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Julie (00:03):

Hello, two of my favorite people. It's good to see your faces. We are here today to talk about the state of the market and being fully transparent—this is a topic that we could talk for hours on, and I think that collectively I can say that this last several years, it's been like a rollercoaster for all of us, right.

So what I'd like to talk about today is really about what the trends are, what you all see for the future, the premium changes, the carrier capacity, the challenges that our clients are having and how they're dealing with it, and how we as advisors can help them navigate all of that. I kind of want to just throw it out to both of you and get your 30,000 foot view on what's going on in the industry today.

Cindy (01:22):

I think if the one thing that we can collectively say that we've learned over the last 24-36 months is there's actually no limitation on what events you're going to have, no matter where you sit. We've had hurricanes in Hawaii. We've had earthquakes in New Jersey. I for the first time ever saw an actual wildfire firsthand going down the highway in the state of New Jersey. These things are just happening everywhere, and I think that it's really changed the landscape of insurance and how we approach it on a national basis because things are just not what they used to be.

Julie (02:08):

Who would've thought that there were floods in the mountains of North Carolina?

Cindy (02:13):

It's just something nobody ever prepared for. No. If you had sat there and said, okay, do you think you're at a high risk flood zone in Asheville, North Carolina? The collective answer would've been no.

Tyler (02:23):

Yeah, and I think the carriers are really struggling to keep up. It's one thing that you have a storm, a wildfire, you have a hurricane when it all happens simultaneously, coast to coast, and the fact that our industry is so highly regulated, a lot of these changes that carriers need to make in order to have a profitable book of business is delayed. And so that's where we're seeing massive increases come across the industry. All lines of business— particularly around property—we've seen that over the last couple of years. We've seen restrictions, but the state of California is really, and same thing with Florida, they're really struggling with capacity carriers are actively pulling out. So right now we're in a situation where many individuals cannot find coverage at all. They're dependent on the state mandated insurance carriers in order to find coverage. But to be quite honest, a lot of the coverages are woefully inadequate.

Julie (03:18):

Cindy, we've talked to a lot of the carriers recently about their appetites and what they're looking for. Can you speak a little bit about what they're saying to us? I mean, we talk about it amongst ourselves, but what are they telling us that might give us some hope or what they're really looking for now?

Cindy (03:35):

Look, I think carriers have become very selective on how they're distributing out that capacity. It's not only just to the brokers that they want to give it to, but also to the clients that they want to give it to. And I think it's put capacity at a premium. But there are areas in which we're starting to see more capacity coming into the market. In our conversations, so typically we go to London every year we try to meet with the London markets because really when you think about insurance that's kind of where it all starts from, so getting a little bit of the buzz on what's going on in London and they're saying, look, there are people that are kind of just sitting on the sidelines and they're waiting. But there's capacity that's getting ready to enter the market. Now, what costs that capacity is going to be is yet to be determined. It's not going to be inexpensive. I don't think we're going to see in the next three to five years a time in which you're going to really start to see pricing coming down, but you are going to see some more capacity that is going to enter the market and be available for the right type of risk.

Julie (04:47):

Okay, so I'm going to switch gears for a minute. But there's a lot of buzz and a lot of discussion also around lawsuits, and nuclear verdicts, and having that impact our industry. What can our audience be thinking about when they are trying to either reduce their risk, or mitigate their exposures, and what are we actually thinking about and telling them and advising them on how they need to be doing that? It's an ongoing thing now, but I think it's gotten bigger and bigger within the past three, four years.

Tyler (06:53):

Yeah, so it’s interesting, one of our high-net-worth carriers recently did a study of 800 high net worth individuals both in the US and in Canada. And what they found was that 92% are concerned about the size of a verdict against them. Not entirely surprising, right? Most individuals would be worried about a verdict. But what was interesting is that only 36% actually have excess liability insurance. So obviously there's a huge gap between yes, and I understand that I'm at risk, especially if I have wealth, but they're not getting the level of liability limits that they really need in this marketplace. So that study was pretty telling that individuals, first of all, need to make sure that they have a liability policy in place. But secondly is what limit is the right limit for you and for your family? That's something that we openly discuss with our clients, go through their risk profile and figure out what's the appropriate amount of risk that they have and how much they'll be liability that they need.

Cindy (07:48):

Don't forget, also, we do have a creative little tool called www.whatsmyliability.com. So, to help be able to help our clients determine what that right limit is. But if you look at the U.S. versus other countries in other countries, liability is not a big issue with them. The U.S. is very suit happy. So if you go to another country to buy a high liability limit, half the time it's not even available. Or if it is, it's pennies on the dollar as opposed to us pricing.

Julie (07:05):

Okay, next topic. Since we've talked a lot about the doom and gloom of the insurance industry, we as a team have talked a lot about—and had lots of conversations about—how we show up for our clients and what we can do and how we can turn this whole scenario into good. And one of the themes of our team has been opportunities over obstacles. So how do you two see the silver linings?

