Category: Insurance

This post is part of a series sponsored by AgentSync.

Today’s insurance agencies rely on an average of 5.7 to 11.9 different technology platforms for day-to-day operations, depending on their total revenue. For large-scale carriers managing multiple agencies and their downstream producers, it’s likely that number is even higher. While this level of digital innovation represents a positive change in the insurance industry’s ability to offer modern experiences to its consumers and efficient workflows to its employees, cultivating a more robust tech stack doesn’t come without challenges.

Each time an insurance organization invests in a new digital solution, it’s creating greater efficiencies for at least one piece of the insurance distribution puzzle. When a business starts out, it may only have the resources to purchase the most essential technology, like an email application and a bookkeeping software. As the business grows, it invests in more technology to help manage the increase in clients and employees — an HR system, a customer relationship management (CRM) system, a compliance management solution, and so on.

While these systems no doubt create greater efficiencies for the business, there’s no denying the irony that the more complex your tech stack gets, the more inefficient it can become. In fact, it’s not uncommon that, as carriers and agencies purchase more systems, they discover some big problems.

How does a complex tech stack impact your insurance business?

Poor integration capabilities lead to fragmented systems

The more systems you add to your tech stack, the more important it is for those technologies to communicate with one another. But with as much as 74 percent of insurance companies still relying on legacy technology for their core business functions, seamlessly linking existing systems to new ones so that they function together in a meaningful way isn’t exactly the norm. Older systems use different data formats, protocols, and structures than modern solutions. These differences can cause significant compatibility issues that make integrations more complex and ultimately lead to system fragmentation.

Silos limit smart, data-driven business decisions

Your distribution channel is filled with data on every downstream partner you work with. Proactive insurance organizations use this data to intelligently expand, contract, and restructure their distribution channels in response to shifting market opportunities and challenges. As a result, data-driven businesses are 23 times more likely to acquire new customers and 19 times more likely to achieve above-average profitability than their less data-driven counterparts. However, data silos, a common symptom of lackluster integrations between multiple systems, make it difficult to leverage producer data for informed decisions. Silos prevent producer data from flowing seamlessly through your systems, creating multiple versions of truth in your records and making it difficult to decipher where the most accurate information actually lives.

Scalability issues prevent profitable growth

When it comes to sustainable growth, automated solutions have been a real game-changer for the insurance industry. For example, these days, with the right distribution channel management solution, any carrier onboarding an agency and its multiple downstream producers can validate multiple licenses across multiple lines of authority and multiple states all at the click of a button. Not all that long ago, the same process was only achievable through hours, if not days, of manual work. However, not all automations are created equally and many legacy technologies lack the ability to scale efficiently, making it just as difficult to grow without also increasing overhead costs.

Disjointed systems increase security and compliance risks

Complex and ever-changing regulatory requirements form the backbone of the insurance industry (seriously, we have a whole series about it), making compliance increasingly complex to maintain. Staying on top of regulations and avoiding penalties is particularly challenging when you’re dealing with disjointed systems that are unable to update in real-time, creating inconsistencies in your distribution network data. On top of compliance risk, data security is a major concern for businesses with a complex tech infrastructure. In a study examining the state of cybersecurity across the insurance sector, SecurityScorecard found that third-party software and IT vulnerabilities were to blame for half of the data breaches reported by 150 top insurance firms.

Budget predictions reveal a greater focus on reducing IT complexity

Between the pitfalls of a complex tech stack and the ongoing market volatility and consequent budget tightening of the past few years, it may come as a suprise that experts predict an increase in tech spend across the insurance industry over the next year. But, digging a little deeper into where and how businesses plan to use those funds paints a clearer picture.

With talks of tech consolidation from big-name players like GEICO, and greater pressure on IT departments to deliver faster ROI, it’s likely we’ll see less prioritization on multi-year, complex technological overhauls and greater investment in lower-lift, modular solutions to help consolidate fragmented infrastructure, reduce vendor management complexities, simplify workflows, and unlock deeper data analytic capabilities.

The focus shift makes even more sense when you consider the fact that many insurance carriers and agencies have already invested decades of time and millions of dollars into their existing systems. When it comes to their IT, these folks aren’t looking to reinvent the wheel so much as they’re looking for supplement solutions that will boost their efficiency with as little business interruption as possible.

The solution: Investing in APIs to reduce tech complexity and boost operational efficiency

For businesses with existing distribution channel management ecosystems, application programming interfaces (APIs) offer a solution for improving operational efficiency without ripping and replacing current systems. Modernizing large and complex systems, like those used to manage your insurance distribution channels, can take months or years. APIs reduce tech complexity and get the most complete and up-to-date producer data flowing through your systems more quickly and efficiently than ever before. Carriers and agencies that invest in APIs benefit from their:

Improved integration capabilities: APIs integrate directly into an organization’s existing platforms, opening the door for more seamless data exchange between disparate systems and eliminating bottlenecks in daily workflows.

Seamless, secure scalability: By leveraging APIs that derive data from industry sources of truth, businesses can focus less of their time and resources on data maintenance as their business grows, and more on making the most of the tech infrastructure that drives their core business processes.

Real-time data: APIs can elevate distribution network data quality by synchronizing an organization’s existing tech (and the data that lives within it) with industry sources of truth. Rather than relying on manual data validation, APIs automatically ensure producer data is always up-to-date and useful.

By leveraging APIs, insurance carriers and agencies can transform their tech infrastructure from complex, fragmented, and inefficent to agile, connected, and modern. As a result, they’ll avoid spending the time and money needed to complete a total system overhaul and gain greater visibility into their distribution channel data across their existing platforms.

Let AgentSync’s ProducerSync API meet you where you’re at

If tech complexity is blocking key distribution channel data from flowing through your existing systems, then your data’s not doing you much good. From surfacing key producer data when and where you need it (think before binding a policy or paying out a commission), to highly sophisticated analyses on how to optimize your distribution channel for maximum success, ProducerSync API can be the tech enhancement your business needs at the cost and implementation timeline it wants.

Contact one of our experts today to find out how your organization could benefit from ProducerSync API.

