Coming as the Trump Administration takes such steps as eliminating FEMA’s Building Resilient Infrastructure and Communities (BRIC) program; slashing budgets of federal entities like the National Oceanographic and Atmospheric Administration (NOAA) and the National Weather Service (NWS); and revoking FEMA funding for communities still recovering from last year’s devastation from Hurricane Helene, these discussions were, to say the least, timely.

Helge Joergensen, co-founder and CEO of 7Analytics, talks about using granular data to assess and address flood risk.

In addition to the panels, the event featured a series of “Shark Tank”-style presentations by Insurtechs that got to pitch their products and services to the audience of approximately 500 attendees. A Triple-I member – Norway-based 7Analytics, a provider of granular flood and landslide data – won the competition.

Earth Day 2025 is a good time to recognize organizations that are working hard and investing in climate-risk mitigation and resilience – and to recommit to these efforts for the coming years. What better place to do so than walking distance from both the White House and the Capitol?

Learn More:

BRIC Funding Loss Underscores Need for Collective Action on Climate Resilience

Claims Volume Up 36% in 2024; Climate, Costs, Litigation Drive Trend

Data Fuels the Assault on Climate-Related Risk

Outdated Building Codes Exacerbate Climate Risk

JIF 2024: Collective, Data-Driven Approaches Needed to Address Climate-Related Perils

Industry Awards & Events, Insurance Industry, Risk Management

Predict & Prevent Podcast Honored By Inclusion Among ‘Insurance Luminaries’

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The Institutes’ Predict & Prevent® podcast has been named to PropertyCasualty360’s Insurance Luminaries Class of 2024 in the category of Risk Management Innovation. This annual recognition celebrates people and initiatives driving meaningful progress within the insurance sector, highlighting key advancements and forward-thinking approaches.

The podcast explores new ways to respond to some of the biggest risk challenges facing society today by working to better predict and prevent losses before they occur. This proactive approach is crucial in a rapidly changing world in which traditional risk-management methods – which focus on risk financing and responding after a loss – are becoming less sufficient.

By exploring new technologies and resilience strategies, the podcast addresses the urgency of mitigating current risk landscapes and paves the way for future advancements in risk prevention.

The Institutes is a nonprofit organization made up of diverse affiliates – including Triple-I – that educate, elevate, and connect people in the essential disciplines of risk management and insurance.

As the podcast rounds out its second year, its focus remains to empower the risk-management and insurance community with actionable insights and forward-thinking strategies. Those interested in exploring innovative technology and resilience solutions can listen to podcast episodes, access articles, and subscribe to the Predict & Prevent newsletter here.

Disaster Resilience, Industry Awards & Events

Triple-I Town Hall, Nov. 30, in D.C., Targets Climate Risk

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Property/casualty insurers have a powerful interest in mitigating climate-related risk and promoting investment in resilience. The industry is uniquely qualified to help address these perils, but traditional risk-transfer mechanisms on their own are no longer sufficient. Collective responsibility and a multi-disciplinary approach are needed for predicting and preventing catastrophic losses.

That’s why Triple-I’s first-ever “Attacking the Risk Crisis” Town Hall is focused on climate-related perils. The one-day event – being held on November 30, 2023, at the Mayflower Hotel in Washington D.C. – will feature three moderated discussions among private-sector innovators, government, academia, and other stakeholder groups whose engagement is necessary to drive resilience investment and behavioral change.

“Climate risk alone is a formidable adversary,” said Triple-I CEO Sean Kevelighan, noting that insured losses related to natural disasters have increased tenfold since the 1980s. “Resource constraints, legal system abuse, economic pressures, and political intricacies further complicate matters.”

Triple-I has long been a participant in the climate-risk conversation, and this Town Hall is part of its effort help turn these discussion into action. It recently played a key role in a project with the National Institute of Building Sciences (NIBS) to develop a roadmap for stakeholders in flood-risk management to drive investment in mitigation and resilience.

Learn more about the NIBS project here.

In the same spirit as the NIBS project, Triple-I is holding this Town Hall to reach across the barriers that often separate sectors that would benefit from investing in resilience to different degrees and in different stages of the value-creation chain.

“Aligning incentives for these diverse co-beneficiaries of resilience investment is a key hurdle to be cleared,” Kevelighan said. “Triple-I’s subject-matter experts have been speaking and publishing on these topics for years. But our industry can’t do it alone.”

