I had a socialist professor for some business class or another as an undergraduate. Like most of my undergraduate courses, it was a fairly expensive waste of money, especially given that he was a socialist, but he said one thing of value that has stuck with me because he was 100% correct: Bankers will always need bailouts The Federal Government will always be bailing out banks because bankers cannot accept that banking is boring and generates a relatively low ROI in a safe en

I recently wrote about a GA case in which, if it stands, agencies’ standard of care will be about as high as possible. The only possible solutions are to complete thorough coverage checklists, which require the proper use of the checklist by the agent, or to use a Scope of Work contract that delineates exactly what the agent will do, which is typically very little when these contracts are employed. There is also the CA case that increased the standard of care there far above

​A year ago, I spoke at a limited membership insurance conference. The organizer introduced me as the best consultant, but the worst consultant ever at branding themselves. Maybe because I’ve lived in cattle country most of my life, I’m a little hesitant about the thought of branding myself. But he was 100% correct that I’ve done a horrible job creating a big brand. I find it frustrating that people with a much better brand get a lot of work because of their brand. However, s

A recent ACORD report estimated that 75% of mergers and acquisitions by reinsurers and multiline insurers destroy value. The worst performers were motivated to do deals to acquire scale. ​Scale is not a determining factor in this industry. Management intelligence and execution matter far more than scale. Scale enables management teams to hide poor results more easily, and no one should ever doubt that motivation. ​ At the carrier level, I’ve analyzed results of around 80 carr

I read an article in Carrier Management (Dec 18, 2025) about how insurance companies are pairing AI and process engineering to drive subrogation outcomes. The immediate thought that came to mind is that carriers are not culturally or intellectually ready to do this. Most insurance companies and agencies are horrible strategic planners. Sure, they go through the motions, and many pay hundreds of thousands to consultants to build strategic plans. What is missing besides a lot?

A recent, very well-written article with great points, “Why Prevention is the New Protection,” by Daniel Grimwood-Bird, prompted me to write this article. His points are dead-on accurate about how a majority of auto accidents are almost 100% preventable with the right risk management tools. ​Excluding catastrophe losses, almost 100% of property claims are also preventable. Even catastrophe claims can largely be mitigated, minimized, or eliminated. And yet carrier pricing give

It seems everyone in the insurance industry is aware of the California regulatory fiasco. If ever there was an insurance regulatory scenario akin to Nero fiddling while Rome burned, this is it. And it has been going on for decades. I strongly recommend everyone read “These are the Plunderers,” by Gretchen Morgenson. This book has a California focus beginning in 1992 and ending in 2025. If you feel your stomach turning while reading this book, you will not be alone. The regula

I’ll be blunt: Most insurance applications stink. I don’t know who designs them, but whoever it is should be fired – unless you are a conspiracy theorist. If so, then you know insurance applications are written poorly on purpose so insurance companies can later deny claims when insureds provide incorrect answers. This is an important point. For example, a large portion of cyber applications are warranty applications, and yet the questions asked are somewhere between nonsensic

Why can’t carriers generate quality loss runs and underwrite appropriately using those loss runs? I know, I know, they’re just waiting on AI to do all this for them. If that is the case, I strongly recommend all underwriters immediately begin looking for new jobs because your employer is not going to give you AI as an underwriting tool. They’re going to replace you even if they shouldn’t. However, AI cannot work effectively with incomplete and inaccurate data. I was reviewing

I read the Wall Street Journal daily, and one of my favorite wealth writers, Jonathan Clements, recently passed away. Another columnist, Jason Zweig, wrote two articles about his passing. One included several insightful passages Clements had written regarding human psychology and investing. One that hit home, from April 8, 2007, was, “Think you’re immune to confirmation bias? If you are a regular reader of this column, ask yourself this question: Why do you keep reading my ar

Carriers have a growth problem, and they only have one likely solution to generate organic growth. A recent research paper, “Valuation and Long-Term Growth Expectations,” by Angel Tengulov of the University of Kansas, Josef Zechner of the Vienna University of Economics and Business, and Jeffrey Zweibel of Stanford University, identified key variables in determining long-term growth. In other words, what factors best predict long-term growth? A factor that improves long-term g

Hardly a day goes by without the industry press covering an employee lawsuit, usually involving a salesperson, where a competitor has poached key people. “Poaching” typically means that the new employer enticed the employee(s) to leave in violation of the employee’s contract. Sometimes the suit involves entire teams. One recent headline described how one broker poached 140 employees at one time from another broker! That would hurt! Often, the new employer is sued along with t

Around 10 years ago, I told an audience of insurance distributor associations that their lobbying efforts were poor to complete failures. The industry had failed, completely, not partially, to prevent banks from entering the industry (which did nothing but mess up the industry further because of their incompetence in running agencies). They failed to prevent the ACA (which definitely decreased commissions and created a concentration of risk for a large proportion of agencies)

The legal standard of care requiring that insureds read and understand their insurance policy is absurd. The typical standard for written communications with the average consumer is to write at an 8th-grade level or lower. Insurance policies, however, are legal contracts. To read and understand an insurance policy requires more than an 8th-grade level of reading ability. It is unreasonable to place the burden on the average consumer that they must read (i.e., have a duty to r

Historically, the P&C market rode a seven-year wave, give or take. The market would be soft for around seven years, hard for around two to three years, and repeat. During the soft market phase, the carriers who had plenty of surplus and were unwilling to compete on price wrote the accounts that came their way and waited for the hard market. When the hard market arrived, they had the surplus, the capacity, to write everything at their price. They would grow significantly and p

A California State Court ruled that the California FAIR Plan’s homeowners form is unlawful and fails to meet minimum coverage requirements. How long has the form been in place? One year? Two years? Decades? And the California DOI never raised any questions? The California FAIR Plan, with an evidently inadequate policy, meaning their coverages and therefore their claims are less than normal, or were until this ruling, still effectively went broke after the fires. (My definitio

I saw an item on the news recently regarding medical malpractice rates being approximately 4 times higher than normal, too few doctors as a result, and so on. The story covered the entire litany of bad things that happen when the litigation environment is too favorable for plaintiff attorneys. The reporter then interviewed a plaintiff attorney who made all the same comments plaintiff attorneys always make. “Insurance companies make billions.” “Consumers will be harmed if caps

The insurance industry suffers from a long legal history and a dictionary's worth of terms. This combination is toxic because the industry is scared to improve wording for fear that new wording will not comply with historical case law. The net result is we continue to build a Tower of Babel, more and more words used synonymously that are not synonymous, and terms that are oxymoronic to people outside the industry. For example, how many different kinds of brokers are there, an

Homeowners insurance is a disaster created by many parties, none of whom work together, but whose teamwork is required to fix the issues. The industry has created an insurance product that is not affordable for many consumers. Furthermore, study after study shows a large proportion of homeowners are materially underinsured. What’s the value to a consumer of buying an inadequate policy at a price they cannot afford? On the other side of the equation, carriers are selling an in

I doubt there has ever been a time when more people are pushing, developing, or considering the creation of state-backed FAIR plans. Somehow, in some way, through magic finance, these people are pushing the narrative that they can provide affordable insurance because they don’t have to make a profit, unlike those “greedy” insurance companies. This is not good for the public, who will fund these programs and the resulting losses. Insurance companies are, on average, excluding