Topics
InsurTech
Tech

By Lewis Nibbelin, Contributing Writer, Triple-I

Two lawsuits filed in Los Angeles claim major California insurers colluded illegally to impede coverage in wildfire-prone areas, forcing homeowners into the state’s last-resort FAIR Plan.  Accusing carriers of violating antitrust and unfair competition laws, the two suits exemplify an ongoing disconnect between public and insurer perceptions of insurance market dynamics, exacerbated by legislators’ resistance to accommodating the state’s evolving risk profile.

An untenable situation

Both suits claim the insurers conspired to “suddenly and simultaneously” drop existing policies and cease writing new ones in high-risk communities, deliberately pushing consumers into the FAIR Plan. Left underinsured by the FAIR Plan, the plaintiffs argue they were wrongfully denied “coverage that they were ready, willing, and able to purchase to ensure that they could recover after a disaster,” Michael J. Bidart, who represents homeowners in one of the cases, said in a statement.

Established in response to the 1965 Watts Rebellion, the California FAIR Plan provides an insurance option for homeowners unable to purchase from the traditional market. Though FAIR Plans offer less coverage for a higher premium, they cover properties where insurance protection would otherwise not exist. California law requires licensed property insurers to contribute to the FAIR Plan insurance pool to conduct any business within the state, meaning they share the risks associated with those properties.

Intended as a temporary solution until homeowners can secure policies elsewhere, the FAIR Plan has become overwhelmed in recent years as more insurers pull back from the market. As of December 2024, the FAIR plan’s exposure was $529 billion – a 15 percent increase since September 2024 (the prior fiscal year end) and a 217 percent increase since fiscal year end 2021. In 2025, that exposure will increase further as FAIR begins offering higher commercial coverage for farmers, homebuilders, and other business owners.

With a policyholder count that has more than doubled since 2020, the FAIR Plan faces an estimated $4 billion total loss from the January fires alone.

Out of touch regulations

Homeowners are understandably frustrated with dwindling coverage availability, which currently afflicts many other disaster-prone states. Supply-chain and inflationary pressures, which could intensify under oncoming U.S. tariff policies, help fuel the crisis. But California’s problems stem largely from an antiquated regulatory measure that severely constrains insurers’ ability to manage and price risk effectively.

Despite a global rise in natural catastrophe frequency and severity, regulators have applied the 1988 measure, Proposition 103, in ways that bar insurers from using advanced modeling technologies to price prospectively, requiring them to price based only on historical data. It also blocks insurers from incorporating reinsurance costs into their prices, forcing them to pay for these costs from policyholder surplus and/or reduce their presence in the state.

Insurers must adjust their risk appetite to reflect these constraints, as they cannot profitably underwrite otherwise. Underwriting profitability is essential to maintain policyholder surplus. Regulators require insurers to maintain policyholder surplus at levels that ensure that every policyholder is adequately protected.

Restricting insurers’ use of prospective data, however, inhibits risk-based pricing and weakens policyholder surplus, facilitating policy nonrenewals and, in serious cases, insolvencies.

Insurance Commissioner Ricardo Lara implemented a Sustainable Insurance Strategy to mitigate these trends, including a new measure that authorizes insurers to use catastrophe modeling if they agree to offer coverage in wildfire-prone areas. The strategy has garnered criticism from legislators and consumer groups, one of whom is suing Lara and the California Department of Insurance over a 2024 policy aimed at expediting insurance market recovery after an extreme disaster.

“Insurers are committed to helping Californians recover and rebuild from the devastating Southern California wildfires,” Denni Ritter, the American Property Casualty Insurance Association’s department vice president for state government relations, said in a statement about the suit. “Insurers have already paid tens of billions in claims and contributed more than $500 million to support the FAIR Plan’s solvency – even though they do not collect premiums from FAIR Plan policyholders.”

A call for collective action

Litigation prolongs – it does not alleviate – California’s risk crisis. Government has a crucial role to play in addressing it, from adopting smarter land-use planning regulations to investing in long-term resilience solutions.

For instance, Dixon Trail, a San Diego County subdivision dubbed the country’s first “wildfire resilient neighborhood,” models the Insurance Institute for Business & Home Safety (IBHS) standards for wildfire preparedness, but not at a cost attainable to most communities, and few local governments incentivize them. Launched by state legislature in 2019, the California Wildfire Mitigation Program is on track to retrofit some 2,000 houses along these guidelines, with the goal of solving how to fortify homes more quickly and inexpensively. Funded primarily by FEMA’s Hazard Mitigation Assistance Grant program, the pilot has thus far avoided the same cuts befalling FEMA’s sister programs under the Trump Administration.

Regardless of what legislators do, California homeowners’ insurance premiums will need to rise. The state’s current home and auto rates are below average as a percentage of median household income, reflecting a combination of the increased climate risk and of the regulatory limitations preventing insurers from setting actuarially sound rates. Insurance availability will not improve if these rates persist.

To quote Gabriel Sanchez, spokesperson for the state’s Department of Insurance: “Californians deserve a system that works – one where decisions are made openly, rates reflect real risk, and no one is left without options.” Insurers do not wield absolute control over that system, and neither do legislators, regulators, consumer advocates, or any other singular group. Confronting the root causes of these issues – i.e., the risks – rather than the symptoms is the only path towards systemic change.

Learn More:

Despite Progress, California Insurance Market Faces Headwinds

California Insurance Market at a Critical Juncture

California Finalizes Updated Modeling Rules, Clarifies Applicability Beyond Wildfire

How Proposition 103 Worsens Risk Crisis In California

Tariff Uncertainty May Strain Insurance Markets, Challenge Affordability

Issues Brief: California Struggles to Fix Insurance Challenges (Members only)

Issues Brief: Wildfire: Resilience Collaboration & Investment Needed (Members only)

“When we, as LGBTQ+ adults, make the decision to get into a relationship and start a family, it’s not always with the support of our own family.” That is a poignant statement that will resonate with a lot of people.

This insight came from MyLin and SK Stokes Kennedy, who are married and raising their blended family in Southern California. The couple appeared on season six of “Black Love,” where they opened up about the challenges of cultivating their partnership and raising three children.

We are thrilled that they agreed to work with us again this year on spreading the message about the importance of life insurance.

Life insurance? You may ask, “Where does that come into all of this?” Well, it may be more important than most people think, so read on as we chat with MyLin and SK.

 

Life Happens: When is the first time you both heard about life insurance?