The first panel – Climate Risk Is Spiraling – What Can Be Done? – will be moderated by David Wessel, senior fellow in Economic Studies at the Brookings Institution and director of the Hutchins Center on Fiscal and Monetary Policy. This panel will discuss the current state of climate risk and share their insights as practitioners and thought leaders.

The second – Innovation, High- and Low-Tech: How Insurers Are Driving Solutions – will be moderated by Jennifer Kyung, vice president and chief underwriter for USAA, and focus on how the tools, techniques, and strategies insurers are bringing to bear on these complex and costly challenges.

And the third – From Outdated Regs to Legal System Abuse: It Will Take Villages to Fix This – will be moderated by Zach Warmbrodt, financial services editor at Politico, and panelists will delve into the legal and public policy considerations that need to be addressed to move the needle on climate resilience.

Solution-focused and organized with an eye toward driving positive action across stakeholder groups, this event is an opportunity to meet and interact with people who are doing the work and developing the strategies and tactics. Hear and share insights and – perhaps most important – get involved in the attack on the risk crisis.

You can register and check out the agenda and speaker profiles here.

Industry Awards & Events, Insurance Industry

2023 Global Inclusion in Insurance Event to Be Held in New York City

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By Loretta L. Worters, Vice President, Media Relations, Triple-I

The Insurance Industry Charitable Foundation (IICF) will host its Inclusion in Insurance Global Conference June 13-15 at the New York Hilton Midtown.

The first in-person international event in the conference series since the 2019 Women in Insurance Global Conference, it will bring together hundreds of insurance professionals, C-suite executives, and experts on leadership and diversity, equity, and inclusion (DEI), along with sustainability, wellness, and business leaders for sessions dedicated to advancing ideas into action and providing actionable take-aways and strategies.

What makes any conference strong is the quality of the content and its speakers. IICF’s planning committee, which changes from year to year, is made up of industry professionals who are closest to the issues of the day, representing all areas of the United States and the United Kingdom in the planning.  It’s an industry working together that makes this conference particularly powerful. 

This year’s conference will feature emerging topics in leadership, personal and professional growth, the business of insurance, and the future of work.

Leadership topics include:

  • Personal Finance, with Jean Chatzky — financial editor of the Today Show for 25 years and founder and CEO of HerMoney.com and the coaching programs FinanceFixx and InvestingFixx;   
  • Building the Public Voice of Women, with Emily Donahoe, founder/principal, WOMENSPEAK Training; and
  • Navigating Intergenerational Differences, with Chris Desantis, author, speaker and podcast host of Cubicle Confidential.

Industry topics include:

  • Attracting Customers to the Insurance Offer (in an Inclusive Way), with Claire Burns of The Hartford. 

Inclusion topics include:

  • Changing the Conversation about Bias, Discrimination, and Privilege Using Brain Science, with best-selling author and speaker Eric Bailey; and
  • Changing the Workplace for Good, with diversity speaker, author, and consultant Michelle Silverthorn. 

Other speakers include:

  • Carmen Duarte, vice president, Diversity, Inclusion & Social Impact, Intact Insurance Specialty Solutions; and

“IICF is thrilled to welcome such an accomplished field of speakers for the eleventh year of what was formerly known as the IICF Women in Insurance Conference Series,” said Elizabeth Myatt, vice president, chief program officer, and executive director of the IICF Northeast Division.  “This event serves as a powerful catalyst for our industry as we bring together insurance professionals of all ages and career stages to discuss, learn and propel critical strategies.”

Elizabeth Myatt, vice president, chief program officer, and executive director of IICF Northeast Division

Myatt, who has led the conference since its inception, noted that it’s her favorite part of the job.  “It has been wonderful to see the evolution of the conference series,” she said. “It is not just gender-focused — it is all kinds of diversity, leadership, and innovation and it’s the business of the industry itself, which has made it so valuable and meaningful to attendees.”

Myatt recognizes the importance of advancing DEI, which must be embedded in everything in the business, and everyone needs to see the shared value. She said a Congressional report this year spelled out some of the ways where the insurance industry has made an impact. 

“There has been progress in gender diversity and for African-Americans, though we have not made as much progress within the Hispanic community as we’d like,” she said. “Through our conferences and the IDEA Council’s development of the IICF Talent Hub – an online resource center for non-traditional job seekers to learn about insurance industry jobs and career opportunities – and the Mentoring Alliance, which will prepare, inspire, and empower diverse talent by pairing them with role models and allies from leading companies across the industry, we are starting to see results.”

