| The New York Compensation Insurance Rating Board announced this week that it has proposed a 2.6% decrease in Workers' Compensation insurance loss costs for 2023. If approved, the new schedule of loss costs will apply effective October 1, 2023.
The filing is subject to approval by the New York State Department of Financial Services. The filing and explanatory memorandum are available for review online.
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In a recent meeting, Independent Market Solutions, LLC (IMS) and Hippo Insurance Company joined forces to provide homeowners with an unparalleled insurance experience. The collaboration aims to revolutionize the way individuals safeguard their homes, combining advanced technology, swift policy processing, and comprehensive coverage. With a focus on specialization, efficiency, and cutting-edge solutions, Hippo Insurance is set to reshape the home insurance landscape. Your agency can sign up today at IMSaccess.com. Hippo has carved a niche for itself by specializing in one insurance policy the HO3. This specialized policy allows homeowners to protect their property, and possessions, with tailored coverage. By narrowing their focus, Hippo ensures that their offerings are finely tuned to meet the unique needs of homeowners in these specific areas. One of the most impressive aspects of Hippo is their ability to provide quick and hassle-free quotes. In just 30 seconds, your agency can obtain an accurate quote for your customers' insurance needs. Furthermore, you can bind a policy in under 4 minutes, eliminating the typically lengthy process associated with obtaining coverage. This remarkable efficiency is a testament to Hippo's commitment to streamlining insurance for the modern homeowner. Hippo also recognizes the importance of seamless integration within the insurance ecosystem. They have proactively integrated with numerous Personal Lines Rating Platforms, allowing for easy accessibility and a seamless user experience. This integration empowers homeowners to effortlessly explore their insurance options and select the policy that best suits their needs. During the meeting, Hippo revealed their targeted expansion plans, with New York (NY) being identified as a state with significant growth potential. By expanding their reach into NY, Hippo aims to offer their innovative insurance solutions to a broader agency plant, enriching homeowners' lives with comprehensive coverage and cutting-edge technology. One of the most significant advantages for consumers of Hippo is their integration of technology-based loss control. Hippo offers a free SimpliSafe system that utilizes advanced sensors to quickly identify water leaks, fires, and break-ins via the Smart Home endorsement. This technology-driven approach to loss control provides homeowners with an additional layer of security and peace of mind, knowing that their homes are being monitored around the clock. Hippo Home Care is another standout feature offered to consumers. This innovative service provides homeowners with access to a network of trusted and skilled professionals who can address a range of home-related issues. Whether it's finding a reliable plumber or a qualified electrician, Hippo Home Care ensures that homeowners receive prompt and reliable assistance when needed most. The partnership between IMS and Hippo marks a significant milestone in the realm of home insurance. With a focus on specialization, efficiency, and cutting-edge technology, Hippo is leading the way in transforming the insurance experience for homeowners and Agents. By offering swift quotes, integrating with rating platforms, leveraging advanced loss control technology, and providing comprehensive home care, Hippo has cemented its position as a trailblazer in the industry. To embark on a seamless and convenient insurance journey with Hippo and IMS, your agency can sign up today at IMSaccess.com today. Take advantage of the extraordinary benefits offered by IMS and Hippo by safeguarding your clients' homes with confidence and peace of mind.
