The insurance brokerage industry has long relied on M&A as a core growth strategy, fueled by accessible, low-cost capital and strong free cash flow generation. While recent Federal Reserve rate cuts have provided some relief, deal volume in 2024 was still down nearly 20% compared to 2023.
Despite M&A headwinds, brokers continue to face significant pressure to grow. With already high debt ratios and moderating organic growth, brokerages are evaluating alternative ways to bring in new capital sources and generate long-term value. Broadly speaking, there are three primary avenues for brokers to access additional liquidity. These are investment from financial sponsors, strategic acquisitions and initial public offerings.
1. Investment from financial sponsors (e.g., private equity)
Financial sponsorship remains the most common source of capital funding. Over the past decade, private equity (PE) firms have accounted for the majority of transactions, responsible for more than 70% of brokerage M&A activity in 2024. The brokerage model is attractive to these investors due to its predictable cash flows, strong operating margins, and capital-light structure. Additionally, unlike insurance carriers, brokers face no actuarial or interest risk, making them an appealing investment within the insurance value chain.
To secure financial sponsorship, brokers must demonstrate their ability to consolidate at scale, expand margins, and achieve double-digit growth. While common processes and integrated technology are not prerequisites, they provide a competitive advantage by driving greater operational efficiencies and revenue synergies. Beyond strong financial performance, financial sponsors prioritize the following characteristics:
Scalability – A track record of successfully consolidating agencies, centralizing key functions, and creating enterprise capabilities for new acquisitions to leverage.
Accurate reporting – Standardized data elements and reporting packages that enable performance management and transparent investment analysis.
Technology-enabled operations – A well-integrated tech stack that minimizes technical debt, enhances automation, and facilitates data-driven decision-making.
Best-in-class brokerages proactively implement standardized operating procedures (SOPs) and workflows, ensuring stronger controls, consistent processes, and accurate financials. Those that achieve a high degree of operational rigor and transparency are best positioned to command premium valuations from financial sponsors.
2. Strategic acquisitions
Strategic acquirers in the insurance brokerage industry are increasingly targeting firms that offer scalability and complementary capabilities. Additionally, they prioritize brokers with standardized processes and centralized technology infrastructures, which streamline operations and facilitate easier integration. Specifically, the key factors strategic buyers consider include:
Complementary capabilities – Brokers with unique specializations (e.g., niche industry expertise, specialized product lines, or geographical access) that enhance the acquirer’s existing operations.
Centralized functions – Brokers with centralized finance, HR, and IT functions are more attractive due to the relative ease of integration and the ability to redeploy talent across the business.
Technology-enabled Operations – A modern, integrated infrastructure that minimizes technical debt and seamlessly integrates into the acquirer’s existing tech stack.
For public company acquirers, operational and financial controls are particularly important. Best-in-class brokerages establish robust governance, documented operating procedures, security protocols, and financial & operational audit processes to accelerate integration readiness.
3. Initial public offering (IPO)
Preparing for an IPO is a significant undertaking, requiring a high level of operational maturity and rigorous controls. This pathway is typically pursued by large brokers that have outgrown alternative capital strategies. While many of the operational and technology requirements align with those of a strategic acquisition, IPO readiness requires additional maturity in three key areas:
Financial reporting – Public companies must meet rigorous financial reporting standards, ensuring timely and accurate financial statements. Beyond core financials, brokerages must provide directional commentary on operational metrics, such as renewal rates and pricing change.
Controls & compliance – Achieving SOX compliance is essential for any company preparing to go public. This requires a robust internal control framework, including segregation of duties, access controls, and regular audits to safeguard data integrity.
New corporate functions – Companies preparing for an IPO often need to establish new functional groups, such as investor relations, external communications, and risk management, while also strengthening existing teams (e.g., accounting, legal, and compliance) to handle the complexities of operating as a public company.
Taking the first steps toward capital readiness
For brokers evaluating their next capital move, the path forward starts with a clear understanding of their business and strategic objectives. The following steps can help brokerages prepare for their next liquidity event:
Assess your liquidity options – The right capital strategy depends on a brokerage’s size, growth trajectory, and long-term goals. Smaller firms may find financial sponsorship or strategic acquisition the most viable, while larger brokers may need to prepare for an IPO as alternative options become limited.
Understand the requirements for each path – Every liquidity option comes with its own financial, operational, and compliance requirements. Brokers should evaluate their current state and determine what is feasible given their existing infrastructure, resources, and culture.
Develop an actionable plan – Identifying gaps between current operations and the requirements of the chosen liquidity strategy is critical. Brokers should prioritize initiatives such as financial reporting improvements, operational standardization, or technology enhancements to increase their attractiveness to investors and acquirers.
By taking a structured approach, brokers can access new sources of capital, drive long-term growth, and confidently navigate an evolving market landscape.
Let’s Talk
We’ve helped and are actively assisting brokerages in navigating this evolving capital landscape. If you’d like to discuss further, please reach out to Rob Held, Bob Besio or Robert Green if you’d like to discuss further.
This post is part of a series sponsored by EZLynx.
Performance data is one of the most powerful tools an independent agency can use to stay competitive—but only when it’s timely and easy to understand. Outdated spreadsheets, static end-of-month reports, or having to chase down emails and colleagues just to get the stats you need won’t cut it anymore.
With EZLynx’s reporting and analytics capabilities, everything you need to understand and improve your agency can be accessed directly within the management system.
When You Know More, You Can Do More
The EZLynx Agency Pulse Report provides you with a clear, real-time overview of your agency’s overall health—straight to your inbox every month. From sales pipelines and revenue to customer counts, accounting data, staff performance, personal vs. commercial lines breakdowns, and total written policies and premiums, all your key metrics are centralized and easy to review.
The numbers speak for themselves: data-driven organizations are 58% more likely to beat their revenue goals and are 162% more likely to significantly surpass revenue goals than firms relying on outdated methods. If you want to grow your agency, you need real-time visibility into your business—right down to the details.