The theme for the last four years of the global conference has been advancing ideas into action, Myatt said.  

“We want to provide tools, as well as new thinking.  We don’t want the ideas that are shared here to stay in the room,” she said. “We plan to arm our audience with ways to make change, whether it’s personal, professional, or cultural.”

To register, for the conference, go to: https://inclusion.iicf.org/.

Industry Awards & Events, Insurance Industry, Insurers and the Economy

JIF 2022 Wrap-Up:From Risk Transferto “Predict & Prevent”

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Among the themes running through Triple-I’s 2022 Joint Industry Forum (JIF), a dominant one was the growing importance of predicting and preventing losses, versus the property/casualty insurance industry’s traditional emphasis on transferring risk from policyholders to insurers and assessing and paying claims when they arise.

Increasing severity of weather- and climate-related events, compounded by rising numbers of people moving into the most vulnerable geographies; cyber criminals shifting their targets and evolving their strategies, often protected by nation-state hosts; and legal-system abuse, pushing up litigation costs in ways that ultimately hurt all policyholders are among the factors contributing to the need for this shift in focus.

Against this backdrop, insurers still must price coverage and appropriately reserve for these costly risks while ensuring that their business practices remain equitable and insurance is available and affordable for all who need it. This means financial and economic issues and diversity, equity, and inclusion considerations are always part of the conversation.

Predicting and preventing requires strategy, effective use of data and technology, and partnerships across diverse disciplines and stakeholder groups – along with a focus on educating consumers, policymakers, media, academia, businesses, communities, and others about the complexities of risk and risk management.

Triple-I plays this educational role every day, through its research and media outreach and support; continuous contact with its members, regulators, content partners, and data providers; and participation in and sponsorship of events like JIF.

JIF-Related Blog Posts:

Leaning Forward into a Changed World

JIF 2022 Climate Panel Focused on Wildfire Risk

Cyber Criminals Shift to Softer Targets and Reputation Threats

Combined Ratio Takes Center Stage

State Farm CEO Talks About the Power and Promise of Mutuality

Florida and Legal System Abuse Highlighted at JIF 2022

Progress And Challenges in Diversity, Equity, and Inclusion

Industry Awards & Events, Insurance Industry, Legal Environment

Florida and Legal System Abuse Highlighted at JIF 2022

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By Max Dorfman, Research Writer, Triple-I

Florida took center stage at JIF 2022, as a group of panelists discussed growing courtroom costs and the rise of legal system abuse.

“Legal system abuse is a combination of factors, including social inflation, nuclear verdicts, third party litigation funding, tort reform pullback, cost shifting schemes, and attorney advertising,” opened Ronna Ruppelt, CEO of CLM & Claims Pages, who served as moderator.

Ruppelt added, “Florida is the poster child for legal system abuse.”

The panel analyzed the general landscape of these issues, and how Florida became the epicenter of many of these issues.

They noted that in Florida, roof and windshield claims are part of this cottage industry, driven by plaintiff fee recoveries more than the subject of the litigation itself. The costs of roofs have dramatically increased even in the past three years. This is not primarily driven by disasters.

“In 2021, Florida had 116,000 property insurance lawsuits pending,” Ruppelt said. “The state is on pace for approximately 130,000 in 2022.” 

Most states only have a few hundred. California, the most populous state in the U.S., had a mere 3,500 property insurance lawsuits pending in 2021.

“The numbers highlighted are staggering,” said Fred Karlinsky, shareholder and global co-chair of Greenberg Traurig, LLP. “It’s been recognized at the highest levels of state government.”

With the recent gubernatorial election in Florida, this problem has only become more visible. Incumbent Ron DeSantis and his challenger (and former governor of Florida) Charlie Crist debated over the costs of roof replacement, as well as litigation over home insurance.

“There may be a $10,000 judgement award, but millions of dollars of fees,” Karlinsky said.

Indeed, the property insurance market has become similar to health care, with assignment of benefits (AOBs)—in which an insured signs their benefits over to the medical provider—getting paid by insurers.  AOBs utilize unscrupulous contractors that come in before the insurers, and “make your home a disaster zone.”

“The insurers have no way to know what the damage was, and now they have to fight these claims,” Karlinsky added, noting that once the insurer enters the court system, it often results in nuclear verdicts.