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|  By: Carey Wallace Over the past 18 months, we have experienced the highest interest rates since 2000, with them peaking at 7.08% in November of 2022. Over one-third of the independent insurance agencies in the U.S. anticipate a change in ownership in the next two years, which means that over 13,300 agencies will transition ownership according to the 2022 Agency Universe Study. Many agency owners plan to transition their ownership to family, children, or a current partner, and if a bank loan is involved the change in interest rates can have a significant impact on the price of their agency and their retirement. Now more than ever, it is important for agency owners that wish to maximize the value of their agency to focus on the things that they can control. Get Informed Take a close look at your agency's financial statement and get to know your numbers. Compare your agency's performance to the industry standards to determine the areas where you are lagging behind and the areas that you excel. When you are planning to sell, a buyer will use these benchmarks to set their expectations on what it will take to run your agency and what profitability they can expect for an agency of your size. For those agencies that are outperforming the benchmarks, the benchmarks can create a discount for your agency. It is in your best interest to know your own proven performance and maximize that performance prior to selling your agency both internally and externally. Profitability The best way to maximize the value of your agency when you are selling is to run your business like you're selling it tomorrow. By removing all discretionary expenses and investing those funds in the growth of your agency, you will position your agency to command the maximum value at the time of your ownership transition. This will allow you to fund the investment in the resources, infrastructure, and technology, and support your agency needs to operate efficiently and be positioned for growth and scale. Common investments can include people, training, technology, and the development of strong operating procedures. Transition time Do not wait until you are ready to walk away to start planning to sell your agency. We are in a relationship business, so you are an important component in the transition of the ownership of your agency. By working through a transition plan to provide a warm handoff of your staff, customers, centers of influence, referral partners, and carrier partners, you will increase the likelihood that those key relationships will stay with the agency. Your recommendation and behavior will speak volumes to the people who have trusted you. They will look to both your actions and your words to determine if they want to continue to do business or work with your successor. If you are not willing to work with them, they may not want to either, and that would be detrimental to the retention of key staff, customers, and ultimately the value of your agency. Plan to spend this time to ensure that you are able to demonstrate your strong support to your successor. Minimize Risk Be aware of the risks inside your business and work to reduce those risks prior to your transition. There are three main types of risks: concentration, performance and culture. Consider the areas of your agency that are dependent on one person, one carrier, one relationship. This could be related to a specific area of expertise, risk appetite, or simply a responsibility that you have never opened up to anyone other than a key person inside your agency. Whenever possible look for ways to minimize that risk by exposing multiple people to the customer relationship, invest in training, and document the processes that are handled in all key roles to minimize the delay or confusion should any key employee no longer be part of the team. Performance Risk To address risk in performance, it is critical to know the key performance indicators that will impact the value of your agency. You should know what the growth, retention, new business, profitability, and efficiency expectations are for the key roles inside the agency. By knowing these standards, you can work to strengthen the areas of your agency that are weak, and highlight your agency's areas of strength. These performance indicators will serve as a guide for you to where to invest and also provide a way to measure the success of your investments. Too often when technology is implemented there is no way to measure the impact, which makes it hard to know the return on your investment. Think of these performance metrics as ways to measure your ROI. Culture Risk The last area of risk is culture. This is the area that many times is the most important as well as the hardest to mitigate. This encompasses how you run your agency, is your sales and service work clearly defined or is it blended roles inside your agency? How do you drive new business to your agency? Is it based solely on referrals, or do you have a well-defined strategy for attracting new clients with a content and marketing strategy? Do you have contracts in place with your staff, or are you at greater risk of losing business if they leave the agency? What is the level of expertise inside your agency when it comes to coverage, technology, automation, and innovation? Have you created a culture of trust that allows you to embrace change, or do you have a culture in your agency that resists change? All of these factors are important to the continuity of your agency in a transition of ownership. How you lead your team can impact the value of your agency, so think about ways to foster a culture of trust. It will have a positive return. The compensation structure as well as the benefits package that you provide for your staff is also an area that will impact the value of your agency. When another agency is looking to buy or when the next generation is looking to purchase the agency, the compensation structure will impact the cash flow of the agency. Compensation is the largest controllable expense inside any agency, so if your compensation structure is not in line with the industry standards, it may be difficult to continue and also provide you with the price you expect for your agency. If the incoming owner makes a change to the compensation structure they will be at risk of losing talent and staff that are critical to keeping the customers and relationships with referral partners and carriers. If you want to maximize the value of your agency, you need to embrace a strategy to move your staff to compensation plans that are tied to the growth of your agency long before you plan to transition the ownership of the agency. If you do not make this change inside your agency, and your compensation structure is not in line with industry standards, you need to be realistic in your expectations for the price of your agency. There are many things you can do to plan for the successful transition of your agency, and it starts with focusing on the factors that will impact the value of your agency that you can control. Well-run agencies will continue to command high multiples regardless of interest rate fluctuations and other factors that are not within our control. By knowing your numbers, focusing on driving profitability and performance inside your agency, and planning ahead, you will maximize your agency's value and be well-positioned when the time comes for you to transition the ownership of your agency. For more information on how to best prepare for the future of your agency visit www.agency-focus.com or email carey@agency-focus.com.
