Issuu

October 5, 2026 • Vol. 104 No. 15

Contents News & Markets

Special Report

Idea Exchange

Special Report: Reworking the Insurance Playbook for Evolving Energy Sector

WTW, Ivans Reports Signal More Commercial Rate Moderation

Special Report: Surplus Lines Leaders Remain Bullish on Outlook in a Shifting Market

Insurance Companies Join Letter to Push TPLF Disclosure in Federal Courts

Cleared of Charges, NJ’s Norcross Sues Inquirer, Editor for $100M in Defamation Suit

Closer Look: The Big Data/ AI ‘Revolution’ Is Driving Up Verdicts, Settlements as Plaintiffs Buy In

Amid Soaring Costs, Health Benefits Brokers Seek New Strategies The Competitive Advantage: Agency Duties — Legal vs. Ethical

Minding Your Business: How to Find New Producers

Workplace Marijuana Use: What Growing Employer Tolerance Means for Workers’ Compensation

Leveraging Tech for Talent Management in Insurance

Closing Quote: Liability in Life Sciences: Complex Ecosystem Raises Exposures

Departments 6 Opening Note 4 | INSURANCE JOURNAL | OCTOBER 5, 2026

12 Figures

14 Declarations

20 Business Moves

24 People

27 My New Markets

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1 Rating received 12/22/08, and affirmed 04/12/24. Fifth highest of 21 ratings. 2 Rating received 12/07/23; affirmed 11/07/24. Third highest of 16 ratings. 3 Based on revenue, FORTUNE magazine (June 2, 2025). Products are underwritten by Nationwide Mutual Insurance Company and affiliates, Columbus, Ohio. Nonadmitted products may be underwritten by Scottsdale Insurance Company, an eligible nonadmitted insurer in every state except AZ, DE and OH (NAIC No. 41297); Scottsdale Surplus Lines Insurance Company, an eligible nonadmitted insurer in every state except AZ, CA, FL and NY (NAIC No. 10672); or Scottsdale Indemnity Company, an eligible nonadmitted insurer in AZ and DE (NAIC No. 15580). Products are subject to underwriting guidelines, review and approval. Products and discounts might not be available to some persons in some states. Nationwide, the Nationwide N and Eagle and Specialized protection. With confidence. are service marks of Nationwide Mutual Insurance Company. Third-party marks that appear in this message are the property of their respective owners. © 2025 Nationwide ESO-0961AO (07/25)

Opening Note Write the Editor: awells@insurancejournal.com

Agency Universe

he number of independent insurance agencies fell slightly from 2024 (39,000) to 2026 (37,000). The good news is that most independent agencies report profitability across both personal and commercial lines, with significantly fewer agencies reporting revenue decreases compared to 2024, down from 12% to 8%. That’s according to the Big I’s 2026 Agency Universe Study on behalf of Future One, a collaboration of the Big “I” and 16 independent agency companies. The primary focus of the Agency Universe Study is to provide information on the size and characteristics of the independent agency system.

Key Highlights

Andrea Wells V.P. of Content

6 | INSURANCE JOURNAL | OCTOBER 5, 2026

ADMINISTRATION / CIRCULATION

Chief Financial Officer Terry Freeburg | tfreeburg@wellsmedia.com Circulation Manager Elizabeth Duffy | eduffy@wellsmedia.com Staff Accountant Sarah Kersbergen | skersbergen@wellsmedia.com

EDITORIAL

V.P. of Content Andrea Wells | awells@insurancejournal.com Executive Editor Emeritus Andrew Simpson | asimpson@wellsmedia.com National Editor Chad Hemenway | chemenway@insurancejournal.com Southeast Editor William Rabb | wrabb@insurancejournal.com South Central Editor/Midwest Editor Ezra Amacher | eamacher@insurancejournal.com West Editor Don Jergler | djergler@insurancejournal.com International Editor L.S. Howard | lhoward@insurancejournal.com Assistant Editors Jahna Jacobson | jjacobson@insurancejournal.com Kimberly Tallon | ktallon@carriermanagement.com Columnists & Contributors Contributors: Bridget Bergan, Gamble Cuce, Rick Dennen, Riva Dumeny Columnists: Chris Burand, Catherine Oak

SALES / MARKETING

On average, agencies report 9.9 staff members across all positions, up from an average of 8.2 in 2024. While 1 in 3 agencies say their employee count has increased in the past two years, hiring depends on size. About 7 in 10 agencies report increases in personal lines revenue and 2 in 3 in commercial lines revenue from 2024 to 2025. Nearly half (46%) of agencies report using AI, up significantly from 15% in 2024. Uses include marketing content generation (49%), coverage form analysis (43%), and contract reviews (35%). Lack of knowledge about capability (60%) and security and privacy (48%) were the top two barriers to AI adoption, both increasing by 10% compared to 2024. The biggest technology challenge for agencies was, as in previous years, dealing with multiple carrier interfaces. Most agents (86%) continue to prefer that customer service go through their agency via phone or other non-online methods. Less than a quarter prefer online self-service via a carrier website or app. The survey found that the top challenges overall for agencies were finding and screening job candidates with strong potential (45%); keeping up with the latest in AI (43%), which was a new entry; and growing personal lines business (41%). As the market softens, concerns about carriers’ market commitment eased to 41%, down from 56% in 2024. Interestingly, more than half (57%) said there is a significant need for training to help customer service representatives (CSRs) and producers sell on value rather than price. “Independent agencies are successfully navigating a changing insurance landscape and the surge of AI,” said Charles Symington, Big “I” president & CEO. “As the market evolves, agencies are investing in AI and other technologies without losing sight of what distinguishes the channel: trusted advice, choice, and personal relationships.” The Agency Universe Study was first conducted in 1983. Since 2002, the study has been completed biennially. Since 2004, the Agency Universe Study has relied on internet data collection. In total, 1,376 respondents were included in the 2026 study, conducted by Zeldis Research in cooperation with Future One. Thank you to this issue's sponsor, Ryan Specialty.

Chairman of the Board Mark Wells | mwells@wellsmedia.com Chief Executive Officer Joshua Carlson | jcarlson@insurancejournal.com

Chief Marketing Officer Julie Tinney | jtinney@insurancejournal.com West Sales Dena Kaplan | dkaplan@insurancejournal.com Romeo Valdez | rvaldez@insurancejournal.com Kelly DeLaMora | kdelamora@wellsmedia.com South Central Sales Mindy Trammell | mtrammell@insurancejournal.com Southeast and East Sales (except for NY, PA, CT) Howard Simkin | hsimkin@insurancejournal.com Midwest Sales Lisa Whalen | (800) 897-9965 x180 East Sales (NY, PA and CT only) Dave Molchan | (800) 897-9965 x145 Advertising Coordinator Erin Burns | eburns@insurancejournal.com Insurance Markets Manager Kristine Honey | khoney@insurancejournal.com Marketing Director Derence Walk | dwalk@insurancejournal.com

DESIGN / WEB / VIDEO

Graphic Designer Chris Johnson Web Team Lead Josh Whitlow | jwhitlow@insurancejournal.com Ad Ops Specialist Jeff Cardrant | jcardrant@insurancejournal.com Web Developer Terrance Woest | twoest@wellsmedia.com Web Developer Jason Chipp | jchipp@wellsmedia.com V.P. of New Media Ashley Cochrane | acochrane@insurancejournal.com Senior New Media Strategist Ashley Waldrop | awaldrop@insurancejournal.com

ACADEMY OF INSURANCE

Director Patrick Wraight | pwraight@ijacademy.com Online Training Coordinator George Jack | gjack@ijacademy.com

SUBSCRIPTIONS:

Call (800) 897-9965

or visit ijmag.com/subscribe Insurance Journal, The National Property/Casualty Magazine (ISSN: 00204714) is published 18 times annually by Wells Media Group, Inc., 3570 Camino del Rio North, Suite 100, San Diego, CA 92108-1747. Periodicals Postage Paid at San Diego, CA and at additional mailing offices. SUBSCRIPTION RATES: $17.95 per copy, $27.95 per special issue copy, $195 per year in the U.S., $295 per year all other countries. DISCLAIMER: While the information in this publication is derived from sources believed reliable and is subject to reasonable care in preparation and editing, it is not intended to be legal, accounting, tax, technical or other professional advice. Readers are advised to consult competent professionals for application to their particular situation. Copyright 2026 Wells Media Group, Inc. All Rights Reserved. Content may not be photocopied, reproduced or redistributed without written permission. Insurance Journal is a publication of Wells Media Group, Inc. POSTMASTER: Send change of address form to Insurance Journal, Circulation Dept, PO Box 708, Northbrook, IL 60065-9967 ARTICLE REPRINTS: Contact (800) 897-9965 x125 or visit insurancejournal.com/reprints

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News & Markets

WTW, Ivans Reports Signal More Commercial Rate Moderation

.S. commercial insurance rates increased 0.5% in the second quarter of 2026, according to the latest WTW Commercial Lines Insurance Pricing Survey (CLIPS). “Commercial insurance pricing is continuing to move toward a more balanced market, with overall price increases moderating across many lines,” said Yi Jing, managing director, insurance consulting and technology, WTW. “While there are still areas of the market experiencing upward pricing pressure, the pace of change has slowed considerably. This quarter’s results reinforce the trend we’ve been seeing toward greater stability in commercial insurance pricing.” WTW said the result of the second quarter marks a continued moderation in commercial insurance pricing, down from a 2.5% increase for Q1 and a 3.8% increase during Q2 last year. 8 | INSURANCE JOURNAL | OCTOBER 5, 2026

The largest price increases keep coming from excess/umbrella liability, said WTW, but they dropped to a high-single-digit increase in Q2 2026. The largest price decrease was in commercial property. The survey compared price changes on policies underwritten in Q2 2026 with policies with the same coverage in Q2 2025. According to the survey, price increases moderated for small commercial and mid-market. For large accounts, an overall price decrease was seen for the first time since the end of 2017, said WTW.

Ivans Results in Line

Year over year, average U.S. commercial premium renewals for July increased in all lines except workers’ compensation, according to the Ivans Index. Month over month, commercial auto,

business owners policy, general liability, commercial property, and umbrella saw a decrease, while workers’ compensation experienced an increase, said Chicagobased Ivans. Results follow those from July 2026, when rates were down from the previous month. Premium renewal rate change by line of business for August 2026 include: • Commercial Auto: 3.58%, down from 4.03% last month. • BOP: 5.44%, down from 5.94% at the end of July. • General Liability: 4.18%, down from 4.99% last month. • Commercial Property: 5.69%, down from 6.16% in July. • Umbrella: 6.82%, down from 7.42% in July. • Workers’ Compensation: -1.1%, up slightly from -1.26% for the previous month. INSURANCEJOURNAL.COM

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Figures

87%

The percent of consumers who feel having a human insurance agent is important when making insurance decisions, according to a new survey commissioned by the Independent Insurance Agents & Brokers of America (Big “I”). A little more than half of respondents said human agents are preferred when filing an accident, storm, or a major claim. Only 6% were comfortable relying on AI alone. Nevertheless, 61% of the 400 consumers surveyed across the nation said they would prefer an agent who uses AI to tailor coverage and speed up the process.

$600 million The projected amount of insured losses to date from wildfires in Washington state, with the bulk of that coming from residential losses at roughly $535 million, according to the state’s Office of the Insurance Commissioner. It’s the most expensive fire damage in Washington history. Spokane County Assessor Tom Konis puts rebuilding costs from three recent wildfires at more than $1 billion.

70%

The amount litigation funding in the U.S. has surged in recent years, now topping $16 billion a year. It is expected to reach $25 billion in the next decade, according to the Washington Legal Foundation.

12 | INSURANCE JOURNAL | OCTOBER 5, 2026

460

The number of ransomware attacks on the healthcare industry in 2025. FBI data on reported ransomware attacks on “critical infrastructure” in 2025 shows that the healthcare industry was the largest target for ransomware, with 460 of 2,118 reported ransomware attacks targeting the healthcare and public health sphere.

12,000 The number of “orphaned,” or abandoned, oil wells in Texas. Nearly 160,000 inactive Texas wells are at risk of becoming orphans. Left unattended, these wells can become conduits for oil and gas wastewater, causing environmental disasters and tens of millions in damages that taxpayers pay to fix.

INSURANCEJOURNAL.COM

Declarations

TPLF Disclosure Rules

AI in the Courtroom

South Dakota Drought

— Alex Dahl, Lawyers for Civil Justice’s (LCJ) general counsel. LCJ includes the insurance executives and counsel from more than 200 companies that submitted a letter to a federal court rules committee urging development of a third-party litigation funding (TPLF) disclosure requirement.

