Happy Wednesday! In this week's Big I Buzz, we are diving into AM Best's outlooks for both US Personal lines segment and the  P/C  commercial lines segment. 

AM Best Maintains Negative Outlook on U.S. Personal Lines Insurance Segment

AM Best maintains a negative outlook on the U.S. personal lines insurance segment for 2024 due to worsening results in personal auto and homeowners' lines, driven by escalating loss costs amid inflationary pressures. The report, "Market Segment Outlook: U.S. Personal Lines," acknowledges challenges in maintaining rate adequacy and notes elevated reinsurance costs due to increased catastrophe loss volatility. Despite solid capitalization levels and improved investment yields, insurers face erosion in their capital cushion, making a return to underwriting profitability unlikely in the near term. Factors like higher fatality rates, increased repair costs for newer vehicles, and ongoing inflation contribute to the escalating severity of losses. Catastrophe-related losses from events like Hurricane Idalia, wildfires, floods, and severe storms have further strained the segment, hinting at continued challenges ahead. Read more here. 

AM Best Maintains Stable Outlook for U.S. Property/Casualty Commercial Lines

AM Best maintains a "stable" outlook for the US property/casualty commercial lines segment owing to robust underwriting performance despite economic volatility, driven by consistent rate increases in major commercial lines until 2023. While most classes of business exhibit positive pricing momentum, workers' compensation and specific management liability classes experience rate decreases due to stringent regulation and strong multi-year underwriting performance. Strong underwriting results through 2023, fueled by prior rate hikes and economic expansion, are expected to persist, facilitated by disciplined risk selection and improved loss control strategies, reducing claims frequency and severity. Operating profitability benefits from higher reinvestment rates, particularly in longer-tailed casualty lines, though reserve development from prior periods might vary across different lines of business. Concerns linger over economic inflation, geopolitical risks, and rising social inflation impacting casualty lines. The report also highlights emerging markets such as evolving liabilities related to substances, technological advancements, climate exposures, and litigation financing. Insurers are leveraging technology for enhanced underwriting decisions amid a diverse landscape. The complete market segment report is available through AM Best's website, along with a video featuring Associate Director Alan Murray discussing the US commercial lines market segment outlook. Read the full article here. 

For more news, check out the Action News section of our weekly e-newsletter, Big I Buzz. If you aren’t subscribed, click  here  to add your email to our emailing list.

Happy Wednesday! In this week's BIg I Buzz, we are sharing tips to keep cooking fires from ruining your holiday and how financial fears are affecting life insurance sales. 

Keep Thanksgiving Cooking Fires at Bay

The National Fire Protection Association (NFPA) highlights Thanksgiving as a day witnessing three times more cooking fires than an average day, attributing 53% of reported home fires, 38% of home fire injuries, and 18% of home fire deaths to cooking mishaps. To safeguard against these incidents during holiday meal preparations, the NFPA stresses precautions. Their recommendations in case of a cooking fire involve swiftly leaving the building and shutting the door behind to contain the fire, contacting local emergency services, ensuring a clear exit path if attempting to extinguish the fire, and having pot lids nearby to smother small grease fires by turning off the burner, covering the pan, and allowing it to cool completely.

Here are 10 tips from FEMA for how to keep cooking fires from ruining your holiday: 

1. Stay near the food while you are cooking on the stovetop. If you leave the kitchen, turn off the stove burners. 

2. Most cooking fires start while frying food, so keep an extra-close eye on those dishes as they cook. 

3. Roll up your sleeves while you cook to reduce the chance of them catching fire. 

4. Keep an eye on children and pets to make sure they  stay away from the stove. 

5. If you see any smoke or grease boiling while cooking, immediately turn the burner off.

6. If you have an oven fire, keep the door closed and turn off the oven. Keep the oven door closed until it has fully cooled. 

7. Move flammable items - like dishtowels and curtains - away from the stove before you begin cooking. 

8. Turn pot handles toward the back of the stove to keep people from accidentally running into them and knocking them off the stove or tipping them over. 

9. Turkey fryers should only be used outdoors. They should also be placed on a level, sturdy surface away from flammable materials. 