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| A Manhattan court has granted the New York State Department of Financial Services' request to be appointed as ancillary receiver of United Property & Casualty Insurance Co. (UPC.) The order enables DFS to liquidate the insurer's New York assets and resolve claims that may be insured under its policies. If you have clients who were insured by UPC, you should advise them now that they have until Feb. 27, 2024 to submit claims.
As we previously reported, Florida-based UPC was declared insolvent earlier this year by the Florida Department of Financial Services. A court appointed the Florida department as the insurer's receiver, giving it authority to liquidate the insurer's assets. Florida subsequently asked the NYS DFS to seek appointment as an ancillary receiver for the insurer's New York assets. The NYS DFS made that request to the court, a request that was granted on May 4.
Under the court's order: - DFS has the authority to liquidate UPC's assets and resolve claims.
- All claims for coverage under UPC policies must be submitted to DFS no later than Feb. 27, 2024. Claims submitted after that date are barred.
- New York lawsuits against UPC and the DFS regarding the liquidation are barred.
- Parties with legal actions against UPC insureds for covered liability insurance losses are barred from further proceedings until Oct. 31, 2023.
- Those with first-party claims under UPC policies are barred from presenting them to DFS until Aug. 2, 2023.
- If funds are available to repay unearned premiums to UPC insureds, repayments will not occur before Jan. 29, 2024.
- DFS is immune from lawsuits regarding its handling of the UPC liquidation.
- UPC's New York license is revoked.
Questions should be directed to the New York Liquidation Bureau at Claims@nylb.org or by phone at (212) 341-6552.
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| Industry standards-setting organization ACORD has revised four personal and commercial automobile insurance forms to reflect a recent change in state law. The revised forms are for use on and after August 1, 2023. You should expect to see them in your ACORD Advantage subscriptions or agency management systems over the next few months.
As we previously reported, a law taking effect on August 1 will require every personal and commercial auto liability policy to include "supplemental spousal liability coverage" unless the insured specifically rejects it. Under current law, the insured has the option to add the coverage. After August 1, the insured will have the option to reject it.
The revised forms will carry an edition date of 2023/08. The four forms are:
- ACORD 65 NY (2003/01), New York Auto Supplement - Spousal Liability Coverage
- ACORD 90 NY (2015/12), New York Personal Auto Application
- ACORD 137 NY (2021/03), New York Commercial Auto Coverages/Limits Section
- ACORD 290 NY (2015/12), New York Personal Auto Application Section
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| The New York State Workers Compensation Board has announced that the maximum disability benefit will increase to $1,145.43 per week. The change applies to workplace injuries occurring on and after July 1, 2023.
State Workers Compensation Law requires the board to adjust the maximum disability benefit annually. The maximum is set at two-thirds of the statewide average weekly wage for the prior calendar year. The board said that the New York State Department of Labor has determined that the average in 2022 was $1,718.15.
The new maximum benefit is a slight increase from the $1,125.46 level that currently applies.
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More than 20 Big I NY members traveled to Washington, DC on April 26-27 for the Big I National Legislative Conference. They had a total of 13 meetings with members of Congress to discuss federal issues impacting independent agents and their clients including small business tax credits, national prohibition of most non-compete agreements, National Flood Insurance Program and others. The weather was perfect and many found a bit of time to take in the sights, including a group tour of the Capitol. Big I NY is the voice of independent agencies in New York!