— Brian McCarthy, CEO of eMaxx Assurance, a group of Florida-based property/casualty insurance firms, on the growing use of AI and software in courts. AI allows the plaintiffs’ lawyers to zero in on reptile tactics at trial, McCarthy said, referring to what some behavioral scientists have dubbed the “reptilian brain” — the oldest and most primitive parts of humans’ minds that can produce revulsion at an insurer’s actions or sympathy for an injured plaintiff. The tactics are aimed at driving higher jury awards and settlement demands, insurers and lawyers said.

— Nick Randall, shop foreman at J&J Asphalt, whose shop and water station are located in drought-stricken Rapid City, South Dakota. Many of the area's shallow wells are running slow or have gone completely dry, forcing people to go to great lengths and expense to provide clean water for themselves or their livestock. Until this year, there were three or four places to buy bulk water in Rapid City. But now, J&J is the only public-access spigot still flowing.

Equal Rates for Singles

Headache on a Half Shell

“A broad spectrum of business leaders agree that nonparty financial stakes in litigation should be disclosed. A rule requiring TPLF disclosure would be consistent with the fundamental principle of transparency that is deeply rooted in our legal system and is critical to courts and litigants who are trying to manage and settle their cases.”

“The price of your auto insurance should be based on how you drive, not whether you’re married. For 30 years, insurers have been allowed to use marital status when setting rates. Today, we are taking action to end that outdated practice and reinforce a simple principle: Insurance rates should be grounded in actual driving risk, not personal circumstances that have nothing to do with how someone behaves behind the wheel.”

— California Insurance Commissioner Ricardo Lara, proposing changing regulations to prohibit insurance companies from using a driver’s marital status as an optional factor when setting private passenger automobile insurance rates. 14 | INSURANCE JOURNAL | OCTOBER 5, 2026

“It’s true now more than ever: The competition is not other insurance companies. It’s the plaintiffs’ lawyers.”

“I’ve got 5.3 million oysters I can do nothing with. I’m out that whole year of business. It’s looking like I’m out of the second year of business… What I want is for them to cover our losses… They need to fix our ecosystem.”

— David Sorrells, the owner of Pig and Rooster Oyster Farms, which has filed a third-party lawsuit against liquefied natural gas company Venture Global, claiming that dredging operations in preparation for the construction of a new terminal in Cameron Parish, Louisiana, resulted in a sediment spill that killed millions of oysters. Sorrells estimates his losses at over $5 million.

“Everybody is hauling water these days. Some days, there’s so many people lined up that we can’t get our own trucks in and out.”

Regulating Rates

“This regulation strengthens transparency for New York policyholders by ensuring that any increase in private passenger auto rates is subject to comprehensive and independent review.”

— New York State Department of Financial Services (DFS) Acting Superintendent Kaitlin Asrow on a proposed regulation amending the process for insurers filing private passenger auto insurance rates. The regulation will require insurers to seek express prior approval from DFS before implementing any upward rate changes. Under the state’s current system, insurers may implement no more than two overall average private passenger auto rate increases without prior approval if the cumulative effect is within 5%. INSURANCEJOURNAL.COM

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News & Markets Microsoft, Meta, Target, Amazon, Walmart, Ford, Toyota, and Uber. In the letter, LCJ said court rules favor the disclosure of those with financial interests, including insurers, in litigation. “Given the [rules’] emphasis on transparency about financial interests in litigation, the absence of a TPLF disclosure requirement is inexplicable. Contracts for litigation funding directly or indirectly give nonparty funders a share of judgments and settlements and provide a basis for influencing or controlling litigation and settlement decisions,” LCJ wrote, adding that its analysis of known TPLF contracts found these nonparties often have as much influence over a case as named parties. LCJ said numerous courts, states, and other rulemaking bodies have adopted, or are considering, TPLF disclosure requirements. In addition, federal lawmakers have advanced proposals. North Carolina recently became the first state to pass an outright ban on TPLF.

Insurance Companies Join Letter to Push TPLF Disclosure in Federal Courts By Chad Hemenway

nsurance executives and counsel joined in with those from more than 200 companies that submitted a letter to a federal court rules committee urging the development of a third-party litigation funding (TPLF) disclosure requirement. According to a group called the Lawyers for Civil Justice (LCJ), the letter was submitted September 14 to the Advisory Committee on Civil Rules, part of a long process in making federal rules of practice and procedure for litigation in federal courts. The committee meets October 21. LCJ said the letter endorses a rule it and the U.S. Chamber Institute for Legal Reform proposed to the committee earlier this year to require the disclosure of any funder with financial interest in the litigation, as well as the funding agreement. Insurers on the list of signers include some of the industry’s largest—Allstate, 16 | INSURANCE JOURNAL | OCTOBER 5, 2026

AIG, Chubb, State Farm, Liberty Mutual, Nationwide, Travelers, AXA XL, FM, and USAA—as well as Alfa, Amica, Arch, Church Mutual, Cincinnati, CNA, Erie, Grange, Great American, Hanover, Hiscox, Intact, Markel, Munich Re, Sentry, Selective, and Zurich North America. “After over a decade of consideration, it is time for the Advisory Committee to draft a straightforward rule requiring the disclosure of nonparty financial interests in cases,” said Alex Dahl, LCJ’s general counsel, in a statement. “A broad spectrum of business leaders agree that nonparty financial stakes in litigation should be disclosed. A rule requiring TPLF disclosure would be consistent with the fundamental principle of transparency that is deeply rooted in our legal system and is critical to courts and litigants who are trying to manage and settle their cases.” Other companies who signed include heavy-hitters such as Anthropic, OpenAI,

‘After over a decade of consideration, it is time for the Advisory Committee to draft a straightforward rule requiring the disclosure of nonparty financial interests in cases.’ The insurance industry has routinely pointed to litigation funding—investments in lawsuits in exchange for a percentage of a settlement or judgment—as a big reason for a rapid increase in litigation costs. The practice is typically afforded confidentiality protection in many cases, making it difficult to gauge its true influence. Last year at an insurance industry conference, Gareth Kennedy, principal of insurance and actuarial advisory service for EY, said the firm found the average cost for a commercial claim has gone up 10% to 11% per year since 2017. He said the research concluded that over the next five years TPLF will cost the insurance industry up to $50 billion in direct and indirect costs. INSURANCEJOURNAL.COM

A Legacy of Malpractice Defense The 1970s saw a malpractice crisis with soaring claim frequency and severity, making medical liability coverage costly or unavailable. In response, physicians nationwide created insurer-owned mutuals—sometimes derisively called “bedpan mutuals”—to protect themselves. Mutual Assurance of Alabama was one such company, which, after decades of mergers and adapting to changes in healthcare, evolved into ProAssurance. As we mark our 50th year, we honor the physicians, partners, and professionals who shaped our story.

Strength You Can Depend On Rated “A” (Excellent) ProAssurance Group is rated “A” (Excellent) by AM Best as of 7/9/2025. This is the third highest of 16 rating levels. AM Best’s financial strength rating is assigned to companies that have, in their opinion, an excellent ability to meet their ongoing insurance obligations.

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ProAssurance is the marketing name for subsidiaries of ProAssurance Corporation that write medical professional liability insurance. Coverages may be underwritten by ProAssurance Indemnity Company, Inc., Birmingham, AL, ProAssurance American Mutual, A Risk Retention Group, Birmingham, AL, or NORCAL Insurance Company, San Francisco, CA. Certain coverages may be provided through surplus lines insurance subsidiaries of ProAssurance Corporation through licensed surplus lines brokers. That coverage may be underwritten by ProAssurance Specialty Insurance Company, Birmingham, AL, or NORCAL Specialty Insurance Company, Austin, TX. Insurance coverage is subject to underwriting guidelines, review, and approval.

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News & Markets Cleared of Charges, NJ’s Norcross Sues Inquirer, Editor for $100M in Defamation Suit By Andrew G. Simpson

rominent New Jersey insurance, development, and civic leader George Norcross III has filed a $100 million defamation lawsuit against the Philadelphia Inquirer and one of its editors for allegedly helping to orchestrate a bogus criminal case against him that was unanimously thrown out of court. Norcross claims he spent nearly two years “under the cloud of a politically motivated investigation” undertaken by former New Jersey Attorney General Matthew J. Platkin and facilitated by the Inquirer and its justice system editor Nancy Phillips. Norcross alleges that Phillips supplied law enforcement with false and fabricated notes from a 2019 interview with a Norcross associate and the Inquirer regularly published articles that portrayed him in a bad light as part of a conspiracy to “destroy his life, get him arrested and charged with serious crimes.” Filed in the Philadelphia Court of Common Pleas, the $100 million suit brings claims of defamation, false light, infliction of emotional distress, abuse of process, and conspiracy. The Inquirer and Phillips have not commented on the lawsuit. The Inquirer has a large circulation in New Jersey. Norcross is a well-known business executive, philanthropist, and Democratic political influencer in the state who has advocated for the revitalization of Camden and its waterfront. He was the executive chair of the insurance agency Conner Strong & Buckelew and chaired the board of trustees for Cooper University Health Care-MD Anderson Cancer Center at Cooper. The lawsuit maintains that Phillips and the Inquirer facilitated the 2024 indictment by Platkin that accused Norcross and five others of running a criminal racketeering enterprise from 2012 to 2024. Platkin’s indictment alleged that Norcross Enterprises used coercion, extortion, and 18 | INSURANCE JOURNAL | OCTOBER 5, 2026

other criminal acts to tailor legislation to serve its interests, obtain property and property rights on the Camden waterfront, collect as much as $240 million in government-issued tax credits, and control and influence government officials including a former mayor of Camden. Norcross pleaded not guilty and sought to have the charges dismissed. At the time, his lawyers characterized the indictment as a “crime thriller without a crime” as it sought to turn routine politics and everyday business negotiations undertaken to revitalize the Camden waterfront into crimes of extortion, racketeering, kickbacks, and bribery. “Although the indictment exceeds 100 pages and asserts over a dozen counts, it still fails to properly allege a single crime,” the defense asserted. On February 26, 2025, the trial court threw out the indictment. The judge said prosecutors had failed to show that Norcross’ actions were criminal or unlawful. Earlier this year, the Appellate Division unanimously affirmed the dismissal and the state declined to appeal, fully clearing Norcross of the charges. Freed from the threat of prosecution, Norcross determined to uncover what he calls the “the corrupt mechanisms used to smear his name and threaten his freedom.” According to the lawsuit, Platkin’s failed case relied on “knowingly false, fabricated information deliberately funneled to state prosecutors with the explicit intent to implicate him falsely in criminal conduct.” The lawsuit accuses Phillips of operating behind the scenes to interview an

individual closely aligned with Norcross in 2019, typing notes attributing false and misleading statements from the interview to the associate, injecting her own “unsubstantiated story ideas” into them, and then arranging to share the allegedly doctored notes with the New Jersey attorney general whose indictment against him contained a number of the falsehoods. According to Norcross, the 2019 notes described an “outsized role” for him in the property deal and painted him as insulting and threatening to others. They prove, the lawsuit contends, that Phillips acted as a “field general” of investigative operations into Norcross and Camden’s revitalization projects. According to Norcross, Phillips “harbored a wellknown and widely acknowledged deep-seated personal animosity” toward him, which he said was tied to a “bitter, public corporate battle with her late long-term romantic partner, Lewis Katz.” The 33-page lawsuit contains eight pages of links to dozens of Inquirer articles from the coverage that Norcross argues assailed him and agitated for his criminal prosecution. The transmission of the notes to law enforcement was a violation of both Pennsylvania and New Jersey reporter’s shield laws designed to prevent state collusion, the lawsuit alleges. Prior to 2026, a protective order prohibited public disclosure of these notes, thereby preventing discovery into how the state obtained them. Norcross believes discovery will determine how prosecutors obtained the notes. INSURANCEJOURNAL.COM

OUR JOURNEY CONTINUES WITH FRESH WIND IN OUR SAILS.

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Business Moves multigenerational agency offering personal and commercial lines. Headquartered in Gainesville, Florida, King Risk Partners now has more than 50 locations on the Eastern Seaboard from New Hampshire to Florida, including six in each of the states of Massachusetts, New York and Connecticut.

World Insurance Associates LLC, TE Freuler

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Aon Plc Raises $13.5 billion to Acquire USI Aon Plc raised $13.5 billion from a high-grade bond offering to help fund its planned acquisition of USI Insurance Services, marking one of the biggest M&A financing deals to come to market in 2026. Investors placed as much as $65 billion of orders on the sale, with the longest maturity drawing the most demand, according to people familiar with the matter. Aon sold notes in seven parts, with maturities ranging from three to 30 years. Price talk on the longest tenor tightened by 0.35 percentage point from initial discussions to a yield of 1.15 percentage points above Treasuries, a separate person said, asking not to be identified because they are not authorized to speak publicly. Aon agreed to buy USI from KKR and other shareholders in an all-cash $17 billion transaction funded with debt. The purchase, expected to close by year-end, is intended to expand the firm’s footprint with midsized corporate clients. Aon is one of the world’s largest insurance brokers, while USI provides insurance brokerage and consulting services to businesses and individuals. The company is also expected to sell a $4 billion term loan as part of the deal financing, according to a S&P Global Ratings note. All of the notes except the 30-year tenor would have to be redeemed at 101 cents on the dollar, plus accrued and unpaid interest, if the USI acquisition falls through or isn’t completed by Dec. 1, 2027. The $13.5 billion note offering marked the year’s second-largest high-grade bond 20 | INSURANCE JOURNAL | OCTOBER 5, 2026

deal tied to mergers and acquisitions, trailing only Abbott Laboratories’ $20 billion transaction in February.

