Consulting, to varying degrees, involves seeing into the future and advising clients how to best navigate that future. As a consultant and holding myself to a little bit of accountability: were my projections of the future of insurance distribution correct from about 10 years ago? In particular, a decade ago, I opined about which of 10 new insurance Insurtech distributors were likely to succeed. I advised my clients regarding why they should pay special attention to certain o

I read about a lawsuit alleging 25 carriers conspired in California to withdraw from wildfire prone locations simultaneously. I haven’t read this lawsuit, only some articles regarding it, so what follows may be total folly. If so, have some fun with it. My first reaction in reading these articles is that here we go again, more nut jobs suing insurance companies for likely unfounded reasons. A segment of our country appears to think prosperity is built through lawsuits. But th

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

It is not rocket science. I read an article about a new MGA using “dynamic” modeling software to identify wildfire exposure and proactively make recommendations to mitigate damage potential. That sounds awesome. It’s also an unnecessary expense. Everyone is so wrapped up in technology that they have forgotten how simple property underwriting really is. I recently wrote an article stating carriers are lazy, and they are. A reader was upset I said this, and went on to say how g

In a span of two days, I received three articles casting considerable doubt on insurance companies’ reputation and credibility. The first was a Newsweek article (2-25-25) citing a study done, but never made public, for the Florida Department of Insurance. The study showed how insurance companies were moving money from their Florida subsidiaries to parent companies rather than leaving money in these subsidiaries, adding to surplus and theoretically their stability. I did not r

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.,

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

The insurance industry’s law of large numbers is broken eight ways from Sunday. And it is broken due to a lack of critical thinking skills combined with minimal accountability. I’ll use Florida as a starting point. If the law of large numbers is applicable, then the way loss ratios should be reviewed is over a long period of time. This is an especially important statistical approach because, according to Wikipedia, about 121 hurricanes have hit Florida since 1851 (per the NOA

First, when you see mutual companies reorganizing to gain better access to capital, this generally means they’re out of operational surplus. It might also mean executives have figured out this might be a way to make a lot of money. Based on the carriers reorganizing, my assessment is most just need an influx of capital because they’ve lost so much surplus. How did they lose so much surplus? Every carrier’s story is unique but quite a number incurred huge investment losses whe

Paying agents full commission who don’t offer quality guidance to consumers is too expensive. Many carriers are now paying agents more than 50% of all their expenses. There is nothing left to cut and yet, my very detailed research shows a high correlation between strong growth and low expenses. In other words, if you have nothing else left to cut internally and your expenses are still too high, agents’ commissions are all you have left if you want to succeed. And why might cu

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 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

In the fantastic book, The Secrets of Consulting by Gerald Weinberg, the author humorously describes common mistakes consultants make (and mistakes to which their clients should pay attention). One of his classic stories involves consultants and grocery stores. He calls it Rudy’s Rutabaga Rule. Seriously, you need to read any book that has a Rutabaga Rule! The story goes like this: A grocery chain asks a consultant to help them improve profitability. The consultant identifies

Humans have always been attracted to fast money like moths to flames. Nothing is new in human behavior, at least in this regard. The difference today though is how technology can now measure how strongly attracted the moths are to the flames. An old-fashioned analysis of a gold rush is a good example of people chasing easy, fast money. This example is very relatable versus discussing financial engineering, huge debt loads that are not really debt but sort of is debt, derivati

It has now been 20 years since New York Attorney General Elliott Spitzer began investigating the insurance industry, and particularly one broker initially, for artificially inflating the price of insurance through “kickbacks”. He alleged the broker received these kickbacks through contingencies and also that the broker leveraged their threat to move carriers’ business if the carriers did not pay more. (Note: I am not sure these are the correct legal terms. These are my common

I was talking to my good friend Don Phin who has worked with, spoken to, and consulted with over 10,000 CEOs. He made a succinct statement that I’ve found to be true for people running insurance companies and especially people running insurance agencies/brokerages: CEOs are extremely motivated by revenue growth, sometimes to their peril. They tend to ignore other critical factors because their emotional brain simply does not connect. A singularly or even heavily focused, sale

A friend in a major city with no material extraordinary fire or flood catastrophe risk, PC 3, low crime, and upper middle-class neighborhood, advised his homeowners premium had tripled in the last five years. The carrier wants another 20% this year. He’s never had a homeowners claim. That kind of rate increase makes zero sense, unless the carrier itself has financial issues. Needing to increase rates 300+% in five years means the actuarial models used five years ago were fail

“It’s what they don’t tell you that matters.” The person, an esteemed expert, who emailed me this quote was referring to insurance company shenanigans, illusory coverage, and maybe fraud. The easiest analogy is E&O (errors and omissions/professional liability). Most E&O classes cover errors, mistakes that agents make (do you ever wonder why the policies are professional liability policies but in E&O classes instructors advise agents to never classify themselves as professiona