Best’s Review’s Online Archives Be Prepared MassMutual Chairman and CEO Roger Crandall plans to double down on the company’s digital approach and is ready to shift its product mix in response to changing conditions. Page 32 AM BEST’S MONTHLY INSURANCE MAGAZINE December 2022 • Volume 123 • Issue 12 www.bestreview.com ISSUES & ANSWERS: Agriculture; Platform and Experience Starting on Page 13 Top Audit and Actuarial Firms Page 19 Insurers Plot Course For 2023 Challenges Page 40 Last-Mile Delivery Helps Boost Inland Marine Page 481BEST’S REVIEW • DECEMBER 2022 From the Editor’s Desk In New Year, Insurers Face Prospects of Inflation and Recession; Best’s Review to Debut New Online Format The December issue includes Best’s Review’s annual listing of top auditors and actuaries as well as rankings of U.S. surplus lines insurers and U.S. inland marine, U.S. ocean marine and U.S. fire and allied writers. Should insurers break out cyber metrics in their financial statements? 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: As 2022 comes to a close, insurers see uncertainty on the horizon, with inflation often cited as one of their top concerns for the new year. Senior executives, in their third-quarter earnings conference calls, spoke about the inflationary environment and its impact on business. Massachusetts Mutual Chairman and CEO Roger Crandall spoke with Best’s Review about how the life insurer plans to meet the coming year’s challenges. In “MassMutual Prepares for the Worst Amid 2023 Warning Signs,” Crandall spoke about the company’s core strengths and how he aims to be flexible in the face of rising interest rates and shifting market demands. A quick pulse check of the larger industry showed a fair share of doom and gloom at year’s end. While losses from catastrophes certainly added up this year and inflation raised concerns, insurers also should be able to benefit from higher rates. In “Mix of Forces Set to Shape Insurance Markets in Coming Year,” Best’s Review spoke with leaders about the issues set to influence the markets. “What I’m expecting is that pricing will remain rational and that pricing will continue to reflect the underlying loss cost trends,” said Robert Hartwig, director, Risk and Uncertainty Management Center, Darla Moore School of Business, University of South Carolina. “So does that mean the overall market will be harder? Potentially not, but pricing will likely be at level pace that would allow insurers to generate reasonable underwriting results.” In “Insurers’ Balance Sheets Increasingly See Unrealized Losses in Rising Asset Management Challenge,” Best’s Review spoke to AM Best and other industry experts about the impact of rising interest rates on insurers and their investments. December is Goods and Cargo Awareness Month. In “Keep on Trucking: Online Shopping Helped Drive Inland Marine Premiums Over the Last Decade,” Best’s Review examines the growth in direct written premiums in the inland marine segment. The issue also includes rankings of the top U.S. inland marine, U.S. ocean marine and U.S. fire and allied writers. The December issue also features Best’s Review’s exclusive ranking: “Top Audit and Actuarial Firms.” In “COVID-19 Mortality Trends, Interest Rates and Climate Change Seen as Key Issues for Actuaries in 2023,” Nik Godon, director of insurance consulting and technology at WTW, said actuaries should expect a fair amount of uncertainty next year. The December issue also includes a ranking of the top U.S. surplus lines insurers. Note: Beginning in January, Best’s Review’s online magazine will move to a new, interactive format, which can be found at bestsreview.ambest. com . BR Patricia Vowinkel Executive Editor patricia.vowinkel@ambest.com2BEST’S REVIEW • DECEMBER 2022 CONTENTS AUDITORS & ACTUARIES Pages 19-30 This special section includes an AM Best exclusive ranking of the Top Audit and Actuarial Firms and an interview with Nik Godon, director of insurance consulting and technology at WTW, who discusses the top issues for actuaries in 2023. Page 19 Top Audit and Actuarial Firms Ranked by loss reserves. Page 26 COVID-19 Mortality Trends, Interest Rates and Climate Change Seen as Key Issues for Actuaries in 2023 Nik Godon, director of insurance consulting and technology at WTW, says actuaries can expect a lot of uncertainty and volatility in 2023. Godon was one of the speakers at the Society of Actuaries’ ImpACT conference. ISSUES & ANSWERS Page 13 • Agriculture • Insurance Platform and Experience Modernization Experts discuss the new trends and challenges in the agriculture insurance market and how technology is helping insurers achieve digitalization of their business processes. ON THE COVER: LIFE INSURANCE Page 32 MassMutual Prepares for the Worst Amid 2023 Warning Signs As 2022 draws to a close, Chairman and CEO Roger Crandall seeks to build on the company’s strengths in technology and annuities as any number of issues—inflation, interest