A persistent misconception runs through international insurance broking: coordination is too often equated with execution, and execution with logistics. This reduces the broker to a courier of documents, a facilitator of timelines, or a tracker of deliverables. None of these reflect the strategic weight of the role. When done well, coordination is not operational but strategic. It is the management of a system shaped by competing logics, timelines, and incentives. The international broker is not a messenger, but a translator, a synchronizer, and a system designer.

Every global program operates within structural tension. The client seeks coherence and visibility. The local broker needs flexibility and adaptation. The insurer imposes compliance and format. The reinsurer or network may add further alignment requirements. These are not nuisances to be worked around, but structural forces that define program behavior. The broker sits at the centre of this system, absorbing incompatibilities and redistributing them as coherence. This is not administrative work. It is strategic work.

Strategic coordination requires more than efficiency. It requires a theory of control—not control in the managerial sense, but as the design of influence. Who interprets ambiguity? Who manages silence? Who decides which deviations are absorbed and which demand escalation? These questions shape program outcomes. Most coordination structures are reactive, waiting for drift before responding. A strategic broker works differently: anticipating drift, building buffers, and adjusting rhythm before misalignment becomes visible.

The core skill in this environment is pattern recognition. It is knowing when a familiar delay signals the start of disengagement, reading when a client's brief contains conflicting pressures, or seeing how a change in local legislation will cascade into claims architecture. These are system signals, not checklist items. A good coordinator tracks deliverables. A strategic one interprets pressure and reshapes the environment.

In this context, strategy is not about market selection or portfolio pricing. It is about designing operating conditions. The broker decides how knowledge flows through the system. Who is informed first? How is urgency created without panic? When is silence strategic, and when is it dangerous? These decisions determine whether a program feels smooth or fragmented. If the client senses clarity, if the local broker feels heard, if the insurer sees process aligned with underwriting intent, it is rarely due to flawless execution alone. It is because the system was shaped to hold tension without breaking.

The more complex the program, the more decisive this shaping becomes. In simple domestic placements, strategic input may be minimal. In multi-country, multi-stakeholder environments, the design of the system defines performance. Without rhythm, local brokers disengage. Without narrative, insurers lose trust. Without structure, clients begin managing the process themselves—and once they do, the broker is reduced to reacting instead of guiding.

Strategic broking goes beyond delivering on time. It involves designing time itself: choosing when to launch a renewal, anticipating when a claims notification will strain internal capacity, deciding when to inform the client of a delay and when to wait for resolution. These decisions shape perceptions of competence and trust, and they shape the broker's ability to retain long-term control of the program.

It also demands narrative control. Every international program tells a story about risk, protection, and trust. If that story fragments, so does the relationship. The broker is not simply passing on documents. They are curating the storyline. A quote delivered with context and rhythm reinforces trust. A claims update that shows progress and meaning reinforces engagement. Done poorly, the system may still function, but the narrative is lost—and without narrative, even functional programs are vulnerable to sudden rupture.

The shift from coordination to strategy requires a new posture. Value is measured not only in outputs but in resilience. The question is not how many quotes were delivered, but how the system absorbed disruption. Not how many emails were sent, but whether stakeholders stayed aligned through uncertainty. Strategic brokers see coordination as environment shaping, not task flow.

This shift also requires deliberate reflection. Strategy is not the product of constant action; it emerges from pauses for sense-making and design. After each renewal, the strategic broker asks what failed structurally, where control was lost, and how it could have been built differently. This reflection is not optional—it is the foundation of improvement. Without it, brokers remain trapped in firefighting and short-term fixes.

The international broker's role must be redefined. They are not service agents, but system designers working under conditions of ambiguity. Their value lies in how they think as much as in what they do. The most effective brokers do not simply execute processes. They shape the environment so those processes can withstand complexity. That is the essence of strategy: structure, rhythm, and meaning, held together under pressure.

The insurance industry stands at a critical juncture in 2026. Technological advancements, evolving customer expectations, climate volatility, and regulatory shifts are transforming the landscape at a rapid pace. While the road ahead is filled with uncertainty, it also offers unprecedented opportunities for innovation, growth, and resilience.

Insurers that recognize the dual nature of these changes—as both challenges and catalysts—will be better equipped to lead the industry into the future.

The Challenge of Climate Risk and Catastrophe Losses

One of the most pressing challenges facing insurers in 2026 is the rising frequency and severity of climate-related events. Wildfires, floods, hurricanes, and droughts are no longer rare—they are regular disruptors. Traditional risk models that rely on historical loss data are proving inadequate in predicting the impact of increasingly erratic weather patterns.

Key implications:

• Underwriting climate-sensitive policies has become more complex and data-intensive.
• Reinsurance costs are increasing, tightening capacity in catastrophe-prone areas.
• Insurers must invest in forward-looking climate models and scenario-based risk assessments.

The opportunity lies in developing innovative risk mitigation tools—parametric insurance products, climate-resilient policies, and proactive loss prevention services—that enable both insurers and policyholders to adapt.

Digital Acceleration and Customer Expectations

Digital transformation is no longer a differentiator in 2026—it is a baseline requirement. Policyholders expect seamless, personalized, and omnichannel experiences across every stage of the insurance journey. Whether they are filing a claim, updating coverage, or interacting with a chatbot, the expectation is immediate, intelligent, and empathetic responses.

Key challenges:

• Legacy systems are still prevalent in many insurance companies, slowing down modernization.
• Balancing automation with a human touch is difficult but essential for customer trust.
• Disjointed digital ecosystems can lead to fragmented experiences.

The opportunity is to adopt a customer-first mindset, driven by AI, machine learning, and data analytics. Insurers can create real-time engagement models, hyper-personalized products, and intelligent self-service platforms that turn digital interactions into moments of value and loyalty.

Cybersecurity and Digital Risk Exposure

As insurers digitize their operations and offer more cyber coverage, they are increasingly vulnerable to cyberattacks themselves. Ransomware, data breaches, and supply chain risks pose a significant threat to business continuity and reputation.

Key issues:

• Growing cyber insurance claims are affecting profitability and pricing models.
• Insurers are becoming targets due to the vast sensitive data they store.
• Accumulation risk from connected policies and clients is harder to quantify.