The Baldwin Group Inc. Goes Private

Insurance brokerage The Baldwin Group Inc. entered a definitive agreement resulting in it becoming a privately held company. An entity formed by Sequence Holdings and DFO Management is to pay an all-cash sum of $7.7 billion to acquire a majority interest in Baldwin. Tampa, Florida-based Baldwin will continue as a wholly owned subsidiary of the new parent company. DFO Management manages the investment assets of Michael Dell, the founder, chairman, and CEO of Dell Technologies. After the deal, expected to close during the first quarter of 2027, Baldwin said its eligible employees will retain a significant minority equity stake alongside Sequence and DFO. Baldwin shareholders will receive $32.50 in cash for each share of Baldwin common stock they hold. Those eligible will roll over a portion of holdings into the private company. The purchase price is comprised of about $4.6 billion in equity and about $3.1 billion of net debt to be assumed or refinanced.

East

King Risk Partners, Norton and Siegel

King Risk Partners acquired the independent insurance agency Norton and Siegel in New York. Established in Babylon Village on the South Shore of Long Island in 1892, Norton and Siegel is a

Insurance broker World Insurance Associates LLC has acquired the business of TE Freuler of Somerset, New Jersey. Terms of the June 1, 2026 transaction were not disclosed. TE Freuler, which also has offices in Newark, has been providing commercial and personal insurance since 1963. Jack J. Butler is the agency’s president. Giordano, Halleran & Ciesla provided legal counsel to World. Satin and Lee Law P.C. provided legal counsel, and Centurian Group advised TE Freuler on the transaction. World Insurance, based in Iselin, New Jersey, is ranked #14 on Insurance Journal’s Top 100 Independent Property/Casualty Insurance Agencies list. The agency serves clients from more than 250 offices across the U.S. and U.K.

Arrow Financial Corp., Upstate Agency LLC

Bank holding company Arrow Financial Corp. announced that Upstate Agency LLC, a subsidiary of Arrow Bank National Association, has agreed to acquire Skene Valley Agency Inc., an independent insurance agency in Washington County in upstate New York. Founded in 2002, Skene Valley Agency is based in Granville, with satellite operations in Whitehall and Cambridge. Based in South Glens Falls, Upstate Agency has been offering personal, commercial and group employee benefit insurance for more than 50 years. Financial terms were not disclosed. The sale is targeted to close by the end of the third quarter of 2026. Following the completion of the sale, Skene Valley Agency will merge with and into Upstate Agency, which will expand its operations in

continued on page 22 INSURANCEJOURNAL.COM

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Business Moves continued from page 20

Washington County and further enhance its personal and business insurance solutions.

Summit Expands Eastern Coverage

Workers' compensation provider Summit has expanded its coverage into Maryland and Washington, D.C. Based in Lakeland, Florida, Summit is a member of Great American Insurance Group.

Midwest

NFP, Moores Insurance Management Inc. NFP announced the acquisition of Moores Insurance Management Inc., a multi-disciplinary risk management firm based in Minneapolis, Minnesota. Mark Moores, CEO of Moores, will join NFP as senior vice president, Commercial P&C, reporting to Amanda Ruback, managing director of P&C for NFP’s Central region. Jack Moores, president of Moores, will join as senior vice president of Personal Lines, reporting to Mary Mullen, senior vice president of Personal Risk for NFP’s Central Region.

EPIC Insurance Brokers & Consultants, Korotkin Insurance Group

EPIC Insurance Brokers & Consultants has acquired Korotkin Insurance Group, a fifth-generation independent brokerage with over a century of operational history in Michigan. KIG brings a strong regional presence and specialized expertise across multiple industries and client segments to EPIC’s growing national platform. Grand Rapids based-KIG will serve as a key anchor for the firm’s continued growth in Michigan and the broader region.KIG has established practices serving clients across for-hire transportation, family entertainment centers, real estate and fitness franchises, as well as private client and small business.

Maridea Wealth Management, River Cities Financial Services, Dietz, Futrell & Walters

Maridea Wealth Management acquired River Cities Financial Services and Dietz, 22 | INSURANCE JOURNAL | OCTOBER 5, 2026

Futrell & Walters Insurance (DFW), two affiliated firms based in Marietta, Ohio. The addition marks Maridea’s first presence in Ohio. DFW Insurance was founded in 1948 as an independent insurance agency, and River Cities Financial Services grew out of that foundation in 1985 to provide comprehensive wealth management, financial planning, retirement planning, investment planning, and estate planning services. Michael Anthony, President of River Cities Financial Services and a partner at DFW Insurance, will join Maridea as senior investment advisor and managing partner. He is joined by Dustin Becker, Vice President of River Cities Financial Services and a partner at DFW Insurance, who will join Maridea as Director of Insurance.

South Central

Inszone Insurance Services, Harris Insurance Services

Inszone Insurance Services acquired Harris Insurance Services. This acquisition strengthens Inszone’s personal lines footprint in Oklahoma, bringing a century-old family agency into the Inszone family. Founded in 1925 by Charles R. Harris and later incorporated in the 1970s, Charles G. Harris Insurance Agency INC., doing business as Harris Insurance Services, has served the West Tulsa community across three generations of the Harris family.

World Insurance Associates, Cubriel Insurance Agency

World Insurance Associates announced that it acquired the business of Cubriel Insurance Agency of Laredo, Texas on June 1, 2026. Terms of the transaction were not disclosed. Cubriel is a P&C agency with a business mix of commercial lines and personal lines. Giordano, Halleran & Ciesla provided legal counsel to World on the transaction. Eduardo Romero, PLLC provided legal counsel to Cubriel on the transaction. No other advisors, diligence firms, or legal counsel were disclosed.

Equal Parts, ProSource Insurance Agency Equal Parts has acquired ProSource Insurance Agency, a Plano, Texas-based

brokerage specializing in transportation insurance. Completed during the first quarter of 2026, the acquisition strengthens Equal Parts’ transportation insurance capabilities and expands its presence in one of the nation’s largest freight markets. Founded in 2003 by President Paul Nhem, ProSource serves trucking companies, owner-operators, commercial fleets, and transportation businesses throughout Texas and across the United States. Nhem began his insurance career in 1990 and held roles with State Farm, The Hartford, Fireman’s Fund, and CNA Insurance before founding ProSource.

West

Arthur J. Gallagher & Co., McMillan Insurance & Bonding Inc.

Arthur J. Gallagher & Co. acquired Englewood, Colorado-based McMillan Insurance & Bonding Inc., dba Innovise Business Consultants. The Innovise Business Consultants team, led by Jason McMillan, will relocate to Gallagher’s Denver office under the direction of Bret VanderVoort, head of Gallagher’s Western Zone retail property/ casualty brokerage operations. Innovise provides commercial insurance brokerage and surety bonding services with industry focuses of construction, energy, real estate and manufacturing. Arthur J. Gallagher is a global insurance brokerage, risk management and consulting services firm headquartered in Rolling Meadows, Illinois.

Keystone, Infinity Assurance Group

Keystone acquired Infinity Assurance Group in Orange County, California. The deal marks Keystone’s first platform partner in California. IAG will continue to operate under its current leadership, with John Kookootsedes, founder and chairman, and Eric Doll, CEO, continuing at the helm. IAG’s team, client relationships, and community presence remain intact, according to Keystone. IAG is an independent insurance brokerage. Keystone was founded in 2020. INSURANCEJOURNAL.COM

People National

Marsh appointed Linda Jones as U.S. healthcare

industry practice leader, Marsh Risk, effective today. Based in Washington, D.C., Jones reports Linda Jones to Darren Cromwell, industry practice group leader, Marsh Risk, U.S. and Canada. Jones has been advising health systems, hospitals, managed care, and other provider groups on their risk management strategies for 40 years. She joined Marsh in 2018 and most recently served as U.S. Healthcare Growth & Innovation Leader. She succeeds Gisele “Gigi” Norris, who will shift her focus to her role as global commercial industry leader, Marsh.

Jessica Ciak joined the healthcare segment Guy Carpenter as the firm’s as a senior vice president, focusing on the U.S. medical professional liability sector. Based in Minneapolis, Minnesota, Ciak reports to Martha Jessica Ciak Jacobs, Guy Carpenter’s healthcare segment leader. Ciak joins Guy Carpenter from BMS Group, where she most recently served as a senior vice president. She has over 25 years of reinsurance experience, having placed treaty reinsurance across a wide range of property/casualty products, most recently with a focus on specialty lines, including medical professional liability.

CRC Group hired four

professionals across its underwriting and brokerage teams nationwide. Hart Slade joined CRC Specialty as an underwriting team leader. Based in Sumter, South Carolina, Slade has over a decade of Hart Slade personal lines underwriting experience, including work with high-net-worth and hardto-place risks. Brian Stephens joined CRC Specialty as a broker based in Austin, Texas. His background includes managing all-lines E&S Brian Stephens placements, leading underwriting operations and building relationships across the retail and carrier marketplace. Tyler Fuchs has joined CRC Specialty as an underwriting team lead in Charleston, South Carolina. Fuchs background includes commercial risk evaluation, account servicing and underwriting operations. Alyssa Scher joined CRC Group as a senior associate underwriting team leader in Tampa, Florida. Her background includes Alyssa Scher account management, risk assessment and underwriting operations.

Verisk named Greg Alling president of its casualty solutions business. Most recently,

24 | INSURANCE JOURNAL | OCTOBER 5, 2026

Alling served as senior director of product management at CCC Intelligent Solutions.

Ascot made a series of

changes to its U.S. operating and distribution model, including a new U.S. regional executive leadership team, an expanded North America distribution role and the consolidation of seven U.S. business segments into five product verticals. These updates will align underwriting expertise and regional leadership more closely around the exposures, geographies and client segments Ascot serves. Brian Chiolan, currently executive vice president, head of management and professional liability at Ascot, has been appointed U.S. regional executive officer. Oliver Ade, currently senior vice president, central region partnership engagement leader, has been appointed executive vice president, regional executive for the central region. Jeff Canfield, currently executive vice president, head of specialty casualty, has been appointed executive vice president, regional executive for the West. Dane Lopes, currently Ascot’s head of U.S. partnership engagement and strategy, has been appointed head of North America distribution.

Chubb Limited named Sean Ringsted as chief scientist

and executive vice president, Chubb Group, a newly created role. Ringsted has over 30 years of experience at Chubb and its predecessor, ACE Group. He most recently served as executive vice president, Chubb Group and chief digital

business officer and has led the company’s AI efforts globally.

Technical Risk Underwriters

(TRU), the Ryan Specialty Underwriting Managers’ managing general underwriter specializing in complex first-party risks for the construction industry, made two leadership promotions. Earlier this year, Nick Hays was promoted to president. Hays joined TRU in 2023. Hays is a former Navy SEAL, Fortune 500 solutions architect, and performance coach for NBA and NFL organizations. Aaron Reissner was promoted to executive vice president. Reissner joined TRU in 2012.

The National Association of Professional Insurance Agents (PIA) named David Gorman

as president, succeeding Mark Suhr, who will serve as immediate past president. Gorman, of Dallas, Texas, founded Red Gorman Insurance Services in 2018 and has a long history of service to the independent insurance agent community holding various leadership roles in the PIA of Texas and PIA National. Joining Gorman as national officers are Vonda Copeland of Manhattan, Kansas, as president-elect; Albert S. Pappalardo, Jr. of New Orleans, Louisiana, as vice president/treasurer; and Erin Dey of Portage, Michigan as secretary/assistant treasurer.

East

The MEMIC Group, headquartered in Portland, Maine, added Brandon Waddingham to its Northeast underwriting team as a production underwriter. Waddingham

continued on page 26

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joins MEMIC with nine years of insurance experience. In his role, he partners with independent agents and brokers throughout New Jersey to evaluate new and renewal opportunities, underwrite and price accounts, and identify market opportunities.

RT Specialty, the wholesale brokerage division of Ryan Specialty, promoted John O’Marra to regional director and appointed him to its executive leadership team. With more than two decades in the specialty insurance sector, O’Marra joined RT Specialty in 2011 and assumed the role of president of RT Specialty NY in July 2023. O’Marra remains president of RT Specialty’s New York City office. Insurance broker network

Keystone, headquartered in

Mechanicsburg, Pennsylvania, appointed Kevin Meskell as national brokerage leader. Meskell will lead Keystone’s national brokerage strategy, joining Keystone from The Baldwin Group, where he most recently served as national placement leader. Prior to Baldwin, he spent his career at Marsh, most recently as U.S. placement leader for Marsh Affinity. Earlier in his career, Meskell served as a reinsurance broker at Guy Carpenter.