rates, the Russian invasion of Ukraine and energy volatility—weigh on his mind. ASSET MANAGEMENT Page 35 Insurers’ Balance Sheets Increasingly See Unrealized Losses in Rising Asset Management Challenge A new consequence of rising interest rates rears its head as unrealized losses crop up. For insurance asset managers, one option might lie in taking paper losses after a decade of low rates crimped investments.3BEST’S REVIEW • DECEMBER 2022 WHAT’S AHEAD IN 2023 Page 40 Mix of Forces Set to Shape Insurance Markets in Coming Year Inflation, recession, interest rates and more present new concerns for insurers. Page 46 APCIA: Inflation Will Make the P/C Industry Pay in 2023 The American Property Casualty Insurance Association is worried that inflation exacerbated by natural disasters such as Hurricane Ian and social inflation will make the industry suffer next year. COLUMNS 10 At Large DEPARTMENTS 1 From the Editor’s Desk 3 Advertisers Index 4 Best’s Calendar 5 Executive Changes 7 Web Traffic 9 Masthead: Forestay 57 What AM Best Says 60 Underwriting & Loss Control 62 State Rate Filings 64 Book Store 65 App Store 66 Trending: Best’s News 67 Trending: Best’s Research 68 AM Best Webinars 69 AM Best TV & Audio 71 Best’s Credit Rating Actions 76 Preferred Publisher Program 77 Insurance Professional Resources 79 Masthead: Backstay 80 The Last Word ADVERTISERS IFC AAM 12 BestESP 14 Philadelphia Insurance Cos. 16 Cognizant 18 Baker Tilly Virchow Krause LLP 22 & 23 Johnson Lambert LLP 29 Pinnacle Actuarial Resources 31 Mazars USA LLP 39 The AM Best Business Trilogy 45 Best’s Alert Services 70 AM Best’s Ratings Services BC Applied Underwriters IBC Saint Joseph’s University 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. Photo courtesy of MassMutual INLAND MARINE INSURANCE Page 48 Keep on Trucking: Online Shopping Helped Drive Inland Marine Premiums Over the Last Decade The growing inland marine segment added $15.7 billion in direct written premium from 2011 through 2021, aided by the escalation in online shopping. BEST’S RANKINGS Page 53 Top 25 US Ocean Marine Writers – 2022 Edition Ranked by 2021 direct premiums written. Page 53 Top 25 US Inland Marine Writers – 2022 Edition Ranked by 2021 direct premiums written. Page 54 Top 25 US Fire and Allied Writers – 2022 Edition Ranked by 2021 direct premiums written. Page 55 US Fire and Allied Lines - Top Writers by State, Canada and US Territories - 2021 – 2022 Edition Ranked by 2021 direct premiums written. Page 56 Top 25 US Surplus Lines Insurers – 2022 Edition Ranked by 2021 direct premiums written. Page 62 Commercial Inland Marine Filings by Rate Impact Greater Than 10% Commercial inland marine insurers made more than 30 filings for rate increases of greater than 10% with a disposition date from Jan. 1 to Oct. 1, 2022. Visit news.ambest.com for a full listing of Best’s Rankings.4BEST’S REVIEW • DECEMBER 2022 Best’s Calendar AM Best to Speak at IASA Xchange Lite Virtual Event Dec. 1: Joint Industry Forum, Insurance Information Institute, New York, NY, USA. Dec. 8: AM Best’s Networking Reception, AM Best, New York, NY, USA. Dec. 12-16: NAIC Fall Meeting, National Association of Insurance Commissioners, Tampa, FL, USA. Dec. 15: VIRTUAL. IASA Xchange Lite, Insurance Accounting & Systems Association. Jan. 6-11: American Farm Bureau Convention, American Farm Bureau Federation, San Juan, PR, USA. Jan. 18: St. John’s Insurance Leader of the Year Awards Dinner, St. John’s University, New York, NY, USA. Feb. 5-7: APCIA Emerging Leaders, American Property Casualty Insurance Association, Charleston, SC, USA. Feb. 10: Artemis ILS NYC, Artemis, New York, NY, USA. 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 December Is Goods and Cargo Awareness Month Best’s Review examines the growth of inland marine insurance—thanks in part to the explosion in popularity of online shopping and the need to keep goods moving nationwide—and how the line has handled pandemic-related challenges. Also included are AM Best’s rankings of the top U.S. ocean marine and inland marine insurers. Coverage begins on page 48. 22.MK071L Meet AM Best at the Joint Industry Forum 2022 When: December 1, 2022 Ň Where: New York, New York AM Best is a bronze sponsor of the event. Meg Mulry, senior director, strategy & communications, will be in attendance. 