The opportunity is to lead in cyber risk management by offering not just protection, but prevention. Insurers can partner with cybersecurity firms, offer real-time threat monitoring, and use AI to detect and mitigate risks—strengthening both their defenses and customer offerings.

Talent and Workforce Transformation

The insurance workforce is changing. New technologies require new skills, and attracting the next generation of talent is becoming more competitive. At the same time, experienced professionals are retiring, taking decades of domain knowledge with them.

Key challenges:

• There is a widening gap in skills related to data science, AI, cloud computing, and UX design.
• Traditional organizational structures are slow to adapt to agile and hybrid work models.
• Employee expectations around flexibility, purpose, and upskilling are rising.

The opportunity lies in reimagining the insurance workforce. Companies that invest in continuous learning, build cross-functional teams, and embrace diverse, inclusive cultures will be better equipped to attract and retain top talent.

Regulatory Pressure and Compliance Complexity

As risks become more complex and technology adoption grows, regulators are responding with new frameworks aimed at ensuring fairness, transparency, and resilience. From AI ethics and ESG reporting to data privacy and solvency rules, compliance is becoming more burdensome—but also more necessary.

Key developments:

• AI in underwriting and claims must be explainable and free of bias.
• ESG regulations require insurers to disclose climate risks and sustainability efforts.
• Cross-border regulations for global insurers add complexity to compliance management.

The opportunity is for insurers to turn compliance into a strategic advantage. Those who embed regulatory intelligence into their operating models—using tools like RegTech and AI-powered monitoring—will reduce risk and build stronger stakeholder trust.

The Emergence of Ecosystem-Based Business Models

In 2026, the most innovative insurers are no longer operating as standalone entities. Instead, they are becoming part of broader ecosystems—collaborating with insurtechs, fintechs, health providers, auto manufacturers, and digital platforms to deliver value beyond traditional insurance.

Key trends:

• Embedded insurance is creating new revenue streams through non-traditional distribution.
• Ecosystem partnerships enable insurers to offer prevention, wellness, and lifestyle services.
• APIs and open insurance models facilitate real-time data exchange and product bundling.

The opportunity is to become an integral part of customers' lives—not just when disaster strikes, but every day. Ecosystem thinking unlocks loyalty, diversification, and deeper customer relationships.

Evolving Role of Insurers in Society

In a world defined by uncertainty—be it health crises, natural disasters, or digital threats—society looks to insurers not just as risk carriers, but as resilience enablers. There is a growing expectation that insurers will play a role in financial inclusion, sustainability, and social impact.

The challenge is that traditional models don't always align with these expectations. Insurers need to rethink their purpose and value proposition.

The opportunity is immense. By offering microinsurance for underserved communities, supporting green investments, and promoting responsible AI use, insurers can build goodwill, relevance, and long-term impact.

Conclusion

The year 2026 is a defining moment for the insurance industry. The challenges are real—climate instability, rising risks, digital disruption, and talent shortages—but so are the opportunities.

Insurers that can navigate this storm by embracing innovation, putting customers first, and redefining their role in society will emerge stronger, more agile, and more trusted. The future of insurance is not just about protection—it's about connection, resilience, and purpose.

And the time to act is now.

Auto liability insurance is mandatory almost everywhere in the United States. Although few motorists question the product's necessity, many are anxious about paying for it due to the growing distrust of private insurers. Many policyholders feel uncertain about whether they can rely on their insurance carriers in their hour of need. Countless horror stories reinforce the perception that insurers would drag their feet when it's time to pay or unfairly deny valid claims altogether — and get away with it.

Significant rate hikes erode any remaining goodwill American adults have toward auto insurance companies. In a car-dependent society, being forced to spend more on an inescapable auto-related expense would leave a bad taste in people's mouths. Charging higher premiums is justifiable and even vital in many cases, but is the insurance industry blameless for the public's prevailing sentiment?

An Epidemic of Excess Premiums

Car insurers had windfall profits in 2020. The pandemic compelled different levels of government to impose lockdowns to help curb the spread of COVID-19, which reduced the number of miles driven. Less vehicular traffic meant fewer car crashes and insurance claims, shrinking insurers' risk exposure overnight.

The business shutdowns and stay-at-home orders caused by the coronavirus outbreak economically affected tens of millions of policyholders. In the spirit of solidarity, auto insurance carriers provided relief to customers.

In April, over 80% of insurers announced that they would rebate policyholders more than $6.5 billion over the next two months. State Farm credited customers an average of 25% of premiums from March 20 to May 31. American Family paid customers $50 for every insured vehicle in April. Farmers Insurance gave a discount of 25%, while Progressive refunded about 20% of all premiums paid for April and May.

In addition, many insurers temporarily paused policy cancellation due to nonpayment and waived late fees in the spring of 2020. Most premium relief programs ended in June, but some providers continued to entertain requests for flexible payment plans or similar concessions on a case-by-case basis. They were particularly considerate of financially distressed customers, especially those furloughed or laid off.

The Consumer Federation of America (CFA) welcomed the news. The nonprofit noted that car insurers would've overcharged customers whose premiums were based on driving 1,000 miles monthly and imposed rates considered unreasonable due to the sharp decline in vehicular accidents had they not returned a portion of their revenue to policyholders.

While the premium givebacks were a positive gesture from the industry, the CFA claimed that auto insurers shortchanged policyholders. In August 2021, the pro-consumer group and the Center for Economic Justice (CEJ) analyzed the insurance providers' premiums and claims data. They found that the companies collected $42 billion in windfall profits and returned less than a third of them to payers.

About $30 billion in excess premiums remained in the insurers' coffers. The CFA and CEJ claimed that the insurance carriers used the money to inflate the payouts to their senior executives and stockholders.

Government Inaction — Regulators Becoming Bystanders

The CFA and CEJ had been vocal about the possibility of excess premiums as early as March 2020. The organizations foresaw that the then-current insurance prices would be too high when governments prohibited people from moving freely across jurisdictions.

Granted, the COVID-19 outbreak was a black swan event, and no underwriter could have predicted that American roads would be virtually empty for an extended period. However, the regulators could have stepped in and ordered car insurers to return some of the premiums they raked in during the early months of the pandemic.