Southeast Jackie Obusek,

who spent 30 years with the North

Carolina Jackie Obusek Department of Insurance, including the last six as chief deputy insurance

commissioner, retired from the DOI on Oct. 1. She is now senior managing director of strategy and operations for Examination Resources, an Atlanta-based firm that provides examination services for regulators.

South Central

Erick Johnson joined INSURICA as vice president of

sales, P&C. Based in Oklahoma City, Oklahoma, Johnson has over 25 years of experience in production, sales leadership and agency management.

Stephen Armstrong joined Brown & Riding’s national

casualty practice. With over 14 years of industry experience, Armstrong specializes in complex casualty placement, with a strong focus on real estate and construction. Brown & Riding also added David Grollman and Matt Grollman to its national Construction Practice. David Grollman has nearly 35 years of industry experience with expertise in both major projects and practice policies. With 14 years of industry experience, Matt Grollman specializes in complex casualty accounts. His construction expertise spans from complex OCIP and CCIP projects to various classes of contractors’ practice policies.

Midwest

Church Mutual Insurance Company named Ben Parisi as

vice president, head of finance operations and financial planning and analysis. Parisi leads finance operations, expense management, procurement, payroll, financial planning and analysis, and management reporting. Parisi brings more than 25 years of finance expe-

26 | INSURANCE JOURNAL | OCTOBER 5, 2026

rience to the newly created role, including more than two decades with Zurich North America. Most recently, he served as vice presiBen Parisi dent, head of finance operations.

Jeff Black joined Alliant Insurance Services, headquar-

tered in Irvine, California, as senior vice president within its employee benefits group. The Chicago, Illinois-based consultant will advise a diverse portfolio of clients on human capital and benefits strategies. Prior to joining Alliant, Black was a partner with a global employee benefits consulting firm, where he held various leadership positions in both health and M&A advisory areas.

American Agricultural Insurance Company appointed Andrew Ealey as vice president, international brand awareness. Ealey brings more than 30 years of insurance and reinsurance experience to the newly created role. He most recently served as head of property treaty at Canopius Group.

West

Barrett Esarey joined Alliant Insurance Services as vice

president within its employee benefits group. Based in Los Angeles, California, he serves a national client base. Prior to joining Alliant, Esarey was a business consultant with a national employee benefits and HR consulting firm. Alliant is headquartered in Irvine, California.

The California Department of Industrial Relations swore in Nicole Richardson as administrative director of the Division of Workers’ Compensation on Sept. 1, following her appointment by Gov. Gavin Newsom. Richardson previously served as DWC’s acting administrative director and chief counsel. Richardson has more than 20 years of experience in California’s workers’ compensation system. Earlier this year, she was named acting administrative director.

Burns & Wilcox, headquartered in Farmington Hills, Michigan, hired Winston Rendall and Sandra Shambaugh as associate managing directors for the West region. Rendall comes to Burns & Wilcox with 10 years of experience. Most recently, he was vice president of sales, distribution and business development at Hull & Company, part of Bridge Specialty Group. Shambaugh has over 15 years of executive leadership experience and previously served as vice president of insurance at AAA Hoosier Motor Club. Burns & Wilcox also promoted Tom Carvalho to regional vice president. Carvalho will oversee Burns & Wilcox operations in Portland, Oregon; Seattle, Washington; and San Francisco, Sacramento and Fresno, California. He joined Burns & Wilcox in 2011 as a producer and has held increasingly senior leadership over more than 15 years, including serving as managing director of San Francisco since 2024. In California, he will provide leadership to the San Francisco, Sacramento and Fresno offices. INSURANCEJOURNAL.COM

News & Markets

California Governor Signs Act to Create Smoke Damage Presumption

alifornia Gov. Gavin Newsom signed legislation establishing standards for investigating, testing and restoring smoke-damaged homes. Newsom signed Assembly Bill 1795, the Smoke Damage Recovery Act. The bill, authored by Assemblymember Mike Gipson and sponsored by California Insurance Commissioner Ricardo Lara, creates a presumption that smoke damage within a wildfire impact area resulted from the wildfire. It also requires insurers to pay for necessary testing and sampling, and it prohibits insurers from terminating Additional Living Expense benefits until homes are restored and safe to occupy. Other mandates include: • Establishing timelines for inspections and claim handling. • Requiring repair estimates that restore

homes to their pre-loss condition while meeting health and safety standards. • Preserving a policyholder rights to choose restoration contractors. • Establishing training requirements for adjusters handling smoke damage claims. • Protecting workers performing restoration and remediation activities. AB 1795 directs the California Department of Insurance and CalOES to evaluate challenges posed by smoke damage and develop recommendations to strengthen protections for property insurance consumers and communities affected by future contamination events. The American Property Casualty Insurance Association said the new law represents “a meaningful step toward

clearer guidance on smoke damage claims,” but as regulations are developed around the changes, the must be “grounded in credible science, valid methodologies, and the best available technical expertise.” “APCIA remains committed to working in good faith with policymakers, regulators, consumers, and scientific experts to support standards that protect consumers, improve transparency and understanding, and help maintain affordable and available insurance coverage for Californians,” a statant from the association reads. The legislation grew out of efforts led by the CDI, wildfire survivors, consumer advocates, public health experts, and legislators, to address what they call a consumer protection gap. Smoke damage became a point of contention following the L.A. wildfires in June. Smoke damage claims have emerged as a point of contention between some carriers and consumers. Following the L.A. fires, Lara created the Smoke Claims and Remediation Task Force, which found wildfire victims were falling through the gaps in smoke damage inspection, testing and restoration rules. It also responds to challenges from by the Lineage Logistics warehouse fire in Boyle Heights in June, where prolonged smoke impacts raised questions about insurance coverage. The 491,000-squarefoot building is a cold storage warehouse blaze sent large plumes of dark smoke into the air in the Boyle Heights and surrounding areas.

California Insurance Commissioner Proposes End to Marital Status Use in Auto Rates

alifornia Insurance Commissioner Ricardo Lara is proposing changing regulations to prohibit insurance companies from using a driver’s marital status as an optional factor when setting private passenger automobile insurance rates. “The price of your auto insurance should be based on how you drive, not whether you’re married,” a statement from Lara reads. “For 30 years, insurers have been allowed to use marital status when setting rates. Today, we are taking action

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to end that outdated practice and reinforce a simple principle: insurance rates should be grounded in actual driving risk, not personal circumstances that have nothing to do with how someone behaves behind the wheel.” Under Proposition 103, auto insurance rates are determined by a driver’s safety record, annual miles driven and years of driving experience.

Prop. 103 also gives the commissioner authority to approve additional optional rating factors related to the risk of loss. Since 1996, marital status has been one of those rating factors. Insurers were able to elect to use it in rating plans if they complied with Prop. 103 and got approval from the California Department of Insurance. Lara’s proposed regulation will end that. OCTOBER 5, 2026 | INSURANCE JOURNAL | W1

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property and casualty insurance program built exclusively for tunnel car wash operations, offering broad, industry-specific coverage that can include property, general liability, equipment breakdown, business income, workers’ compensation, auto, umbrella, and environmental exposures, all backed by tailored underwriting expertise and risk management solutions designed to protect every aspect of a car wash business. Has pen. Available Limits: Not disclosed. Carrier: Not disclosed. States: All 50 states and the District of Columbia. Contact: Joe Wegelin, jwegelin@innovativeprograms.com, 515-854-6162

Market Details: RIMAQ Insurance Services

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Telemedicine

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Special Report: Energy

Reworking the Insurance Playbook for Evolving Energy Sector By Ezra Amacher

hifting federal policy over the past year has forced the energy sector to adapt, and the rising energy demand driven by data centers and more is not stopping investment and new project development, insurance specialists say. In the summer of 2025, Congress passed the One Big Beautiful Bill, jolting the renewable energy space by significantly scaling back green energy tax credits 28 | INSURANCE JOURNAL | OCTOBER 5, 2026

established under the 2022 Inflation Reduction Act. So far, the bill has led to an uneven impact on renewable projects. Private investors have stepped in to support wind and solar, while nuclear energy continues to receive continued support, according to Katherine Gerber, head of energy and energy transition, AXA XL. “It’s maybe not at the level of what the tax credits could have done over time, but it is still quite significant,” Gerber said.

The new federal policy hasn’t stopped planned developments in the renewable energy space, and experts say that new projects are still coming through the pipeline. The offshore wind market, meanwhile, has come to nearly a complete halt, and has also seen a major downshift, said Katie Burke, U.S. energy and power growth leader at Marsh. However, many renewable projects that were already under late-stage developINSURANCEJOURNAL.COM

ment at the time of the bill’s passing are now under construction, Burke said, and several new projects are underway.

Data Centers Fuel Power Demand

One area that keeps fueling the energy sector is the demand for new data centers. Companies that build and operate data centers are willing to pay a premium price for power, which has offset some of the investment fallout from the One Big Beautiful Bill. “Energy demand is at such a high level right now, so any sort of power generation is going to be highly valuable,” Burke said. Digital infrastructure, which includes the development of data centers and the energy sources that such facilities rely on, is a “huge growth area” for most insurance companies, said Gerber. “Data centers and digital infrastructure need a lot of capacity,” Gerber said. “Most insurers are really thinking about their strategy around this, and I’ll say most of us are focusing on it.” Gerber said AXA XL has received a lot of requests for support on the energy construction side, with support for the operational side expected to pick up soon, too. The biggest ask is for property and builders risk coverage, Gerber said. “A lot of the support comes for covering catastrophe risks on the property side,” she said, adding that CAT exposure plays a role in what’s available in capacity in terms of the overall market. Owners and operators of data centers are also in the market for outage insurance, a type of parametric coverage, said Burke. The product provides coverage for any liquidated damages because of an outage that’s not otherwise covered by a standard property/casualty policy. “It’s huge when it comes to the contracts that the data centers are imposing on the (independent power producers) and the overall requirements there,” Burke said. Data center owners also commonly purchase service level agreement (SLA) insurance, which helps indemnify them from any tenet losses. INSURANCEJOURNAL.COM

“If there is some sort of downstream outage or loss of power, it can help protect that overall loss of revenue and exposure for the data center,” Burke said. The enhanced interest and development in data centers in a relatively short period of time has led to simultaneous demand for electrical systems to supply the necessary power, said Kimberly Rafuse, senior risk engineer, energy at AXA XL. “As big and as expensive as the data center is in terms of its contents, you have the same complexity there and cost to the energy system behind it to support it,” Rafuse said. Every system looks different depending on where it is and what’s available, “and what they decide they want to put in as the energy production system behind it to support it.”

‘Energy demand is at such a high level right now, so any sort of power generation is going to be highly valuable.’ Some states like Virginia have an existing power grid that can support data center development, while other places must build electrical systems from the ground up. Rafuse said that for data center projects without an existing supporting energy structure, developers may put in clean energy such as gas turbines. One result of the massive energy demand for data centers is that natural gas has received renewed interest as a generator of such power. “They provide stable energy capacity and energy production for a project,” Gerber said. “It’s really creating that base load reliability. And so, it can act as a backup system, sometimes it’s the primary system, but it’s there.” Gerber added that many oil companies typically insure their own assets, which means the energy insurance industry doesn’t “necessarily see the growth” from some of those projects.