MyLin + SK: We became familiar with it after getting married but didn’t get it until we were pregnant with our first child together.

 

LH: Why did each of you decide to purchase life insurance?

MyLin + SK: We realized that we didn’t want the other, or our kids, to suffer financially in the midst of grieving if, or when, something happens to us.

 

LH: What type of coverage do both of you have and why?

MyLin + SK: We currently have term life insurance. In doing research, we found that it was the least expensive option at this point for us.

 

LH: Why should everyone have life insurance, especially LGBTQ+ adults?

MyLin + SK: When we, as LGBTQ+ adults, make the decision to get into a relationship and start a family, it’s not always with the support of our own family. So, if something happens to us, there is the chance that our desires are not withheld by the surviving family. Wills can be contested, things drawn out. With life insurance, you can ensure that your partner and kids receive what you want them to.

 

LH: Have you had conversations about life insurance with your family or friends?

MyLin + SK: Yes, we’ve had convos with both. With our moms being the most important ones because of what positions we may be left in if they don’t have life insurance.

 

LH: What did one of those conversations look like?

MyLin: So, I found out my mom had a very small policy through her job that was under $10,000, which isn’t covering her funeral costs. That led to us looking into getting her a proper policy that would cover her funeral costs (my mom knows a lot of people so it will be big, and we will need funds), bills/debt, mortgage, her car note. There is so much that I don’t want to fall on my brother and I or have to create a GoFundMe and beg people for it. I just want it already taken care of.

 

LH: What does life insurance mean to you?

MyLin + SK: For us it means security and peace of mind, knowing that if anything unfortunate happens to either of us (or both of us), our kids will be taken care of.

 

LH: What do you wish more people knew about life insurance?

MyLin + SK: We wish people understood the gravity it held. How much pain and stress dealing with financial struggles after losing a loved one can be and that we can do something about it now. We just need the knowledge and awareness spread that it’s not a huge, expensive monthly bill.

 

LH: What research findings from our 2024 Insurance Barometer Study (Life Happens and LIMRA) do you find the most interesting?

MyLin + SK: I was interested to see that 62% of people that said they don’t have life insurance also feel as though they need it. The desire is there, they just need more knowledge. So, there is opportunity there to get them the knowledge they need to make that next step.

 

LH: We agree—and that really is our mission!

MyLin + SK: And then that 22% of people that do have it say they need more. I feel like we land in that 22%. We’ve had life insurance for about five years now and pay $83 a month for all our policies, which includes $150,000 policies for each of us as parents and $15,000 policies for each of our three kids. 

Our goal is to jump up to $500,000 of coverage on us as parents because we want our kids to have funds for their future education, just not paying off bills and debt. So even we know that there is room for growth and to receive more knowledge. That’s why we like partnering with you all. It motivates us to dig a little deeper and get more knowledge—and also to share it. Because we know more people need it.

 

Get Started

Don’t let being unsure of how much or what kind of life insurance to buy stop you from getting coverage. To start, you can do a quick calculation with our Life Insurance Needs Calculator to get a general idea of how much you may need. And if you want help choosing the right kind of policy that fits your budget, you can talk with an insurance professional at no cost or obligation. If you don’t have someone to work with, you can use Life Happens’ Agent Locator here.

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The answer: it depends. While many believe that insurance is a “set-and-forget” type of investment, that isn’t always the case. Depending on your area of practice, location, and more uncontrollable factors, your insurance coverage may go “out of date” sooner than you think. That is, if you aren’t setting up a proactive legal malpractice insurance renewal.

It’s imperative that once you get an insurance policy as a legal practitioner, you don’t sleep on staying in the know about your coverage. Getting a legal malpractice insurance renewal done proactively, and beyond the standard annual renewal period, can expose potential pitfalls and new advantages.

But while that all sounds fine and good, you may be thinking to yourself, “How am I going to find the time to check in on my policies so frequently? I’m a lawyer! I have a lot to do!” And, you’d be right. In this article, we’ll go through the reasons why it’s important for you to check in on your policies more frequently, and how to make the process as painless as possible.

Why do I need to keep legal malpractice coverage up-to-date?

Legal malpractice coverage, also known as lawyers’ professional liability insurance or errors and omissions insurance, protects attorneys and law firms from financial losses and reputational damage stemming from claims of negligent legal advice or actions. 

Social inflation has become the main growth driver of US liability claims, according to Swiss Re Institute‘s new Social Inflation Index. Primarily due to a rising number of large court verdicts, social inflation increased liability claims in the US by 57% in the past decade. So, consistently ensuring that your policy limits will cover all of your potential expenses is vital. No one wants to be underinsured.

Beyond the financial, there are some reasons why you may be legally required to keep your malpractice insurance coverage up-to-date: 

• Clients may require their legal counsel to maintain a specific coverage limit in order to act as their representation 
• Depending on your state, you may be legally required to disclose your insurance coverage status to the government as well as to your clients

There are also other reasons why you should keep your LPL coverage up-to-date:

• Peace of mind: Working as an attorney or running your own firm comes with enough stress as is, you don’t need another thing keeping you up at night. Knowing you have adequate financial protection against potential professional liability claims can be one less thing to worry about.
• Uncover potential gaps in your current coverage in advance of making a claim and finding out the hard way. Especially as new circumstances and risks emerge and evolve, you or your business may encounter an issue that your policy doesn’t, or never did, cover.

How often do I really need to review my policy?

An insurance renewal is the process in which an insurance policy is extended for another term, typically under similar or the same conditions as the original policy. This typically occurs for the same duration as the original policy term.

While annual renewals are standard, waiting for them to address significant changes or emerging risks can leave you and your firm vulnerable. In life — and in practicing law — things are always changing and evolving, making the need for a more agile approach to insurance a must-have. 

While the standard review cycle is yearly, it may be wise to check in on your coverages at the halfway point if possible. As well, if you experience significant changes at your firm, it’s probably a good time to review. We’ll go over a few of those potential changes below.

There are some changes within a law firm that could immediately prompt a legal malpractice insurance renewal. It’s easy to assume your current policy still covers all your needs, but changes in your role or responsibilities might introduce new risks that your old policy doesn’t address. 