The CFA and CEJ wrote letters to state insurance regulators tasked with ensuring rates aren't excessive throughout 2020, urging them to take action and require car insurers to return more of their profits. However, the warnings were brushed aside. The consumer advocates asserted that virtually all regulators did nothing to stop insurance companies from pocketing excessive premiums.

A Stern Counterstatement

The American Property Casualty Insurance Association (APCIA), the national trade association representing auto, home and business insurers, denied the findings of CFA and CEJ and called them misinformation.

In a statement released a day after the CFA and CEJ's report came out, APCIA Vice President David Snyder said everything about the consumer advocates' analysis was incorrect. Snyder said that most of what the CFA and CEJ label as profit was expenses paid to sell and service policies, handle claims, cover regulatory fees and pay taxes. The vice president added that auto insurer profits accounted for just 2% of each premium dollar.

Snyder explained that the number of miles driven quickly resumed to pre-pandemic levels after governments lifted the lockdowns — only this time, motorists' driving habits worsened. Data from the U.S. Department of Transportation's National Highway Traffic Safety Administration (NHTSA) backed this claim.

According to the NHTSA, fatal crashes jumped by 6.8% in 2020. About 45% of the drivers of the passenger vehicles involved were speeding, alcohol-impaired, not wearing a seat belt or any combination of the three risky behaviors.

A Period of Underwriting Losses

The property and casualty segment of the insurance industry was in the red in 2022 and 2023. Rick Gorvett, a Casualty Actuarial Society (CAS) fellow, described the two-year period as part of the insurance business's multiyear cycle. The market was soft, partially driven by competition and the ebb and flow of alternative risk management mechanisms.

Supply-chain disruptions contributed to the underwriting losses. The pandemic exacerbated the existing chronic semiconductor shortage due to lockdown-related production downtime, consequently limiting new vehicle production. Lower car inventories drove up the cost of new and used automobiles, ultimately increasing the value of assets insurers have to cover. Rising repair costs due to modern vehicle designs added more burden to insurance companies.

Gorvett pointed out that the social factors, like increased litigiousness, inflated insurance losses. A 2024 joint study by Triple-I and the CAS found that auto liability losses and defense and cost containment expenses spiked by $76.3 billion to $81.3 billion from 2014 to 2023 due to the involvement of billboard attorneys in claims and considerable tort awards.

A Loss-Loss Scenario

The U.S. Bureau of Labor Statistics said that vehicle insurance prices skyrocketed by 17% in 2023 year-over-year, outpacing those of food away from home, housing and electricity by a mile.

Such inflation happened at a time when car insurance underwriters were seeking sustainable rate adequacy levels. Considering that a 2019 study revealed that Americans already overspend about $37 billion yearly on auto insurance, the 2023 figure meant that car-related expenses made up a larger chunk of household budgets.

Elevated crime rates also fueled the 2023 premium hike. 2022 was the worst year for vehicle theft since 2008. Data from the National Insurance Crime Bureau showed that thieves stole over 1 million automobiles that year, some of which ended up in the hands of vehicle traffickers operating in foreign countries.

Underwriters had to factor crime rates into the equation. Underwriting decisions affected customers living in hot spots, whether or not they had fallen victim to car theft.

So consumers and insurers both lost.

The Post-Pandemic Premium Surge

Since the pandemic, 2024 has been the most profitable year for personal auto insurance carriers. The industry segment recorded a net combined ratio of 95.3 and posted a 13% increase in net written premiums year-over-year.

Pundits credited the improvement in underwriting performance to pricing realignment. Efforts to align auto insurance prices with soaring risk levels and implement more effective control loss measures paid off.

Low claim frequency was another 2024 highlight. While the number filed remained below pre-pandemic levels, claim severity was high. Shifting attitudes toward car insurance can explain these two phenomena.

The Jerry 2025 State of the American Driver Report revealed that more consumers are motivated to shop around after seeing rates balloon by over 50% over the past three years. In 2024, 55% of motorists sought better deals in the past 12 months, and some changed vendors to obtain more affordable rates.

Moreover, many drivers bought less coverage and agreed to higher deductibles to lower their premiums. These decisions suggest that more policyholders are keener on filing claims to cover larger losses. Prudent consumers know their claim histories can drive up their future rates, so they only want to call their insurer when it counts the most.

Increasing Auto Insurance Rates Legally

The compulsory nature of car insurance policies makes premium hikes unpopular at best and controversial at worst. Policyholders almost always feel the pinch, regardless of whether auto insurance turns a profit. Judging by how effective the legal system can be when compensating the insured, insurers must navigate the regulatory landscape carefully to raise premiums accordingly without breaking the law.

Independent insurance agencies are operating under pressure unlike ever before. Customer expectations are shifting rapidly toward digital, always-on service. The talent pool is tightening as seasoned producers retire and fewer younger professionals enter the field. And direct-to-consumer players as well as digital-first aggregators are compressing margins and encroaching on traditional distribution territory. In this environment, "business as usual" is no longer enough. Agencies must modernize or risk being left behind.

The good news: Artificial intelligence (AI) is not simply a buzzword. When done right, it can become foundational to how agencies operate, liberating teams from administrative burden, enabling deeper relationships, and powering smarter revenue generation. And for independent agencies that embrace transformation, it can mean resilience in a turbulent market.

Why Now?

We see several converging forces making AI not just helpful, but essential, for agencies.

Let's start with talent constraints. Industry data shows that fewer than 25% of insurance professionals are under 35, and within the next decade or so, half the workforce may retire. With fewer experienced staff members and increased pressure on the remaining staff, agents are challenged to allocate their time to what matters most.

Second, the workflows of our industry are still heavily reliant on repetitive tasks — policy checking, reconciliation, submissions triage, renewal data entry, and servicing follow-ups, to name a few. These are necessary, but they absorb time that could otherwise be spent on the complex, value-generating work of advising clients, developing relationships, and growing the book.

Third, the competitive landscape now rewards speed and precision. Clients expect the same friction-free experience they get everywhere else. Carriers are more likely to prioritize more efficient agency partners. And digital competitors are not slowing down. In this environment, agencies that still run on time-consuming, manual workflows are at a structural disadvantage. Efficiency is no longer optional. It is a requirement to be competitive.