Trenton DeVito, Licensed Insurance Broker and Agency Owner, MyInsuranceGuy
For Trenton DeVito, Licensed Insurance Broker and Owner of MyInsuranceGuy, the updates and automated insights from the Pulse Report have empowered his agency to make smarter, data-driven decisions. With clearer visibility into performance, DeVito and his team no longer have to rely on guesswork or intuition.
“The Pulse report has been a critical piece to our agency’s growth. Before it, we had virtually no metrics to base any decision making off of. It’s essentially playing darts blindfolded. Now, we can make informed decisions with information I didn’t even think would be useful. It tracks almost everything.”
Pulse Reports don’t just support better day-to-day decision-making—they also help you plan for the long term. Because they’re so comprehensive and visually easy to understand, Pulse Reports can help you confidently set targeted goals and develop strategies to drive growth and improve your agency’s performance over time.
“We have been implementing pulse reports into our decision making — into budgeting and planning. We’ve got a five-year plan that we could barely plan two years in advance before this feature,” said DeVito. “It has been incredibly influential.”
Turn Insights into Advantage
You work hard every day to deliver for your clients and stay at the top of your game—so wouldn’t it be helpful to know how your agency truly stacks up against others like yours? EZLynx Pulse Reports’ Peer Benchmarking feature makes that possible by offering a clear view of how your agency compares to similar-sized peers, providing valuable insight into your position in the market.
These insights enable you to focus on areas in your agency that need improvement while doubling down on areas where you excel, helping you sharpen your competitive advantage.
“We had nothing like the Peer Benchmarks before,” DeVito added. “We would try and Google to see if we could find metrics on how we were performing comparatively, and we would never find anything. But now with EZLynx, we’ve got the aggregated data.”
EZLynx reports can also be customized to your needs. Want to stay informed at a glance? EZLynx Summary Reports offer quick, out-of-the-box, dashboard-style visualizations that give you easy access to key metrics and a high-level snapshot of your agency.
If you need more detail, EZLynx Master Reports let you sort and filter across performance indicators like lines of business and carriers by premium, transactions per month or policies per customer. Filters can be as complex as you need, allowing you to apply sophisticated formulas and aggregates to create reports tailored to you.
Empowering Your Agency’s Future
Understanding and accessing your agency’s metrics shouldn’t hold you back from growth. With EZLynx delivering performance insights directly within your EZLynx agency management system, you can skip the busywork of data wrangling and focus on what really matters—serving clients, strengthening relationships, and scaling your agency.
The most important insurance news,in your inbox every business day.
Advertising is one of the most common methods companies use to sell their products and services and influence public perceptions. While the issue brief doesn’t argue that general advertising or filing for due process is problematic, it does offer a risk management-based lens for viewing how aggressive attorney advertising campaigns can fuel costs associated with settling claims.
Key Findings
Legal service providers spent $2.5 billion on 26.9 million ads across the United States.
Research suggests that legal advertising increases the number of plaintiffs in multidistrict litigation (MDL), which are large lawsuits consisting of multiple civil cases involving one or more common questions of fact but pending in different districts.
Product liability cases, which accounted for 38 percent of pending MDLs as of August 2023, emerged as the single largest category of MDLs, while other case types have decreased from 2012 to 2022.
The third-party litigation funding market, with an estimated size of $16 billion, is a likely resource for advertising budgets for mass torts; however, 12 states and two jurisdictions have enacted or are considering disclosure requirements.
Ads for legal services and lawsuits saturate all channels of communication – public billboards, radio and television broadcasts, and social media – dangling the lure of a financial windfall. Legal services marketing isn’t uniquely used for mass litigation cases. Nonetheless, it is overall geared to recruit as many lawsuit filers as possible. Therefore, aggressive advertising for legal services introduces the risk of fueling higher claim costs via problematic litigation.
These advertisements often employ an exaggerated sense of urgency, urging the target audience to take immediate legal action without considering alternative options for resolution. These ads may also often overpromise results by implying guaranteed windfalls (i.e., “We’ll get you your money’’), creating unrealistic expectations for plaintiffs and, thus, potentially impacting the time to settle. Additionally, when ads mention a particular product or brand, attorneys communicate plaintiff-biased information to potential jurors. In essence, a juror may recall seeing a flood of advertisements about the product and think, “Where there’s smoke, there must be fire.”
The brief focuses on MDLs because these are complex, huge, and slow-paced cases that may sometimes involve hundreds, even thousands of individual lawsuits. Therefore, these cases inherently carry the risk of driving up legal costs. Also, the large number of plaintiffs introduces the risk that questionable claims might slip into the lawsuit. For example, a particular product may have indeed caused harm to some, but not all, of the plaintiffs who used it.
Pummeling the world with ads can be expensive. Enter the third-party litigation funding (TPLF) market, which, despite tighter capital controls in recent years, grew to $16 billion in 2024, up from $15.2 billion in 2023. TPLF offers discretionary funding to the litigation industry, which can, in turn, use the money to fuel more lawsuits seeking large settlements — a boon for the firms and the funder. The brief outlines how several states and jurisdictions are moving to create transparency around TPLF involvement.
Practices that foster unnecessary or drawn-out litigation are among several hard-to-measure forces that can shift loss ratios for insurers and disrupt forecasts, making cost management more challenging. Ultimately, the cost is passed on to consumers, adversely impacting coverage affordability and availability. Triple-I is committed to advancing conversations with business leaders, government regulators, consumers, and other stakeholders to attack the risk crisis and chart a path forward.
Read the issue brief to find out more about how attorney advertising can contribute to legal system abuse. To join the discussion, register for JIF 2025. Follow our blog to learn more about trends in insurance affordability and availability across the property and casualty market.
A new bill introduced in the New York State Senate proposes to streamline oversight of podiatrists, chiropractors, and psychologists who treat injured workers under the state’s workers’ compensation system.
Senate Bill 8240, sponsored by Senator Ramos at the request of the Workers’ Compensation Board, was introduced on May 27, 2025, during the 2025-2026 legislative session. The legislation aims to amend the workers’ compensation law by removing what it calls “parallel processes” for the authorization of certain healthcare providers.