The Engineering Behind Energy Growth As the energy industry deploys a mix of traditional energy assets with rapidly

evolving clean energy technologies to meet this surge in demand, underwriters are addressing the risks of more complex risk profiles today. For energy insurers, underwriting in an era of swift energy growth requires forward-looking risk assessment, collaboration with clients, and diversification of risk portfolios. “Developing a culture of constant learning and development is key to addressing those constantly evolving technologies such as battery energy storage system (BESS),” said Priscilla Pazmino-Vitela, head of natural resources for the Americas at Allianz Commercial. Whereas carriers in the past priced BESS solely for battery risk, they’ve moved “well beyond” that, Pazmino-Vitela said, now accounting for things like thermal runway and battery chemistry. “Supply chain constraints are also an important factor that we evaluate.” To adapt to changing technology, insurers are reworking their engineering playbooks alongside external partners. “We’re actively building our benchmarks alongside developers, original equipment manufacturers (OEMs), the industry organizations,” Pazmino-Vitela said. “This is where we really work very closely with our risk consulting team. Working with them will refine the engineering, and the safety standards will underpin how we underwrite these risks because we can absolutely continue with that capacity.” This engineering-first approach relies on insureds actively participating in risk quality management. “Clients that assess their tech based on real-life peer experience and insurance risk engineering recommendations, that’s a big point that we at Allianz really focus on, especially in the area of natural resources and the risks that we write,” PazminoVitela said. As emerging technologies scale, underwriters must navigate starkly different levels of technological maturity across asset classes, said Rafuse. “Underwriting challenges for us are

continued on page 30

OCTOBER 5, 2026 | INSURANCE JOURNAL | 29

Special Report: Energy continued from page 29

some of the technologies from a clean energy perspective where they are in different stages of development and/or need support from an industrial deployment capacity,” she said. While established assets like solar and wind “can almost stand on their own without economic support,” newer energy alternatives lack deep loss histories, added Rafuse. “You look at things like hydrogen—they’re less economically viable at this point. We may have a little less data there because of their deployment rate in terms of losses.” The tools insurers use to quantify exposure are becoming more sophisticated, as well. Underwriters are pairing on-site visits with predictive modeling and high-resolution data streams. “We incorporate weather forecasting, operational data, satellite imagery, and ultimately climate exposure modeling into our risk assessment,” Pazmino-Vitela said. “From a client standpoint, the message really is straightforward: The more quality operational data that the client could share, the more accurately we can assess and price their risk.” Artificial intelligence is being seen everywhere, Pazmino-Vitela said. “It seems to be becoming increasingly integrated across industries, providing additional insights alongside human experience.” Even with access to improving AI and modeling, insurers must remain cautious

30 | INSURANCE JOURNAL | OCTOBER 5, 2026

with how they disperse risk. Gerber, of AXA XL, said that while predictive analytics can improve portfolio alignment, “random events can happen.” As an example, she cited an incident this summer where a straight-line wind swept through South Dakota, causing wind turbines to fold over. “Even if there’s really impressive predictive models, the diversification of a portfolio is incredibly important to make sure that your locations and your exposures have a spread of risk,” Gerber added.

‘We incorporate weather forecasting, operational data, satellite imagery, and ultimately climate exposure modeling into our risk assessment.’ Soft Market Persists

Despite recurring loss events, capital continues to pour into the sector, keeping property rates down and maintaining a persistent soft market. As often tends to be the case in a soft market, new players are eager to enter the space and provide additional capital, according to Marsh’s Burke. MGAs and MGUs have brought “a lot more capacity, a lot more availability,” Burke said. The challenge for brokers, she said, is explaining to clients that even though cheaper options may be available to them, there remains the question of whether these newer markets will be around “when it comes back to a hard market.” More challenging risks with loss history may see a different market, Burke said. “If there’s a significant amount of losses that they have, what does that look like long term?” she wondered. Soft pricing can also conceal hardening and restrictions in policy

language, said Karey Vaught, managing director at Alliant Energy. “Carriers may hold or reduce the rate while narrowing coverage through lower sublimits, new exclusions, or additional operating conditions,” Vaught said. Vaught added that brokers are seeing particular scrutiny around cyber losses, pollution and PFAS, business interruption values, and named windstorm exposure. Energy insurance specialists agree that ample capacity for property should continue through the end of the year. However, the market overall is not uniformly soft for all lines of coverage, according to Vaught and Martin Newman, Alliant’s managing director for energy options. Beneath the competition, “the market has absorbed substantial losses,” they said, making it increasingly likely that energy property will see a correction in pricing as the sector moves into 2027. The casualty side of the business tells a different story, Vaught and Newman added, noting that workers’ compensation and general liability remain relatively stable compared with poor results for commercial auto and excess. This divergence in market trends makes broad labels “less useful,” they said. Burke said she’s seen general liability and excess lines harden, citing continued losses across the industry driven by nuclear verdicts and social inflation. From a broker perspective, it’s important to look at accounts on an exposure-specific basis, she added. “A utility with transmission and distribution lines that are exposed to wildfire is going to have a much, much more challenging excess liability renewal than those who don’t,” Burke said. “A renewable energy company that doesn’t own that kind of exposure is going to be a little bit more straightforward at the end of the day.” As the energy market prepares for potential property repricing while liability lines remain hard, carriers and brokers alike will depend on clear communication surrounding narrowing policy language, transparent data-sharing from clients, and a thorough understanding of evolving technological risks. INSURANCEJOURNAL.COM

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Special Report: Surplus Lines Surplus Lines Leaders Remain Bullish on Outlook in a Shifting Market By Andrea Wells

he surplus lines and specialty commercial markets are becoming an increasingly competitive space, with supply outweighing demand in some lines of coverage and risk classes creating “micro-market” trends not experienced in previous softer markets. AM Best reported in its recently released State of the Market report that there remains an “abundance of capital and heightened competition among insurers, reinsurers, and managing general agents (MGAs),” which is shifting the landscape to a policyholder’s market when it comes to negotiating power. “More than ample market capacity—from insurers, reinsurers, and delegated underwriting authority enterprises (DUAEs) such as MGAs and program managers—is outpacing demand and pressuring margins,” the report said.

‘That is going to be the great stabilizer and probably the growth engine for the E&S market to continue to grow in the future.’ But the competitive landscape is not reducing surplus lines’ piece of the commercial lines pie. Even with rapidly softening rates in the property market, surplus lines carriers represented 27.5% of the U.S. commercial insurance market in 2025, up from 25.7% in 2024, AM Best noted. That percentage first broke the 20% marker in 2021 and has increased successively each year. While insurance market cycle history would tell that now is the time to prepare for retreat of business into the admitted market, this historical trend may now be gone forever. Compared to historical business cycles, the enhanced importance of surplus lines intermediaries will negate any broad, rapid retreat from the surplus lines market as admitted carriers seek opportunities to 32 | INSURANCE JOURNAL | OCTOBER 5, 2026

grow their portfolios, AM Best believes. Also, most carriers now own and operate their own excess and surplus (E&S) entity, allowing them to rebalance exposures across their admitted and non-admitted divisions as market conditions evolve and dictate. Today’s surplus lines market is not the same as it was in past soft markets, said Tim Turner, CEO of Ryan Specialty and chairman of Ryan Turner Specialty, Ryan Specialty’s wholesale brokerage division. “This cycle is very different and unique for a number of reasons,” he said. The overall market has been completely restructured. “In the last soft market, 15 years ago, there were less than a dozen wholesale dedicated insurance companies,” Turner said. “Today, there’s 110, and most large, admitted companies now own an E&S company, too,” he added. That change limits the “gravitational pull from admitted companies” to take business back into the admitted-only market, he explained. “We just don’t see that today, and that gives the E&S market long-term stability.” The world is not becoming less risky or less litigious either. “That is going to be the great stabilizer and probably the growth engine for the E&S market to continue to grow in the future,” said Jim Damonte, president and chief underwriting officer at Upland Capital Group. “The E&S market having the ability to flex on rate and form, and the ability to tailor coverage, will help our market to continue to grow and build as an overall percentage of the entire market.”

MGA Landscape

The U.S. managing general agent market grew direct written premium from roughly $46 billion in 2020 to approximately $128 billion in 2025, according to Conning, which incorporated Lloyd’s business and other premium not fully captured in statutory reporting. Statutory filings reported $102.6 billion in MGA direct premium written, up 12% from 2024, more

than double the broader property/casualty market’s approximately 5% growth rate, The findings underscore the growing role MGAs play in delivering specialized underwriting expertise, technology-enabled capabilities, and flexible access to insurance capacity. However, concerns have arisen about the alignment of value between MGAs and (re)insurers centered around the desire for growth and the need to maintain underwriting and pricing discipline, AM Best noted in its report. “MGAs, at one time primarily known as a highly scrutinized niche within the distribution system, have become a key conduit of surplus lines growth during the past decade, functioning as business INSURANCEJOURNAL.COM

originators and, at times, as product developers,” the report said. “With MGAs depending on wholesale distribution channels for submissions, the current competitive environment heightens the importance of maintaining discipline and ensuring the alignment of interests between MGAs and carriers,” the report said, adding this is particularly important considering the commission-based nature of MGA compensation. There are critics when it comes to the rapid expansion of the MGA space, including Chubb CEO Evan Greenberg, who wrote in a letter to shareholders in Chubb’s 2025 annual report that reinsurers and insurers who support MGAs are making “a bad bet” in a majority of cases. INSURANCEJOURNAL.COM

Greenberg wrote: “An MGA is an agent with underwriting authority. (No conflict of interest in that!) MGAs are not new—they have been around for many decades—but during the recent hard market they proliferated. As agents, they don’t retain underwriting risk. Instead, for a commission, they bind others—insurers, reinsurers, hedge funds, private equity—to risk gathered from retail and wholesale brokers who generally do business with them because they offer cheaper prices and good commissions.” He went on to describe “four or five layers of intermediaries” that are part of a “volume-based incentive system that amplifies the supply cycle,” including brokers taking commissions from fronting

carriers (who take fees) and “broker underwriting facilities” through which brokers “lay off coverage automatically to insurers for additional commission…” “[A]ll of these intermediaries make their money through commission dollars, which are a function of volume. The clear losers are the ultimate risk takers,” he wrote, referring to business taken at “cheap prices with huge intermediation costs.” Ryan’s Turner admits that it’s a valid concern as delegated underwriting authority has become 50% of the total non-admitted surplus lines market in various forms, including binding authority, small commercial programs, and affinity business, and then larger entities that

continued on page 34

OCTOBER 5, 2026 | INSURANCE JOURNAL | 33

Special Report: Surplus Lines continued from page 33

come in the form of managing general underwriters. But he stressed that most insurance companies have faith in delegated underwriting authority. “There’s some skeptics out there, and there’s some concern about it, but there’s always been a flight to quality with delegated underwriting authority,” Turner said. So, while there may be some that are irresponsible, it’s usually a minority, he said. “Most MGUs, including I think our MGUs, are very, very responsible,” he said. “There will likely be some disappointments, but the majority of the industry is very solid and doing the right thing, performing in a profitable, responsible way for their capital providers.”

‘I think the future is very bright for E&S and for specialty broking and underwriting.’ Property

Ben Beazley, Jencap’s president, Atlanta Branch - National Property Practice Leader, said there’s a distinction to be made when it comes to MGAs. “There are a lot of good MGAs in the property sector, he said. “I actually get capacity for what you might deem as an MGA, but there are different types of MGAs with different ownership.” He finds it interesting to look at the capacity behind some newer MGAs. “It’s not just insurance markets backing these MGAs, but other capital coming into the market.” The growth in property capacity as a result has been “staggering,” Beazley said. “The last six months of ‘25, I would say without exaggeration, every two weeks I was hearing of a new MGA being propped up.” Beazley describes the 34 | INSURANCE JOURNAL | OCTOBER 5, 2026

E&S property market as “unprecedented” from 2020 through 2024, as property valuations went up 100%-200%, insurance markets began increasing rates, and retentions blew up for more challenged classes of business with more challenging perils. Then profits started rolling in, he said, and so did other capital to add even more market capacity. Still, in Beazley’s view the far bigger concern is what he calls the “evil eye in the sky: retentions.” “What happened during this time was that retentions rose to a level where claims, or the attritional losses, weren’t making it to the insurance companies,” he said. “Therefore, because that wasn’t happening, the public adjusters all went back under their rocks and a lot of the litigation wasn’t happening, specifically talking about property business,” he said. “Now that retentions are going down and dropping again, they’re dropping almost faster than rates are, quite frankly.” That’s pushing the losses a lot closer to the insurance carriers, he said. “So, now we are seeing the public adjusters (PAs) coming out from underneath their rocks and inflating these claims totally unnecessarily. … I’ve had two claims recently that I’ve been involved in where the PA was trying to inflate the

claims by 300% to 400%,” he said. In this climate, insurance companies and MGAs need to really focus on how to mitigate claims and make sure they’re not giving the world away when it comes to retention, Beazley suggested. “The old adage is doubling a deductible is probably worth 200% of rate. So, if you’re going to half the deductible and you’re deducting the rate, you’re putting yourself in a far more vulnerable situation when it comes to claims activity,” he said. “We have had a very benign CAT season, so everyone’s got this false sense of confidence,” he said. That will change. “I did hear from one insurance company, their property book just crept over 100% combined, so now maybe we’re seeing at least from the direct carriers a little bit of caution.” Even though the property market remains soft, typical property surplus lines business isn’t leaving the E&S sector. “We’re retaining our business and other wholesalers are retaining their business,” said Ryan Specialty’s Turner. “It’s just that the prices have come down dramatically for two years in a row, but it’s not leaving the sector.” He agrees, at some point the property market will firm again. “The global warming factor is not going away, unfortunately, so pricing will ultimately

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moderate and flatten in property, and at some point, it will firm up again. We just don’t know when, but we’re getting there.”