When we recommend AI for agencies today, we're not offering aspirational, "maybe someday" theories. We're talking about a prerequisite to transform capacity, accuracy, and human focus.

Vertical AI: The Right Kind of Intelligence

It's important to clarify what we mean by "AI," as there's a big difference between horizontal and vertical AI. Vertical AI is industry-specific models trained on the terminology, workflows and data of insurance. Horizontal AI is generic, one-size-fits-all models like ChatGPT that don't understand how agency workflows work or what a "policy binder" is, for instance.

Why does that matter? Because workflows in insurance are deeply nuanced. Carriers have different requirements, agencies follow complex servicing and renewal paths, and the relationships between client, agent and underwriter are built on trust and insight. Generic AI may automate some tasks, but it often misses the context that drives value in our world. Vertical AI, by contrast, is designed to comprehend insurance-specific data, pinpoint coverage gaps, analyze risk patterns across a book, and seamlessly integrate into agency systems.

Agencies investing in AI-enabled, insurance-specific workflows can realize meaningful gains. In fact, our research concludes:

• Automating many manual tasks can free up 40-50% of an agent's time.
• AI-based renewal and cross-sell suggestions can boost cross-sell revenue by 20-30%.
• Reducing risk of errors and omissions by automating validation and data entry can cut operational mistakes by up to 90% in certain processes.

These aren't abstract numbers. They represent capacity unlocked, risk mitigated, and revenue uplift realized.

From Admin to 'Hero Work'

Here's where the transformation starts to feel concrete.

Imagine your average producer or account manager spends 10-20 hours per week on administrative tasks, including checking policies at renewal, chasing missing information, reconciling commission statements, and updating client profiles. Now imagine if a significant portion of that load is shifted to automation via vertical AI that understands your book of business, flags data gaps, pre-populates forms, surfaces cross-sell opportunities, and automatically updates the system.

That freed time can be re-invested into meaningful client conversations, strategic risk reviews, proactive outreach, renewal strategy, expanding existing accounts, building trust and loyalty – what we call "hero work." The human element doesn't disappear. It's amplified as agency staff migrates from order-takers to advisors.

When producers and service teams are focused less on "keeping the lights on" and more on value creation, the agency's relationships strengthen, the book grows, the retention rate improves, and profitability follows.

Resilience Enabled

What is resilience in this context? It's more than survival. It's the capacity to absorb disruption and convert it into advantage. And vertical AI sits at the heart of that capability.

Unlocking agent capacity creates room for people to evolve into higher-value roles as the workforce ages and expertise retires. Instead of trying to replace institutional knowledge one-for-one with new hires, AI takes on the repetitive load so existing staff can be trained and redeployed into the "hero work" that a retiring generation used to do. Automating administrative bottlenecks reduces error risk and rework, and it gives teams the time and space to build new skills while still delivering day-to-day performance.

Shifting people toward relationship work creates differentiation in a commoditized market. Direct and digital competitors may offer price, but they rarely replicate trust, insight, and service depth. An agency whose team is equipped — via AI — with the insights to talk to clients about risk trends, coverage gaps, emerging exposures, and value beyond price is one that can build stickiness.

Leveraging vertical AI's ability to identify emerging cross-sell and upsell opportunities using enriched data from public sources, your own book, and insurer signals, builds not just cost savings, but new revenue streams. That mix of operational efficiency plus revenue growth is the essence of resilience.

The Bottom Line

Independent agencies—and the people who lead them—face a choice: continue investing human effort in low-value administrative tasks or redirect that effort toward relationships, strategic advisory, and differentiated service. Vertical AI makes the latter possible.

When you move your teams from admin to hero work, you're investing not just in efficiency, but in resilience. You'll build an agency that can weather talent gaps, margin pressure, and digital disruption. You'll foster the kind of business that doesn't just survive change—but thrives because of it.

We believe deeply that the future of the independent agency distribution channel will belong to agencies that enable their staff to focus on hero work. AI and its impact are no longer theoretical. It is available today to relieve people of admin tasks and put their time back on value. The reward is an agency poised for growth, differentiation, and resilience. When your people spend less time processing and more time advising, you position your business not just for tomorrow but for the next decade of success.

According to a recent report, commercial auto insurance underwriting losses continue to climb.

As brokers and agents work with their clients, it's important they stress approaches that can enhance insurability and help manage costs. There are three major ways to do this:

• Create policies and procedures for driver screening, training and monitoring.
• Leverage technology to ensure drivers are making safe choices.
• Maintain and inspect vehicles on a regular basis.

Driver screening

While safety features are an excellent addition to modern vehicles, they ultimately can't make up for poor driving behaviors. To stay safe on the road, organizations must select drivers who have an exemplary motor vehicle record (MVR).

But maintaining safe drivers does not stop with the selection process. Employers must offer annual training programs and provide continuous monitoring (such as telematics) to ensure drivers are operating vehicles safely. It's all too easy for a driver to become complacent—especially when it comes to distracted driving.

In particular, training programs should stress no cell phone use while driving. In recent years, that has become one of the key causes of crashes. Organizations also should establish procedures their drivers can follow for breakdowns, accidents and adverse driving conditions.

Innovations in technology

In recent years, the auto industry has come far with innovation in technology. Organizations can use this technology to identify risky driving habits and offer drivers more high-level safety features that reduce the risk of a crash. Some of the most prevalent safety features include:

• Telematics – With this technology, a device installed in a vehicle collects data from the vehicle's sensors, such as speed, location and engine status. Some telematics systems provide an alert to the driver when they are exhibiting poor driving behaviors; these alerts help correct behaviors immediately, which is preferred. Telematics data is ultimately transmitted to the driver's employer, who can track how fast they are driving, what their braking habits are and how much fuel they're consuming. Telematics can be especially helpful for usage-based insurance, which bases a company's premiums directly on its drivers' habits.

• Back-up and 360-degree cameras – Many vehicles are equipped with this safety feature now. In fact, it has become so prevalent that if an organization has vehicles without a camera, it should consider replacing them. These features enable a driver to view the surrounding area when backing up and reduce blind spots. This can help prevent fender-benders in busy parking lots and potentially reduce insurance premiums.