10. Check your smoke alarms to make sure they are functioning properly before you begin cooking Thanksgiving dinner. 

Financial Fears Encourage, Inhibit Life Insurance Sales

LIMRA's recent research reveals a strong correlation between financial fears and the desire to purchase life insurance, with those harboring financial worries being over five times more likely to consider buying coverage. However, despite this inclination, affordability remains a significant barrier, leading many individuals to forgo purchasing life insurance. Jennifer Douglas from LIMRA emphasized the paradox where financial fears, while driving interest in life insurance, also hinder its acquisition due to affordability concerns. To bridge this gap, LIMRA suggests that financial advisors understand and address clients' core financial fears holistically, aiming to cater to underserved markets and close the life insurance gap. The study underscores the importance of trust between consumers and financial advisors, highlighting that individuals are more inclined to share their financial fears if they have a trustworthy relationship with a professional. This trust-based approach might encourage more comprehensive solutions tailored to individual financial concerns.

Give Back During the Holidays - IIAW Emerging Leaders Volunteer Event at Hunger Task Force in Milwaukee.
This year we are organizing a group volunteer outing at Hunger Task Force in West Milwaukee. We will be packing stockboxes which are boxes of healthy non-perishable foods for low-income seniors. This takes place at their warehouse at 5000 W. Electric Ave., in West Milwaukee. Must be able to lift 30 lbs. Register to volunteer here:  https://www.iiaw.com/events/EventDetails.aspx?id=1795468&group=

Don't forget if you haven't already updated your information to head back to this week's Big I Buzz email so you can receive our monthly email curated for you and your role. For more news, check out the Action News section of our weekly e-newsletter, Big I Buzz. If you aren’t subscribed, click  here  to add your email to our emailing list.

AM Best has recently downgraded 32 P&C carriers in the first half of 2023, and as a result, now is a good time to revisit SwissRe’s policy language and agency best practices. Should you have any questions, please don’t hesitate to contact IIAW staff.   
 
SwissRe’s policy language as it pertains to carrier downgrades, insolvency, and the exclusions within the policy:  

Section V. EXCLUSIONS, E. INSOLVENCY is deleted and replaced with the following:  

E. INSOLVENCY. The financial inability to pay, insolvency, receivership, bankruptcy or liquidation of any insurance company, any Individual Practice Association, Health Maintenance Organization, Preferred Provider Organization, Dental Service Plan, Risk Retention Group, Risk Provider Group, self-insured plan or any pool, syndicate, association, or other combination formed for the purpose of providing insurance or reinsurance, or any healthcare provider or any reinsurer with which the INSURED directly placed the subject risk.  
 
However, this exclusion does not apply if, at the time the INSURED placed the subject risk with any of the above-described entities, such entity or entities were rated by AM Best as B or higher, or alternatively, such entities were member insurers of the state guaranty fund, guaranty association or the Wisconsin Insurance Security Fund in the state or states of domicile of the subject risk, or such entities were guaranteed by a governmental body or bodies and/or operated by a governmental body or bodies, the INSURED placed the coverage with an insurance carrier through a state established residual market insurance program, or the INSURED placed the coverage with a County Mutual or Town Mutual reinsured by carriers rated B or higher, or the coverage was placed with an insurance carrier admitted in the state or states of domicile of the subject risk and rated A or higher by Demotech.  
 
Guidance as it pertains to carrier downgrades: When an insurer is downgraded below a B, the policy language states, “or alternatively, such entities were member insurers of the state guaranty fund, guaranty association or the Wisconsin Insurance Security Fund in the state or states of domicile of the subject risk” would make this exclusion no longer apply.   For example, Badger Mutual is covered by the Wisconsin Insurance Security Fund. As a result, agencies can continue to represent Badger Mutual and renew and place business with Badger Mutual so long as they follow the procedures as outlined below.  
 
Best practices for agency procedures when continuing business with a carrier with a rating below a B: so long as the state guaranty association covers the carrier, the insolvency exclusion will not apply.  
 
Agencies should notify ALL affected policyholders of the rating change in writing and electronically.  Suppose an agency intends to place new business with a carrier that has been downgraded (such as Badger Mutual). In that case, they should also inform these customers of Badger's rating in writing, what it means, what their options are, and have the customer sign off that they still want their business placed with them despite the low carrier rating.  
 
To help with this, SwissRe has prepared the letter linked below for agencies to use. While you are not required to use the letter, we recommend doing so to cover necessary communications with your clients.   
 
There is no right or wrong decision regarding moving coverage, however, the agency SHOULD NOT make that decision for any of their customers.  Inform the customers and let them decide what they wish to do.  Every E&O claim involving carrier insolvency starts with what the agency knew, when it knew it, and when did it informed its customers. SwissRe’s ability to defend these claims depends on how the client answers these questions, your agency’s ability to follow these procedures for all clients that are impacted and the agency’s thorough documentation in the file.   
 