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|  Big I NY Photo Inspection Reform Bill Clears Legislature:
This week, we celebrated a major milestone in our campaign to end mandatory CARCO inspections, with the State Senate passing our photo inspection reform bill by a vote of 55-8. The bill passed the Assembly in March, meaning that final step is for the Governor to sign it into law. The bill next must be “sent" by the Assembly to the Governor, which triggers a ten-day period for her to take executive action. Big I NY is working with the Governor and Assembly to ensure this process happens swiftly. We are optimistic the bill will be signed, as the language is identical to language that Governor Hochul included in her own executive budget proposal earlier this year. Nonetheless, we are urging all agents to call the Governor and register their support for this common-sense reform. Excess Lines Reform Bill Advances in Senate: Big I NY-priority legislation to eliminate the “diligent effort" requirement for commercial excess lines policies cleared the Senate Insurance Committee and advanced to the Senate floor, where it will soon be voted on by the full chamber. The bill must also pass the Assembly Insurance Committee and a floor vote by the full Assembly before being sent to the Governor. State Insurance Fund Reform Bill Introduced: On April 3rd, Assemblyman David Weprin, Chair of the Assembly Insurance Committee, introduced comprehensive legislation which would level the playing field between the State Insurance Fund (SIF) and private carriers. The bill would require that the State insurance Fund be licensed by the Department of Financial Services (DFS) and subject to the same requirements as other insurance companies providing workers' compensation insurance, and would require that the Superintendent of DFS approve the rules adopted by SIF for the conduct of its business. It would also eliminate the requirement for SIF policyholders to provide 30 days' notice to withdraw from the Fund, and allow the payment of commissions. Big I NY strongly supports this bill and will work with Chairman Weprin to advance it this session.
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| NOTE: This is a rerun of a blog post we originally published in May 2022. Since then, the carrier has informed its agency force of a commission reduction that will impact many more agents. Some Big I New York members have contacted us about it. Big I New York cannot and will not advise members regarding with whom they should or should not do business. We wish to re-emphasize the advice at the end of this post. Big I New York has asked Kemper Auto & Home to delay its announced commission reductions on certain auto insurance policies. The carrier was told in a meeting this week that the suddenness of its move is unreasonable and bad for its independent agents. The carrier informed many of its New York agencies this week that it is reducing the commission rate on its Kemper PrimeSM personal auto insurance product to an extremely low level. The change will take effect on June 1, 2022. Several Big I New York members contacted our office to ask whether the carrier's action is legal. We have concluded that it is, for two reasons: - New York insurance law regulates carrier commission reductions only in situations where the carrier has terminated an agency's contract. For any personal lines policies that the law requires the carrier to continue, the carrier must pay the prevailing commission rate in effect at the time of the termination. For commercial lines, the carrier must pay the commission rate applicable to that agent at the time of the termination. New York law does not regulate commission changes in other situations.
- A review of the carrier's agency contract indicates that it gives the carrier the right to change the commission schedule at any time in compliance with applicable state law.
While it appears that the carrier has the legal right to take this action with little advance notice, Big I New York President and CEO Lisa Lounsbury met with carrier representatives on May 19 to register strong objections. They explained that the carrier took the action after unsuccessfully seeking rate relief from state regulators. During frank remarks, Lounsbury stressed the unfairness of giving agencies little more than two weeks' advance notice of such a large reduction. She asked them to consider delaying implementation to dates further into the summer. Their response was noncommittal. She had a subsequent conversation with Bob Otis, the carrier's president of personal insurance, on May 20 with the same result. As of this writing, we suggest that members who represent this carrier: - Assume the announced reduction will take effect on schedule,
- Respond in the best interests of their clients and their businesses , and
- Contact their Kemper Auto & Home marketing representatives to explain the impact this change will have on their agencies
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| By Julie Furst  (The WNY local group is great at creating opportunities to come together. A little axe throwing, anyone?! Thanks to Carrie Shaw for the photo.)
Connecting, Interacting, Networking.
For over a century, the insurance industry has been built on relationships. They've made everything possible.
The last few years have caused us to develop new tactics for connection. Magic happens when those new ways are married with the traditional methods. As we continue to come back out of our shells and overcome the get-out-the-door hurdle many have developed, here's a reminder of the gifts awaiting in networking.
- Building relationships: Networking provides an opportunity to build and maintain relationships with people who can help you professionally and personally.
- Expanding opportunities: Meeting new people can lead to new job prospects, business partnerships, and other meaningful opportunities.
- Learning from others: Networking allows you to learn from other people's experiences and knowledge, which can help you grow.
- Building your reputation: Building a strong network can help you establish your reputation and credibility in the industry.
- Staying up-to-date: Networking can help you stay up-to-date with the latest industry trends and news, and best practices, which is vital for professional growth and profitability.
- Support and advice: A strong network can provide you with support and advice when you need it. Solutions to problems can be at your fingertips.
Networking and connecting as a community can make a difference for your agency, professional life, and personally. That's why your Big I NY team is committed to giving you those opportunities.
Here are a few fantastic opportunities.
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