Here are some changes that could prompt a review of your current policies:

1. Significant changes in staffing 

If your firm has recently hired a large number of new attorneys or let go of a number of staff, you should take a look at your current policy and ensure it still covers what you need. Further, an increased reliance on “of counsel” contract attorneys may also require some changes in your coverage plan. As well, the departure of key partners may also be cause for a policy review.

Solution: Having a policy with a broad definition of “Insured.” If your policy doesn’t specify exactly how many staff are employed by your firm, you may not be required to amend your policy in this circumstance. However, review your policy to ensure that this is the case.

2. Insurance policies and regulations change

Insurance policies and regulations change to adapt to evolving risks, protect coverage holders, and ensure financial stability within the industry. It’s important to stay informed about any modifications to your policy to avoid misunderstandings or gaps in coverage, it’s not uncommon for regulations to change and you may need to adjust your coverage in turn. 

Solution: Your insurance company will notify you of these changes ahead of time. If there are anticipated or known changes in the terms of your coverage, you will receive a conditional legal malpractice insurance renewal notice.

3. You have changed practice areas 

Regularly reviewing your policies helps ensure compliance with relevant regulations and industry standards, especially in the circumstance that you change your practice area. Perhaps you are entering a new, higher-risk practice area or scaling back other practice areas. These changes can impact your coverage and the cost associated with it. 

Solution: Handle this at your next legal malpractice insurance renewal. Your insurance policy is signed in the previous year for a year’s worth of activities. You can reach out to your insurance provider, but it will not adjust costs or coverage until your yearly renewal date.

4. Changes in your firm’s business operations or structure

Similarly, if your business location has changed or if you are opening locations in new jurisdictions, you’ll need to update your policy to reflect those changes. Firm ownership or beneficiary designation changes should also be considered. As well as expanding to hybrid work models, mergers or new partnerships would also merit an update to your policy. Additionally branching out to pro bono or contract work outside of your regular role and responsibilities should also prompt a coverage review. Being underinsured or having inadequate coverage due to changes in your firm’s place of business or overall structure can leave you vulnerable to unexpected losses.

Solution: All of these changes, including relocations, mergers and acquisitions and more, are all changes that can be made mid-term. These changes should be reported to your insurance provider. It may not change the cost of your policy at the time, but it can be noted for an upcoming legal malpractice insurance renewal.

5. Changes in your professional financial health or client portfolio 

Life changes, such as starting a new business, changing positions, or buying a new property, can affect your insurance needs. Similarly, business changes, like expanding operations or introducing new services, can bring new risks. Substantial growth or reduction in revenue may also merit a change in coverage. Be sure to take note of developments as they arise and check in with your insurance agent if you’re not sure if these new circumstances could impact your policy. 

Solution: Talk with your insurance agent. If you are concerned that a change to your business might negatively impact your coverage, or worse, that you may no longer be covered, your insurance agent can help clarify.

How do I proactively review my legal malpractice insurance?

It is good practice to periodically review your existing professional liability policy before a claim is made to confirm that the policy provides coverage that meets your needs. Further, if no claims have been made and no changes have taken place on your end, twice a year is a safe benchmark for policy reviews. The midyear review will allow for an opportunity to refresh your memory, look at industry changes, and start thinking about what you may need to update or change in advance of your legal malpractice insurance renewal date. 

Ready to start your review? Here’s how to better understand your insurance coverage: 

Review your coverage by following these five simple steps: 

1. Refresh your memory on key terminology including terms like premium, deductible and wrongful act. Grasping the full definitions of these words and others will ensure your review is comprehensive.
2. Get started by looking at your policy’s declarations page. The declaration page summarizes your policy which can make it easier to brush up on your coverage without having to read the entire policy document.
3. You’ve read the summary, now it’s time to read the fine print. Be sure to take a look at any insuring agreements and exclusions. 
4. Finally, you can assess what options you have for renewal. Do you want to change providers? Do you want to add or omit coverage? You should feel equipped to answer these questions once you’ve completed your review. However, if you are still unsure, now is the time to tap into your agent for guidance. 

It’s also important to note that not all insurance policies automatically renew and you may need to be an active participant in your renewal. While insurers are required to send a notice of upcoming renewal, it is important to be prepared with questions on your current and potentially changed coverage. So, mark your calendar.

If there’s a gap between the expiration and your new policy’s effective date, you may not have insurance coverage for that time because insurers are generally not required to back-date to close the gap. 

The early bird benefits of midyear policy reviews 

Changes in business operations or the legal landscape in general can make your existing policy inadequate. Regularly reviewing and updating your policy ensures it remains aligned with your current needs and helps you avoid costly gaps in coverage. 

There’s more to gain than lose with a midyear policy review.

Knowing your insurance coverage is up-to-date and tailored to your specific needs provides peace of mind, especially in case of unexpected events. Proactively setting up a legal malpractice insurance renewal beyond the standard annual renewal is crucial for maintaining adequate protection and mitigating potential risks. 

If you’ve completed your review and are looking for an insurance provider that understands law firms and their needs, get a quote and get started on your legal malpractice insurance renewal journey with Embroker today.

 

 

The annual Accenture Tech Vision report is in its 25th year and continues to be a huge source of insight for our technological future. This year, AI: A Declaration of autonomy  features four key trends that are set to upend the tech playing field: The Binary Big Bang, Your Face in the Future, When LLMs Get Their Bodies, and The New Learning Loop.  “The New Learning Loop” is a particularly compelling trend to me for the insurance industry. This trend explores how the integration of AI can create a virtuous cycle of learning, leading, and co-creating, ultimately driving trust, adoption, and innovation. 

The virtuous cycle of trust between AI and employees 

Trust is obviously important in any industry but since the insurance industry relies on the trust-based relationship between the customer and the insurer, especially when it comes to claims payouts, in essence, insurers effectively sell trust. Customer inertia when it comes to switching insurance providers comes down to the fact that they are happy with a repeatable insurer who makes good on this trust promise at the emotional moment of truth and pays in a timely fashion. This trust ethos needs to carry through to an insurers’ relationship with its employees. For any responsible AI program to be successful, it must be underpinned by trust. No matter how advanced the technology, it is worthless if people are afraid to use it. Trust is the foundation that enables adoption, which in turn fuels innovation and drives results and value.  In fact, 74% of insurance executives believe that only by building trust with employees will organizations be able to fully capture the benefits of automation enabled by gen AI. As this cycle continues, trust builds, and the technology improves, creating a self-reinforcing loop. The more people use AI, the more it will improve, and the more people will want to use it. This cycle is the engine that powers the diffusion of AI and helps enterprises achieve their AI-driven aspirations. 

