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Your Friday Five

Every Friday we distill 200+ insurance, legal, and market-risk articles into three signals your board may need for its Monday briefing.

Three developments caught our attention this week:

• How an anonymous Instagram account with 65,000 followers forced salary transparency across the insurance industry - and why carriers now court its creator
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• Travelers CEO Alan Schnitzer reveals the five market forces causing carrier exodus (climate change ranks fourth)
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• Wednesday's nuclear verdict analysis: Why plaintiff attorneys' neuroscience playbook generated $14.5 billion in jury awards

When 65,000 Followers Drive Insurance Market Change

Summary

An anonymous Instagram meme account has become the insurance industry's most powerful transparency engine.

"The Hard Market" evolved from joking about underwriter life to forcing real market change. The creator tells Global Reinsurance they now field direct messages from senior executives wanting to showcase diversity initiatives and cultural improvements - a complete reversal from when the industry tried to ignore them. The account's "four stages" Daniel Craig meme for London underwriters and "The 7 brokers you meet in hell" for the US market capture unspoken truths that resonate across the industry.

The pivot point came when the creator shifted strategy. "I flipped it, so instead of only saying 'look at this terribly unfair thing that keeps happening,' I started posting about events that got things right," they explain. Suddenly, senior executives went from avoiding The Hard Market to actively seeking coverage of their firms' initiatives.

The account's crowdsourced salary database represents the industry's most radical transparency experiment. Contributors share compensation data anonymously, filterable by gender, race, location, role, and years of experience - intelligence that previously lived only in hushed conference conversations.

​(source: globalreinsurance) (source: the hard market)​

So what?

Our Industry’s talent crisis is now visible to everyone.

The Hard Market's followers routinely screenshot salary data and march into review meetings demanding raises. "People have told me they've taken that data straight to their bosses and used it to negotiate raises. That kind of transparency has power," the creator notes. Multiple carriers that engage with the platform report improved recruitment metrics and cultural scores.

Those that don't? They're watching talent flow to competitors who embrace transparency while their Glassdoor ratings plummet.

The ripple effects extend beyond compensation. Carriers are being forced to address work-from-home policies, diversity initiatives, and cultural issues in real-time as employees share experiences instantly across 65,000 industry professionals. One major carrier's recent London market exodus started with anonymous posts about culture - six months before the official announcement, giving alert risk managers advance warning of potential service disruptions.

The strategic play: During renewal negotiations, ask carriers about their employee engagement scores, turnover rates, and how they're responding to transparency pressure. Request specific metrics on underwriter tenure in your industry segment.
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Carriers hemorrhaging talent can't deliver consistent service, regardless of their financial ratings. The data exists - The Hard Market proved that - and carriers engaging with transparency will share it.

Five Forces Are Breaking Insurance Markets (Beyond Climate Change)

Summary

Travelers CEO Alan Schnitzer just published the insurance equivalent of a distress signal about market failures.

In a LinkedIn manifesto following the LA wildfires, Schnitzer bypassed the usual climate change narrative to identify the real market breakers: litigation abuse driving nuclear verdicts, regulatory policies disconnecting pricing from risk, aging infrastructure multiplying loss severity, population migration into higher-risk areas, and economic inflation outpacing premium adjustments.

His most striking admission?

State Farm's Florida exit after decades of profitable operation had nothing to do with hurricanes and everything to do with regulatory constraints that made sustainable underwriting impossible.

"When an insurance marketplace fails to function, families and businesses bear the consequences. Costs rise, coverage shrinks and economic opportunity suffers," Schnitzer warns. He points to Florida where 71,000 property lawsuits were filed annually - despite the state having fewer policies than California - as evidence of how litigation abuse compounds regulatory failures.

FAIR plans designed as backstops have ballooned into primary markets. California's grew 40% in two years while private carriers fled. These programs now carry exposures they were never designed to handle, with pricing "neither actuarially sound nor reflective of the current risk environment." When catastrophes strike, as with January's wildfires, these undercapitalized pools leave taxpayers and remaining carriers to socialize massive losses.

​(source: Alan Schnitzer) (source: Travelers)​

The LION Lens

What happened - Twenty-four carriers abandoned Florida homeowners markets in 2023-2024, followed by State Farm's complete withdrawal from California new business, creating the largest insurance capacity crisis since Hurricane Andrew.

Why it matters - The pattern spreads predictably: regulatory rate suppression leads to carrier exodus, FAIR plan explosion, catastrophic event, then emergency legislative sessions that arrive too late to prevent market collapse.

Practical implications - Financial institutions with multi-state operations must now manage insurance availability as actively as they manage credit risk, tracking regulatory environments, carrier commitments, and early warning signals of market deterioration.

So what?