The bill proposes the repeal of existing statutory provisions that establish separate practice committees for podiatry, chiropractic, and psychology. These committees currently advise on rules and review matters related to provider participation. Under the bill, that responsibility would rest solely with the chair of the Workers’ Compensation Board.
In particular, the bill repeals subdivisions and paragraphs relating to the podiatry practice committee (§13-k), the chiropractic practice committee (§13-l), and the psychology practice committee (§13-m). Provisions detailing committee composition, compensation, and restrictions on member employment are also removed.
What remains is the requirement that the chair prepare and establish fee schedules for podiatric, chiropractic, and psychological care. The bill maintains that provider associations—such as the New York State Podiatric Medical Association, the New York State Chiropractic Association, and the New York State Psychological Association—may still be asked to submit reports recommending appropriate remuneration for services rendered. These recommendations would be considered alongside views from other interested parties.
The bill also amends sections of the law to reflect gender-neutral language and updates terminology, such as replacing “workmen’s compensation” with “workers’ compensation.”
The proposed changes do not affect injured employees’ right to choose authorized providers, nor do they alter the conditions under which care must be escalated to a physician. It also keeps intact the employer’s liability for fees according to the Board’s established schedules.
Join Life Happens for a Facebook Chat during Insure Your Love month this February. We’ll discuss all things life insurance and love!
Date: Thursday, February 15 from 1 to 2 p.m. ET
Where: Join us onFacebook using your personal handle or your company’s handle.
Hashtag: Use and follow #InsureYourLoveChat during the above time frame.
How to: To share a response from your company account on Life Happens’ posts, first switch your profile to your company’s Facebook page. Then look up Life Happens in the search bar. When you’re on Life Happens’ Facebook page, make sure you’re writing a comment as your company’s page by checking to see that the profile picture and name match your company and not your personal account. If you need any assistance, please contact Corey Goodburn, our Social Media Specialist, at [email protected].
Life Happens will moderate the discussion and drive the conversation on Facebook using the questions below. Pass your answers through company compliance beforehand if needed. We’ll share each question as a Facebook post and create a dialogue in the comments with companies’ answers. Remember, you’ll have to use the #InsureYourLoveChat hashtag in each comment. You are also encouraged to share our posts and engage with other comments.
Q1: How are love and life insurance related to one another? #InsureYourLoveChat
Q2: What are some fears people might have about discussing life insurance with their partner or family? #InsureYourLoveChat
Q3:Four in 10 single parents (43%) hadn’t started planning for their child’s financial future until early childhood (ages of 4-6) or later. Source: Single Parents and the Financial Future, August 2023. What do you think of this statistic? Any tips? #InsureYourLoveChat
Q4: How can people use a life insurance policy’s cash value for love? #InsureYourLoveChat
Q5: Can you share a real life story or example of how life insurance played a crucial role in protecting a family’s financial future? #InsureYourLoveChat
Q6: How can you create multi-generational wealth for your family with life insurance? #InsureYourLoveChat
Q7: Are there any unique life insurance solutions that can cater to the needs of single moms and their kids? #InsureYourLoveChat
And don’t forget, Life Happens is a nonprofit organization with a mission to educate people about life insurance. Want to help us further our mission by becoming a member company? Contact Brian Steiner at [email protected].
It’s not just in your head: Anyone who’s gone hunting through new or used car dealerships in recent years may have wondered if it was just their area or if cars are getting much more expensive.
They are, and it’s not just because of rising sticker prices. Owning a car today means paying $12,297 a year (or $1,024.71 a month) on average now, according to a 2024 AAA study, up from $10,728 as recently as 2022.
Owning a car includes much more than just the car itself, including fixed and variable costs. Fixed costs may change over time, but whether you drive 100 miles or 10,000 miles a year, you typically pay the same for insurance, license, registration, taxes, and finance fees. Variable costs, on the other hand, will increase the more you use your car, including fuel, maintenance, and tolls.
These prices will also fluctuate depending on your state—just like any cost of living price. “Hidden costs”—gas, repairs, insurance—put the most burden on car owners in Georgia, at an average of $687 a month. Prospective buyers in Alaska, Delaware, Montana, Oregon, and New Hampshire will be happy to know there is no sales tax on cars in their state, with the latter having the least hidden costs in the nation.
While California has the highest per-gallon rate for gas (around $4.66 as of July 2024, according to Bankrate), when the total annual miles driven and tanks emptied are calculated, it’s actually those in Indiana that shell out the most for fuel (around $2,913 annually). Unfortunately, a rise in extreme weather events, car crash fatalities, and supply chain shortages means insurance rates are rising nearly everywhere.
The costs of owning a car may be increasingly daunting. Still, for many people—especially those commuting long distances to work or live in rural areas—there’s simply no other option. According to Data for Progress,4 in 5 Americans believe they have no choice but to drive as much as they do.
So many Americans’ backs are against the wall. The average personspends 20% of their monthly income on car-related costs, and 16% had to take on a second job just to afford payments, according to a survey of 1,000 drivers by MarketWatch Guides. The same study also revealed that nearly 1 in 6 drivers had to delay maintenance due to finances. It’s not surprising, then, that car loan delinquency is at a post-COVID-19 pandemic high.
The General used data from AAA via theBureau of Transportation Statistics to examine the overall cost of car ownership. From insurance to weather events to protecting unique features, there’s a lot more to owning a car than just the vehicle itself.
WHAT IS CAR LIABILITY INSURANCE?
Learn all about car liability insurance and what it covers, how much you may need and if it is required in your state.
Owning a Car is Already Expensive
Tariffs
Americans could soon find themselves shouldering the financial burden of diplomatic conflict: In February, President Donald Trump announced a 10% tariff on Chinese imports and a 25% tariff on imports from Canada and Mexico. Considering that the United States is the world’s #1 importer of foreign cars (spending $208 billion in 2023, per the Observatory of Economic Complexity), these tariffs can have very real effects on American car owners’ everyday vehicle costs.