Click Here for a Sample Carrier Ratings Downgrade Letter  


Guidance as it pertains to carrier Receiverships and Rehabilitations 
First and foremost, the agency must keep its clients informed of the situation. In most cases, the carrier will communicate with their policyholders regarding the situation. The agency can provide additional guidance on the client's options at this time, based on the regulatory action taken by the Office of the Commissioner of Insurance. The agency should NOT notify clients if the carrier has not been placed under an order by OCI. A general rule of thumb would be: if the carrier is not sending client notification, the agency likely does not need to either.  If a carrier is notifying clients of carrier receivership or rehabilitation and the agency does not contact the policyholder/client, a situation could arise where the policyholder/client is not clear on what they need to do. Subsequently, a claim by the policyholder/client could be made that is not covered by the client's policy with the rehab/receiver/liquidated carrier. All of which could lead to an E&O claim against an agency. It is recommended that you try and communicate both electronically and by USPS. 

The recommended course of action for agencies to consider: 

• Run a list from your agency management system to identify potentially impacted clients. 
• Contact the clients to advise them of the situation. Initial contact can be by telephone (document your file!) with a follow-up using one of the sample letters, tailored to your needs (below). 
• If there are other documents provided by the DOI/Receiver that can be shared with the client, include them with your letter (example: FAQ). 
• Document any communications with the carrier/Receiver in your carrier file. 
• Be ready with additional markets to assist your clients. 
• Any newly quoted policies should be reviewed for coverage differences. 
• DO NOT offer to pay any outstanding (or new) claims for your clients OR refund unearned premiums!!! 
• DO NOT rely on the Rehabilitator/Receiver to contact your clients on your behalf. 
• Consult your E&O policy’s Insolvency Exclusion and report any potential incidents to IIAW and SwissRe’s Claims Department. 
• It should be the policyholder/client's decision on the course of action. 
• ALWAYS DOCUMENT THE CLIENTS FILE WITH EVERY COMMUNICATION. 

Finally, your agency’s communication should be clear and concise, and advise the policyholder/client to contact your office immediately to discuss potential options. The agency must inform their policyholders/clients of the situation, what impact it has on their coverage, and what their coverage options are moving forward, and let them decide what they wish to do. Most policyholders are confused as to what to do and what this means for their insurance coverage. While stressful for your agency’s employees, these essential steps will help your agency guard against E&O claims that might arise against your agency from policyholders/clients of carriers in receivership/rehabilitation.  

Click here to download a sample letter for carrier placed in receivership or rehabilitation by OCI. 

 
Guidance as it pertains to carrier insolvency 
On November 1, 2023, the Wisconsin Office of the Commissioner of Insurance (OCI) filed a Petition for Liquidation of Wisconsin Reinsurance Corporation and 1st Auto & Casualty Insurance Company, collectively the WRC Group. The liquidation will have a direct impact on 1st Auto policyholders, and OCI is asking you to immediately start working with your clients who have a 1st Auto policy to assist them in finding replacement coverage prior to January 1, 2024. 

Please visit OCI’s website at oci.wi.gov/WRC for up-to-date information. 

• You can review the notice being mailed to agents here
• You can review the notice being mailed to policyholders here

The IIAW and SwissRe have put together sample forms for agencies to use when a carrier goes insolvent, when an agency is unable to procure coverage the client has requested, when a client is non-renewed and the agency is unable to replace coverage with another carrier. Click the links below to access the sample letters.  

As always, please don’t hesitate to contact the IIAW should you have any questions.  

Click here to access sample letter for carrier insolvency 

Click here to access sample letter for when an agency is unable to procure coverage that the client has requested 

Click here to access sample letter for when client is non-renewed and the agency is unable to replace coverage with another carrier 

Happy Wednesday! In this week's Big I Buzz, we are discussing how natural disasters can affect health insurance enrollment and the inherent risks to owning a hot tub.

Natural Disasters Make People More Likely to Get Health Insurance, Study Finds

A recent study conducted by researchers from the University of Louisiana at Lafayette and Louisiana State University explored the connection between natural disasters and health insurance enrollment. Examining a decade of health care data from the Louisiana Health Insurance Survey and disaster data from FEMA, the study found a slight increase in health insurance enrollment among those who had experienced losses from hurricanes and floods between 2005 and 2017. This surge in enrollment can be attributed to survivors' heightened sensitivity to risk after a traumatic event, increased workforce needs during recovery, and the availability of health insurance in temporary positions related to disaster response. The study suggests that public policy could benefit from a better understanding of how disasters affect people's lives and that improving post-disaster health outcomes is essential. While specific policy recommendations are not provided, the findings could guide future research and influence government agencies and public officials in addressing health care needs after disasters.