• Tire pressure monitoring systems – These systems, too, are extremely common in vehicles. They can alert drivers to rapidly changing air pressure in the tires, which may be the result of a nail, screw or other foreign object that has punctured the tire. Under-inflated tires are more prone to blowouts, which may lead to serious accidents. These monitoring systems are vital to decreasing the risk of a crash.

• Advanced driver assistance systems (ADAS) – Collectively, these technologies in a vehicle can help drivers make safe decisions and alert them to hazards. They include:

• Lane departure warning – alerts driver if vehicle is drifting out of its lane.
• Lane keeping assist – corrects steering to keep vehicle in its lane.
• Automatic emergency braking – automatically applies brakes if it detects a potential collision with objects ahead of the vehicle.
• Adaptive cruise control – adjusts vehicle's speed on cruise control to keep a safe distance from the vehicle ahead.
• Blind spot monitoring – alerts driver if a vehicle is in its blind spot.
• Forward collision warning – warns driver of imminent collision with another vehicle or object.

• Night vision and pedestrian detection systems – In low-light situations, these systems use infrared cameras and sensors to detect people and animals.

• Electronic stability control – In icy or wet conditions, this system applies brakes to specific wheels if it detects they are skidding.

• Side-impact airbags and other airbag systems – Studies have shown that side airbags can dramatically reduce a driver's risk of severe injury and death. So if there is a crash, the driver is much less likely to be injured or killed.

Vehicle maintenance

Another important way organizations can help manage vehicle insurance costs is by making routine checks part of their policies and procedures. They can do this by:

• Creating and sticking to a scheduled maintenance plan – refer to the owner's manual for recommended maintenance checks.
• Mandating pre- and post-trip inspections – this includes tires, lights, brakes and fluid levels.
• Establishing clear reporting procedures that ensure small problems don't turn into major hazards – drivers should be required to report anything out of the ordinary.
• Requiring emergency preparedness – all vehicles should be equipped with jumper cables and a complete emergency kit.
• Conducting seasonal maintenance checks – this includes swapping to snow tires for the winter and changing windshield washer fluid.

If organizations make a genuine effort to address the above suggestions, they can help make themselves more insurable and significantly reduce their likelihood of needing to file a claim.

Ransomware isn't just another IT headache. It has become one of the most disruptive business risks of the last decade, with the average ransom demand soaring to $2.7 million in 2024—nearly triple that of the previous year. As attacks escalate, cyber insurance has emerged as both a financial safety net and a source of controversy. Critics argue that guaranteed payouts fuel the ransomware economy, while insurers counter that they provide the expertise and resources companies desperately need to recover. So, is cyber insurance helping or hurting? The answer, as usual, is more complicated than it appears.

One of the biggest misconceptions about cyber insurance is that carriers simply cut a check when ransomware strikes. In reality, insurers are often the calmest (and most experienced) voice in the room. Backed by thousands of claims, they know when paying is the only path forward and when it's a mistake. They bring in seasoned negotiators, navigate legal landmines, and keep the process grounded in facts rather than fear. For a company facing permanent data loss or days of costly downtime, that kind of expertise can be the difference between bouncing back and going under. Insurers also have a vested financial interest in the outcome, but their depth of experience allows them to make rational, non-emotional decisions when clients feel like the sky is falling.

The Strategic Blind Spot in Cyber Insurance

Despite its critical importance, cyber insurance purchasing decisions are often made without the full involvement of those best equipped to understand cyber risk. Too often, financial and legal teams drive procurement with limited input from CISOs and security teams.

This disconnect can leave companies exposed to coverage gaps they only discover after an incident. Common blind spots include social engineering attacks and third-party breaches—threats security leaders know are likely but may not be properly accounted for in policies. If CISOs, finance, and legal teams collaborated earlier in the buying process, companies could align coverage with real-world risk scenarios and avoid costly surprises. One simple but overlooked practice is to run realistic attack scenarios—like a phishing scam or a third-party outage—against your policy to confirm how coverage would actually respond.

Cybercriminals move fast. Insurance carriers, bound by regulatory requirements and the slow process of drafting and approving new policy language, struggle to keep up. While the industry has made strides in adapting to emerging risks, there is always a lag. Threat actors do not need regulatory or internal approval to change tactics. Carriers do.

That doesn't mean insurance is standing still. Carriers are increasingly clarifying how they handle new exposures, from artificial intelligence to evolving ransomware techniques. But the structural lag is unavoidable for most insurance carriers—and it means businesses must recognize that cyber insurance may always be a step behind the threat landscape.

Navigating Exclusions: "Acts of War" and Beyond

Few topics generate as much anxiety as exclusions. "Acts of war" clauses, in particular, leave many companies wondering whether they would be covered if a state-sponsored attack hit their systems. The reality is nuanced. Some carriers have introduced coverage for acts of war, while others continue to exclude them. A similar pattern is now emerging with AI-related risks, with carriers taking divergent approaches.

The best way to evaluate these complexities is by working with a broker who specializes in cyber insurance. Generalist brokers may be able to place a property policy, but cyber requires expertise and constant monitoring of an evolving market. Specialized brokers can help businesses benchmark their coverage, identify gaps, and secure policies that align with their risk profile. Specialized brokers can also pressure-test policies against evolving risks and flag areas where different carriers take very different stances.

Shifting Responsibility Back to Businesses

It's tempting to blame cyber insurers for coverage disputes, but in most cases, the real issue lies in misunderstanding. In fact, most coverage disputes stem not from insurers refusing to pay, but from policyholders assuming protections were included when they never were. Better outcomes come when organizations bring more stakeholders into strategy discussions and lean on specialized brokers to navigate a complex market.

Cyber insurance is neither a silver bullet nor the villain some portray it to be. It is one component of a larger resilience strategy—one that needs to be aligned with security investments, risk appetite, and operational priorities. When used correctly, insurance can reduce chaos, accelerate recovery, and provide much-needed expertise in moments of crisis. When misunderstood or misapplied, it can leave businesses exposed and frustrated.

The future of ransomware defense will require collaboration: between CISOs and CFOs, between insurers and clients, and between the public and private sectors. Only then can cyber insurance fulfill its role as a stabilizer rather than an accelerant in the ransomware economy.