In 2023, the U.S. imported $44.9 billion worth of vehicles from Mexico and $35 billion from Canada. These new tariffs may increase repair costs for cars from these countries by a hundred dollars or more; the average price of a vehicle imported from Mexico or Canadacould rise an additional $6,250, according to S&P Global Mobility.
AMAZING AUTO INSURANCE
Discover one of the highest rated auto insurance agencies with over 60 years of protecting drivers around the nation.
How does that relate to car ownership? Unsurprisingly, insurance costs will be more expensive in states susceptible to natural disasters, including coastal areas and those prone to tornadoes, hurricanes, and blizzards. From 2023 to 2024, for example, auto insurance rates rose by 43% in New Jersey, 30% in Florida, 37% in Georgia, and 57% in Missouri.
In the face of rising storm-related damage, consumers should also consider different kinds of insurance, which can affect what they pay out of pocket. For instance, comprehensive coverage—which is often optional when purchasing auto insurance—can cover damage that you would otherwise pay out of pocket, including damage from storms, floods, earthquakes, and falling trees.
Besides comprehensive coverage, many other types of auto insurance add-ons can keep car owners from having to pay for cripplingly expensive damage themselves. These include property damage liability (which covers the damage you may cause to someone else’s property if you hit it with your car), collision coverage (which covers damage to your own car if you hit another car or object), and personal injury protection (which covers injuries you or your passengers might sustain in an accident).
The bottom line? It’s not just damage to your car that you have to worry about—and having more than one insurance policy might save you money in the long run.
Special Features
As a new variety of cars is rising, their unique features may pose higher price tags when they malfunction and need repair. For instance, automatic brakes and cameras are much more complicated, expensive, and time-consuming to fix. Additionally, modern cars are built out of more advanced materials, including aluminum, magnesium alloys, and high-strength steel. All of these aspects can hike up your repair costs.
Electric vehicles are also particularly costly to repair: At the start of 2024, the average repair bill for an EV in the U.S. was29% higher than that of a regular vehicle (around $6,0666, based on insurance data from Mitchell). That’s mainly because it takes more hours to repair an EV’s more complicated internal wiring: the average number of hours used to repair an EV is about twice that of a regular car. Since the average hourly rate for a mechanic in the U.S. is over $100, that adds up fast.
GREAT ONLINE CAR INSURANCE
With low rates, low down payments and flexible payment options, this is one of the best ways to get car insurance online.
Labor Costs
As cars get more sophisticated, the labor involved in constructing them gets more complicated—and expensive.
Unfortunately, there’s currently a labor shortage for mechanics in the U.S., which is contributing to higher costs for manufacturing and repairing vehicles. From 2023 to 2024, there was a gap of nearly 40,000 car technicians in the country, according to TechForce Foundation’s 2024 Supply & Demand Report.
At the same time, many automobile workers are striking for higher wages, which also means a larger price tag for shoppers. In 2023, GM, Ford, and Stellantis workers were granted a salary increase of 25%; Volkswagen and Honda quickly followed suit with 11% raises; then Toyota with 9%; and Hyundai with 25% over the next four years.
Given these factors that contribute to increased costs, one would think car purchases would be less enticing, but surprisingly, just 8% of drivers expressed regret, according to the MarketWatch survey. Some have also taken a stoic outlook, employing strategies to stay on track with their finances, such as paying loans off early, taking public transit when possible, and attempting repairs themselves.
While there are many reasons for costs to rise, budgeting wisely and making informed choices are two ways owners can stay on the road without overburdening their pockets.
Written by: Andrea Vale. Data Work By Emma Rubin. Story editing by Carren Jao. Copy editing by Paris Close. Photo selection by Clarese Moller.
The stark reality for legal practices today is this: The sensitive client information you handle makes you a prime target for a law firm data breach. Yet, despite the increasing cyber threat to lawyers, many still rely on insufficient insurance policies that leave them exposed to data breaches when it matters most. In fact, more than half of all firms have inadequate coverage.
When it comes to cybersecurity, the gap between awareness and action is growing, and the consequences can be extremely costly. In this article, we’ll break down the unique ways law firms are vulnerable to data breaches and where standard insurance policies fall short. Plus, we’ll cover the steps you can take to assess and improve your coverage before a breach hits.
The disconnect between awareness and action in legal cybersecurity
It’s not that law firms don’t understand the risks. In fact, cybersecurity routinely ranks as a top concern for managing partners and compliance teams. But despite this growing awareness, recent data shows that 52% of law firms believe their current insurance policies would only partially cover their firm in the event of a data breach, if at all. Even more surprising is that only 14% said they planned to expand their coverage in the near future.
So, what’s causing this hesitation? For many firms, it’s a mix of practical constraints and misplaced confidence.
For many lawyers, it’s tempting to assume that a general liability policy or a basic cyber endorsement is “good enough.” But the fact of the matter is that general liability and malpractice policies do not cover security incidents or data breaches.
Insurance policies can be time-consuming and confusing to read, so in some cases, firms may not fully understand the scope of their coverage. Attorneys may mistakenly think they’re already fully covered until a breach occurs and the fine print tells a different story.
The result is a dangerous gap between perceived protection and actual risk exposure. This gap can lead to serious financial, reputational, or regulatory fallout for lawyers.
Why are law firms prime targets for data breaches?
Law firms are typically holding onto a goldmine of sensitive data about their clients. It makes them incredibly attractive to cybercriminals.
It’s a problem highlighted by the increase in attacks the legal industry has been experiencing. Law360 Pulse reported in 2023 that breaches for law firms had doubled from the year before, while another report found a 68% increase in that period, with 636 weekly attacks.
Here’s a breakdown on why law firms are increasingly in the crosshairs for potential breaches.
Handling extremely sensitive client data
Clients trust their law firms with some of the most confidential information they have. This may include financial records, intellectual property, M&A strategy, litigation documents, and personal identifiers. This data is highly valuable to cybercriminals, as it can contain information that they can weaponize against both firms and clients.
