Best’s Review’s Online Archives AM BEST’S MONTHLY INSURANCE MAGAZINE November 2022 • Volume 123 • Issue 11 www.bestreview.com ISSUES & ANSWERS: Affinity Program Market Starting on Page 19 Top Workers’ Compensation Insurers Page 26 Rising Rates Impact Life and Annuity Products Page 28 Homeowners Insurers Tested in Coastal States Page 43 Richard Augustyn Christopher MeeMartin Ween Geof McKernan Heidi Strommen Joel Cavaness Matthew Power Jeremy Hitzig Hank Watkins Troy Korsgaden Insurance executives and industry experts discuss the advantages of specialization and how the industry identifies and develops new opportunities. Pages 33-42 The New Age of Specialty CoveragePhiladelphia Insurance Companies is the marketing name for the property and casualty insurance operations of Philadelphia Consolidated Holding Corp., a member of Tokio Marine Group. All admitted coverages are written by Philadelphia Indemnity Insurance Company. Coverages are subject to actual policy language. CONTRACTING ENVIRONMENTAL EXCESS HOSPITALITY MANUFACTURING REAL ESTATE RETAIL Your Insurance package should sweeten your chances to succeed—freeing you to grow your business. PHLY Excess & Surplus Solutions offers excess protection for small niches like plumbing, taverns, machine shops, environmental contractors, commercial real estate, vacant properties, manufacturers, and flea markets. Even box makers. PHLY E&S Solutions. Neatly packaged to make a big difference, even in your small niche. GOT A NICHE? CALL 800.873.4552 PHLY.COM EXCESS & SURPLUS PROTECTION. NOW IN NEAT LITTLE PACKAGES.1BEST’S REVIEW • NOVEMBER 2022 From the Editor’s Desk The Road Less Taken: Insurers and Brokers Find Growth in Specialization The November issue also includes coverage of developments with workers’ compensation and homeowners insurance. Where has the insurance industry done a good job of innovation and where does the industry need to do more work? Email your answer to bestreviewcomment@ambest.com or scan the QR code to submit your response. Responses will be published in What Readers Say in a future issue. The Question: In an increasingly complex world where new technologies can quickly transform an industry, insurers, brokers and delegated underwriting authority enterprises are moving away from a one- size-fits-all approach. “Specialization allows agents, brokers and MGAs to set themselves apart from their competitors, far beyond the table stakes,” said Richard Augustyn, founder and chief executive officer of NIP Group. Augustyn was a participant in the three-part special presentation “Succeeding in the New Age of Specialty Coverage,” a joint effort by AM Best TV and Best’s Review . In the presentation, which aired on AM Best TV in October, industry experts discussed the specialty markets and what it takes to succeed. The presentation includes three panels: “Making the Move From Generalist to Specialist”; “Prospecting for the Next Great Risk Opportunity”; and “With Specialization Comes Responsibility.” The November issue also includes coverage of workers’ compensation insurance and examines the state of property markets in coastal regions of the United States. In “Top Workers’ Comp Ranks See Movement Upon Emerging From COVID Unemployment Spike,” Best’s Review examines a ranking of the top workers’ comp insurers. The Florida homeowners insurance market has been facing challenging conditions for some time. With litigation costs escalating, several insurers have gone insolvent so far this year. And this was before Hurricane Ian. Florida has been the focus of much industry attention. But homeowners markets in other coastal regions also have faced challenges. In “Severe Weather in Coastal States Presents Big Challenges in Hardening Homeowners Market,” Best’s Review examines conditions in states such as Louisiana, South Carolina and Texas. In Louisiana, for instance, insurers suffered heavy losses last year from Hurricane Ida. South Carolina avoided the brunt of Ian’s wrath, but nevertheless insurers had some losses. For more about the Florida market, also see “AM Best: Florida Specialists Cede a Growing Amount of Premium to Reinsurers.” In “Insurers Submit Florida Homeowners Multiperil Filings in First Nine Months