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) 439-22005BEST’S REVIEW • DECEMBER 2022 Executive Changes Zurich Insurance Group appointed Raul Vargas to succeed Jeff Dailey as chief executive officer of Farmers Group Inc., a wholly owned subsidiary, and as a member of the Zurich Group executive committee. All changes are subject to regulatory approvals and are effective Jan. 1, 2023. Dailey, who is retiring after 11 years as CEO, joined Farmers Group in 2007. He will continue as chairman of the Farmers Group, the company said in a statement. “Jeff has made a positive impact at Farmers over more than a decade of leadership and service,” said Mario Greco, Zurich Group chief executive officer. “He has successfully led the organization by delivering strong results, driving technological innovation and fostering a culture of collaboration.” Vargas is currently president of distribution, life and financial services for Farmers Group. He oversees the sales and distribution activities, in addition to Farmers New World Life and Farmers Financial Solutions, according to the company. Vargas has more than 20 years of international leadership experience across Latin America and Europe. His extensive career with Zurich includes eight years as CEO of Zurich Santander Insurance America, according to a company statement. “He has a strong track record growing one of our largest retail businesses by delivering product innovations and optimizing distribution, while improving the experience of customers,” Greco said. —Staff Report Zurich Insurance Group Names Successor to Retiring Farmers CEO Marsh McLennan appoints a new president and CEO, SiriusPoint hires a new CFO and Munich Re and Allianz Trade announce changes to their boards of management. Marsh McLennan President and CEO to Retire; Successor Named Marsh McLennan has appointed John Q. Doyle to succeed Daniel S. Glaser as president and chief executive officer, effective Jan. 1, 2023. Glaser will retire from Marsh McLennan at year end, following a decade of leading the company through what the company called in a statement a period of extraordinary growth and change. Glaser has served as president and CEO since 2013. Prior to 2013, Glaser served as group president and chief operating officer of the company. He rejoined Marsh McLennan in December 2007 as chairman and CEO of Marsh, returning to the firm where he began his career in 1982, it said. Doyle served as group president and COO of Marsh McLennan since January 2022 and prior to that was president and CEO of Marsh, the company’s risk advisory and insurance solutions business, from 2017 to 2021, the company said. Doyle is an insurance industry veteran with more than 30 years of management experience in commercial insurance underwriting and brokerage. He began his career at American International Group Inc. and held several executive positions at the insurer, including CEO of AIG, and president and CEO of AIG property and casualty in the United States, according to the company. Upon his retirement as president and CEO, Glaser also will retire from the company’s board of directors. Doyle will join the board as a director effective Jan. 1, 2023, the company said. John Doyle Raul VargasJeff Dailey Photo: Business Wire6BEST’S REVIEW • DECEMBER 2022 Executive Changes Allianz Re Names Chief Marketing Officer Allianz Re has named Denis Pehar as chief marketing officer, with two to succeed his former roles. Wolfgang Wopperer will succeed Pehar as head of property/casualty business (third party) in Europe, the Americas, Middle East and Africa, effective Jan. 1, 2023. In addition, Reto Schneider succeeded Pehar as global head of agriculture, effective Nov. 1. In his new role, Pehar will further develop Allianz Re’s global third-party business strategy and will promote its implementation for continued profitable growth. He joined Allianz Re in 2013 and has been leading various client management teams in P/C and agriculture since then, according to a company letter. Wopperer has been head of reinsurance internal Western Europe and Latin America. He has held various management positions throughout his reinsurance career and has broad experience in the external reinsurance market, according to the company. Schneider has been regional head of agriculture since 2018 and location head Zurich. He joined the company in 2017 from Swiss Re, where he had developed his global experience in the agriculture business, the company said. Insa Adena, head of CMO middle office, and Kenrick Law, chief executive officer Singapore and head of P&C business Asia-Pacific (third party), will remain in their current positions, the company said. Former Guy Carpenter Exec Joins SiriusPoint as CFO SiriusPoint appointed Steve Yendall to succeed David Junius as chief financial officer, effective Oct. 31. Junius resigned to pursue other opportunities. Yendall has 25 years of reinsurance industry experience. He reports to Scott Egan, chief executive officer, and becomes a member of SiriusPoint’s executive leadership team, according to the company. Yendall joined the company from Guy Carpenter, where he most recently was managing director Canada and North America. Prior to that, he was CFO and chief operating officer at RSA Canada Group, where he also served as a member of both RSA Canada Group of Companies board of directors and RSA Insurance Agency Inc. board of directors. Yendall has held numerous financial, operational and insurance advisory roles over his career at companies including RSA Canada Group, Ernst & Young, and Accenture, according to a company statement. Munich