Cindy (07:38):

Look, I think that there's a lot of different ways that you can approach the silver linings. And when you talk about our team and you talk about the way in which they interact with their clients, our people genuinely care about their clients. They generally feel a responsibility to them and they're going to fight on their behalf. And the way I think that we've kind of developed this business is to look at what are those needs of our clients and how do we solve for them? How do we proactively provide them with the services that we know that they need, that they may not have today? So, we look at the challenges. So if you look at the challenges in the market of, say, trying to find coverages for houses that are in risky areas. Okay, well, we've developed a risk management team that can go out and work with the clients to make a risk more attractive, to be able to get our clients the best insurance at truly the best price that's available and be able to give them options with that.

So it's those types of things that we do on a daily basis. And the claim settlement, when someone has a claim in the personal insurance world, it truly is what it's called. It's personal to them. It's either their belongings that they've worked so hard to get, it's something with a family member, it's something that hits the heart. So we do our best to try to handhold our clients through those scenarios and be able to walk them through the good and the bad and prepare them for what that outcome might look like. It's just part of the ongoing service that we're going to provide, and we're going to continue to find new ways to benefit our clients in what we do.

Julie (09:27):

Agreed

Tyler (09:30):

And, one last thought,

Julie (09:31):

Of course, Tyler!

Tyler (09:32):

I just want to, I just want to add one more thing, because I do think that we are fortunate, you know,

Cindy (09:34):

Always have to have the last word.

Tyler (09:36):

Of course, um, because I think we are fortunate here at Alliant Private Client because, you know, we have invested in the future. You know, the perspective around loss control. We just had one of our worst wildfires ever, and Cindy mentioned a wildfire out in New Jersey as well. I mean, getting out in front of these risks, showing clients what they can do to, to protect their home. Simple things like brand guard vents, ember resistant, you know, materials on the exterior of the home, making sure that there aren't trees and brush that are up against the house. These are things that are going to save a home.

And there's nothing worse than looking at a client in a home and talk to them after they've had a total loss, um, due to a wildfire. It really is. It is an absolutely terrible part of our business. So how we can get out in front of it, prevent the risk, is something that I think we're uniquely situated to do. And something that we are only going to expand, um, within the industry to make sure that our clients are properly protected.

Julie (10:34):

Agreed.

Tyler (10:35):

That’s it. I'll shut up now, I promise.

Julie (10:36):

Are you sure? Are you sure that's it?

Tyler (10:37):

Promise. That's it.

[Laughter]

Julie (10:42):

Like I said, we can go on and on and on about this, especially Tyler could go on and on and on about this.

Cindy (10:47):

Without a doubt!

Tyler (10:48):

I just, I'm passionate because I do think that our clients need help. They need education. And you know, if your broker's not educating you, you need to find a broker that will, and that will help you navigate this tumultuous time that we have in our industry.

Julie (11:01):

Well, okay. So that kind of leads me to the last, lightning round, right? You kind of already said some things, but um, what are just a few takeaways that our audience should know before we leave?

Cindy (11:13):

I'm going to say that while insurance is a pain point right now for a lot of people, it will get better and they kind of have to ride it out. And the best thing that they can do is be honest with us—who I hope are their broker—um, about the risks that they're facing and what's going on, because you, you, you don't want to try and hide things and then have something go wrong.

Julie (11:40):

Tyler, I know you got a comment.

Tyler (11:42):

I mean, I would just, I promised you I'd shut up last time. So this will be the last, find someone that's going to advocate for you in this marketplace. You know, not someone that's just going to give you a policy or renewal. You need someone that's going to fight for you, um, day in and day out. And I think, again, we are uniquely positioned in the marketplace to fight for our clients, um, because they need representation in the marketplace and our strength and the business that, uh, we've built here at Alliant Private Client is something that every client deserves.

Julie (12:13):

Well said. Well said. Well, thank you both. Appreciate it.

Host: Julie Rison- Director, Strategic Client Relationships
Guests: Cindy Zobian- Executive Vice President, Managing Director and Tyler Banks- Executive Vice President, Growth & Strategy

00:00 - Welcome & introduction

Julie Rison welcomes Cindy Zobian and Tyler Banks to discuss key market challenges, including rising premiums, carrier capacity, and risk management strategies.

01:00 - The changing landscape of high-net-worth insurance

Cindy highlights how natural disasters in unexpected areas are reshaping risk exposure and insurance strategies.

02:45 - Insurance market challenges and carrier capacity issues

Tyler explains how simultaneous catastrophic events and regulatory delays are driving premium increases and reducing market capacity.

05:00 - Carrier appetite and market capacity

Cindy shares insights from the London market, explaining that new capacity is entering, but carriers are highly selective.

06:30 - Lawsuits, nuclear verdicts & high-net-worth liability risks

Tyler discusses how 92% of affluent individuals fear liability lawsuits, yet only 36% have adequate excess coverage.

08:15 - U.S. vs global liability trends

Cindy explains how liability exposure is significantly higher in the U.S. compared to other countries, driving up insurance costs.

09:30 - Risk mitigation strategies for affluent clients

Julie and Cindy discuss how proactive risk management, such as home assessments and loss prevention, can improve insurability.

10:30 - Future outlook: Will the market stabilize?

Cindy predicts that while more capacity will enter the market, high pricing will continue, making broker-client transparency essential.

11:30 - Final takeaways

Tyler urges clients to work with an advocate-focused broker, and Julie encourages listeners to seek expert guidance for tailored coverage.