For retail or healthcare companies, data breaches might result in quick sales on the dark web. But the data held by law firms is much easier to use for targeted extortion and insider trading. It can also lead to long-game phishing attacks.
With the stakes this high and clients increasingly aware of it, more and more clients are building cybersecurity standards into non-negotiable parts of engagement. Firms that can’t prove strong data protection may lose out on business.
Subject to ethical and confidentiality obligations
Confidentiality is a cornerstone of any legal practice, so law firms are ethically and professionally obliged to protect client data. Any breach has the potential to jeopardize attorney-client privilege, and this can violate bar regulations and trigger disciplinary action.
The challenge for firms is that ethical duties don’t pause for technical limitations. If a breach occurs because your systems are outdated, or you have unclear protocols or weak insurance coverage, it doesn’t lessen the consequences.
Courts and regulatory bodies expect firms to take reasonable steps to safeguard client information before, during, and after a cyber event.
Reliance on legacy systems and inconsistent IT practices
Many law firms still operate on outdated software, older infrastructure, or IT setups that haven’t kept pace with evolving cyber threats. Midsize and boutique firms are particularly prone to these issues.
Other factors like bring-your-own-device (BYOD) policies, remote work habits, and different tech capabilities across offices lead to fragmented environments that are more difficult to keep secure.
Even firms with internal IT teams in place can lack dedicated cybersecurity expertise. This can leave blind spots, especially in areas like endpoint security and threat detection. Hackers are incredibly savvy and are aware of this. They specifically look for easy entry points in firms with weak controls or inconsistent IT systems.
Working with high-profile and high-net-worth clients
Working with corporate executives, celebrities, political figures, or well-known brands can put a target on your firm’s back. These high-value targets may attract cyber criminals who are after sensitive information — especially if they can use it for extortion purposes.
Attackers are also motivated by how connected you might be to other, higher-priority systems. For example, if you work with a Fortune 500 client and your systems are easier to breach than theirs, you’re the more efficient target.
Leveraging complex vendor and third-party relationships
Like any company today, your law firm likely relies on a wide range of third-party vendors when it comes to tech. This can be anything from cloud storage to e-discovery tools or even how you manage payroll. Every single touchpoint in your technology stack represents a new layer of exposure. In fact, 61% of respondents to a survey said they experienced a third-party data breach or other security incident in the last 12 months.
You might have your internal systems locked down, but a breach through a vendor can still compromise your firm’s (and your client’s) data. And under many regulations, this means you’re still on the hook for the breach. That’s why proper vendor vetting and contractual protections are crucial. Otherwise, these relationships can quietly become one of your firm’s biggest cyber risks.
Not adequately investing in cybersecurity infrastructure
Talent and billable hours are traditionally the biggest expenses for law firms. However, this generally means that other operational areas, such as cybersecurity, can be underfunded or placed lower on the priority list.
But this short-term cost-saving approach can backfire since the average cost of a data breach in 2024 was $4.88 million.
From firewalls to email filtering and staff training, every layer of defense against cyberattacks matters. Threats to law firms are getting more and more sophisticated, and so are the tools and technology your firm needs to use to stop them. Without consistent monitoring and investment in people and systems to prevent data breaches, even the most well-intentioned firms can find themselves vulnerable.
Evolving regulatory and compliance pressures
The regulatory framework around law firm cybersecurity is only getting more complex. American Bar Association (ABA) guidance, data breach regulations, and regional privacy laws are constantly evolving, making it challenging to stay current.
If you’ve got what passed for “secure enough” even five years ago, it likely no longer meets today’s expectations.
Many firms find themselves scrambling to interpret or comply with new requirements, particularly when it comes to matters such as breach notification timelines or industry-specific obligations. Falling short risks financial penalties and can damage client trust and open the door to litigation.
What standard law firm insurance policies miss
Many firms still assume their general liability or professional liability policies will protect them in the event of a cyberattack. But according to recent data, only 40% of law firms have cyber liability insurance, which is actually down from 46% the previous year.
This is because, at first glance, your policy may appear to cover cyberattacks. But standard policies often exclude critical cyber-related losses like ransomware payments, regulatory fines, or data restoration.
Even those with so-called “cyber endorsements” (an addition to your existing policy) often find they only cover a small portion of costs, like breach notification or credit monitoring. It can leave massive gaps in areas that matter most to law firms.
And when an incident does occur, providers will often provide specialized legal, IT, or PR experts to help you manage the crisis. It’s an extremely helpful aspect of these policies that ensures you’re not left scrambling.
Self-assessment: Does your firm have gaps in its current insurance coverage?
It’s important not to let cyber insurance be a guessing game. But, like with lots of insurance policies, many law firms only really dig into theirs after a breach — and by then, it’s too late. A proactive review helps to uncover important blind spots and align your coverage with real-world risks.
Here’s a step-by-step guide to help your firm evaluate your current cyber insurance and take proactive measures to identify where gaps may exist.
1. Review your existing policies
Start with what you have and examine your policies across general liability, professional liability, and any cyber endorsements you have. Identify:
What’s covered
What’s excluded
Whether you have a standalone cyber policy
When your policy was last reviewed
2. Identify your firm’s unique risks
No two firms are the same in terms of the clients they serve, the areas of law they operate in, and how their existing IT set-up looks.
Know the exact conditions required for your policy to respond. Some policies won’t activate without a formal breach declaration or regulatory involvement. This can delay your response and increase financial and reputational risks.
4. Review policy exclusions and sub-limits
Even if a policy looks strong at first glance, it can have significant gaps buried in the fine print. Look out for exclusions in your cyber coverage as well as carve-outs that relate to social engineering, employee error, vendor failure, or caps on ransomware payments.
5. Assess business interruption and downtime scenarios
Malware attacks, for example, cause significant business disruption, which can be the costliest part of a breach. Check your policy thoroughly or, if you don’t have a cyber-specific policy yet, identify the types of outages and delayed work you would need compensation for during an attack. Closing these gaps helps mitigate significant revenue losses from business disruption.
