Weekly Dispatch: Aug. 18, 2022

August 18, 2022


Report: Hard p/c market expected to continue due to inflation

The 2022 combined ratio for the property/casualty insurance industry is forecast to be 100.7—a worsening of 1.2 points relative to 2021—driven by significant deterioration in the personal auto line. Loss pressures and a hard p/c market are expected to continue due to inflation, supply-chain disruptions, and geopolitical risk, according to the latest underwriting projections by actuaries at the Insurance Information Institute and Milliman in a quarterly report, Insurance Economics and Underwriting Projections: A Forward View. Are you looking for best practices to selling in a hard market?

Survey: Agents, brokers shatter single-digit growth ceiling

Independent insurance agents and brokers have posted a fifth consecutive record-setting quarter of organic growth, according to a survey by Reagan Consulting. At 10.2% in the second quarter of 2022, their median organic growth reached double digits for the first time in the nearly 15-year history of the firm’s Growth & Profitability Survey. According to the survey, agents and brokers anticipate organic growth of 8.5% through the end of 2022, but also see their operating profits decrease.

Trend: Flash flooding a growing threat

Meteorologist are warning that flash flooding, which has been frequent across the United States recently could happen anywhere. Experts predict that flash floods could be shorter in duration but larger in water volume. The trends show that flood events could become more unexpected and destructive. What’s more, because urban landscapes often repel rainfall, runoff is higher in these areas compared to non-urban locations, according to the National Oceanic and Atmospheric Administration. Preparation is key. The September issue of PIA Magazine will focus on preparedness. It will feature articles on the restoration process and the factors that drive the North Atlantic’s hurricane season. Also, PIA Northeast offers members access to its Flood Insurance Tool Kit, which can help you advise current and prospective clients and answer their flood-risk questions.

N.H.: Insurance fraud, mostly auto, on the rise

The New Hampshire Insurance Department reports that as of the end of Fiscal Year 2022, the NHID Fraud Unit has referred 22 cases of suspected insurance fraud—a new record high—for prosecution by state and federal authorities. The fraudulent claims prosecuted during FY 2022 are comprised of two workers’ compensation claims, one homeowners insurance claim, one disability insurance claim, and 18 auto insurance claims. These 22 cases represent nearly $283,000 in fraudulent claims.

PIANJ priority bills signed into law

Two new laws were signed by Gov. Phil Murphy on Aug. 5, which will impact both the personal auto and commercial insurance marketplaces. An auto limits bill (S-481) eventually will increase the minimum auto limits required in a personal auto policy. PIANJ is the only insurance association to publicly support an increase in the minimum limits. Additionally, S-1368 requires business owners and rental owners to maintain certain liability insurance policies. PIANJ has long supported this legislation and it was integral in amending an earlier version of the bill to clarify the insurance requirements. The association commends Gov. Murphy for signing these bills into law.

N.J.: DOBI proposes to amendments to producer CE regulation

The Department of Banking and Insurance formally published proposed amendments to the state’s insurance producer continuing-education regulation earlier this week. Under the proposed amendments to N.J.A.C. 11:17-3.6 would: 1. allow producers to carry over up to 12 CE credits into a new licensing term; 2. allow producers to use one insurance-fraud credit hour toward professional ethics requirements; and 3. give CE instructors twice the approved credit hours for the courses they teach. PIANJ has worked closely with the DOBI to craft amendments that would appropriately reward producers for their efforts to educate themselves. The publication of the amendments is the result of that work. Now starts a 60-day comment period during which the public is encouraged to weigh in on the amendments.


N.J.: PIANJ-priority ‘step-down’ bill introduced in state Senate

Legislation that would prohibit the use of step-down provisions in personal auto policies was introduced in the state Senate last week. Generally, step-down provisions are found in some personal auto policies. They act to reduce the amount of coverage to which an insured would be entitled, and they can be triggered by a variety of factors. S-2980, introduced by Sen. Joseph P. Cryan, D-20, would prohibit the use of step-down provisions in personal auto policies. Step-down provisions were in the news recently when the Superior Court of New Jersey, Appellate Division ruled that an “intra-family step-down provision” was a “hidden trap” and thus unenforceable in a particular instance. This case, and others like it, demonstrate the need for legislation to limit the use of step-down provisions.


N.Y.: Revised WC loss costs take effect Oct. 1, 2022

In May, an application for an overall loss cost decrease of 8.7% was submitted to the New York Department of Financial Services by the New York Compensation Insurance Rating Board. The DFS approved the application as filed with an effective date of Saturday, Oct. 1, 2022. There is no change in deductible premium credits and the Workers Compensation Security Fund surcharge (remaining at 0%). However, the United States Longshore and Harbor Workers Coverage percentage is changed from 75.1% to 76.6%.

NYAIP looking for qualified insurance producers

At the request of the DFS, the New York Automobile Insurance Plan is looking for qualified insurance producers (with at least five years of work experience) to serve as public members or public member alternates on the NYAIP Governing Committee or Peer Review Panel. The Governing Committee is responsible for the oversight and direction of the NYAIP; the Peer Review Panel helps the NYAIP’s Special Investigations Unit examine suspected cases of producer fraud. If you are interested in serving on the committee or panel, submit the electronic application form no later than Saturday, Aug. 20, 2022. The DFS will review the applications and submit its public member appointments and recommendations to the Governing Committee for its November 2022 Annual Meeting.


N.J.: Call for nominations: YIP of the Year

NJYIP is looking for nominations for its Young Insurance Professional of the Year award. It recognizes an active NJYIP member, who demonstrates a commitment to professionalism and excellence in the insurance industry and values the importance of the independent agent. The deadline for award submissions is Thursday, Sept. 1, 2022. We hope you can join us to celebrate the winner at the NJYIP Halloween Spooktacular in October.

Educating insurance agents

N.Y.: New classes that meet the New York State Department of Financial Services’ new CE requirements are available online and in private on-site sessions.


Thanks to those who attended NJYIP Summer Reception

More than 30 insurance professionals attended the recent NJYIP Summer Reception last month at the Burnt Mills Brewery in Bedminster. Attendees were able to relax and network while dining inside and trying out brews, as well as listening to a live band and playing cornhole. See photos from the event.


N.Y.: NYCIRB offers transition resources on manual changes

Last year, the DFS approved a new edition of the New York Compensation Insurance Rating Board’s New York Experience Rating Plan Manual. The manual will affect experience mods with a rating effective date on or after Saturday, Oct. 1, 2022. The new plan incorporates several new methods, and it discontinues others. To help insurance producers prepare for the changes, it’s offering New York Experience Rating Transition Webinars and Resources. Four webinars cover the following topics: What is the expected impact?; How does the new plan work?; Understanding the Rating Worksheet; and Why is my mod so high and how can I reduce it?

Register now

Monday, Sept. 12, 2022: PIANJ Golf Classic

Thursday, Sept. 29, 2022: PIANH Symposium

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