From ‘Human in the loop’ to ‘Human on the loop’ 

In fostering this dynamic interplay between workers and AI, initially, a “human in the loop” approach is essential, where humans are heavily involved in training and refining AI systems. As AI agents become more capable, the loop can transition to a more automated “human on the loop” model, where employees take on coordinating roles. This approach not only enhances skills and engagement but also drives unprecedented innovation by freeing up employees’ thinking time, exemplified by the fact that 99% of insurance executives expect the tasks their employees perform will moderately to significantly shift to innovation over the next 3 years. 

Capitalize on employee eagerness to experiment with AI 

Insurers need to take a bottom-up rather than a top-down approach to employee AI adoption. Stop telling your employees the benefits of AI- they already know them. Everybody wants to learn and there is already huge excitement amongst the general public about the endless possibilities of AI. We see this in our daily lives. We use it to help our children do their homework. The AI action figures trend is just one that shows how people are eager to demonstrate their willingness to try it out and have fun with the technology. The key is to actively encourage employees to experiment with AI. Build on the conviction that we think it will be useful and enhance our and their careers if we all become proficient users of AI. We are already building this generalization of AI at many of our clients. Our recent Making reinvention real with gen AI survey revealed that insurers expect a 12% increase in employee satisfaction by deploying and scaling AI in the next 18 months. This increase is expected to lead to higher productivity, retention, and enhanced customer trust and loyalty, all of which drive efficiency, growth, and long-term profitability.  

Insurers need to turn any perceived negative threat into a positive by emphasizing the fact that AI will lead to the reduction of mundane, repetitive tasks and free up employees to work on innovation projects like product reinvention. With 29% of working hours in the insurance industry poised to be automated by generative AI and 36% augmented by it, the necessity of this constant feedback loop between employees and AI is reinforced. This loop will help workers adapt to the integration of technology in their daily lives, ensuring widespread adoption and integration. 

Cut out the mundane and the noise for your employees 

Underwriters, in particular, can benefit from AI by using LLMs to aggregate and analyze multiple sources of data, especially in complex commercial underwriting. This can significantly reduce the time spent on tedious tasks and improve the accuracy of risk assessments. The international best-selling book “Noise: A Flaw in Human Judgment” by Daniel Kahneman, Olivier Sibony, and Cass R. Sunstein, one of my personal favorites, focuses on how decisions and judgment are made, what influences them, and how better decisions can be made. In it, they highlight their finding at an insurance company that the median premiums set by underwriters independently for the same five fictive customers varied by 55%, five times as much as expected by most underwriters and their executives. AI can address the noise and bias in insurance decision-making, even among experienced underwriters. AI can provide acceptable ranges and objective criteria for premium calculations, ensuring more consistent and fair outcomes. 

Addressing the readiness gap through accessibility 

Despite 92% of workers wanting generative AI skills, only 4% of insurers are reskilling at the required scale. This readiness gap indicates that insurers are being too cautious. To bridge this gap, insurers can take a more proactive approach by making AI tools easily accessible and encouraging their use. For example, within our own organization, all employees are using AI tools like Copilot and Writer on a regular basis. We don’t have to tell them to use these tools; we just make them easily accessible. 

To foster this proactivity, insurers should recognize and advertise successful use cases, showcasing both the people and the learnings. The key is to find the spearheads—those who are already using AI effectively—and highlight their achievements. The insurance industry is still in the early stages of AI adoption, and no one knows the full extent of the killer use cases yet. Therefore, it is crucial to allow employees to experiment with the technology and not be overly prescriptive. 

Reshaping talent strategies through agentic AI 

This integration of AI is also disrupting traditional apprenticeship-based career paths. As insurers develop AI agents, new capabilities and roles will emerge. For instance, the product owner of the future will engage with generated requirements and user stories, while architects will be able to rapidly generate solution architectures and predict the implications of different scenarios and outcomes. With AI embedded in the workforce, insurers will need to focus on sourcing skills needed to scale AI across market-facing and corporate functions. This may involve looking beyond their own walls for expertise and capacity, covering a wide spectrum of low to high domain expertise roles. 

How to capture waning silver knowledge  

With a retirement crisis looming in the very near future in the industry, in an era of fewer employees, how can AI agents drive a superior work environment, providing choice and better balance? The new generation of insurance personnel can leverage the knowledge and experience of retiring experts by extracting decisions and risk assessments from historical data, free from bias. For example, Ping An’s “Avatar Coach” transforms training with immersive scenes and customizable avatars powered by an LLM, reducing training expenses by 25% and achieving a stellar 4.8 NPS for high engagement. An AI use case that we increasingly encounter is documenting the functionality of legacy systems where control has been lost or is very scarce. We have come across instances where tens of millions of lines of code are not documented due to the age and size of the systems. LLMs are extremely useful here as they can effectively read the code and tell us what the modules do. This will help insurers regain control before the mass employee exodus. 

A cultural shift to embed AI in the workforce is the key to success 

The New Learning Loop is not just a technological shift but a cultural one. By fostering a dynamic interplay between employees and AI, insurers can create a virtuous cycle of learning, leading, and co-creating. This cycle will not only enhance employee satisfaction and productivity but also drive innovation and long-term profitability. The key is to build trust, encourage experimentation, and recognize and celebrate successful use cases. As the insurance industry continues to evolve, the integration of AI will be a cornerstone of its future success. 

This post is part of a series sponsored by AgentSync.

P&C market summary

It’s no secret the property and casualty (P&C) market is full of struggle. After years of premium increases and market withdrawals, the right sizing of risk-to-profit is … a work in progress.

Some areas of the market have seen the necessary improvements to lift underwriting above water. Auto insurance, for instance, has buoyed the profiles of the carriers who write it, thanks to the post-pandemic years of sharp premium increases.

Some markets are notoriously difficult. Florida and California, for instance, are both still on a journey of legislative reform and market changes. And wildfire risk across the country has insurers rethinking their approach to underwriting this risk.

