< Previous8BEST’S REVIEW • DECEMBER 2022 Executive Changes Neches is an insurance industry veteran with more than 20 years of experience as an operator, investor and adviser in regulated industries. He has deep knowledge of Fortitude Re’s business, having held various senior executive roles at AIG, including global treasurer and head of corporate development, where he was involved in the creation of Fortitude Re. Neches joins from global investment firm Carlyle, where he was a partner and managing director in Carlyle Insurance Solutions. In that role, he worked closely with Fortitude Re’s senior management in building the business, the company said. Zurich Insurance Names Group Chief Underwriting Officer Zurich Insurance Group appointed Penny Seach to succeed Hayley Robinson as group chief underwriting officer, effective Jan. 1, 2023. Robinson, who has held the role since June 2021, decided to step down at the end of the year for family health reasons. She will continue in her role through the end of the year, working alongside Seach to ensure a seamless transition, the company said. Seach is currently chief underwriting officer Europe, Middle East and Africa. She has more than 25 years of insurance experience with various multinational insurance companies. She joined Zurich in 2017 and has a strong track record of leading large diverse teams across geographies and disciplines, according to a company statement. Seach joined the company from American International Group, where she worked for more than five years, lastly as regional head of casualty Asia- Pacific. She also has held roles at RSA, Chubb, and Ace, according to her LinkedIn profile. MS Amlin Underwriting Names CEO MS Amlin Underwriting Ltd. appointed Andrew Carrier to succeed Johan Slabbert as chief executive officer. Slabbert has been named in the newly created role of CEO of MSIG Holdings (U.S.A.) Inc. Carrier is currently MS AUL’s chief underwriting officer and will transition to his new role on Jan. 1, 2023, subject to regulatory approval. He has more than 20 years of leadership experience in international (re)insurance markets, taking up his new role after two years as MS AUL’s CUO. He has played a pivotal role in transforming MS AUL’s underwriting strategy and portfolio, creating a more sustainable future for the company and helping it return to profitability, according to a company statement. Prior to his time at MS AUL, Carrier spent six years at Everest Re, where he was responsible for the firm’s London Market, Continental Europe, and Asia Pacific reinsurance operations. His career also includes serving as group CUO at Argo for seven years and more than 20 years at Kiln, the company said. Slabbert will be responsible for driving forward the U.S. growth strategy of Mitsui Sumitomo Insurance —MS AUL’s parent company—as it seeks to build on its growing domestic foundations following the proposed acquisition of Transverse LLC, in August this year, subject to regulatory approval. Slabbert will remain with MS AUL until the end of the year to support a smooth transition and regulatory handover, the company said. Insurtech Hippo Appoints Chief Human Resources Officer Kelly Wolf joined Hippo as chief human resources officer, according to the company. Wolf will lead Hippo’s human resources team and will be responsible for critical people-centered functions including employee relations, talent acquisition and management, and leadership development, the company said. Wolf has more than 20 years of experience leading diverse HR organizations. She joins Hippo from online retailer Zulily, where she was vice president of people, overseeing human resources, talent acquisition, diversity, equity and inclusion and more. Prior to that, Wolf led various people-centric teams, including employee relations, talent management and leadership development, at Amazon and Shopbop. com, according to a company statement. BR Kelly Wolf Andrew Carrier Penny Seach9BEST’S REVIEW • DECEMBER 2022 Monthly Insurance Magazine Published by AM Best A.M. BEST COMPANY, INC. Oldwick, NJ CHAIRMAN, PRESIDENT & CEO Arthur Snyder III SENIOR VICE PRESIDENTS Alessandra L. Czarnecki, Thomas J. Plummer GROUP VICE PRESIDENT Lee McDonald A.M. BEST RATING SERVICES, INC. Oldwick, NJ PRESIDENT & CEO Matthew C. Mosher EXECUTIVE VICE PRESIDENT & COO James Gillard EXECUTIVE VICE PRESIDENT & CSO Andrea Keenan SENIOR MANAGING DIRECTORS Edward H. Easop, Stefan W. Holzberger, James F. 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FORESTAYAt Large 10BEST’S REVIEW • DECEMBER 2022 By Tony Kuczinski Expect the industry in 2023 to place a stronger focus on systemic and cascading risks, particularly those connected to catastrophic events. After COVID-19, Insurance Industry Must Adapt to Emerging Risks T he end of the year is traditionally the time we look back over the past 12 months, review various “best of” lists and reflect on changes since the last time we flipped over to a new calendar year. Contemplating the final days of this year led me to thoughts of December 2020 and 2021, when our biggest concern was COVID and the ongoing effects of the pandemic. Thankfully, the pandemic is no longer top of mind. Nevertheless, I am reminded of the old adage, “The more things change, the more they remain the same”—especially in our business. In the insurance industry, risk is always with us, whether it takes the novel form of a worldwide pandemic or the natural catastrophes we know all too well. While we may join in a collective sigh of relief about lessening COVID issues, we can’t get too comfortable. No matter what is happening around the world and no matter what technological advancements are being rolled out, our industry must continually adapt and