With organizations facing a continually evolving landscape and the challenges that arise in operating a business, securing and retaining good employees, and trying to shield themselves from a far more litigious environment than ever before, the need for employment practices liability insurance (EPLI) is finally raising eyebrows—the quiet and unassuming coverage that speaks volumes. Employees are increasingly aware of their rights and more willing to challenge perceived violations, from harassment and retaliation to discrimination and wage-hour disputes. The costs and frequency of litigation have risen exponentially, and the once-safe mindset of "what we've always done" no longer insulates organizations from legal or operational risk.

How We Got Here

Over the past several decades, the legal landscape for employment rights has expanded dramatically. Since the Civil Rights Act of 1964, additional legislative acts have been introduced—such as the Americans with Disabilities Act, the Age Discrimination in Employment Act, and, most recently, the Pregnant Workers Fairness Act of 2024—that have ensured strengthened protections for employees. While these laws have improved workplace conditions, they have also increased the complexity of compliance, making EPLI more essential than ever.

Commonly identified misconduct and harassment that could give rise to claims include discrimination based on age, race, sex, religion or disability; harassment and sexual harassment such as hostile work environment or unwelcome conduct; wrongful termination through violations of law or contracts; retaliation in the form of actions that cause one to feel punished for exercising their rights; and third-party interactions such as with customers, vendors or contractors that allege discriminatory or harassing behavior from an organization's employees.

Emerging practices, like the use of biometric and genetic data for identification, have introduced new exposures to consider. In 2008, the State of Illinois enacted the Biometric Information Privacy Act, which ensures recourse to individuals when their biometric identifiers such as fingerprints, facial recognition, DNA, palm print, retina scans are collected, used, and stored by private entities. Both biometric and genetic information are now considered protected classes, adding another layer of risk for employers navigating modern compliance. This evolving environment is exactly why Employment Practices Liability Insurance (EPLI) has become such a critical safeguard for organizations of all sizes.

How Does EPLI Protect Businesses?

Without EPLI an organization may be forced to absorb the full cost of litigation, settlements, or judgments on its own. The financial impact of an EPLI claim can be devastating (sometimes beyond repair), threatening not only an organization's ability to continue operations but also its reputation and long-term recovery.

Defense coverage is one important benefit of a standard EPLI policy and can be triggered even if the complaint is groundless. For businesses, EPLI may be a form of balance sheet protection.

Employers today are not as insulated as they once believed, especially smaller organizations that may underestimate their obligations or the potential impact on their financial stability. The unforeseen is already revealing itself in subtle "red flags" that, left unchecked, can quickly evolve into costly lawsuits.

Lawsuits may allege denying promotion to employees due to age, or an employee dispute claiming failure to pay overtime or duty misclassification may turn into a wage-hour lawsuit. Complaints could include an employer's operations being ceased due to employing undocumented migrant workers, or an employee could sue because of biometric data improperly safeguarded. An EPLI broadened policy can address fines and legal fees and provide the pre-claim and post-claim resources employers need.

Looking Ahead: Protecting the Evolving Workforce

The evolution of employment law continues, driven by changing workplace norms, remote/hybrid models, artificial intelligence, hiring and termination practices, and new legislation. For example, emerging litigation related to algorithmic bias in hiring tools is already attracting attention.

We emerge from history with practices for a better future. As society and laws evolve, new challenges will emerge. Employers who proactively protect themselves with EPLI are better positioned to survive and thrive through those challenges.

In Summary

Employment Practices Liability Insurance is intelligent risk management. As we've seen, the workplace has evolved dramatically. New laws, new technologies, and new employee expectations have reshaped what it means to be an employer today. These shifts have also created more opportunities for liability. EPLI provides organizations with balance sheet protection in an environment where litigation and reputational risks are only growing. Employment law will not stand still, and neither should your protection strategy. If your business is not yet covered, now is the time to act to safeguard your operations, your people, and your financial future.

A study conducted by our colleagues at the Insurance Information Institute (Triple-I) and by the Casualty Actuarial Society found that legal system abuse and related litigation trends contributed to between $231.6 billion and $281.2 billion in increased liability insurance losses over the past decade.

That elicits a WOW from me. We've all been aware of social inflation for years now, and I've certainly read (and published) a lot about third-party litigation funding and new tactics by plaintiffs lawyers, but I had no idea the dollars involved were that large. 

Let's take a look at the report — and at some ways the insurance industry can fight back.

I won't be a total cheerleader for the insurance industry here. We all know that insurance policies are complex, that legal disagreements occur, and that insurers can be in the wrong. Sometimes, they deserve to be sued and deserve to lose. But the treatment of insurance lawsuits as an asset class that can be packaged and sold to big money investors, the use of AI to blanket insurers with claims and overwhelm their legal departments.... Those sorts of tactics, for me, cross the line into abuse. 

The report, Increasing Inflation on Liability Insurance – Impact as of Year-End 2024, found that "rising jury awards, litigation financing and evolving legal dynamics have driven higher claims costs and defense expenses" that have increased insurers' claims costs far beyond what economic inflation would lead you to expect. By category, the findings are:

• Personal Auto Liability: Legal system abuse and inflation increased losses and defense and cost containment by $91.6 billion–$102.3 billion, or 8.7%–9.7% of booked losses.
• Commercial Auto Liability: $52 billion–$70.8 billion, or 23%–31% of booked losses.
• Other Liability – Occurrence: $83.4 billion–$103.3 billion, or 27%–34% of booked losses.
• Product Liability – Occurrence: $4.6 billion–$4.8 billion, or 27%–28% of losses and DCC.
• Total: $231.6 billion - $281.2 billion

Claim severity, not frequency, is driving the rise in costs. "While the number of claims has generally declined, the average cost per claim has soared," the report says.

Those increased costs translate, of course, into higher premiums, so it's not just insurers who are losing. The broad population of policyholders is, too.

What can be done? 

In the long term, the sort of work that the Triple-I is doing to highlight abuses feels like the answer. Getting state legislatures to require the disclosure of third-party litigation financing, for instance, would go a long way toward changing public perception. Suits against insurers have historically been seen as little guy versus deep pockets. Increasingly, though, the kind of third-party money being thrown into lawsuits means the contests are between big money and insurers struggling to keep premiums reasonable— a hot issue especially in the wake of COVID's disruptions and now in the face of hefty tariffs. The change in perception could influence juries that otherwise would be inclined to award "nuclear" verdicts against insurers. 