“Florida is tougher for adjusters,” mentioned Joseph Blanco, the president of Crawford & Company. “After we confirmed up for Hurricane Irma, there have been billboards all over the place saying don’t believe adjusters.” 

Attacking the credibility of adjusters, Blanco said, makes it very difficult for insurers. This only adds to unrealistic expectations for claims, making it more challenging to settle pre-litigation.

Though the panel recognized this kind of legal abuse began in the 80’s and experienced upward trends in the 90’s and early 2000’s, there were calls at the time for nationwide tort reform. However, the lawyers involved in these suits have become more sophisticated, making it even more challenging to confront this issue.

“The lawyers involved identify a theory of liability, find litigation funders, create advertisements, and then they go forum shopping,” said Harold H. Kim, the president of the Institute for Legal Reform, and the chief legal officer and executive vice president of the U.S. Chamber of Commerce. “They roll the dice to see if they can achieve a settlement or a nuclear verdict, which shifts the value of negotiations.”

“It’s so pernicious that the corporate community is in the crosshairs,” Kim added. “The stability of the rule of law and the ability to operate a business is critically challenging.”

The panelists agreed that problems surrounding legal abuse are only growing more significant.

“What we have seen is the use of plaintiff attorneys are moving out of Florida to you,” Karlinsky said. “AOBs and the roof phenomena are not just going to be in the large states. We’re seeing them all over the place. The plaintiff’s bar does not have the same restrictions as the insurance industry.”

“What happens in Florida doesn’t stay in Florida,” concluded Kim.

Industry Awards & Events, Insurance Industry, Insurers and the Economy

JIF 2022: State Farm CEO Talks About the Power and Promise of Mutuality

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Photo credit: Don Pollard

State Farm CEO Michael Tipsord discussed a wide range of insurance industry issues and trends with Triple-I CEO Sean Kevelighan at Triple-I’s 2022 Joint Industry Forum. A unifying thread throughout their conversation was the continued relevance of State Farm’s mutual ownership structure and “captive” agent network in today’s risk and operational environment.

State Farm is unusual among large U.S. insurers in that it has retained its mutual structure and continues to rely primarily on a network of more than 19,000 captive agents to sell its products. Founded in 1922 by a farmer who believed farmers shouldn’t have to pay the same auto insurance rates as city dwellers, State Farm has grown to become the largest home and auto insurer in the United States, in terms of market share and premiums written.

The mutual structure – in which policyholders own the insurer – was popular at the time, but in recent decades many mutuals have converted to stockholder-owned companies to access capital needed to grow more quickly.

“This mutual structure permeates everything we do, every decision we make,” Tipsord said. “My focus is always on what’s in the best long-term interests of that State Farm customer group as a whole.”

Mutuality “gives us the flexibility to make choices that our publicly traded counterparts may not think they have,” he explained. “That mutual structure has to be combined with financial strength. Annual operating results are just a means to that end. We’re not subject to the same pressures” as insurers that have to answer to external shareholders.

Similarly, State Farm’s captive agent workforce – located in all but two U.S. states – “are in their communities, day in and day out. They’re in a position to understand their customers because they’re living with their customers.”

Tipsord noted that 95 percent of State Farm’s business comes through its agents, and “we are investing back” into that workforce.

When the pandemic hit and lockdowns commenced, Tipsord said, “Our agents and team members proactively reached out to their customers – not to sell anything, just to check in, to see if they were okay. To see if they needed any help. There are hundreds of stories of agents identifying elderly who needed help buying groceries. It always comes back to our mission of helping people.”

But the success of State Farm’s mutual model and captive agency force doesn’t absolve the company from the need to evolve with changing conditions. State Farm is investing heavily in “digitally enabling our agents,” Tipsord said, “and our agents and their teams readily adapt” to their customers’ expectations.

Part of that digitization effort was State Farm’s recent investment of $1.2 billion in ADT for a 15 percent stake in the home-security company.

“What was most important in that transaction was the relationship that it created among State Farm, ADT, and Google,” Tipsord said. “This is what I call the $300 million opportunity fund. Let’s dedicate resource so we can look for ways in which you bring these three organizations that have very different skill sets together to help our customers.”