improve how we manage, respond to and underwrite risk. That never changes. However, one thing I do expect to change in 2023 and beyond is a stronger focus on systemic and cascading risk. “Systemic risk” refers to a single incident potentially affecting multiple aspects of an economy, an industry or an individual business at the same time. For example, a cyber breach might cause a business to suffer concurrent operational, capital market and reputational losses, significantly compounding the negative impact of a single event. “Cascading risks” have grown as the world is increasingly connected, impacting both “traditional” and “newer” exposures. A region’s ability to recover from a natural catastrophe could be affected by supply chain shortages, global inflation or a war thousands of miles away. Similarly, a cyberincident impacting a popular software program could prove disastrous for countless firms worldwide. Best’s Review contributor Tony Kuczinski is chief executive officer of Munich Re US P&C Cos. He can be reached at bestreviewcomment@ambest.com.11BEST’S REVIEW • DECEMBER 2022 We know that a natural disaster may not necessarily correlate to additional risk exposure outside a specific region in the same way that a single cyber event could have an extended national or global impact. However, as the intensity and frequency of weather-related natural catastrophes continue to increase due to climate change, the impact of these events will expand as well. Recently, we’ve seen that social and economic inflation, as well as supply chain issues, can reach beyond local and national boundaries to have a global impact. In other words, considering all these factors, the world today is a riskier place than it used to be, especially for our industry. Some things that won’t change, however, are the competitive aspect of the (re)insurance business and the cyclical nature of the market. Competition notwithstanding, there are ways that we can respond collectively to some of the issues that we will continue to face. As I’ve said in the past, it is critical that insurance and reinsurance companies and their partners come together to tackle the significant challenges facing our communities, our economy and our industry. As we look to 2023 and beyond, I aspire to see a variety of players in our industry—from established leaders to innovative startups—join forces on these macroissues. Whether it is ensuring an ongoing sustainable cyberrisk solution, helping to reduce carbon dioxide emissions, driving a move to stronger and more sustainable building codes or improving the reputation of the insurance industry to win the war for talent, a joint effort to address these issues will benefit not just our industry, but society as a whole. BRPowered by AM Best’s Experience and Knowledge ȼˏ4 !(ȥ /! ˏˏ0 010+.5ˏ˛(%*#ˏ/+"03 .! ȼˏ*ˏ! /5ȥ0+ȥ1/!ˏ%*0!." !ˏ"+.ˏ 1. 0!ˏ * ˏ!˝ %!*0ˏ/0 0!)!*0ˏ,.!, . 0%+* ȼˏ.+"!//%+* (ȥ(++'%*#ȑˏ-1 (%05ˏ+10,10 ȼˏ '! ˏ 5ˏ ˏ!/0Ȟ/ˏȆȇȅɌˏ5! ./ˏ * (56%*#ˏ%*/1. * !ˏ 0 ELECTRONIC STATEMENT PREPARATION Our Insight, Your Advantage ™ Learn More: bestesp_sales@ambest.com (908) 439-2200 22.ESP04FView past Issues & Answers sections at www.bestreview.com/issuesanswersarchive.asp Special Advertising Section I SSUES & A NSWERS: • 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. Interviewed Inside: Nathan Bleich Philadelphia Insurance Cos. Meera Krishnamurthy CognizantIn your business, growth is everything. At PHLY, we protect the farmowners industry, with coverage designed for a variety of farm and ranch operations such as beef cattle, sheep, goat, horse and hog farms as well as nurseries, orchards and vineyards. Our programs provide liability, property, vandalism, and more benefits. They also include our signature Bell Endorsement, offering 10 more coverages—such as Identity Theft Expense and Image Restoration and Counseling—at no additional charge. PHLY Farmowners Solutions. For all your growing needs. Call 800.873.4552 or visit PHLY.com. EVERY FIELD OF DREAMS DESERVES FERTILE PROTECTION. FARMOWNERS INSURANCE Philadelphia 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. AM Best A++ Rating Ward’s Top 50 2001-2022 97.5% Claims Satisfaction 120+ Niche IndustriesSPECIAL ADVERTISING SECTIONSPECIAL ADVERTISING SECTION Share this edition at www.bestreview.com/issuesanswersarchive.asp. BEST’S REVIEW • DECEMBER 202215 Issues & Answers: Agriculture claims has increased. Newer autos are harder to get, so a lot of people are repairing their old ones, but those costs have certainly increased with inflation. How have wildfires impacted farmers and ranchers? It’s been a huge impact, especially in the western part of the country. Whether it be dwelling or structural fires, equipment losses, crop insurance losses, damage to their crops, smoke taint to their crops or other commodities. Then just the difficulty of finding insurance coverage that covers them adequately. It’s definitely been a challenge. From a mitigation standpoint, there’s some things that they can do. They can have a plan ahead of time. Be prepared for when that event occurs. Nathan Bleich, vice president of Agribusiness Underwriting for Philadelphia Insurance Cos., said most agribusiness clients may not fully understand all the ins and outs of insurance. “Agents have to help them understand some of their unique exposures and what they need coverage for,” he said. Following are excerpts from an interview. What are some of the trends and challenges in the agribusiness? There’s a lot going on right now in the agribusiness space, from inflation to severe weather challenges and changes. There’s also wildfires taking place, especially in the western part of the country. Then there’s the availability of water to irrigate