6. Compare your coverage against industry benchmarks
What are similar-sized firms in your space insuring against? Brokers and legal industry reports can help you see how your policy measures up against peer standards and industry best practices.
7. Consult an insurance broker who specializes in legal risks
Generalist brokers may not be fully aware of law firm-specific exposures. Work with someone who understands attorney-client privilege, confidentiality obligations, and the unique structure of legal operations to make sure you close as many gaps as possible in your policy. At Embroker, we create insurance policy packages with law firms in mind.
8. Use risk modeling tools and outside audits
Cyber risk isn’t a one-size-fits-all approach, so consider consulting a broker or IT provider to explore modeling tools that quantify your exposure. External audits can also help validate your policy against your real-world risk.
9. Review vendor and third-party risk exposure
We’ve discussed the type of risk you’re exposed to from third-party technology and vendors in the event that they themselves experience a breach. Make sure your policy accounts for vendor breaches and includes clear coverage for third-party liability.
10. Evaluate client contract requirements
Some clients require proof of cyber insurance (or even specific limits) as a condition of doing business. Failing to meet these expectations can cost you work or create liability conflicts.
11. Check for coverage of reputational harm and PR support
Rebuilding client trust after a data breach is hard work, so look for policies that include PR and crisis communications support. This helps you to manage the fallout from a breach effectively and protect long-term relationships.
12. Incorporate your insurance into your incident response plan
Your cyber policy and your breach response plan should be in sync. Review both your cyber policy and incident response plan to make sure your firm is sufficiently covered. Ask yourself:
Who’s responsible for what issues
How do you contact your insurer in a crisis
What resources will be provided
This is a good opportunity to evaluate your incident response plan, since only 26% of law firms believe their firm is “very prepared” to respond to cyber incidents.
13. Test and update your coverage annually
Cyber risks evolve constantly, and they’re increasing in volume and complexity. Set a schedule to revisit your coverage every year, especially if you’re adding new technology or taking on bigger clients. Even small updates to your operational processes can produce new risks, and an annual review helps you to stay on top of them.
Best practices for managing cyber risk and coverage
Insurance is just one piece of the puzzle. Here are a few essential best practices you can implement to strengthen your risk posture and complement your insurance coverage:
Prioritize cyber hygiene with strong passwords, multifactor authentication, and keeping software and systems up-to-date.
Train your team regularly to avoid breaches that start with human error. Invest in ongoing training to help staff spot phishing attempts and follow security protocols.
Develop a clear incident response plan so you know exactly what steps to take if a breach occurs, and align your cyber policy with this plan.
Audit vendors and third parties with the same scrutiny as you do to your own systems because their security gaps can quickly become yours.
Document everything from IT policies to employee training logs, as this is typically required for insurance claims and compliance audits.
Strong cyber coverage is essential, but you can make it even more effective by integrating it as a core component of your overall risk management strategy.
Close your coverage gaps before they cost you
Cyber threats against law firms aren’t slowing down. Take the time to audit your current coverage and assess your firm’s risks by diving into our 2024 Legal Risk Index Report to stay ahead of emerging risks. At Embroker, we work closely with law firms to craft insurance packages that close coverage gaps and protect you and your clients. Get a quote today!
Throughout history, insurers have been pivotal in driving social change, enabling human progress, innovation, and prosperity. From seatbelts to vaccines and fire-retardant materials, insurers have fostered numerous innovations. Nowadays, they face a new monumental challenge: climate change. 2024 has been another record loss year for insurers driven by natural catastrophes linked to climate change. Insurers are hence seeking greener pastures. If done right, aiding businesses in their transformation to reduce greenhouse gas emissions becomes a positive for insurers. They can be facilitators of the transition to a carbon-neutral future by exerting influence across the wide variety of industries they finance.
There is an opportunity for insurers to safeguard their top-line and bottom-line while supporting customers on their net zero journeys. In Underwriting, that minimizes risk exposure and scope for regulatory fines by proactively responding to changes, and clients who effectively embark on the green transition are expected to bring higher sales in the mid to long term. In Investments, the case is even better understood: 93% of investors say that climate issues are most likely to affect the performance of investments over the next two to five years.Non-transitioning companies or those who start transitioning too late are in danger of losing an investment grade credit rating, while the outperformers – what we call ‘green stars’ are expected to benefit from green technologies shift in a Paris-agreement-aligned world scenario.
A new tool for profitable portfolio decarbonization
Insurers need to be able to translate their investee and clients’ emission reduction measures into financial implications for appropriate risk calculations, to decarbonize profitably on their own end.
As we at Accenture are committed to fostering net zero business practices we have introduced the GreenFInT (Green Financial Institution Tool ), also known as the Profitable Portfolio Decarbonization Tool. Comparing sample client portfolio dynamics up until 2050 for high carbon intensive sectors, it shows ‘green stars’ might outperform ‘climate laggards’ by 30-40 percentage points. The true value of the tool lies in familiarizing insurance managers across investment, risk and pricing with setting assumptions for different world views, from a ‘hot world’ scenario to reaching the Paris alignment.
Allow me to delve into the tool in greater detail. The GreenFInT tool caters to both the emissions measurement and reporting use cases (e.g., ESRS E1 quantitative KPIs for CSRD) as well as to business value cases with regards to decarbonization. The tool applies climate scenarios (e.g., 1.5°C, 2.4°C) to portfolio companies’ technology mix, depending on their Net Zero pledges and transition plans. Differences in technology mix, pledges, and plans translate into divergent profitability curves via required capital investments and differences in operational costs.