Re Announces Board of Management Changes The Supervisory Board of Munich Re appointed Thomas Blunck to succeed Torsten Jeworrek as the chair of the reinsurance committee of the group’s board of management, effective Jan. 1, 2023. Jeworrek, who will step down from the board of management on Dec. 31 at his own request, has been with the company for a total of 32 years and has been a member of the board of management for 20 years, the company said in a statement. Blunck joined the board of management in 2005. In addition to becoming the chair of the reinsurance committee, he also will chair the global underwriting and risk committee. On the board of management, he also will be responsible for data and analytics, Internet of Things, corporate underwriting, claims, accounting, reinsurance development, controlling and central reserving for reinsurance, and information technology. Stefan Golling will take responsibility for capital partners on the board of management, according to a company statement. The supervisory board also appointed as new members of the board of management Clarisse Kopff, effective Dec. 1, and Mari-Lizette Malherbe, effective Jan. 1, 2023. Kopff will head the Europe and Latin America nonlife division. Malherbe will succeed Blunck and take over responsibility for the life and health division, according to the company. Kopff had been with the Allianz Group for the past 21 years, most currently based in Paris, where she was Allianz Trade’s chief executive officer. She was previously chief financial officer at Allianz France and Euler Hermes, the company said. Malherbe has been with Munich Re since 2007, and to date headed the life and health reinsurance Denis Pehar Thomas Blunck Steve Yendall Photo: Munich Re7BEST’S REVIEW • DECEMBER 2022 Europe and Latin America divisional unit from London, according to the company. Allianz Trade Names CEO-Chair for Board of Management Allianz Trade has named Aylin Somersan Coqui to succeed Clarisse Kopff as chief executive officer and chairperson of the board of management of Allianz Trade, subject to regulatory approval. Coqui began her career as a financial analyst at Morgan Stanley in 1998, and then joined the Allianz Group in 2002. She served in various positions with Allianz Global Investors and PIMCO before holding multiple international leadership roles within the group, including chief financial officer and then CEO at Allianz Turkey, chief human resources officer at Allianz SE and board member and labor director at Allianz Deutschland AG. Since 2020, she has been group risk chief officer at Allianz SE, according to a company statement. Allianz Trade offers trade credit insurance and is a specialist in the areas of surety, collections, structured trade credit and political risk, it said. Allianz Trade is the trademark used to designate a range of services provided by Euler Hermes. Universal Insurance Holdings Appoints Chief Claims Officer Universal Insurance Holdings Inc. has appointed William Degnan as chief claims officer. Degnan was previously executive vice president, claims of Alder Adjusting Corp., Universal’s wholly owned claims adjusting subsidiary. He will continue to lead enterprise-wide claims processing and adjusting, overseeing over 300 professionals and multiple third-party relationships, according to a company statement. Degnan has been with Universal since 2011. Prior to serving as EVP of Alder Adjusting Corp., he held various positions of increasing responsibility within Universal’s claims department, the company said. Universal Insurance is a holding company offering property/casualty insurance and value-added insurance services. Fortitude Re Names President-Chief Executive Officer Fortitude Re appointed Alon Neches to succeed James Bracken as president and chief executive officer. Bracken stepped down to pursue other opportunities and will be available to assist in the transition during the months ahead. Neches also will join Fortitude Re’s board of directors, the company said. Under Bracken’s leadership, Fortitude Re was successfully carved out of American International Group Inc. and has evolved into a leading independent reinsurance franchise with a strong balance sheet and world-class capabilities tailored to serve a growing base of global insurance clients and their policyholders, according to a company statement. Aylin Somersan Coqui Alon Neches William Degnan 05,000,00015,000,00025,000,00035,000,000 Assurant P&C Group Amer Intl Group Chubb INA Group Allianz US PC Ins Companies Travelers Group Nationwide Group Liberty Mutual Ins Co USAA Group State Farm Group Progressive Ins Group Web Traffic: Visits to US Inland Marine Writers Visits Source: www.semrush.com Reported traffic for October 2022. Visit news.ambest.com for a full listing of Best’s Rankings. Progressive leads web analytics provider Semrush's ranking of the top 10 U.S. Inland Marine Writers based on 2021 direct premiums written.Next >