Shareholder expectations are their own force within the industry, and carriers and agencies that hope to spread their risks while exploring new avenues for profitability will necessarily be on the lookout for good partners for merging or acquisition.

That brings us to the following: For P&C carriers that hope to deliver on their bottom line, McKinsey reports four common factors that can make the difference in the coming year:

• Clear strategies to capture profitable growth and focused execution
• Modernized underwriting
• Cost-effectively acquiring businesses that solve for distribution
• Operational efficiencies that lower internal administrative costs

Clear strategies to capture profitable growth and focused execution

If you read the McKinsey report and it seemed like the summary was, “to win, you need a plan to win,” you’ll be forgiven. But if you’ll indulge us, there’s a little bit of nuance.

Sure, it may seem like it goes without saying that you need a strategy to grow, but here’s why all those adjectives matter:

• Clear strategies: If it takes some mental gymnastics to tie your current tactics to your business objectives, then your message is muddy and your team can’t possibly be aligned and rowing in the same direction.
• Profitable growth: Growth that just takes your current reality and makes it bigger isn’t growing profit, because it grows your challenges alongside any new business you bring in. You’re looking for growth that puts more money in your business coffers, not the same problems at a different scale.
• Focused execution: Yes, everyone looks busy at your business. But if everyone’s spending their time putting out a million little fires and working on side projects and things that don’t move the needle, then your effort is just a lot of noise (which takes us back to those clear strategies).

The McKinsey report champions the idea that most strategies will involve some sort of M&A plans. But again, the principles of clear, profitable, and focused apply. If your acquisitions are scattershot affairs of snapping up partners without evaluating their overlap with your existing pipeline or how they align with your growth strategies, you may find yourself in a morass of a merger with no clear line on profitability. I.e., bigger ain’t always better.

Modernized underwriting

1. Telematics. Internet of Things devices. Underwriters have more tools at their disposal than ever before in collecting data about insureds. Yet, this overwhelming mass of data is only helpful if you know what to do with it and have the processes in place to support it.

AI can be instrumental in assessing a risk even as applications and information comes from multiple varied sources. But this is only useful if you can ensure you’re falling in line with various states’ regulations of AI in underwriting and plugging what you can use into a comprehensive and holistic system.

In the end, your business may have a very tailored definition of what “modernized” underwriting means to you or your business partners. But if you don’t have a way to activate it, it’s still just data collection for the sake of data collection instead of delivering lower business risk for you and right-sized premiums for your customers.

Cost-effectively acquiring businesses that solve for distribution

M&A is the lifeblood for many P&C carriers and agencies alike. But the margins on your new ventures—and the long-term ROI—vary. A lot.

What makes a new acquisition cost effective? You get the most ROI out of an acquisition that:

• Adds opportunities without significantly increasing your business or regulatory risk
• Brings on more blood without significant duplications or overlaps in internal operations
• Has a clean and understandable balance sheet

Unfortunately, businesses that have low internal operations costs, are streamlined, and are clearly profitable are rarely just sitting on the market with a “Buy Me” nametag. Instead, you may not really know whether a business can be purchased and cleaned up to be a profitable add until after you’re already too deep.

Businesses that solve for distribution are businesses that may have relationships you want to add to your network. Or they may have impressive downstream agents. Or they may have an innovative way of going to market. Whatever it is, focus your time and effort on acquiring businesses that are an add for you, not just businesses that make you “bigger.”

The cost-effectiveness of an acquisition really comes down to the way you handle your internal administrative costs. Businesses that purchase another company and then let that company continue to operate in a bubble often see the risks of M&A (agent churn, regulatory risks, bloat) with the barest of skinny-margin rewards.

Operational efficiencies that lower internal administrative costs

The real payoff for you and for any M&A activity in your business comes from your internal operational efficiencies. When you streamline your internal administrative costs, you make it easier for a handful of employees to manage lots of complexity.

Onboarding new partners, new agents, and new acquisitions necessarily means a high volume of data. But most of it is the same data, every time. So having every single onboard turn into a special snowflake is a waste of time and money (and since time is money, it’s a waste of more money).

By streamlining your internal processes, you lower your administrative costs and make your M&A activities far more successful. It adds up to more money in your pocket and the ability to be more reactive and proactive when the P&C market gets turbulent.

AgentSync and your M&A success

AgentSync helps agencies and carriers in P&C stay abreast of regulatory changes and shifting market conditions. By streamlining internal processes, our clients can make their M&A activity more profitable while also improving their reputations with their distribution partners, from agencies to carriers and everyone in between.

• Onboarding portals make it easy for agency partners and individual producers to onboard and maintain their own data without staff babysitting the process.
• Hierarchies that can handle complexity make it easier to accurately reflect business relationships and maintain accurate commission payments no matter what state or business structure an agent is affiliated with.
• Integrated data from the industry source of truth makes it abundantly clear which subordinate businesses are selling policies (and which ones cost more than they’re worth).
• Easy, accurate reporting cuts down hours of personnel time to hunt information, and makes regulatory audits a breeze.

If you’re ready to level up your M&A activity, see what else AgentSync can do for you; schedule a demo today.

Topics
Property Casualty

Louisiana’s Senate passed five tort reform bills last week to curb legal system abuse driven by billboard attorneys in the Pelican State. The legislative success represents the culmination of sustained advocacy efforts – including a Triple-I-backed awareness campaign, StopLegalSystemAbuse.org – to build public support.

The new legislation addresses Louisiana’s longstanding challenges with high insurance premiums and the state’s reputation for being plaintiff-friendly in civil litigation. The reforms include stricter limits on damages, clearer standards for expert testimony, and other procedural changes designed to restore balance to the courts while reducing financial burdens on Louisiana families and businesses.

However, an additional measure intended to change state regulations for approving rate filings for auto and home insurance overshadowed the positive actions taken by lawmakers, the Times-Picayune reported.

House Bill 431, which would prevent drivers who are at least 51 percent at fault in an accident from receiving any compensation for their own injuries, requires final House approval due to Senate amendments. So do Senate Bill 231, which would allow insurers’ lawyers to present jurors with the actual amount paid for medical bills, rather than the total billed, and House Bill 436, which would ban undocumented immigrants injured in car accidents from receiving general (non-economic) damages.

