A recent headline read, “How AI is Redefining Insurance Pricing Strategies,” followed by, “AI in pricing represents a breakthrough, with some insurers already shifting to automated solutions that promise more accurate risk assessment and increased profitability.” If someone is working in an Ivory Tower and not in the real world, AI probably is the solution. Otherwise, this statement and concept fail in light of two realities. The first is simply summed up by the old truism ab

In the March 28, 2025 edition of Carrier Management, the synopsis of a study by the Insurance Research Council stated that 33.4% of drivers were either uninsured or underinsured. A 2022 survey by the American Property Casualty Insurance Association identified that the majority of homeowners have not even considered increasing their values, given building inflation. Another 2022 study by Cape Analytics identified that approximately 67% of homes are underinsured by an average o

A recent IRS case highlighted the importance of hiring a qualified appraiser for asset and business transactions. "Qualified” is a definition provided by the IRS. A person cannot legitimately claim to be “Qualified” if they don’t meet the definition provided by the IRS. Here is an AI summary, which is actually a pretty good summary of the situation. The Hidden Risk of Using Unqualified Business Appraisers: Choosing a business valuation provider based solely on price can be a

I’ve read so many business books on how to do this or do that better I’ve become jaded. People don’t change, which is why Socrates and Thucydides remain high quality sources of wisdom and strategy. Ancient Greeks may sound boring, but wise people recognize these are sources of great insight into how to get people to do what you want, though sometimes you must look inward first. Fast forward about 2,500 years to a long-forgotten book, The Force, by David Dorsey, on how high pr

The standard market insurance industry, due to its sloth, greed, incompetence, whatever other applicable descriptive, is a categorical failure in providing the value it was created to provide. That is not one opinion of a consumer advocate group. It is a fact reported by the industry itself. Here is the proof: According to the Aon/Ponemon Institute 2024 report, “Intangible Versus Tangible Risks Comparison Report”: The average Probable Maximum Loss (PML) of information (i.e.,

I read an article in Carrier Management in which the author advocated for a distribution model that “…emerges as the best of both worlds.” “In an industry facing high policyholder churn…” The article involved independent agents, and I know independent agents and their results extremely well. For decades, the normal client retention rate has been 90%, give or take two percentage points depending on the line of business and state. That number excludes non-standard auto, which

When I was a high school senior, I received an invitation to be listed in the Who’s Who of American High School Students. I was excited. My ego was growing exponentially by the minute. And then I read that to be listed, all I had to do was pay $29.99. I thought, “What a joke! My ego hasn’t inflated enough to pay so that my ego can be further inflated!” What's the goal here? Obviously, the publication’s goal is to make money off people who need some kind of stamp giving them l

In the summer of 2016, I gave a presentation to insurance distributor-related executives that was the epitome of the “Come to Jesus” moment. That presentation remains the hardest I’ve ever given because I knew the audience was going to viscerally react. I knew they were going to circle the wagons and completely reject reality. They were going to don denial as if they were putting on a helmet. I reviewed that presentation to learn if I went too far, didn’t go far enough, or wa

I recently received a press release advertising another earth-shattering automated insurance quoting platform. The press release reminded me of a conversation I had a few weeks ago with an industry veteran who cited chapter and verse a 30-year-old press release from an insurance industry technology organization promising single entry in the immediate future. I have no clue how many automated quoting platforms have been built, or how many have crashed and burned. And we still

Several readers requested more articles related to insurance company financial terminology. I appreciate these requests because I would have thought it would be one of the most boring subjects possible for anyone other than insurance geeks. Words truly do matter. It’s funny, often ridiculous, and sometimes bordering unethical when I hear carrier employees, executives, and claims adjusters say things like, “Well, the contract does read that way, but that’s not what we mean so

First rule: Hire the best attorney you can afford who has specific expertise fitting your exact need. Do not hire jack-of-all-trade attorneys unless you’re just checking boxes and do not care if they know what they’re doing. The very best attorneys may charge more per hour, but they generally work faster because they know what they’re doing. Besides, the full cost is not just the initial fee. If, for example, you hire an attorney to write a contract, but that contract is cont

Strategy and cultural changes are more urgent than ever. For the past four years, the P&C insurance industry has been in the hardest market in the last 50 years. Hard markets are 100% driven by a lack of surplus, not a profit issue. This is evidenced by how profitable carriers have been over the last four years. In 2023, they made record profits--but they didn't before record surplus. Strategy and cultural changes are more urgent than ever. For the past four years, the P&C in

I met a man last week who has a seriously complicated insurance situation. He owns five different businesses that are quite different kinds of businesses, involve travel to multiple continents, share employees and equipment daily, and some employees have their own businesses but may use his equipment. About 10 years ago, his teenage son had an accident and his captive insurer of 25 years nonrenewed him lickety-split. We all know teenage drivers are accidents waiting to happen

I give up! I’ve been talking to walls long enough. I’m flipping my perspective from carriers’ financial strengths being important to not caring at all about carriers’ financial strengths. Why am I changing my perspective? Because most agents, like around 90%, don’t pay any attention to carriers’ financial strengths except to avoid the most toxic. If 90% believe a certain way, the 90% must be right, right? Instead, I will focus hard on suggesting agents have the most carriers

Considerable research, articles, and fodder for politicians’ “business is bad” sound bites have originated from consumer companies shrinking their products while keeping prices the same. The theory is that if prices don’t increase but the product shrinks, consumers won’t notice or won’t be as upset. The price per ounce increases nonetheless, but creative packaging might mitigate the blowback. Just to satisfy my intellectual curiosity, I’d like to see how much this “creative”

I consult with insurance agencies, brokers, carriers, and support systems of all sizes. My agency clients range in size between $100,000 in revenue to far over $100 million in revenue. I believe small agency owners have the hardest job because they must generate the revenue, service the revenue, manage IT, manage people, manage carrier relationships, and wash the dishes. Years ago when I began my career, life was less complex and being a small agency owner was easier. But now

It was recently suggested that I begin writing stories of my colorful consulting adventures. That would be self-indulgent, though possibly entertaining to readers. I like to make my articles beneficial to readers so they may be better positioned to build their businesses stronger. With this in mind, I’ll share a few stories about largely incompetent attorneys with the hope that readers will see the need to hire the highest quality legal advisors they can find. The first time

I received a request to write an article relative to critical insurance carrier financial ratios. The suggestion was to give explanations and definitions of various terms. My first reaction to this request was, I should have done that long ago! My second reaction was the impossibility of fulfilling the request. I have spent probably a solid 1,000 hours studying insurance company financial definitions. It really should have taken less than 40 hours. Maybe I’m slow but this ind

My research suggests insurance companies are in far more trouble than is being made public. Just think about these recent actions taken by insurance companies: A $10 million book with a 32% five-year loss ratio “must be moved”. A $7 million book with a 37% loss ratio that was so bad, so horribly bad (satire here), that the carrier could only afford to write it directly (although it did not appear like they wrote it directly because of the hidden ownership of the agency to who

This is the hardest market since 1987-1988 and that was a casualty hard market. I do not have any idea when such a hard property market existed in history. Hard markets are always caused by a shortage of surplus. Hard markets are not caused by one or two years of poor loss ratios. In 2023, insurance companies made record profits. Lack of profits is not the problem, no matter what your carrier is telling you, unless your carrier is especially incompetent. When companies run sh