of 2022,” Best’s Review examines rate filings for Florida homeowners multiperil coverage in the months preceding Hurricane Ian. In the life insurance sector, Best’s Review examines the impact of rising rates on product offerings. To find out more, go to “Rising Interest Rates Sure to Bring Shifts to In-Force Life and Annuity Products.” The Best’s Rankings in this issue include a ranking of the top homeowners insurers, workers’ comp insurers and property/casualty asset distribution. The November issue also includes a corrected version of the Top 50 Global Reinsurers. The original ranking ran in the September issue. In this issue, Best’s Review also launches a new feature highlighting information about Best’s Insurance Professional Resources. BR Patricia Vowinkel Executive Editor patricia.vowinkel@ambest.com2BEST’S REVIEW • NOVEMBER 2022 Heidi StrommenMatthew PowerHank Watkins Jeremy Hitzig Christopher Mee Martin Ween CONTENTS SPECIALTY COVERAGE Pages 33-42 Insurance executives and industry experts discuss the advantages of specialization and how the industry identifies and develops new opportunities. Page 34 Making the Move From Generalist to Specialist The old days of one person being able to deal with all of a customer’s insurance needs have gone by the wayside. Page 37 Prospecting for the Next Great Risk Opportunity Underwriters need to think about how they invest time and capital in launching new products and searching for new opportunities. Page 40 With Specialization Comes Responsibility A panel of insurance experts says specialists are held to higher professional standards—and consumers expect to get what they pay for. ISSUES & ANSWERS Page 19 New Developments in the Affinity Program Market An industry expert discusses the new opportunities and the importance of technology in the affinity insurance market. WORKERS’ COMPENSATION Page 22 Pie CEO Says $315 Million Fundraise Advances Expansion to Full-Stack Carrier Pie distributes direct, through wholesale and retail agencies and via partnerships with payroll and small and medium-sized businesses. Page 24 Top Workers’ Comp Ranks See Movement Upon Emerging From COVID Unemployment Spike Travelers Group and Hartford Insurance Group retain the No. 1 and No. 2 spots in a ranking of workers’ compensation direct premiums written, as just six of the top 25 carriers remained unchanged in a 2021 marked by shifts in virtually all levels, according to AM Best research. Richard Augustyn Geof McKernan Troy Korsgaden Joel CavanessLocal expertise with global capabilities. Coverages are underwritten by the following insurance company subsidiaries of Intact Insurance Group USA, LLC: Atlantic Specialty Insurance Company, Homeland Insurance Company of New York, Homeland Insurance Company of Delaware, OBI America Insurance Company, OBI National Insurance Company, located in Plymouth, MN, or The Guarantee Company of North America USA, located in Southfield, MI. With our deep product and industry expertise, we deliver global solutions to address the unique risks you face, wherever you operate. Our experts have a comprehensive understanding of your ocean marine business. Let us tailor a solution for your specialized insurance needs. To learn more, talk to your broker or visit intactspecialty.com4BEST’S REVIEW • NOVEMBER 2022 LIFE INSURANCE Page 28 Rising Interest Rates Expected to Bring Shifts to In-Force Life and Annuity Products With the Federal Reserve in an aggressive rate-raising mode for the first time in a decade, its moves could create a fault line between newly issued life and annuity products. After years of shifting to products that are less interest-sensitive, the industry may also see a move the other way. COASTAL PROPERTY Page 43 Severe Weather in Coastal States Presents Big Challenges in Hardening Homeowners Market While much attention is focused on Florida, storms have wreaked havoc on the property markets in other coastal states, particularly Louisiana, Texas and South Carolina. CONTENTS (continued ) COLUMNS 14 At Large 16 Risk Adviser DEPARTMENTS 1 From the Editor’s Desk 4 Advertisers Index 6 Best’s Calendar 7 Executive Changes 9 Web Traffic 12 Masthead: Forestay 13 In the News 52 What AM Best Says 55 Underwriting & Loss Control 57 State Rate Filings 60 Book Store 61 App Store 62 Trending: Best’s News 63 Trending: Best’s Research 64 AM Best Webinars 65 AM Best TV & Audio 67 Best’s Credit Rating Actions 73 Corporate Changes 74 Preferred Publisher Program 75 Insurance Professional Resources 77 Industry Updates 79 Masthead: Backstay 80 The Last Word ADVERTISERS IFC Philadelphia Insurance Cos. 3 Intact Insurance Specialty Solutions 5 Pinnacle Actuarial Resources 11 AM Best’s Ratings Services 18 AM Best 20 One80 Intermediaries 25 Omaha National 27 Best’s News & Research Services 32 BestESP 66 Best’s Capital Adequacy Ratio IBC Saint Joseph’s University BC Applied Underwriters Notice: While AM Best confirms the accuracy of Best’s Ratings of insurers referenced in advertisements published in this magazine, these ratings are subject to change after publication. The current ratings of insurance companies are available free on the web at www.ambest.com/ratings. Further, we can’t warrant the Best’s Ratings claimed by brokers advertising coverages from unrated insurers. In addition, some of the insurance policies, products and services advertised may not be available, licensed or legal in all jurisdictions. Cover design by Andrew Crespo. BEST’S RANKINGS Page 26 US Workers’ Compensation – 2021 Direct Premiums Written – 2022 Edition Page 48 US Homeowners Multiple Peril – 2021 Top Writers – 2022 Edition Ranked by 2021 direct premiums written. Page 49 US Homeowners Multiple Peril – Top Writers by State, Canada and US Territories – 2021 – 2022 Edition Ranked by 2021 direct premiums written. Page 50 US Property/Casualty – 2021 Asset Distribution – 2022 Edition Ranked by 2021 total admitted assets. Page 51 Top 50 Global Reinsurers – 2022 Edition Ranked by unaffiliated gross premiums written in 2021. Page 58 Florida Homeowners Multi-Peril Filings by Rate Impact Greater Than 10% Based on a disposition date from Jan. 1 to Oct. 1, 2022. Visit news.ambest.com for a full listing of Best’s Rankings.pinnacleactuaries.com ReinsurancePricing and Product Management Predictive Analytics Loss Reserving Litigation Support Legislative Costing Enterprise Risk Management Alternative Markets Commitment Beyond Numbers You have unique strategic goals, and we provide tailored solutions to your business challenges. As a full-service actuarial firm, our mission is simple: we provide professional expertise and superior customer service. Through data-driven research presented with clear communication, we work hard to provide substantial value to your business. You can trust Pinnacle’s commitment to look beyond today’s numbers in planning for tomorrow. Beyond Numbers6 BEST’S REVIEW • NOVEMBER 2022 Best’s Calendar AM Best to Hold Europe Market & Methodology Briefings Nov. 1: Insurance Market Briefing – Singapore International Reinsurance Conference, AM Best, Singapore. Nov. 2-3: Delaware Captive Conference (Fall Forum), Delaware Captive Insurance Association, Wilmington, DE, USA. Nov. 2-3: RAA Refinance - The ABCs of Financial Reporting & Analysis for Property/Casualty Insurers and Reinsurers, Reinsurance Association of America, New York, NY, USA. Nov. 6-9: CAS Annual Meeting, Casualty Actuarial Society, Minneapolis, MN, USA. Nov. 9: Europe Insurance Market & Methodology Briefings, AM Best, London, England. Nov. 10-11: IMF Polak Conference, International Monetary Fund, Washington, DC, USA. Nov. 16-19: NCOIL Annual Meeting, National Council of Insurance Legislators, New Orleans, LA, USA. Nov. 29-Dec. 1: Cayman Captive Forum, Insurance Managers Association of Cayman, Grand Cayman, Cayman Islands. All events subject to change as organizations monitor developments regarding COVID-19. For a full list of conferences and cancellations, visit www.bestreview.com/calendar. Attending Exhibiting Speaking Hosting Sponsoring Video November Is Workplace Awareness Month While concerns about the workers’ compensation segment persist, the impact of the COVID-19 pandemic on what is the third-largest component of the commercial market was largely muted, according to a new AM Best report. At the same time, growth in the segment was affected in 2020 and 2021 by the rise in unemployment and rate pressures. Coverage begins on page 22. 