Matthew Perry and Hot Tub Risk, Insurance Concerns

The recent death of actor Matthew Perry in his hot tub on October 28, 2023, has highlighted the risks associated with owning hot tubs and raised concerns about liability and insurance. More than 300 people annually suffer hot tub-related accidents, with children being particularly vulnerable. When combined with home swimming pools and spas, the annual injury count exceeds 6,000. Common causes of hot tub injuries include slips and falls, suction mishaps, overheating, and chemical imbalances, which can lead to accidental drownings. Homeowners with hot tubs, swimming pools, or spas require insurance coverage for potential accidents and damage to these amenities, resulting in higher homeowners' insurance costs. The complexity of hot tub insurance claims has led to questions about their equivalence to swimming pool claims, coverage for mechanical equipment, and the nature of damage claims. Some insurance providers may refuse to cover hot tubs due to their inherent risks or require added endorsements for coverage.

Don't forget if you haven't already updated your information to head back to this week's Big I Buzz email so you can receive our monthly email curated for you and your role. For more news, check out the Action News section of our weekly e-newsletter, Big I Buzz. If you aren’t subscribed, click  here  to add your email to our emailing list.

Happy Wednesday! In this week's Big I Buzz, we have a few registration reminders that you won't want to wait on.

"How to Succeed in a Hard Market" featuring MarshBerry

1 to 5 p.m. (happy hour to follow) on November 2, 2023 at the Park Hotel in Madison, WI

Our afternoon of learning from MarshBerry is quickly approaching and registration will be closing soon. If you haven't already, click here to get registered. You'll learn how to better communicate your value in a hard market, improve your strategy for growing organically and improve your internal culture. Plus, following the event, join us for drinks and apps!

InsurCon2024 Attendee Registration Price Increases on November 1st

Join the IIAW as we celebrate 125 years at InsurCon2024, happening on May 15-16, 2024 at the iconic Lambeau Field! Don't wait to register, as our Early Bird pricing is only available until the end of the day on October 31st.  

If you haven't already, check out what's included with attendee registration:

• An Evening with Charles Woodson
  Includes Past Presidents' Cocktail Hour
  Charles Woodson Keynote Presentation
  Bottle of Charles' Whiskey or Wine
  Meet & Greet Led by Professional Photographer
  
  
• Meet Packers Head Coach Matt LaFleur
  Includes Meet & Greet with Matt LaFleur
  Cornhole Tournament
  Ultimate Tailgate Dinner
  
  
• E&O Risk Management Course
  Includes 3 Ethics CE Credits
  
  
• Insightful Panel Discussions
  IIAW Past Presidents' Panel
  Green Bay Packers Risk Management Panel
  CEO Panel
  
  
• Wisconsin's Largest Insurance Exhibitor Showcase
  Ability to network an win BIG prizes (cash, door prizes and Blackout Bingo prizes)
  
  
• Agency Appreciation Luncheon (Invite Only)
  Open to agency personnel, Exclusive Supporting Company Members and those who receive a special invitation. Includes access to the Champions Club, lunch, a presentation featuring Packers Director of Public Affairs, Aaron Popkey, and a fast-paced CEO Q&A
  
  
• Exceptional Dining Experience
  Agency Appreciation Luncheon (Invite Only)
  Ultimate Tailgate Cuisine During Tailgate Party
  Continental Breakfast
  Gourmet Lunch Overlooking Lambeau Field
  Evening Celebration Dinner in Lambeau Field Atrium
  
  
• Guided Lambeau Field Stadium Tour and Hall of Fame Tour
  Join us on Friday, May 17th to redeem your guided Lambeau Field Stadium Tour and self-led Hall of Fame Tour
  
  

Learn more about this year's milestone event and register before our Early Bird savings are gone: https://www.iiaw.com/page/insurcon 

Don't forget if you haven't already updated your information to head back to this week's Big I Buzz email so you can receive our monthly email curated for you and your role. For more news, check out the Action News section of our weekly e-newsletter, Big I Buzz. If you aren’t subscribed, click  here  to add your email to our emailing list.