Casualty

The casualty market hasn’t hit the softening pricing trends as significantly as other areas of the E&S sector. According to WTW’s latest Commercial Lines Insurance Pricing Survey (CLIPS), the largest price increases in second-quarter 2026 continued to come from excess/umbrella liability, but even this area dropped to a high-single-digit increase. Upland’s Damonte said his specialty carrier hasn’t been impacted by some of the significant rating decreases seen in property. “We view the market as sort of a whole host of micro markets, and we tend to participate in some of the tougher marketplaces when we think about some of our transportation business or public entity business,” he said. “But some of the areas that we play in, we’re certainly seeing the pricing pressure… It doesn’t necessarily mean that we’re not able to get rate increases, just probably not at the same level that we had in years past,” he said. “But it’s undoubtedly a softening market at this point.” He added there is a stark difference between primary casualty business and excess casualty business, however. “We are seeing some different characteristics there,” he said. “Excess liability, when you’re building larger towers of insurance, that lends itself to having multiple parties in order to put those towers together. It’s going to require two, five, 10 different participants, and so that allows for a firmer market.” It’s a different dynamic when looking at primary versus excess. “I’d say that the primary side of things is a good deal more competitive at this point.” While medium-hazard casualty business has a little bit of softness in it, there are several very firm niches within casualty that are providing tremendous opportunities for wholesalers in the U.S., according to Turner. “Examples of that would be transportation-related business. It’s a loss leader in the reinsurance world and long-tail casualty business, so anyINSURANCEJOURNAL.COM

Wholesale Talent in the Age of AI

eil Kessler, CEO of Specialty at CRC, sees the AI wave in all aspects of the wholesale specialty business. “A lot has changed because of AI,” he said. “When we think about AI, we think about it helping in two ways. We’re trying to basically make the process faster and to make our people all smarter.” Kessler said AI is helping with new business submission ingestion, automated account clearance, and now quote ingestion. “So, now you can start to think about, ‘How do we use this information to make our people smarter?’” He sees a key difference from other technology revolutions in the past where changes were all about access and speed. “This AI-focused revolution is about those things, but it’s also about knowledge and intelligence. That’s the real difference.” But he cautions that a blind reliance on AI is probably not the way to go. “I think you’re going to need to have a little bit of both.” AI and tech along with a human touch. He understands the concerns around job roles as AI advances for both new and existing talent in the market. “There definitely will be changes to the work that people do. But I personally have a more optimistic view that we will find ways to continue to provide more value to our customers by getting those people plugged in, in different ways,” he said. “But I do think that if people are only able to do tasks that are able to be automated by AI, that’s going to be a problem for them.” He advises current and new, incoming young talent in the wholesale industry to think about their future career progression in an age of AI innovation. “How do I learn more skills? How do I get better? How do I embrace the future?” he said. “That’s what we’re trying to get people focused on. Our goal is to take people in those jobs that we’re trying to automate and move them up into successful and growing teams to do more that’ll hopefully lead to better client experiences and more opportunity for all.”

thing that has latency and long-tail aspects to it is very firm.” The lost cost adjustment factors in long-tail casualty business are accelerating and continue to accelerate, making it very difficult to price, he added. “Lots of examples of what I would call niche firming phenomenon that continue to keep the casualty segment very firm, including shared economy, delivery, trucking, basically anything in transportation is tough,” Turner said.

Outlook

The softening market in E&S is not dampening the optimism of surplus lines leaders. “I think the future is very bright for E&S and for specialty broking and underwriting,” Turner said. “The world unfortunately continues to be riskier, and global warming’s not going away.” The demand for specialty services and for the services of delegated underwriting

authority and wholesale broking altogether will continue to be there, Turner noted. “We see opportunities for creativity and innovation in E&S and in the trading relationships that we have with our retail customers and our markets. I’m very bullish on the E&S market moving forward.” “A couple of softening cycles of property does not change the entire outlook for E&S business, in my opinion,” agreed Neil Kessler, CEO of Specialty at CRC. “Look at the world, it’s just a riskier place.” Kessler keeps a focus on macroeconomic trends in the U.S. that are driving specialization and a move toward more specialty distribution. “That’s only going to continue,” he added. “I think the standard, the level of expertise and specialization needed will continue,” he said. “As things get riskier and continue to evolve in the economy, people are looking for specialization, and our retail partners rely on us to provide that expertise.” OCTOBER 5, 2026 | INSURANCE JOURNAL | 35

Closer Look: Legal

The Big Data/AI ‘Revolution’ Is Driving Up Verdicts, Settlements as Plaintiffs Buy In By William Rabb

ick Kosiavelon, an insurance defense attorney in Massachusetts, tells the story about some plaintiffs’ lawyers he faced off against in a recent brain-injury lawsuit. He said within an hour of seeing the list of potential jurors in the jury pool, the lawyers from national injury law firm Morgan & Morgan seemed to have an incredible amount of information on their laptops about each potential juror, including social media

postings, property records, education levels, employment, and more. The Morgan team was able to quickly decide who to exclude from the jury. “I mean, I don’t get that information in general, over time, because it’s a lot of work to get all that,” Kosiavelon explained. “They definitely had a lot more information than I had.” It was all on laptops and tablet computers. The plaintiffs’ table didn’t have a scrap of paper or a briefcase on it during the two-week trial, Kosiavelon said. He wasn’t sure

36 | INSURANCE JOURNAL | OCTOBER 5, 2026

of the name of the software used by his opponents at the May trial. Morgan & Morgan attorneys and communications staff could not be reached by Insurance Journal for comment. But that software appears to be just one small part of what lawyers and an insurance executive have termed a troubling new world of insurance litigation: A growing number of injury and claims law firms—some of which may be flush with cash from investors and litigation funders—now hire online mock juries of as

many as 1,200 people to test legal theories, sift through big data to find sympathetic jurors and court venues, and utilize artificial intelligence programs to instantly analyze their own and their opponents’ trial arguments. The tactics are aimed at one thing: driving jury awards and settlement demands higher and higher, insurers and lawyers said. “It’s true now more than ever: The competition is not other insurance companies. It’s the plaintiffs’ lawyers,” said Brian McCarthy, CEO of INSURANCEJOURNAL.COM

ioral scientists have dubbed the “reptilian brain”—the oldest and most primitive parts of humans’ minds that can produce revulsion at an insurers’ actions or sympathy for an injured plaintiff.

‘JuryBall’

eMaxx Assurance, a group of Florida-based property/ casualty insurance firms. This growing use of AI and software allows the plaintiffs’ lawyers to zero in on reptile tactics at trial, McCarthy said, referring to what some behav-

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One product that has gained attention in recent months is “JuryBall,” a book and app published in 2024 by three successful trial lawyers: Alicia Campbell, John Campbell, and Sean Claggett, the latter of whom is also a law professor. The book’s title refers to the 2003 book “Moneyball,” about the use of data in baseball. It contends that vetting plaintiffs’ and probable defense arguments with hundreds of mock jurors will provide huge amounts of data and exponentially increase damage awards. In one case study highlighted in the book, a child sexual-abuse victim in New Mexico was offered $15 million to settle. But arguments presented to online mock juries, with multiple variations, showed that even a bad day at trial for the plaintiffs’ firm would bring in a jury verdict of at least $77 million. The team went to trial, and the jury returned an award

of $485 million, the book explained. The use of mock juries is not new. Law firms of all stripes, to one extent or another, have long utilized focus groups to prepare for some trials. Claggett and the Campbells argue that’s no longer enough. Using vast numbers of mock jurors can produce better data and better insights. And mock jurors these days are easily found online, hired for less than $60 each to listen to and answer questions about a case argument that may take about an hour. After one argument is presented, another group of people hears a different variation, until the strongest case emerges, the $200 book notes. The book explains how to weed out “professional” mock jurors, those who sign up repeatedly, and those who live outside the United States. Big data will soon be needed on every case worth more than $500,000, the book suggests. A website for “JuryBall” notes that a smartphone or computer app also is available, allowing lawyers to create questions for potential jurors and record their answers, jot down notes about the jury, and allocate points for each person.

The purchase price for the app was not listed on the website, and the app was not found on the Apple AppStore.

Instinct and Intuition

The heavy reliance on big data does not sit well with some lawyers who have relied on years of practice to hone their gut feelings about arguments, jurors, and case presentation. “They’re taking instincts and intuition out of the equation,” said Greg Katz, national managing partner for Lewis Brisbois, one of the largest U.S. insurance defense firms. “They think they’ve come up with a different way to ring the bell and, in their words, add zeroes to awards.” Those zeroes appear to be piling up as private equity firms and other third-party litigation funding groups see lawsuits as a revenue stream to be exploited, Katz argued. Litigation funding in the U.S. has surged 70% in recent years, now topping $16 billion a year, and is expected to reach $25 billion in the next decade, The Washington Legal Foundation reported in May. At the same time, lawsuits and litigation costs nationwide

continued on page 38

OCTOBER 5, 2026 | INSURANCE JOURNAL | 37

Closer Look: Legal continued from page 37

are on the rise, including class-action lawsuits, the American Tort Reform Association and other lawsuit tracking organizations contend. Over the past decade, injury lawsuits have soared 70% in state courts and 33% in federal courts, according to data from Thomson Reuters Westlaw, the New York Times reported in August. Meanwhile, nuclear verdicts (those of at least $10 million) jumped 41% from 2024 to 2025 to their highest level since 2009, according to a report from Marathon Strategies. “That’s really the essence of this big-data revolution in litigation, as they call it,” Katz said. “So many plaintiffs’ firms have all this private equity money now that they can put into this.” Besides the greater risk of high-dollar losses and escalated defense costs and containment, taking a lawyer’s gut feelings out of the process also takes the fun out it for

many attorneys, said John Riordan, an insurance lawyer with the Kelley Kronenberg firm. Still, he said he recognizes the growing importance of big data and AI strategies. Jury selection is hugely important in most trials.

‘They’re taking instincts and intuition out of the equation.’ “If plaintiffs’ counsel is employing these tools while defense counsel continues to rely exclusively on traditional questioning, handwritten notes, and instinct, the carrier may be placed at a strategic disadvantage during one of the most important stages of trial,” Riordan said.

AI in Litigation

Another app, one of the few available on the AppStore, is JuryVision. It allows lawyers to give opening arguments or rebuttals, pick AI platforms,

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and then receive feedback from the software within minutes. A trial use by Insurance Journal showed the app’s feedback focused as much on verbal delivery and appearance as the substance of the opening argument. Lexis-Nexis also offers a “very expensive” platform known as Protégé that lets counsel analyze arguments, reference actual court opinions in the Lexis caselaw records (not hallucinated citations), and provide a road map for trial, Riordan noted. Some courts may not allow the use of AI in the courtroom, but it may not be so easy to detect, so it is difficult to combat, said Kosiavelon, the Massachusetts insurance lawyer with the Boyle Shaughnessy law firm. Katz said more insurance carriers are buying into the idea of hi-tech data and AI in litigation, but many are not. He urged insurers and their defense firms to consider investing the resources in the

new approach. Kosiavelon agreed. “It all comes down to what an insurance company wants to spend on it,” Kosiavelon said. In his brain-injury case, the artificial intelligence programs may not have mattered, he noted, adding that the plaintiff was not very credible, and real-time data probably didn’t help overcome that with the jury. At the end of the trial, the Middlesex County jury awarded less than 10% of what the plaintiff’s lawyers had asked for, Kosiavelon said. Katz agreed that the brave new world is scary, but it doesn’t mean trial lawyers will always win going forward. “We’re a large firm and we still get good results,” Katz said. “So, I can’t say that ‘JuryBall’ and all of this has changed the game completely. But you do need defense firms that understand it and have lawyers that are using the technology and are ready to fight.”

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Idea Exchange: Benefits

Amid Soaring Costs, Health Benefits Brokers Seek New Strategies

ffordability challenges are transforming the health benefits market, requiring brokers, carriers, and employers to make difficult decisions. In 2000, healthcare spending comprised roughly 13% of total U.S. Gross Domestic Product (GDP). Today, that figure is up to 18%. By 2033, it's projected to reach By Riva Dumeny 20%, which is $1 out of every $5 spent attributed to healthcare. As costs climb and market conditions tighten, brokers can no longer rely on rate shopping alone to find the right benefits package for employers and plan sponsors at renewal. Instead, brokers will need to identify and implement new strategies to help reduce the cost curve and manage employees’ out-of-pocket exposure on behalf of their clients. Doing so will require year-long communication and education.

are creating material market changes and severe cost shifts. Prescription drug costs represent the highest estimated increases for plans this year at 11%. Widespread use of GLP-1 therapies, infusions, and biologics are key drivers. So are specialty drugs for serious conditions like cancer or hemophilia. These medications comprise just 2% of prescriptions but account for nearly 50% of a health plan’s total drug spend. Simultaneously, million-dollar-plus claims are increasing in frequency and severity, heavily impacting the commercial market. Add site-of-care variances and expenses associated with technology and health innovation to the equation, and 2026 could bring the highest annual renewal projections in more than a decade. We’re seeing carriers applying medical cost trends of 10% to 12% in formula renewals, with pricing models that bake in buffers to offset volatility and high-cost claims.