The insurance crisis follows a predictable playbook you can track and anticipate.

Florida's 2022 collapse preceded California's 2024 exodus by exactly 18 months. Both states capped rate increases while litigation costs exploded - Florida averaging those 71,000 lawsuits annually on just 5.5 million policies. The math stopped working: carriers faced $1.50 in losses and expenses for every premium dollar collected. California's Prop 103 created similar dynamics, requiring lengthy approval processes for rate adjustments while inflation and catastrophe frequency accelerated in real-time.

The next dominoes?

Watch states combining high catastrophe exposure with pending rate regulation. Louisiana faces coastal exposure plus a legislature considering rate caps. Colorado combines wildfire risk with growing regulatory activism. Texas maintains relatively free markets but faces pressure as displaced carriers seek profitable deployment for abandoned capital - potentially triggering a capacity bubble followed by rapid withdrawal if losses spike.

Smart institutions are creating dual-track strategies: maintaining traditional coverage in stable states while building alternative risk financing for jurisdictions heading toward market failure. They're also engaging regulators before crisis moments, providing data on actual risk costs versus political rate targets.

The LION POV

Here's how we're advising clients:

• Create heat maps overlaying your operational footprint with our proprietary regulatory risk index - states combining rate suppression, high catastrophe exposure, and litigation-friendly venues face 12-24 month coverage countdowns before capacity crises emerge
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• Build relationships with excess and surplus carriers now, before they become your only option in failing markets - E&S carriers can price to risk without regulatory approval but charge 2-3x admitted rates and exclude many standard coverages
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• Document risk management investments obsessively, including employee training, facility upgrades, and claims prevention protocols - when traditional markets fail, E&S carriers price primarily on demonstrated safety culture rather than industry class codes
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• Consider parametric coverage for catastrophe-exposed operations in troubled states - these products bypass traditional claims processes and regulatory constraints but require sophisticated treasury management to handle basis risk

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Geographic arbitrage in insurance has become as important as geographic diversification in operations.

In Case You Missed It: Wednesday's Nuclear Verdict Intelligence

Summary

If you missed Wednesday's deep-dive, we uncovered how plaintiff attorneys are systematically using "reptile theory" to trigger primal fear responses in jurors; driving a 235% increase in nuclear verdicts over five years.

Last year's 89 nuclear verdicts generated $14.5 billion in awards, with half concentrated in just four states: California, Florida, New York, and Texas. The median award climbed from $21 million in 2013 to over $51 million today. These aren't random outlier events. They're the predictable output of a systematic playbook that treats courtrooms as laboratories for behavioral psychology.

The four-step process is devastatingly effective: reframe individual incidents as community-wide threats ("this company endangers every family in your neighborhood"), make jurors feel personally at risk (“this could’ve been you”), position massive awards as the only deterrent ("only $100 million will make them change"), then anchor expectations with astronomical initial demands (requesting $400 million to make $78 million seem reasonable).

So what?

The nuclear verdict era is here. And geography matters more than safety records.

Werner Enterprises learned this expensive lesson in a Texas courtroom during 2022.

Their risk management team ran standard exposure models, coverage was priced according to historical patterns, everyone anticipated normal settlement ranges. The $91 million verdict that followed exposed how traditional underwriting never contemplated modern jury manipulation.

National carriers need nuclear verdict insurance because they'll always be vulnerable. They're permanently "them" in the us-versus-them equation that plaintiff attorneys exploit. But regional insurers and mutuals? They don't need to play defense in a game they've already won. They just need to start leveraging the advantage they've always had.

In Wednesday's edition, we revealed:

• Why defense attorneys trained in traditional legal argumentation find themselves "outgunned by emotional warfare"
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• How litigation funders are bankrolling cases specifically in nuclear verdict jurisdictions
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• Why your adjusters living in town and coaching little league provides better verdict prevention than million-dollar defense strategies
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• The specific countermeasures proving effective: evidence preservation protocols, narrative-trained defense counsel, and systematic community engagement

​>>>Read the full analysis​

The Bottom Line

Between social transparency reshaping carrier culture, regulatory failures creating coverage deserts, and jury psychology driving verdict inflation, the insurance market's traditional risk models have become obsolete. Financial institutions that recognize these new dynamics will maintain coverage and pricing advantages while others scramble for capacity.

That's why we created the D&O Contract Vigilance Blueprint. It's a 5-day email course to help you:

• Secure better D&O insurance: Learn how to avoid common policy mistakes
• Protect your personal assets: Understand your potential liability

​>>>Get the D&O Contract Vigilance Blueprint​

Don't wait until a claim hits to find out your institution is under-protected.

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Stay Covered,

Natasha & Mark

Co-Founders and Managing Partners

LION Specialty
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