In the short term, insurers can also use data analytics, including AI, to fight back, in ways laid out in four articles that Taylor Smith and John Burge have published with ITL in the past two years.

In the first, they show how "The Plaintiff Bar Is Winning in AI" and explore how insurance attorneys can level the playing field.

In the second, "Are We Losing Our Negotiating Power?", they describe how the plaintiff bar has investigated a staggering amount of money to improve its data on claims settlements and explain how the insurance industry can catch up. 

In the third, "The Tripling of Verdict Size Post-COVID," they not only provide the data to back up that headline but get deeper into how the insurance industry can (and must) combat the data advantage that the plaintiff bar has worked so hard to build.

Most recently, in "We're Losing Billions--Before We Ever Get to Court," they argue that settlement negotiations, not the courtroom, are where the real battle is being waged — and lost by the insurance industry. They suggest new tactics.

Stay tuned. This issue will be with us for a long time, and we'll keep publishing as much smart thinking as we can find on the issue, as often as we can. This is important.

Cheers,

Paul 

Mid-market insurers today are under intense pressure to modernize. They need to build digital experiences, add AI capabilities, and upgrade legacy systems, but many are still relying on platforms built two decades ago. A recent industry report found that 74% of insurers still use outdated or legacy technology for vital processes such as underwriting, pricing, and claims.

The problem is less about the tools and more about how technology is organized and operated. Many carriers pursue three familiar paths: buy more software as a service (SaaS), hire contractors, or outsource big projects. Each may produce tactical gain, but none deliver an operating model that truly supports continuous innovation. What mid-market insurers need is a model that combines the speed of SaaS, the depth of full-time tech teams, and the accountability of managed services. That model is Technology Department-as-a-Service, or TDaasS.

Why Innovation Keeps Getting Pushed Aside

For many mid-sized carriers, the bottlenecks are technical and organizational. They may still rely on legacy policy or claims systems that cannot support rapid change. A recent survey by Gartner revealed that many insurers ranked application modernization, including replacing or upgrading legacy assets, as a top priority.

At the same time, insurers know they need AI, cloud and new digital platforms, but those need a foundation that often simply does not exist. In a survey of EU insurance undertakings, only 52% reported they already have a dedicated digital-transformation strategy in place, while 25% had none or were only developing one.

The managers and boardrooms of these firms often hear: "We need faster products" or "We need more automation." But the IT function remains focused on uptime, cost and delivery of features rather than business outcomes. Without a unified tech department that sits beside the business rather than behind it, innovation stalls.

Why Traditional Options Fall Short

Buying SaaS tools seems like a fast path to modernization. Yet every new tool still needs integration, configuration, and management. It may solve one narrow problem but it rarely changes the architecture, culture or operating model. You end up with a patchwork stack and increasing complexity.

Staff augmentation fills skills gaps. But contractors require onboarding, ramp-up time, and oversight. Once their contract ends, that knowledge often walks out the door. The organization is left with systems built by someone else, and little enduring capability.

Outsourcing large projects to system integrators is another choice. But this often shifts the burden rather than eliminates it. The vendor may build the solution, but the carrier still has to operate it and evolve it afterward. That leaves the carrier dependent, and often still without the internal structure to change rapidly.

In short, none of those models create the consistent, flexible, outcome-oriented tech team a growth-oriented insurance carrier needs.

Enter TDaasS

Technology Department-as-a-Service offers a different approach. Imagine you subscribe to a full technology department: developers, QA, UX designers, cloud engineers, security specialists, and compliance experts, all aligned with your strategy, working as your team. You don't hire them; you access them on a flexible basis. You scale up or down depending on phase, project, or business objective.

In practice, this means the carrier defines business outcomes—faster claims processing, higher customer retention, faster product launches—and the TDaasS team supports it end-to-end. They handle delivery, operations and optimization. They stay aligned with leadership rather than simply responding to tickets or vendor demands.

One regional insurer we supported had a legacy policy system and limited innovation capacity. After engaging a TDaasS model, they replatformed core applications to a cloud environment and launched an AI-driven agent portal within six months. Claims settlement improved by about 20% and IT spending dropped by roughly 15%. The tech team operated as a single entity from development to operations and compliance, accelerating value rather than fragmenting it.

Modernization Without Disruption

Replacing a legacy core is expensive, risky, and slow, and many mid-market carriers cannot afford to stop business functions while doing it. With TDaasS, you modernize in layers. You build new capabilities like microservices, APIs and front-end portals on top of your existing platform. Meanwhile, you treat the legacy core as the system of record while you gradually migrate, modernize or wrap it. Research points to this "middle-office" model for carriers unwilling or unable to perform a big-bang transformation.

Why Mid-Market Carriers Are the Ideal Fit

Large national carriers may already have big internal tech operations. Small niche insurers might rely fully on third-party stacks. Mid-market carriers live in between: complex enough to demand tailored systems, yet without the budget or scale of the largest players. TDaasS gives them enterprise-grade tech capability without enterprise overhead.

This model offers cost predictability and capacity flexibility. When you need a sprint team for a new product you scale up. When you shift to steady-state operations you scale down. You stop thinking about head-count, vendor management or internal hiring cycles. You replace that complexity with a managed function aligned with your business.

Most importantly, it alters how tech works in the enterprise. Instead of technology being a cost center measured by uptime and head-count, you start measuring it in terms of outcomes: product launch speed, customer retention, claims efficiency. That shift is what separates digital leaders from the rest.

Final Thoughts

Digital transformation in insurance is no longer optional. It is essential. Yet the path carriers adopt often determines their pace and outcome. Technology Department-as-a-Service is that model. It enables insurers to modernize their legacy platforms, integrate AI capabilities, and build digital products without being weighed down by technology debt. Over time it turns IT from a bottleneck into a growth engine. For a carrier serious about scaling innovation and doing so without paralysis, TDaasS may be the model you didn't know you needed.