In February, Congress enacted legislation to expand PBM transparency obligations and provide group health plans with more insight into PBM compensation and pricing practices. As part of this effort, Congress clarified the scope of ERISA’s § 408(b)(2)(B) compensation disclosure rule by eliminating prior references to specific categories such as “brokerage services” or “consulting,” and instead applying disclosure requirements to any service provider that furnishes services falling within the statute’s enumerated list. This clarification is designed to ensure that PBMs are subject to the same fiduciary-level compensation disclosure obligations as brokers. At the same time, ERISA-focused class action lawsuits have sparked greater awareness about fiduciary duties, and a handful of cases have moved through the court system. It remains to be seen exactly how these emerging lawsuits will play out.

A Perfect Storm of Cost Pressures

Increased Scrutiny Raises the Risks

Growing regulatory and legislative pressures impacting Pharmacy Benefit Manager (PBM) relationships and fiduciary responsibilities are hot topics this year.

As healthcare expenses and regulatory risks heighten, employers and plan sponsors will rely on their broker to identify the most comprehensive coverage at the lowest possible cost. That’s why it’s critical

Inflationary trends and multiple industry-specific factors, including provider reimbursements and rising utilization, 40 | INSURANCE JOURNAL | OCTOBER 5, 2026

Four Ways to Bend the Cost Curve

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for brokers to proactively inform and educate their clients about emerging market conditions and seek creative solutions.

Evaluating the full funding spectrum.

which move dialysis out of the PPO network, reprice claims, and integrate case management to help delay chronic kidney disease progression, can help plans reduce costs by up to 90% or more of billed charges. Site-of-care optimization programs can redirect appropriate infusions from hospitals to lower-cost outpatient facilities or in-home services, with estimated savings of 25% to 65%.

Rate shopping within one funding model leaves value on the table. Brokers should run a complete market check across the continuum (i.e., fully insured, level-funded, self-funded, group captive, PEO/MEWA, ICHRA). Each carries a distinct risk-and-reward profile that can reshape an employer’s cost trajectory. For example, level-funded health plans mimic a fully insured feel while capturing some of the upsides of self-funding and giving employers visibility into costs and utilization. Many national carriers now quote 50% to 100% surplus retention. The right structure depends on group size, risk tolerance, and claims profile.

Investing in AI. Brokers who embrace AI will operate with more accuracy, speed, and insight. Many industry professionals recommend using AI to streamline underwriting, which will bring tangible benefits in more volatile and tougher-to-predict markets. AI has also shown promise in streamlining RFP processes and workflows to manage the flurry of renewal activity each fall.

Recommending cost-containment programs. Dialysis management solutions,

In a market where rate tells only part of

Treating ancillary renewals strategically.

GOT RISK? WSIA MEMBERS ARE INSURANCE PROFESSIONALS DEDICATED TO THE WHOLESALE DISTRIBUTION SYSTEM.

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the story, ancillary renewals warrant a disciplined approach. Brokers can use renewals to consult their clients on leave and multi-state compliance exposure and overall benefit strategy alignment with current employee needs.

Make Benefits Strategy an Ongoing Conversation

Regardless of market conditions, carriers, brokers, partners, and plan administrators share a responsibility to maintain appropriate, high-quality benefits coverage options for individuals and families. Brokers that assist employers in navigating cost and compliance complexities and work with niche specialists to implement targeted cost-containment strategies yearround will uphold this promise to their clients while addressing the affordability crisis head on. Dumeny is president of Amwins Benefits. She can be reached at riva.dumeny@amwins.com.

LET A WSIA MEMBER HELP YOU MANAGE IT.

Some decisions are too precarious to take on alone; you need a partner to help you create the right solution for your client’s risk, while minimizing yours. And, it’s cost-effective. A Conning, Inc. analysis concludes that wholesale distribution does not increase the cost to the insured. That’s a safe decision.

wsia.org/findamember

OCTOBER 5, 2026 | INSURANCE JOURNAL | 41

Idea Exchange: The Competitive Advantage

Agency Duties — Legal vs. Ethical

hile I’m not an insurance agent, I recently received an email from a commercial insured after he read one of my columns. In the column, I explained how the importance of insurance is being diluted because deductibles are so high, and how insureds have become de facto, but unknowing, insurance companies By Chris Burand themselves as a result. His email thanked me for explaining what was happening. Neither his agent nor his carrier had explained that his firm was now an insurance company when they raised the deductible. He advised that he was not an insurance expert and did not understand what it meant for his deductible to be increased to a material 42 | INSURANCE JOURNAL | OCTOBER 5, 2026

percentage. He admitted he did not understand the total insurable value (TIV) to which the deductible would be applied. His business has absolutely nothing to do with insurance, building values, or understanding coverages. In fact, he runs a non-profit and is not a businessperson. His deductible had gone from $5,000 to $350,000 in 24 months with no explanation, no conversation, and no options from his agent. This does not include the major change in terms, which he also did not understand. In my article, I asked why someone should buy insurance at all in this kind of situation. This non-profit could not afford a claim with a $350,000 deductible, so what difference does it make if they have insurance? I have been busy lately teaching top agents how to do the math on this so they can advise their clients. A great many properties really don’t need insurance given these terms and condi-

tions. It’s better to take the risk, especially since insurance companies are indicating that their “sophisticated” models tell them not to take on risks requiring these deductibles. His email was gratifying to me in the sense that I had helped someone make sense of what I’d argue was an unacceptable omission by his agent. In that state, the agent standard of care dictates it is the insured’s responsibility to “read and understand” their coverage. That is too high a standard. Further discovery showed the problems were more significant. Neither the agent nor the carrier had ever updated coverages due to building changes, never asked, never advised, but always took his money. Legal? If the insured wants to sue for E&O, the judge will rule whether it was legal. Was it ethical? Nope. Not by my ethics. What I truly hope occurs with AI is that commissions go to 8% for order takers INSURANCEJOURNAL.COM

who have such low ethical standards and provide no real value to insureds. AI will be able to place insurance for 8%. All the junk agents say they provide great service but don’t, and then they stand behind low standards of care, dictating insureds must read and understand their coverage when challenged, which will hopefully be eradicated by AI. Another recent case in Georgia (a person really must love the Georgia courts’ ability to extend coverage to the deepest, and now any, pockets) found that agents had better be offering every available coverage. The articles I read included agents’ associations and defense attorneys advising that agents face doom, since E&O carriers will not offer coverage in such a toxic environment. This is an overreaction to protect agents who are nothing but order takers, and who do not want to be held accountable for offering clients the coverages they need. I’ve been an E&O auditor for 30-plus years. The solution is incredibly simple. No AI is required. Walk clients through a coverage checklist. An E&O claim is less likely if clients have the coverages they need, and

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the best way for clients to obtain those coverages is to offer them. Will they buy them all? No, they will not. But then have them sign off. To destroy the common argument, “But what if I miss one coverage? Then I’m really screwed!” This just highlights incompetent math skills. What are the odds of missing a coverage when the agent does not offer 50 coverages versus not offering one coverage? In 30+ years of teaching E&O, doing E&O audits, and serving as an E&O expert witness and expert consultant, I’ve only had one client ever lose an E&O claim that had used a coverage checklist well, and that was because the defense counsel was inadequate. The plaintiff’s attorney found a prominent person who lied on the stand, and the defense counsel did not do the work to prove the lie. Instead, almost 100% of my clients accused of missing a coverage when using a coverage checklist had their claims dropped before the insured even contacted an attorney. A checklist should also address deductibles. Furthermore, when changes as significant as the deduct-

ibles noted earlier occur, an agent owes the insured—ethically if not legally—an explanation of what that means. Agents really need to assess their ethics. The CE ethics classes seem to be a total waste from what I see in the real world. Insurance is the most important financial protection tool, but insurance is complex. Order taker agents are what give the industry a bad name. Look at your heart and decide whether you have an ethical duty to advise your clients regardless of your state’s legal standard of care. The opportunity to elevate is great. Furthermore, the opportunity to increase revenues by accepting and adapting to the higher standard is significant. My clients who do all have better profit margins, better protected clients, and happier relationships. Another great advantage when done well is less dependence on insurance companies, especially carriers that don’t seem to want to take risk but keep charging high premiums. Burand is the founder and owner of Burand & Associates LLC based in Mountainair, New Mexico. Phone: 719-485-3868. E-mail: chris@burand-associates.com.

OCTOBER 5, 2026 | INSURANCE JOURNAL | 43

Idea Exchange: Minding Your Business How to Find New Producers

ost of our agency clients tell us they have a hard time finding producers. They want to know where to look and how to bring them into the agency. It is not an easy task to find someone who is experienced from another agency, especially someone By Catherine Oak who can come in free-and-clear with a book of business and easily fit into the agency’s culture. Every agency is different, has different levels of support staff, different markets, training, computers, perks, and contracts. The following are some of the ways an agency can find good people and be successful in this endeavor from our experience in working with thousands of agencies over the past 35-plus years.

Promote from Within

We have interviewed so many agency staff from countless agencies who feel resentful that owners and managers often look outside the agency to bring in

managers and new producers. They may be account managers who have worked in the agency for a long time and know the customers, underwriters, and the agency’s processes and procedures well. Often, we are told they do not have an avenue to move up in the organization, nor are they ever asked at performance review time. It is just “assumed” that they are not interested or willing to move up. They also have a big fear that if they did move into sales, they would have to go on straight commission. With this concern, even if they have a sales personality and could handle most commercial lines or benefits call-ins, they won’t accept the job. The answer can be a different role, a role that some agencies call an account executive (AE). AEs can handle existing books as producers do but are not expected to bring in new clients. They are usually expected to cross sell the existing account with other coverage lines, such as umbrellas, EPLI, fiduciary responsibility coverages, business interruption, cyber, and more. Most can do this if they have taken some CSR and CIC courses and have a good manager to learn from.

The key is to properly compensate them for this work. Most AEs that have this type of position are compensated on a percentage of the book they handle as a salary, usually in the 20% to 25% range. AEs still have CSRs to delegate to for clerical tasks and operate more as a producer on their accounts. If they cross sell or bring in new accounts, they should receive commission for this outside of their salary. In most agencies, personal lines sales are handled by the CSRs/account managers and not specific producers.

Hire Professionals in the Community

This idea worked great for one firm we knew. This agency would hire people in their community that were coaches and teachers. These professionals knew everyone in town and had a desire and drive to win. They are usually also unable to make more money in their current profession, so they are somewhat limited in earning potential with their careers. The agency we knew that did this hired about 40 people from the community, and they rarely left the firm. They were extremely hardworking and grateful for the opportunity and were quick studies when it came to learning about insurance.

Salespeople Connected to Niches

Another source is to look at people that sell in the niches the agency likes to write. This type of professional already knows that specialty well. An example might be a lumber salesperson or equipment dealer salesperson for an agency with a specialty in contractors or dealers. The salesperson already knows contractors and their subcontractors to connect with and can talk to them about what programs the agency has to offer that would be perfect for their needs. 44 | INSURANCE JOURNAL | OCTOBER 5, 2026

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Another example would be a car salesman when the agency writes dealerships, or an attorney who can easily write law firms they know.

‘We have interviewed so many agency staff from countless agencies who feel resentful that owners and managers often look outside the agency to bring in managers and new producers.’ College Internships

One of our clients has found two great long-term employees—a producer and a marketing manager—through this idea. They started as college business students needing to do a marketing project for a business. By working on their project, they got to know what the agency does, what its marketing efforts were, and worked with the agency on its website, mailings, ads, social media, etc. After making recommendations for their project to the agency, both students ended up interning at the firm. Then once they graduated from college, both students were offered jobs and are still there today. Many people do not really understand the various job roles in an insurance agency, or how challenging and exciting it can be to work with a wide variety of clients, especially in commercial lines and employee benefits. When I was in college, we had an insurance degree at the University of Wisconsin, Madison, called Risk Management & Insurance. After graduation, the college had recruiters from insurance firms come to school to interview graduates. It helped students get a big-picture view of all the roles available in the insurance industry. I took a job with St. Paul Fire & Marine as a marketing trainee. I also had a summer internship with Employers of Wausau, which was recommended by a risk management professor. My sister and I did not have anyone in our family that had been in the insurance INSURANCEJOURNAL.COM

business, which is unusual. The internship at Employers really opened our eyes to all the job possibilities in insurance. Visit local colleges and community colleges to pitch what your insurance agency has to offer. An agency can also post openings on the college website, which can help students find great jobs in insurance. There are many colleges nationwide that offer risk management and insurance programs, including colleges in California, Arizona, Michigan, Massachusetts, Alaska, Mississippi, Colorado, and Wisconsin, to name a few.