‘Green stars’ win out in the long term
For illustration, an insurer’s ‘green star’ client from the power generation sector with a SBTi verified Net Zero target by 2040 has and will have a larger share in renewables than a client classified as ‘laggard’. With its proactive transition towards net zero, the ‘green star’ client has initial high capital costs to finance the build out of installed capacities from renewable energy sources to meet its milestones while electricity prices are relatively high – outlining a business opportunity for insurers as the client is in need of financing and insuring of the renewables built out. In comparison, a ‘laggard’ company had no and will not have capital investments beyond usual replacement and maintenance costs of its power plants. On the other hand, renewables have much lower operational cost compared to power generated from nuclear energy and natural gas. Thus, the ‘green star’ that has invested in renewables in a timely fashion will benefit from lower operational costs while the ‘laggard’ will have higher operational costs from traditional energy sources.
Let’s take an exemplary insurance portfolio with 40 large company clients from four high-intensity sectors, namely power generation, steel, real estate, and automotive, focused within Europe. In a 1.5°C scenario, the capital need for the net zero transition of these companies amounts to approximately 650bn USD 2023-2050 – according to the GreenFInT modelling. While in the mid-term up until 2030, the EBT margin of ‘laggards’ outperform ‘green stars’ by approximately 6 percentage points, in the long-term, 2023-2050, ‘green stars’ outperform ‘laggards’ by 30-40 percentage points (see graph below).
This forward-looking approach – leveraging scientific sector carbon budgets vs. traditional forecasts based on historical values – enables insurers to integrate long-term scenarios (up to 2050) into their current considerations. This is a most important step towards breaking the ‘tragedy of the horizon’. GreenFInT makes it possible to identify insurers’ investees and clients with trustworthy net zero commitments as the business case assessment can reveal who may not be able to afford their net zero commitments. Building a trusted relationship with these companies as insurer or investor today, is key for a profitable decarbonization. Insights gained through GreenFInT can be helpful to prioritize clients to engage with and a grounded conversation opener to better understand the clients’ transition plans.
Beyond a net zero business case analysis, GreenFInT also covers the accounting of Scope 3 Category 15 emissions in absolute terms and physical intensities as well as target setting and a ‘What-If’ capability, enabling insurers to simulate effects on their carbon footprint with adjustments to their portfolio.
The time to act is now
Insurance has consistently demonstrated resilience in the face of numerous challenges, and the current push towards decarbonization is no different. By embracing the transition to net zero, insurers can not only safeguard their profitability but also play a pivotal role in fostering a sustainable future. The integration of science-based sustainability targets into underwriting and investment practices will enable insurers to drive significant change across various industries. As regulatory pressures and public expectations continue to rise, insurers must act decisively to avoid the risks of inaction and greenwashing. The tools and strategies outlined provide a clear pathway for insurers to achieve profitable portfolio decarbonization, ensuring long-term growth and trust in a rapidly evolving landscape. The time to act is now, and the opportunities for those who lead the charge are immense. For further discussion on how to implement these strategies in your enterprise, please get in touch.
This post is part of a series sponsored by Cotality.
There’s a blurry line between where a wildfire ends and a conflagration begins. But, without an understanding of both types of fires, their dynamics, and their unique risks, it is impossible to develop a comprehensive wildfire-related risk management strategy.
A wildfire is an uncontrollable fire that usually begins in the wildlands and is largely fueled by natural vegetation. A conflagration, on the other hand, occurs when a wildfire spreads to the built environment and evolves into a structure-to-structure fire. With manmade materials fueling the flames, conflagrations intensify and accelerate much faster than traditional wildfires could.
Once a wildfire turns into a conflagration, the flames can burn communities to the ground in just a couple hours, or less.
Conflagrations are on the rise, which is why Cotality launched the Wildfire Conflagration model — the first solution of its kind to analyze the risk of conflagration at every structure.
While traditional wildfire models focus solely on the hazard, Cotality’s new model is dedicated to evaluating risk of conflagration in the built environment.
Using a conflagration-specific risk assessment tool in tandem with a traditional wildfire risk evaluation solution like the Cotality Wildfire Risk Score (WFRS) enables insurers to create a more holistic risk management strategy. It is only with mechanisms to look at all angles of wildfire-related risk that insurers can provide more coverage in higher risk areas — without gambling their solvency.
Wildfire and conflagrations: A distinction that matters
Historically, catastrophe risk management professionals classified wildfires as “secondary perils”, believing they did not warrant the same level of modeling scrutiny as did traditional “primary perils,” like hurricanes and earthquakes. But after a decade of rising losses tied to wildfires, the catastrophe community now classifies wildfires as an “emerging secondary peril,” inching their way into the “primary” ranks of hurricanes and earthquakes.
The growing intensity of wildfires over the last decade has prompted many property insurance providers to shift their risk appetite. They are pulling out of the wildfire-prone areas, suspending the renewal of certain policies, and substantially increasing premiums.
This surge in wildfire destruction isn’t due to dramatically shifting weather patterns or increasingly flammable natural vegetation alone. Rather, it’s because wildfires are increasingly becoming wildfire-induced conflagrations, including the 2023 Maui fires and the 2025 Los Angeles fires.
Once considered an exclusively urban threat, conflagrations are now blazing more frequently in suburban and even rural areas. Driving this phenomenon is the rapid expansion of the Wildland-Urban Interface (WUI) — where human development meets natural wildland. These zones have grown quickly in the era of remote work and rising property values, as land in the WUI is often more affordable to build on, particularly in California, while also offering scenic views and proximity to nature. Swaths of new homeowners in these areas inadvertently add fuel to potential fires — quite literally.
Since 2020, there have been 10 major wildfire-induced conflagrations that have resulted in 26,000 structures destroyed in the U.S. The Los Angeles wildfires alone caused between $35 to $45 billion in insured losses, according to Cotality™ data. With events like these happening at least every other year, insurers need to measure the elevated risk that conflagration can bring to their portfolio.
A dual approach for a natural-ish hazard
With conflagration in the mix, wildfires present a complex, multi-dimensional peril. Although different than “all natural” perils, they aren’t uninsurable. With the right risk strategy and digital tools, insurers can make more data-backed risk decisions that enable them to operate in the expanding WUI.