House Bill 434, which would increase the threshold from $15,000 to $100,000 for uninsured drivers to collect medical expenses for bodily injuries in accidents, and House Bill 450, which would require plaintiffs in car accident lawsuits to prove their injuries were actually caused by the accident, are awaiting Gov. Jeff Landry’s signature.

Learn More:

Triple-I “Trends and Insights” Issues Brief: Louisiana Insurance Market (Members only)

Louisiana Senator Seeks Resumption of Resilience Investment Program

Louisiana Reforms: Progress, But More Is Needed to Stem Legal System Abuse

Louisiana Is Least Affordable State for Personal Auto Coverage Across the South and U.S.

Who’s Financing Legal System Abuse? Louisianans Need to Know

 

Industry expert Michael Lieberman, co-founder and CTO of software firm Kusari, shares his thoughts on what a leading policy looks like in 2025.

“It is something that is future proof at some level, that is evolving with the times as different types of cyberattacks become more sophisticated. What’s also very important is being crystal clear about what is covered and what is not,” he says.

Fellow cyber insider Kelly O’Brien, senior cybersecurity practitioner at Compass IT Compliance, also defines what is market leading.

“It should be broad, adaptive coverage including specific considerations for AI usage both internally and across third-party vendors,” she says. “It also goes beyond basic coverage by including proactive services like threat intelligence, security posture assessments, third-party risk tools, and workforce awareness training.”

Other key differentiators include:

Ransomware has become an even bigger threat for cyber insurers in 2025 as they react to an uptick in attacks. Part of the increase is down to the rise of ransomware-as-a-service (RaaS) and AI-powered variants.

The most common is by a VPN compromise as threat actors scan Secure Sockets Layers (SSL), commonly a web page log-in. From there, they use brute force and try thousands of password combinations a minute until they gain entry.

“Upwards of 40 percent to 50 percent of ransomware attacks right now take place that way and it’s quite a simple technique. You don’t really need a lot of sophistication,” says Jacob Ingerslev, head of cyber and tech underwriting at 5-Star 2025 insurer Tokio Marine HCC – Cyber & Professional Lines Group.

The other way ransomware is used by threat actors is to target a big vendor, knowing they can have a large impact if they can exfiltrate data.

“If the vendor doesn’t pay up, then they can start extorting the individual customers,” adds Ingerslev.

Deloitte’s annual Cyberthreat Trends Report observed a 17 percent increase in ransomware attack claims in 2024, peaking in the fourth quarter with 57 percent more claims compared to the fourth quarter of 2023.

This jump is partly explained by the emergence of new ransomware groups such as:

• ALPHV
  
   

• El Dorado/BlackLock
  
   

• Lynx
  
   

• Fog
  
   

• APT73/BASHE

Some are judged to be nation state-sponsored cyber espionage, while others are financially motivated, which is another area where the best insurers have a role to play.

For example, reports suggest that CDK Global paid a $25-million ransom after a cyberattack in 2024 and edtech provider PowerSchool confirmed it also paid out.

Tokio Marine HCC – Cyber & Professional Lines Group’s data shows a drop in ransomware attacks in 2022, but that has rebounded and then some.

“We saw a big increase year over year in Q1 of 2025. We look at these so-called leak sites, or the ‘wall of shame,’ which is, if you pay the ransom, you don’t end up on the ‘wall of shame.’ If you look at that in Q1 in 2025, there was an 86 percent increase year over year,” Ingerslev says. 

“We can help with the negotiation if a ransom payment must take place. Typically, when all backups have been destroyed, that’s when you start considering [whether] it is better to pay the ransom, versus spending an exorbitant amount of money to rebuild the data from scratch.”

Particular industries that fellow IBA’s 5-Star Cyber winner Arch Insurance has detected activity in are healthcare and manufacturing.

“In healthcare, there’s technology dependency on operations, as well as a lot of sensitive data and information,” says Jamie Schibuk, executive vice president, professional liability and cyber. “We continue to see attacks on the operational technology that manufacturing companies rely upon, which often tends to be more legacy-type technology, which can create issues if those networks are compromised.”

Lieberman sheds light on how some threat actors take advantage of AI hallucinations or how they seed the internet with bad data to convince new AI models to give misleading answers. 

He says, “You could ask ChatGPT something, and it gives you an answer which seems reasonable to say, ‘Install this software’. It turns out that software was written by malicious actors, but you download it thinking, ‘I should get this software tool.’”

However, the main danger from AI is refining and improving existing threats, as insurers are mainly seeing it deployed in social engineering attacks, as the tech enables threat actors to perfect emails. Often, criminals use AI to mimic the tone and style of emails between two parties using a large language model (LLM), which highly increases the chance of their email being taken at face value.

“It’s very easy to spin up a natural-sounding email, particularly if they have already breached the customer’s inbox,” says Michael Drummond, chief underwriting officer cyber/tech at At-Bay. “Each new LLM model that comes out, you see an uptick in financial fraud because it’s making it easier to pull those things off, as it’s a lot harder to differentiate between what’s a legitimate email and a fraudulent one.”

At-Bay, another of IBA’s 5-Star insurers of 2025, combats this by combing through all the claims that have resulted from these types of emails and using their system to pinpoint indicators that suggest fraudulent activity.

“We know that 80 percent of our financial fraud claims arise from email attacks, so earlier this year, we launched a new email security solution that’s available to every insured in our portfolio,” says Drummond.

 

 

Due to At-Bay’s scale of having 40,000 business clients, from startups to those with $5 billion in revenue, the tool is powered by real-life claims data that mirrors the threats companies are facing. The firm believes so deeply in its solution that it’s willing to double or even quadruple the typical amount of coverage if clients adopt it.

“We have access to information that traditional security providers and companies don’t, as we can actually see what really drives these types of claims and what causes them,” adds Drummond. “We have designed our security solution specifically to identify those characteristics.”

Arch Insurance is even detecting the use of deepfakes to facilitate bank transfers.

“The technology is advanced enough to fool people into thinking that they’re talking to the CFO of their company, when they’re really not,” says Schibuk.

His other concern with AI is that threat actors can leverage it to increase the scale of their attacks. Remaining vigilant across this landscape is a daily concern for Arch. The firm has a 30-person underwriting team, but in addition also has a team of four cybersecurity risk engineers.