crops that’s becoming more of a challenge, and the utilization of precision agriculture, variable-rate technology, and the ability to apply water to more areas that need it. These are just some of the trends that are pertinent in today’s marketplace. What is the most important thing agents should know about supporting agricultural clients? They really need to know their business. What’s important to them? What do they want to cover? What are their liability exposures? Make sure they’ve got coverages that are custom tailored to those needs. They need to help them understand their exposures. They also need to know the carrier’s risk appetite. What does the insurance company want to write? What do they target? What are they really good at? Then, finally, financial stability. Is that insurance company going to be there in the time of a claim, which is when insureds need them the most. What impact has inflation and supply issues had on agribusiness? Inflation is a fact of life right now. For farmers, ranchers and agribusiness clients, they have to worry about increased fuel costs, increased fertilizer costs, increased seed costs. Their equipment and vehicle repairs are higher as well. This means less profit, and loans cost more and may be harder to get. From an agency standpoint, they may have to shop their insurance. If they are taking increases on their policies, it may be a time for them to shop their insurance and find the best fit for them for the best price. As those margins go down in other areas, they’re going to ask, “Hey, how much is my insurance costing me?” On top of that, the cost of Underwriting Agribusiness Nathan Bleich Vice President of Agribusiness Underwriting Philadelphia Insurance Cos. “Agribusiness agents have to help clients understand their exposures and what they need coverage for. Then they need to be a coverage expert.” Visit the Issues & Answers section at www.bestreview.com to watch an interview with Nathan Bleich.SPECIAL ADVERTISING SECTIONSPECIAL ADVERTISING SECTION Share this edition at www.bestreview.com/issuesanswersarchive.asp. BEST’S REVIEW • DECEMBER 202217 Issues & Answers: Insurance Platform and Experience Modernization How is Cognizant leveraging new insurance platforms and ecosystems in insurance and how has that impacted its clients/partners? At Cognizant, we generate value for insurers who are addressing core systems challenges by providing two essential things: deep platform and domain expertise, and a service palette that enables strategic flexibility. As the largest SI [system integrator] in North American insurance, we have knowledge across all major platforms and lines of business, for every step of the insurance value chain. Our advisory capabilities help customize solutions to every client’s specific needs. In addition, we have deep-dive technology expertise across the domains that drive the digital conversation like AI, data, automation, application engineering, and cloud. All that knowledge comes together in a wide range of models which we tailor to client needs, balancing risk and speed. Meera Krishnamurthy, Senior Vice President and Global Head of Insurance for Cognizant, said “from our experience and servicing clients in both the life and property and casualty sector globally, we can say with certainty that there is no one size that fits all solutions.” Following are excerpts of an interview. How has insurance digitized in the last decade with the integration of new technologies and industry platforms? The insurance industry is finally making real progress with digital. Virtually all insurers started in a rudimentary place, where every document at every stage of the insurance life cycle was on paper, and every document had to pass through human hands for things to get done. I still remember the giant storage spaces, whole floors of large buildings in fact, where all that paper was permanently housed in filing boxes! That visual—plus the record retention risks and service challenges—prompted most insurers to start by digitizing all that paper. Fast forward a few years, and insurers have discovered that they can skip right over the paper stage by doing things electronically, and in the process they capture and generate data that has a lot of utility. Where do you still see opportunities for insurers to accelerate their business transformation? For life insurers, we typically see carriers get stymied by a set of blockers, like a growing stack of legacy technology that is really hard to retire. Or an inability to bring new thinking about business processes or business models into the mix. And both of those things are perfectly rational. It is not easy to retire legacy technology, and the industry has seen plenty of failed attempts through the years. On innovation, traditionally it has simply been a risk/reward mismatch. The old business models have hundreds of years of success, so setting them aside to try something newer and risky is quite a leap. Carriers need to think creatively about solving their biggest problems in sequence. On the P/C side, we see tremendous opportunities as carriers develop functional ecosystems. In other words, the ability to combine best practices, great data, and modern technology in innovative ways, without building it yourself. It turns out one of the best things about the insurtech revolution is that we’re learning as an industry to bring capabilities together in a test-and-learn model. Digital Revolution Meera Krishnamurthy Senior Vice President Global Head of Insurance for Cognizant “We are the largest system integrator in the insurance industry in North America.” Visit the Issues & Answers section at www.bestreview.com to watch an interview with Meera Krishnamurthy.Next >