Cotality offers dual views of non-house fire risk through two highly granular, deterministic risk models. These two distinct perspectives helping insurers see past blind spots, delivering a comprehensive assessment of non-house fire risk for any property.
The Cotality Wildfire Conflagration model returns a 1-100 score that insurers can use alongside the 1-100 Wildfire Risk Score to gain a comprehensive view of fire risk for any property. Each score reflects the distinct factors that contribute to conflagration and wildfire risk, respectively, providing straightforward, actionable tools for underwriters and risk managers.
Structure characteristics like roofing and siding composition, combustible attachments, and window materials
Building density
Wind direction
Weather and climate characteristics
Ember component and all nearby vegetation types
Why both scores are must-haves
Using both scores on every property is critical because a property with one type of fire risk may not be at risk for the other. A property with very low wildfire risk — far enough away from the WUI to raise traditional concern — could be at a very high conflagration risk. A recent analysis by Cotality identified thousands of properties within the Palisades and Eaton Fires with low wildfire risk but high conflagration risk.
When insurers leverage both scores in decision-making processes around eligibility, underwriting, and even pricing determinations, they will have a comprehensive view of risk at the property level.
Conflagration at the core of the wildfire consideration
The ability of insurers to provide widespread, affordable insurance coverage to people across the United States — even in high-risk areas — is critical for both the long-term survival of the insurance system and home ownership.
Cotality’s new Wildfire Conflagration Risk Score, now available in California and other western states shortly, is a key addition to any modern wildfire risk strategy. It is the toolset on the market that answers the two critical questions: How will a fire start? And, how far will it go?
It’s time to make conflagration a part of the wildfire conversation—and to give it the dedicated analysis it demands.
To learn more about Cotality’s wildfire suite, contact us today.
By Loretta L. Worters, Vice President of Media Relations, Triple-I
When Karla Scott first entered the insurance industry, she didn’t set out with a grand plan to become a leader in marine underwriting.
“I fell into it,” she admits. Starting at a brokerage firm focused on logistics insurance, she quickly discovered a passion for global trade and cargo underwriting.
“It’s different every day,” says Scott, who is global logistics product leader and senior managing director, Ocean Marine, The Hartford. She joined the company after The Hartford acquired Navigators in 2019.
“The technical work keeps my skills sharp, while the camaraderie and shared purpose offer personal and professional fulfillment.”
– Karla Scott
Scott works with clients, agents, and brokers around the world to ensure that businesses have the protection they need through the product’s entire supply-chain life cycle. Her team insures raw materials and finished goods that are transported on containerships, planes, trains, and trucks. From geopolitics to commodity shifts, it’s an ever-evolving, complex industry that demands constant awareness and adaptation.
Now, with 24 years in marine insurance, Scott reflects on a career shaped by resilience, strong mentorship, and a deep commitment to community. Her journey underscores both the opportunities and challenges faced by women in a traditionally male-dominated field.
“Disrupting trade with…China, Canada, or Mexico would affect cost and the availability of insurance coverage.”
– Karla Scott
A Sea Change for Women
“Fifteen years ago, I sat at a table with 35 industry leaders and was the only woman,” Scott says. “But progress is happening. While marine insurance remains a niche within the broader insurance world, more women are entering the field and rising into leadership roles.”
There continues to be a gender pay gap and lack of career advancement opportunities, but Scott says “part of the reason, frankly, is that women tend not to self-advocate. It’s critical in the marine insurance space to promote yourself, but women often feel uncomfortable doing that. Self-advocacy is not boastfulness. No one is going to put you in the spotlight unless you step into it. Those are the skills we need to teach women coming up in this business.”
Being a woman on the West Coast in an East Coast-dominated industry meant navigating additional hurdles.
“There’s a current you swim against,” she says.
Overcoming Barriers
Support from forward-thinking male mentors and advisors helped her stay the course.
“I am indebted to three mentors who presented different strengths,” Scott says. “I learned how to manage people, to motivate people, technical skills, how important your reputation is in this industry, and how to push hard and be aggressive in certain situations and not aggressive in other situations.”
She also candidly addresses the internal battles many women face — imposter syndrome.
“I’ve experienced it myself and have reached out to my mentors, who are great at listening to my frustrations,” she says. “Having a strong network can help you work through those issues. Now that I’m on the other side, I’m pushing my mentees through those obstacles, helping them find their voice and teaching them to self-advocate—skills critical to closing the gender pay gap.”
The Power of Community
Scott’s involvement with the American Institute of Marine Underwriters (AIMU) and the Board of Marine Underwriters in San Francisco has been instrumental in her career. She has served as president of the latter twice and speaks passionately about the importance of collaboration in the insurance industry.
“One of the most unique parts of marine insurance is that we work in partnership with competitors to solve industry problems,” she says. “The technical work keeps my skills sharp, while the camaraderie and shared purpose offer personal and professional fulfillment.”
Trade Tensions and Industry Impacts
As global trade faces increasing scrutiny and tariff battles, Scott is already seeing the effects.
“Clients are canceling freight contracts, and volumes are dropping,” she says. “The result means lower trade volume, higher valuation of goods, and potential inflationary cycles may hit consumers hard.”
She points out that the lack of federal stimulus (unlike during the pandemic) leaves little room for economic cushioning.
“It’s a ‘hold your breath’ kind of moment,” Scott says.
Cargo theft is another growing concern.
“It spikes when inflation rises,” Scott notes, pointing out how easy it has become to resell stolen goods on platforms like Amazon and eBay.
Talk of reshoring manufacturing often overlooks the complexity of global trade.
“You can’t flip a light switch and manufacture everything in the U.S.,” she explains. “Machinery to build those goods often comes from Germany or Japan.
“Disrupting trade with top partners like China, Canada, or Mexico would significantly affect both cost and the availability of insurance coverage,” Scott says. “If consumer confidence drops and trade volumes fall, insurance demand will, too.”
Scott also highlights a deeper economic risk: the potential erosion of the U.S. dollar’s dominance in global trade. “If that shifts, the American economy could face even greater challenges.”