22.MK071K AM Best’s Europe Insurance Market & Methodology Briefings – London When: Wednesday, 9 November 2022 │ Where: etc.venues, St Paul’s AM Best rating analysts and industry leaders will discuss a variety of topics including global reinsurance, Best’s Performance Assessment for Delegated Underwriting Authority Enterprises, and cyber resilience. The methodology briefing will examine the latest developments in rating criteria. Note that event details are subject to change. Scan the QR code for the latest conference information. CONNECT WITH US TO GET THE BEST INDUSTRY PERSPECTIVE Our Insight, Your Advantage ™ Learn More: conferenceinformation@ambest.com www.ambest.com • (908) 439-22007BEST’S REVIEW • NOVEMBER 2022 Executive Changes Hartford Financial Services said Doug Elliot will retire as the company’s president effective Dec. 31, after more than 11 years with the company. Elliot oversaw the integration of the Navigators Group Inc., a global specialty underwriter, after Hartford acquired it in 2019. The acquisition led to the creation of two distinct multibillion-dollar, market-facing businesses—middle & large commercial and global specialty, which together offer specialized solutions to help clients manage risk, according to a company statement. Prior to joining Hartford in 2011, Elliot served as chief executive officer of Hartford Steam Boiler after a long career in the insurance industry. He started his career in public accounting, the company said. Effective Nov. 1, Hartford will realign its leadership structure in preparation for Elliot’s retirement. A. Morris “Mo” Tooker, who currently heads middle & large commercial, will report directly to Christopher Swift, Hartford’s chairman and chief executive officer. Tooker will take on expanded responsibility for global specialty and sales & distribution. Stephanie Bush will report directly to Swift and will maintain her role as head of small commercial and personal lines. Ross Fisher, the company’s global chief underwriting officer, also will report directly to Swift and will continue to have responsibility for underwriting across the enterprise, global reinsurance, risk engineering and the company’s Internet of Things operations, according to a company statement. “Doug was instrumental in expanding the company’s suite of products, developing industry-specific verticals within our property/casualty business and elevating our underwriting excellence,” Swift said in a statement. —Staff Report Hartford Announces Retirement of President Doug Elliot SiriusPoint fills permanent chief executive officer spot, Allstate taps a new executive vice president and chief information officer and Axis Capital welcomes a new group chief underwriting officer. SiriusPoint Hires Former RSA Exec as CEO SiriusPoint Ltd., a global specialty insurer and reinsurer, named Scott Egan to succeed Dan Malloy, interim chief executive officer, as permanent CEO. Malloy was named as interim CEO in May after Sid Sankaran, chairman and CEO, resigned from the company to pursue other opportunities. Egan has more than 25 years of insurance industry experience, including leading businesses through transformation and growth. He also has a successful track record in risk and financial management. He joins the company from Royal Sun Alliance UK & International, where he was most recently CEO, according to a company statement. Egan served on the board of RSA Group plc for six years, working as chief financial officer as well as CEO of its U.K. and international business. He has held senior positions at a number of companies including Aviva, Zurich Financial Services, Brit Insurance and Towergate Broking. He is also a qualified accountant, the company said. Former CVS Exec Rejoins Allstate as EVP and Chief Information Officer Allstate re-hired Zulfi Jeevanjee for the newly created role of executive vice president and chief information officer. The creation of this role will further build Allstate’s technology strength and accelerate its digital transformation and deployment of new technology systems, according to a company statement. In his new role, Jeevanjee will be responsible for all business- and Scott Egan Zulfi Jeevanjee Doug Elliot Next >