Nick and I sit down once again to talk about all the things on our mind. We recorded this in the hotel the morning after ITC 2023 ended, so we recap the event a bit, talk about insurability in Florida and how the rest of the nation is likely to follow that state, Hurricane Otis and more.

As always, Nick is a source of a ton of knowledge, perspective and new thinking on what is and what could be for our industry.

Highlights from the Show

• Nick is the Managing Partner of Insurance Nerds, and has just co-founded the Insurance Advocacy Forum of Florida
  • It is an alliance of carriers, brokers, reinsurance brokers, insurtechs, claims professionals and more to advocate for and promote a healthy, stable insurance market
  • Efforts in Florida will be important for the rest of the country since it's generally been a few years ahead of where the rest of the country has ended or will end up given the changing loss patterns driven by climate change and liability costs
  • You need the conditions in place for risk capital to come in and the regulatory structure for the flexibility to use that capital efficiently and effectively and to drive the innovation needed to create product options for consumers to be able to afford to buy coverage and for carriers to be able to afford to offer them
• At ITC, Nick saw a lot of GenAI talk, but the substance behind it wasn't always there
  • This is driven by the need to compete for airtime and investor attention when GenAI is so hyped up in the conversation
  • ITC has so much going on thematically that it's hard to say what the single theme of the event is
  • It's really more of a networking opportunity given the concentration of people you need to see all being together, though the logistics of seeing so many people when you're running around and being grabbed by people who want to talk is tricky
    • Nick also saw a lot of private meetings rather than trying to fight through the crowds, including bringing people into town since so many of the folks they'd need to talk to are there anyway
  • Outside of ITC, Nick has had conversations with several mutuals who are seeing a need for E&S paper to take advantage of risk opportunities that their strict, admitted underwriting guidelines won't allow them to write
  • Insurance only works at scale, so finding ways to stay viable as a business if you have to contact too far could be a real risk for carriers who are left with pulling out of markets as the only tool in their tool box
• Hurricane Otis went from Tropical Storm to Cat 5 Hurricane in just 12 hours, which is incredibly rapid
  • This puts pressure on modelers to be able to accommodate for and predict that behavior
  • This was also a strong example of the power of good building codes; Acapulco was built to withstand earthquakes given that this is the main CAT exposure the area faces, so a Cat 5 hurricane basically hollowed out the buildings there because they were only built to stand up to tropical storms
    • Floridian buildings are increasingly built to Cat 5 standards, especially in South Florida, so Nick believes the same storm in Florida would have left the buildings able to reopen within days instead of the extent of rebuilding needed

This episode is brought to you by The Future of Insurance book series (future-of-insurance.com) from Bryan Falchuk.

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