Non-Owner Producer Competitors

Consider other agency non-owner producers as possible job candidates as well. Perhaps a sale was lost to a competing firm’s non-owner producer, and the client shared the winning producer’s name. Your agency might reach out to see if they would ever consider taking a job at your

firm. Deferred compensation in their book might be an interesting offer for a great producer like this, which might one day lead to agency stock ownership. Lastly, recruit people you come across that impress you. For example, a waitress in a restaurant could be impressive, or a clerk in a store. Are they worth exploring for your own firm? Always remember that it is much easier to teach a person about insurance than it is to teach a person the skill of closing a deal. The key is to make sure they get the right insurance training. Oak is the founder and president of Oak and Associates, an international consulting firm to the insurance industry and specializes in mergers, acquisitions, perpetuation planning, valuations, planning meetings, and streamlining operations for insurance agencies. Contact her at catoak@gmail. com, call 707-935-6565, or visit www.oakandassociates.com. Offices are located in Sonoma, California and Bend, Oregon.

AI IS CHANGING WHOLESALE INSURANCE.

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Technology is changing how insurance work gets done, but the right processes, training, and people still matter.

OCTOBER 5, 2026 | INSURANCE JOURNAL | 45

Idea Exchange: Workers' Compensation

Workplace Marijuana Use: What Growing Employer Tolerance Means for Workers’ Compensation and Liability

mployers’ attitudes toward cannabis are changing, but not solely by their choice. More employees are testing positive for marijuana use in the workplace today than five years ago, according to the 2026 Quest Diagnostics Drug Testing Index. Fewer employers are concerned, however. Some have stopped pre-employment cannabis screenings altogether, even in states where they are still permissible. By Gamble Cuce Some are concerned they will not be able to compete for top talent. Others believe their policies won’t change employee behavior seen as increasingly mainstream. When employers relax their stance on 46 | INSURANCE JOURNAL | OCTOBER 5, 2026

cannabis, they increase the risk of workers’ compensation and liability claims. Agents and brokers bear the responsibility of educating employers about marijuana’s potential dangers and working with clients to develop strategies that protect their workers and companies.

Mainstream Marijuana

Despite remaining federally illegal, research from the Substance Abuse and Mental Health Services Administration (SAMHSA) shows that more than 21 million Americans use cannabis daily, or nearly daily. Marijuana is currently legal for recreational use in 24 states and Washington, D.C., with 40 states allowing it for medical purposes. Additionally, FDA-approved marijuana products and state-licensed medical marijuana were reclassified to a less dangerous Schedule

III category in April 2026. As state laws ease, drug testing policies are becoming increasingly lax. New York, for example, prohibits pre-employment testing for marijuana for most job applicants. Some major employers have removed pre-hire cannabis screenings. This patchwork of laws and testing bans dilutes the reality that marijuana use on the job can create a cascade of negative consequences for workers and employers. It is also creating a generational gap. Older workers who grew up during a time when cannabis use was banned across all 50 states view the risks differently than younger workers who may be more prone to believe that marijuana use is not overtly dangerous unless they are in a safety-sensitive job, such as airlines or trucking. From a workers’ compensation standpoint, injuries related to workplace INSURANCEJOURNAL.COM

marijuana use can quickly escalate into complex, long-tail claims.

Cannabis Workers’ Comp Complexities

To understand the risks of cannabis use in the workplace, consider the example of an employee who gets hurt on the job. If the company operates in a state that allows drug testing, the worker may test positive for marijuana use after the incident. In many states, however, a positive drug test alone is not enough to deny an employee from receiving workers’ compensation benefits. That’s because marijuana can remain in a person’s system for up to a week. If the employee denies using cannabis in the past seven days, is not a regular user, and was not high on the job, the workers’ comp claim can snowball. The worker will likely hire an attorney, who will put the burden of proof on the employer. Further, if the employer cannot prove beyond a reasonable doubt that the worker was high on the job at the time of the incident, the employee will become compensable.

Liability Beyond the Injured Worker

A single workers’ compensation claim may create broader liability exposures if it results in injuries to customers, property, and other third parties. Take the example of a security guard on fire watch who uses marijuana during a break and then falls asleep. If a fire

breaks out while the worker is impaired, the entire plant could burn to the ground, and the security guard agency will face litigation. The situation is even worse if employees are in the building at the time of the fire.

‘A single workers’ compensation claim may create broader liability exposures if it results in injuries to customers, property, and other third parties.’ Similarly, a pest control company could face multiple liabilities from a single incident. If a worker holding a ladder is impaired, and an employee doing bee eradication work falls from the ladder and suffers serious injuries, the pest control firm could face a workers’ compensation claim, along with lawsuits from the homeowner or property owner where the work was being conducted.

Mitigate Cannabis-Related Risks

Marijuana use can increase workers’ compensation and liability risks, so it is important for employers to establish clear workplace cannabis policies to protect employees and safeguard their businesses. Business owners should consider discouraging workplace cannabis use to

limit claims. It is incumbent on agents and brokers to share the risks and potential mitigation steps with their clients. Consider starting with an open and honest discussion. Explain that while cannabis may be legal and socially acceptable in certain states, business owners are free to set their own rules to address employee behavior. Employers who discourage or ban cannabis use are at less risk of workers’ compensation claims than employers who do not discourage or ban its use. Those that fail to clearly communicate marijuana use policies could face increased liabilities and become uninsurable. Agents can also recommend clients include strict drug-and-alcohol policies in their employee handbook. The policy should include clear details about drug testing for cannabis, assuming it is permitted in your state. It should also detail the actions to be taken if an employee is found using cannabis on the job. A clear policy will give the employer a certain level of protection from liability. Both agents and brokers should keep abreast of changing state laws regarding cannabis use and drug testing so they can educate their clients. They should also explain the worst-case scenario, so clients understand the potential downstream risks of workplace marijuana use. Agents can also encourage employers to follow the counsel of human resources and loss control professionals when it comes to marijuana use.

Laws Have Changed. The Risks Haven’t.

Do not assume the risks of marijuana use have lessened just because legal restrictions have been rolled back. Cannabis’ effect on absenteeism and workplace accidents is well documented. Agents and brokers who share these facts with their clients can help keep workers safe and prevent workers’ compensation and liability claims from spiraling out of control. Cuce is the program manager for workers’ compensation and crime at the Brownyard Group, a family-owned program administrator providing specialized insurance coverage for select industry groups. Email: gcuce@brownyard.com. INSURANCEJOURNAL.COM

OCTOBER 5, 2026 | INSURANCE JOURNAL | 47

Idea Exchange: Technology Leveraging Tech for Talent Management in Insurance

he insurance industry continues to face talent shortages, so agencies are increasingly turning to technology to help bridge the gap. AI and other software tools can improve productivity, help with hiring, and By Rick Dennen facilitate better communication with clients. There are several benefits of adopting new tech tools, but it’s important to know how to choose the right packages and facilitate a smooth rollout.

What can tech tools do for an insurance agency? If there’s a task to be done in an

insurance office, there’s almost certainly a technology tool to address it. AI tools embedded with predictive analysis capabilities can improve underwriting by forecasting future claims and identifying high-risk customers. Chatbots can answer routine questions from customers, freeing up agents to resolve more complex issues. Small language models can be used to personalize marketing and sales communications. Administrative tasks such as time tracking and project management can be streamlined with technology tools. Claims management can be automated. And all these time-saving tools allow agents to have more time for meaningful engagement with clients and prospects.

Finding the right tools. Just because a

technology tool is powerful, it’s not necessarily a good fit for every situation. Each agency is different, and that means their technology needs vary, too. To find the best tools, agency owners need to identify what their greatest needs are. What are the staff’s pain points? Where are the biggest time sinks for team members, and how could those be alleviated with technology? What are producers’ biggest impediments to growing the agency’s book of business? Once those needs are delineated, 48 | INSURANCE JOURNAL | OCTOBER 5, 2026

it’s possible to identify software tools designed to address them. Then comparisons can begin to determine the package that provides the best solutions at the most attractive price.

Overcoming pushback. Bringing new

technology tools into an agency can be met with uncertainty. To ensure a smooth rollout, it’s important to help staff learn how new tools can save them time and help them be more efficient. It helps to start by introducing small elements of the new tools first, rather than unleashing the entire suite of services all at once. In this way, team members experience small wins without major disruption to their workflows. It also creates a pathway for staff to inject their own thought processes into making the technology work for the agency, which promotes buy-in. Team members also need to understand the “why” behind the adoption of new systems. For example, demonstrating a tool’s ability to provide data intelligence that leads to faster closes can help the team grasp the value of the new system.

Connecting remote teams with technology. In agencies with remote workers

or satellite offices, team members may become disconnected. That can be a real problem in a people-oriented profession like insurance. Agency owners need to be proactive in keeping teams in touch with one another, not just through business engagements but by facilitating social interactions, as well.

Using technology in recruiting. Hiring

managers have been using applicant tracking systems for years. These tools have become even more powerful with the addition of AI capabilities. It’s important, however, that these tools be used in conjunction with a strong interview process, as applicants are now using AI not just to create perfectly polished resumes but to provide them with answers during remote interviews. To get a full picture of a candidate’s suitability for hire, there’s no substitute for in-person interviews. Seeing how they interact with other team members can go a long way in determining if they are a good fit with the agency’s culture.

Choosing the right technology that meets an agency’s specific needs is key to a smooth rollout, as is addressing team members’ nervousness about adopting new tools and systems. With the right tools and a well-planned introduction, new technology tools can drive agency growth. Dennen is founder and CEO of Indianapolis-based Oak Street Funding, a First Financial Bank company, with customized loan products and services for specialty lines of business including certified public accountants, registered investment advisors and insurance agents nationwide. INSURANCEJOURNAL.COM

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Closing Quote Liability in Life Sciences: Complex Ecosystem Raises Exposures for All Participants

By Bridget Bergan

he life sciences industry has become increasingly interconnected. Pharmaceutical manufacturers, medical device companies, dietary supplement brands, contract manufacturers, and distributors often operate within complex networks designed to accelerate innovation and improve efficiency. While this ecosystem has enabled organizations to bring products to market faster than ever before, it has also created a new reality: When something goes wrong, scrutiny is rarely confined to a single party.

Evolving Model

Traditionally, many life sciences companies maintained greater control over product

development, manufacturing, and distribution. But today, organizations routinely rely on third-party partners to perform critical functions throughout a product’s lifecycle. For example, a pharmaceutical company may rely on a contract development and manufacturing organization (CDMO) to scale production of a sterile injectable therapy, including filling, packaging, and quality documentation. A medical device company may source sensors, batteries, packaging, and sterilization services from different vendors before the final product reaches hospitals, physicians, and patients.

Who’s Accountable?

But accountability does not disappear because an operation has been outsourced. A labeling error on a supply of pharmaceuticals for a clinical trial of a contamination issue at a contract manufacturing site, for example, can trigger a recall, regulatory investigation, litigation, and/or reputational

harm. It is increasingly difficult to identify the true source of the problem, as outsourcing becomes more sophisticated and supply chains more fragmented. Further, plaintiffs and regulators frequently focus on every organization involved in bringing the product to market following a problem. As a result, participating in the supply chain often creates exposure regardless of the underlying issue’s origin.

Limitations of Contractual Risk Transfer

Many organizations attempt to address this issue through contractual risk transfer. But while indemnification provisions and supplier agreements play an important role in defining responsibilities among business partners, contracts alone may not eliminate risk. Recovery may depend on a supplier’s financial strength, available insurance limits, or willingness to defend a claim. Even when indemnification ultimately applies, a company may still face significant defense costs, business disruption, and reputational damage while disputes are resolved.

Brokers’ Strategic Value

This shift to more outsourcing presents an opportunity for brokers to deliver strategic value as risk advisors. Brokers who examine how products are designed, manufactured, tested, and distributed, as well as the extent to which third parties perform critical functions, may uncover exposures 50 | INSURANCE JOURNAL | OCTOBER 5, 2026

not evident from surface-level observations. This in-depth knowledge enhances brokers’ advice and leads to more effective risk management.

Carriers’ Specialized Expertise

Insurers also play an important role in helping organizations navigate the evolving life sciences risk landscape. Specialized insurance solutions address complex liability concerns that can arise throughout the product lifecycle. Along with offering tailored coverage, carriers with experience in the life sciences sector can provide valuable insights into emerging risk trends, regulatory developments, and loss scenarios. When combined with sound risk management practices and contractual protections, insurance can serve as an important component of a broader strategy to help organizations manage uncertainty and build resilience.

Thinking About Risk Broadly

As the life sciences industry continues to evolve, liability is becoming increasingly shared across a network of organizations. As a result, participants should consider who is responsible and how responsibility is allocated. Shared responsibility requires a broader risk management approach—one that seeks to optimize risk management programs, contractual protections, and insurance strategies in a coordinated way. Bergan is Lexington’s Life Sciences Practice Lead. INSURANCEJOURNAL.COM

Specialty underwriting is as much art as analysis. These islands of risk demand bold expertise—where the unknown becomes knowable, and the impossible is nothing. Experience the confidence only Applied delivers. Learn more at auw.com or call (877) 234-4450.