Natural disasters have always strained the American landscape. In recent years, Americans have grown accustomed to watching natural disasters dominate the news cycle. The consequences extend beyond the emotional and physical burden placed on individuals and communities to financial burdens that disturb the broader economic ecosystem. According to a report by insurance broker Aon, the $126 billion in losses from natural disasters in the United States is triple the average over the last century. The total cost of damages from weather and climate disasters in the U.S. approximates $2.9 trillion (as of February 2025) over the last 45 years. The increase in these costs is driven by both the increase in natural disasters and the increase in national wealth. The increase in national wealth provides a larger pool of assets to be destroyed by natural disasters.

In response to these challenges, the implementation of federal insurance programs has played a critical role in mitigating the financial impact of such events and supporting recovery efforts. Fundamental illustrations from recent news, such as the devastation caused by Hurricane Helene in North Carolina and recurring wildfires in California, provide insight into the current financial burdens created by gaps in coverage availability and affordability.

Here, the focus lies on the effect expanded federal disaster insurance programs have on the financial security and resilience of our American communities. The economic stability of a community collapses when homes and businesses are destroyed or made uninsurable. On top of the monumental cost to rebuild a community, the mortgage markets and property tax bases shrink. With real estate providing the underlying basis for household and community wealth, the compounding effects of the deterioration of property values and tax bases can leave an entire community in financial and physical ruin.

Using the National Flood Insurance Program (NFIP) as a model can provide a valuable foundation for the expansion of the federal disaster insurance programs. The modern landscape of natural disasters expands beyond flooding to include wind and wildfire damage. Private insurers often face limitations in providing affordable and comprehensive coverage for catastrophic events. Federal insurance programs can step in to fill this gap, offering financial protection and facilitating disaster recovery for our communities.

The Financial Wounds on Communities

A community is created from many different stakeholders intrinsically related to each other through every facet of life. These primary stakeholders can be classified into general categories, including households, businesses, municipalities and the broader economy. Each of these stakeholders is burdened with financial losses in natural disasters.

Households face the immediate cost of repairing or replacing property, often while simultaneously losing their source of income. The multiplicative effect of these costs and loss of income lead to mortgage and personal debt defaults and long-term financial instability. Businesses endure similar hardships. A local hardware shop may lose inventory or have facilities damaged, reiterating the multiplicative burden of households. Businesses may never reopen, leading to job losses and reduced tax revenue for local governments.

Municipalities must repair functional infrastructure, including roads, utilities and schools while their tax revenue erodes. The reduction in tax revenue leads to new debt issuances or emergency federal aid. The broader economy feels the ripple effects of these disasters, far beyond the local or state borders. Supply chains are disrupted, and populations are displaced. Rising insurance costs further exacerbate the affordability issues when private insurers leave specific markets.

These financial wounds are not abstract. After Hurricanes Helene and Milton in 2025, North Carolina residents faced nearly $113 billion in combined damages. Many could rely on NFIP for flood protection, but wind damage forced communities into financial ruin. The popular tourist town of Chimney Rock, North Carolina took over one year to rebuild and invite visitors back. The local economy and its residents suffered throughout the entire recovery period, and effects will continue for years to come. Similarly, when wildfires scorched Los Angeles earlier that year, more than $250 billion in damages overwhelmed state safety nets, leaving homeowners exposed as private insurers raised rates by double digits or withdrew entirely.

Expanded Federal Insurance to Close the Gaps

The additional federal insurance programs could implement separate programs to cover different disaster types, including the creation of a National Wind Insurance Program (NWIP) and National Wildfire Insurance Program (NWFIP). While under the purview of the Federal Emergency Management Agency (FEMA), the group of disaster recovery programs could benefit from economies of scale to provide efficiencies and reduce overhead. Modeled after the NFIP, the creation of NWIP and NWFIP programs would provide affordable wind and fire damage insurance to property owners in high-risk areas. The programs could have a greater chance for success by collaborating with private insurers to share risks and improve financial sustainability.

Risk-mitigating incentives through premium discounts can encourage property owners to install preventative resilient structures, such as wind-resistant building materials and fire-resistant landscaping like that advocated by the Institute for Business & Home Safety (IBHS), a non-profit organization that takes a more scientific approach to advance the industry's understanding to reduce catastrophic losses.

These expanded programs provide reliable protection for the stakeholders of our communities. Homeowners can avoid foreclosures, preserve credit scores and protect generational wealth. Small businesses can replace inventory, repair facilities and continue uninterrupted payroll. Municipalities face fewer uncollectible taxes or reductions in tax revenues, while lowering the demand for emergency federal assistance for losses that currently go uninsured. The overall economic fallout is less volatile with the assurances that the federal insurance programs create.

Disaster Coverage Implementation Challenges

Expanding federal insurance programs comes with its own challenges. Many property owners in high-risk areas remain uninsured or underinsured. Just as only a fraction of Texans carried flood insurance during recent floods, uptake is a challenge. Efforts to increase awareness and participation in federal insurance programs are essential. Broad participation rates are a fundamental cornerstone of sustainable and affordable insurance coverage: spreading the risk across a broad risk pool.

Another challenge is the red tape involved in implementing new far-reaching programs. There are many reasons one could be hesitant to expand the reach of the federal government, including weaknesses in the current NFIP, which already faces low participation. However, by first focusing on fixing the weaknesses of the ready and available NFIP, the additional NWIP and NWFIP programs could be modeled and implemented swiftly and economically.

The Path Forward

The United States has always rallied in times of disaster, sending relief workers, supplies and emergency funds. But relief alone is reactive and costlier. Insurance is proactive and transforms post-disaster chaos into manageable risk. The NFIP has shown what is possible when the federal government steps in to insure against uninsurable perils. Now, with hurricanes growing stronger and wildfires spreading faster, it is time to extend that protection to wind and fire.

This would not only shield households from bankruptcy and businesses from closure, but also preserve the fiscal health of municipalities, strengthen national resilience and ensure communities endure beyond the financial hardship. The choice is clear in an age where increased national wealth guarantees more severe losses from natural disasters.

Expanding federal disaster insurance to include wind and wildfire coverage is an investment in the financial security and resilience of the American community. It is a promise that no matter where disaster strikes, recovery will not depend on luck, charity or wealth. It will be secured by the shared commitment of a nation prepared to face the storms and fires of tomorrow.