“They all have a background working within security operation centers of companies, so they’re approaching it more from the client side. That’s really helpful in both the risk evaluation as well as helping us to vet a lot of third-party tools and risk management services, because they have actual implementation experience in using a lot of those tools,” says Schibuk.

And he adds that high-quality professionals are still the difference makers.

“There’s a lot of technology and process that we can leverage and implement, but at the end of the day, so much of it comes down to our approach to the business and the people that work on it every day.”

Tokio Marine HCC – Cyber & Professional Lines Group’s threat awareness and remaining in step with all the latest developments relies on its Cyber Threat Intelligence team, which has the tools to monitor clients’ networks on an ongoing basis. 

The team has delivered for clients who have fallen victim to wire fraud transfer, as over the last year, it has recovered over $30 million by working with law enforcement and acting fast. It is also plugged into forums where tool kits are for sale that grant access to systems.

This learning mindset is a competitive advantage to the firm, as it continually explores and discovers what threat actors are planning and then informs their insureds. One such way is via honeypots – fake machines on the internet that look like an actual company with an actual server but are just there to pick up activity and learn what threat actors are doing.

Ingerslev says, “That’s one way to learn, and the other way is to collaborate with people who operate in the dark web forums. One company we work with intercepts attacks by purchasing access to customers from threat actors.”

There is also great benefit from Tokio Marine HCC – Cyber & Professional Lines Group’s in-house Incident Response Management team that gathers forensic reports from all the claims. 

“We can determine what are the most common causes of loss, and what are the most common ways threat actors get into a network, and also address these. That feedback loop is so important,” says Ingerslev.

Highlighting just how powerful this is, Tokio Marine HCC – Cyber & Professional Lines Group often discovers software vulnerabilities before even the vendors of the technology do.

Ingerslev adds, “In some cases, we’re faster and it’s because we have the claims. That’s why we see it quickly and we have a very strong incentive to help the clients, because it helps us, too.”

Arch prioritizes awareness and ensures it puts brokers in the best possible positions with its clients.

Schibuk appreciates that brokers’ role has become harder in cyber due to the risk factors and advancing technology.

“With all the value-added services, they’re helping to facilitate that conversation, so they’re a really key part of the process and enable us to roll out a lot of the risk management services.”

The industry has become more technical over the past five years and Arch’s Integrated Risk engineering team has become more sophisticated around the questions it asks and the tools it utilizes to evaluate.

“We’re definitely a very entrepreneurial type of company. We take pride in being creative on how we approach risk,” says Schibuk. “We have a more flexible approach than a lot of others in the marketplace, along with the ability to customize coverage for individual insureds.”

 

 

This mentality extends to At-Bay, where the team is focused on enabling brokers to understand the security posture of clients. The team ensures that brokers understand its products and what puts companies at risk from cyber threats.

The At-Bay team views itself as a resource for brokers to lean on.

“We’re happy to engage at whatever level they want, from very deep technical conversations to just making sure who are the right people to call or hand the customer off to if they’re not as comfortable, getting into the weeds on some of the cybersecurity stuff,” says Drummond.

Giving brokers license to customize products is another service that At-Bay brings to the table. Its software engineers and developers built the company’s entire underwriting platform, claims system, and security platform. This affords them the ability to have a tight feedback loop across all business operations. 

Its InsurSec solution, At-Bay Stance™, is a unified security platform that helps insureds proactively identify and mitigate cyber risks associated with 86 percent of customer claims. Access is included with every Cyber and Tech E&O policy and offers an estimated value of up to $72,000 per year in security solutions.

Earlier this year, At-Bay also launched two new InsurSec solutions designed to combat the most common type of cyber claim: financial fraud. These tools help prevent fraud before it happens and can unlock enhanced coverage terms for eligible insureds, including financial fraud sublimits of up to $1 million.

At the core is the firm’s ethos of responsiveness and critical thinking.

Drummond says, “Whether that’s a more complex or less complex account, our folks are there to have those conversations and they aren’t afraid to think outside of the box and tailor something.”

Flexibility, responding quickly and running educational webinars are ways Tokio Marine HCC – Cyber & Professional Lines Group supports its brokers. The firm is also content to be transparent about what it does and what it can offer.

“Even if a competitor knows our techniques and approach to client monitoring, alerting and the incident response, it would still take them a long time to build something similar. So, we’re comfortable,” says Ingerslev.

Tokio Marine HCC – Cyber & Professional Lines Group’s primary target market is the small to mid-sized segments that can use the insurer’s preventative services, compared to a Fortune 1000 company that is likely to have in-house cyber teams.

This year’s recognition is the fifth successive annual cyber award for Tokio Marine HCC – Cyber & Professional Lines Group, which supports its view that its infrastructure and systems in place are formidable.

“It’s a stamp of quality and also a sign of consistency,” adds Ingerslev. “We are a big global insurer with very solid financial stability behind us, and that allows us to continue to stay relevant and have a reasonable market share, but also not fall into some traps in parts of the market cycle.”

Both industry experts – Lieberman and O’Brien – who spoke to IBA for this report agree that cyber insurance has not yet reached the maturity where it exists alongside more established areas such as flood or fire.

O’Brien says, “They are backed by decades of actuarial data, but cyber insurance is still evolving due to the rapid pace of technological change and the volatility of cyber threats. Many incidents go unreported, and the risk landscape continues to shift, making it harder to standardize and stabilize the market to the same degree.”

Lieberman also points to the rapidly evolving nature of the market, which makes it difficult to define coverage and leads to confusion.

“If a new type of attack is discovered, is that covered automatically? The challenge for a lot of insurance companies is that the state of things is changing so fast,” he says.

And he also cites that the cuts to government agencies focused on compliance and regulations in the cyber security space is leading to concerns. For example, National Institute of Standards and Technologies (NIST) lost hundreds of cybersecurity staff due to downsizing. Part of its role is to run the National Vulnerability Database, which some fear may disappear in the future.

Liberman adds, “If it does go away, what is going to be there is unclear. That’s a huge problem for insurance companies, because they’re viewing this as if you have vulnerabilities that exist in the database, and you need to fix them. But if that goes away, what are they going to use as a gauge to say you have this vulnerability?”

• AIG
• AXA XL
• Beazley
• CFC
• Chubb
• Cowbell