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Good morning Insurance Friends! 🦸🏼‍♂️🦸🏼‍♀️

We are already halfway through the first month of 2025 and the insurance industry keeps getting hammered. With all the bad publicity our industry is getting due to the devastating (and heartbreaking) wildfires, this is a great time to reach out to your clients to let them know how much you care about them and that we are here for them. Something as simple as an email or text message letting them know how much care about them will go a long way.

Don’t know what to say? Don’t worry, we got you. Check out the text message below and feel free to copy/paste it.

Hey [Client’s Name],

At [Insurance Agency Name] we want you to know how much we care about you. As your trusted insurance agents, we’re always here to support and protect you and your loved ones. If you need anything or have any questions, don’t hesitate to reach out. Your peace of mind is our top priority.

Download FEMA’s Avoiding Wildfire Damage checklist HERE.

Now, let’s enjoy another day in the best industry in the world.

Let’s GOOOO!

😱This week’s OMG moment

The escalating wildfires in Los Angeles are driving insurance loss estimates to as high as $40 billion, doubling earlier projections from Keefe Bruyette & Woods analysts due to the fires remaining largely uncontrolled. Major home insurers like Allstate, Chubb, AIG, and Travelers are the most exposed, while global insurers such as Japan’s Tokio Marine are also feeling the impact. Goldman Sachs projects insured losses between $10 billion and $30 billion, potentially reaching $40 billion when including uninsured losses. The devastating fires have destroyed over 12,000 buildings across more than 40,000 acres, caused at least 24 deaths, and continue to challenge firefighting efforts, significantly impacting the local economy and the insurance industry as a whole.

🙏🏼Please make sure you include everyone affected, directly or indirectly, by the wildfires in your prayers🙏🏼

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🫱🏼‍🫲🏼For Insurance Agents

📰At the end of 2024, businesses renewing workers’ compensation coverage experienced stable renewals with flat pricing, as the line remains profitable for insurers. This stability is driven by a decade-long trend of lower frequency and severity of claims, which has simplified the renewal environment despite concerns about an aging workforce and rising medical costs. Mark Moitoso of Lockton Cos. LLC highlighted that any potential cost increases have been balanced by adequate pricing and payroll growth, while medical inflation has not kept pace with overall market inflation. The National Council on Compensation Insurance reported a strong labor market with elevated wage growth, maintaining workers' compensation payroll above pre-pandemic levels. Experts like Jeff Eddinger of NCCI and Daniel Aronson of Marsh LLC noted that claim activity and healthcare inflation have stabilized, supported by predictive modeling and policy changes such as formularies and treatment guidelines. Additionally, the profitability of workers' comp has encouraged the bundling of coverage with other policies, although monoline companies may face a competitive disadvantage. Overall, the outlook for workers’ compensation remains stable, with insurers closely monitoring medical costs and inflation.

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🌟Motivation

📝Beloved friends and colleagues, as insurance professionals, we are the pillars of security and trust in our communities. Every policy we write, every claim we handle, and every client we support, we are making a profound impact on people's lives. In these challenging times, remember that your dedication and expertise are more valuable than ever. You have the power to provide peace of mind and stability to countless individuals and businesses. Embrace this responsibility with pride, knowing that your work not only protects financial futures but also builds a foundation of resilience and hope. Together, let's continue to innovate, excel, and inspire confidence in all those we serve. Your commitment to excellence is not just a job—it's a mission. Keep pushing forward, for the best is yet to come.

⚙️Technology

💻Microsoft has launched AutoGen v0.4, the latest version of its open-source agentic framework, alongside Magnetic-One, a new orchestration system designed to coordinate multiple AI agent specialists for handling complex tasks. Magnetic-One introduces four specialized agents: WebSurfer for web navigation, FileSurfer for local file management, and Coder and ComputerTerminal for coding. The v0.4 update features an event-driven messaging system that enables asynchronous communication between agents, facilitating more flexible and customizable workflows. Additionally, the release includes AutoGen Studio for low-code development, AutoGen Bench for performance testing, and enhanced monitoring tools, while maintaining compatibility with various language models and defaulting to GPT-4o integration. This advancement is significant as it paves the way for multi-agent systems capable of tackling intricate applications, signaling a transformative shift in human workflows with the advent of personal agentic teams.

🌎Around the World

🍁In 2024, Canada experienced record-breaking insured catastrophe losses totaling C$8.5 billion ($5.89 billion), nearly tripling the previous year and vastly exceeding the decade-long average of C$701 million. This surge was driven by nine major events, including historic floods in Toronto and Montreal, severe wildfires and hailstorms in Alberta, and a devastating C$3 billion storm in Calgary. These events generated over 250,000 claims, 50% more than the annual average, and surpassed the previous record set by the 2016 Fort McMurray wildfires. The Insurance Bureau of Canada (IBC) highlighted the persistent wildfire risks and increasing weather-related losses, urging proactive government measures in infrastructure, land-use planning, and building codes to mitigate future impacts. Experts warn that the heightened frequency and severity of such disasters will continue to pressure insurance costs, emphasizing the need for strategic risk management and resilience in the insurance industry.

😁Fun Fact

😂Here’s a “cool” and “FUN” Fact about me: My big head made it to the Demotech Difference magazine cover. So awesome! If you haven’t read the Fall 2024 the Demotech Difference magazine, you can check it out HERE.

📰Non-Insurance Stuff

🤖Arizona has approved a groundbreaking and controversial charter school program that replaces human teachers with artificial intelligence to deliver core academic instruction to students in grades 4-8 during a two-hour online school day. Utilizing platforms like IXL and Khan Academy, the AI provides personalized lessons that adapt in real-time to each student's performance, enhancing learning efficiency. The remaining part of the day is dedicated to life skills workshops led by human mentors, focusing on areas such as financial literacy and entrepreneurship. A pilot program reported that students learned twice as much in half the time, allowing more emphasis on essential life skills. This initiative is significant as it represents an early adoption of AI in education, demonstrating its potential to hyper-personalize learning at scale and likely prompting important discussions about the future role of technology in the education system based on its outcomes.

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😂Insurance Meme of the Week

Do you have a funny insurance meme you would like to share? Send it over to us and we will gladly share it in our next newsletter. You will get the credit, of course 😉.

From the bottom of my heart, THANK YOU for being part of our Fun Family.

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I appreciate you,