Industry Awards & Events, Industry Financials, Insurance Industry, Insurers and the Economy

JIF 2022: Combined Ratio Takes Center Stage

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Photo credit: Don Pollard

By Max Dorfman, Research Writer, Triple-I

Insurers are expected to post an underwriting loss in 2022, following four years of modest underwriting profits, according to a panel at the Triple-I’s Joint Industry Forum.

The panel was introduced by Paul Lavelle, head of U.S. national accounts for Zurich North America, who noted that the insurance landscape has dramatically changed over the past year.

“The biggest concerns for the world economy are rapid inflation, debt crisis, and the cost of living,” Lavelle said in his opening remarks. “I think that’s why, we as an industry, need to pull this together, and deal with all the variables.”

The panel consisted of Dr. Michel Léonard, Triple-I chief economist and data scientist; Dale Porfilio, Triple-I chief insurance officer; and Jason Kurtz, principal and consulting actuary for actuarial consultant Milliman Inc.

“Inflation overall has gone up and replacement costs have come down,” Léonard said in his initial remarks. “Growth has been challenging because of federal reserve policy that has brought the economy to a halt. Most growth has been disappearing in homeowners, a bit on the commercial real estate side, and on the auto side.”

Porfilio said the rise in loss trends across the insurance industry reveals an underwriting loss, with a projected combined ratio of approximately 105 in 2022. The combined ratio represents the difference between claims and expenses paid and premiums collected by insurers. A combined ratio below 100 represents an underwriting profit, and a ratio above 100 represents a loss.

The 2022 underwriting loss comes after a small underwriting profit from 2018 through 2021, at 99. However, underwriting results are expected to improve as the industry moves forward.

“The results don’t look like the prior years,” Porfilio said. “The core underwriting fundamentals are concerning. However, after a poor result in 2022, we do expect some improvement in 2023 and 2024.”

Still, commercial lines remain relatively successful.

“In the aggregate, commercial lines are relatively outperforming personal lines,” said Kurtz. “That was the case in 2021 and we expect that to be the case in 2022 and through our forecast period of 2024.”

This includes workers compensation, which is closing in on eight years of underwriting profits, according to Kurtz.

On the personal auto line, gains from 2020 have been changed to the biggest losses in two decades.

“Personal auto is very sensitive to supply and demand,” Léonard said. “In the last 24 months, there’s been a historic swing in prices, and particularly the used auto side. It’s all about supply and demand. Those prices increased 30 to 40 percent year-over-year. Recently, though, prices have come down a bit.”

“The industry lived through high profitability in 2020 due to less drivers,” Porfilio added. “Fourteen billion was returned to customers that year.”

However, due to increased driving and reckless driving, the loss ratios have gone up.

The combined ratio in 2021 stood at 101, and in excess of 108 in 2022, according to Porfilio. Still, loss trends are expected to return to normal in 2023 and 2024.

Interest rates have also affected homeowners lines.

“The federal policies have been punishing growth,” Léonard said.

“Underlying loss pressure and Hurricane Ian have created challenging results,” Porfilio added.

However, the hard market has caused growth of 10 percent in 2022, partially due to exposure agreements, as well as rate increases.

The combined ratio for 2022 is expected to be around 115, dropping to approximately 106 in 2023, before an expected decrease to around 104 percent in 2024.

On the commercial auto side, the panelists predict an underwriting profit with a combined ratio of 99 in 2021, but there was a four-point loss in 2022. This is expected to improve in 2023, with a forecast ratio of 102, and 101 in 2024.

On the commercial property lines, the markets are facing shortages of steel, glass, and copper, according to Leonard, with labor challenges contributing to low-to-mid-double-digit percentage time increases to some tasks.

“One of the most important factors in this is labor. It’s very unlikely that labor will go back to where it was,” Léonard said. “We’ve estimated that it will take 30 percent longer for repairs, rebuild, and construction, and five percent in terms of cost.”

However, Kurtz said that the net combined ratio for commercial property markets is projected to be approximately 99.1 in 2022, a small underwriting profit in spite of losses tied to Hurricane Ian. For 2023, the combined ratio is expected to be roughly 94 and 92 in 2024.

“We are anticipating further rate increases and further premium growth,” Kurtz added.

Indeed, insurers continue to adapt to these new challenges. Although 2022 is predicted to result in small losses, the industry continues to evolve.

As Lavelle said in his introduction, “Insurance companies are no longer able just to assess the risk, collect the premium, and pay the loss. We’re being looked at to come up with answers.”