Private Client Risk & Resilience
Private Client Risk & Resilience
Flood Risk and Insurance Solutions with Joe Rossi of Joe Flood Insurance
In this enlightening episode of the "Private Client Risk & Resilience" podcast, host Kurt Thoennessen, CEO of RiskRevu, is joined by Joe Rossi, the CEO of Joe Flood Insurance Brokerage. They delve into the intricate world of flood insurance, highlighting the unique challenges and solutions facing owners of high value properties.
Key Highlights:
- Joe Flood's Background: Discover Joe's journey from community activism to leading a flood-only insurance brokerage, advocating for more affordable insurance rates.
- Unveiling Asset Risks: Kurt explores the significant risks faced by successful people through their assets and lifestyle, emphasizing the complexity of protecting large assets.
- Innovative Insurance Solutions: Joe Flood shares insights on creating custom insurance solutions for high-value properties, addressing the gap in traditional flood insurance offerings.
- Market Evolution: Engage in a discussion about the evolving landscape of flood insurance, driven by increasing catastrophic events and new market entrants.
- Regulatory Insights: Gain clarity on the regulation in surplus lines and MGA operations, debunking common misconceptions about non-admitted markets.
- Behind-the-Scenes Processes: Uncover the detailed process of risk modeling and underwriting used by Joe Flood Insurance, demonstrating their commitment to tailored insurance solutions.
- Partnership and Growth Opportunities: Learn how to engage with Joe Flood Insurance for both insurance quotes and professional partnerships, fostering a collaborative environment in the insurance industry.
Whether you're an insurance agent seeking to refine your skills or someone looking to protect substantial wealth, this episode is packed with valuable insights and innovative strategies for navigating the complexities of flood risk insurance.
Resources:
https://www.joefloodinsurance.com/
There are more wealthy people today than ever before in the history of the world. The risks they are exposed to through the assets they acquire and their unique lifestyles are significant. The bigger the asset, the bigger the potential loss. The bigger the potential loss, the more complicated the mechanisms for protecting those assets becomes. This show seeks to uncover the risks that successful people face. So we can provide some guidance towards minimizing, mitigating and transferring them. From Coverage contracts and carriers to client experience, technology and claims, we will cover it all. Whether you're an agent looking to hone your skills or someone with significant wealth to protect, I hope this show becomes a valuable resource you can come to rely on to help you protect yourself, your family, and your clients. Welcome to the private client risk and resilience podcast. My name is Kurt Thoennessen. And I am the host of this amazing show. In addition to being the host of this show, I am also the CEO of risk review, which helps agents gather information by using a library of digital smart forms. So welcome to everybody who is coming back to the show and has been here before. And also welcome to any new listeners here. We're really glad to have you. So I'm really excited today and today. It's a gorgeous day, December What is it December 21. Here is late in the month, and we're gonna be talking to Joe Rossi of Joe flood and and flood insurance agency up in Massachusetts and Joe and I met through a prma progress Management Association connection. Joe did a webinar all about flood for the prma. And I listened in it was amazing said have have to get this information out to the PCR community. So here we are today. Thanks for being here, Joe. Thanks for having me. My pleasure. And so I thought just like you know we do with other guests. We'll start off with just kind of like a brief introduction of yourself. Tell us a little bit about yourself and your agency.
Joe Flood:Sure. So my name is Joe Rossi, also known as you mentioned, also known as Joe flood. And I'm president and CEO of Joe flood insurance brokerage, and we are an mga and wholesale brokerage for flood only. So my background started actually in activism and community activism with changing flood maps and the Biggert waters act and kind of advocating for more affordable insurance rates. And then over time, that evolved into a warrant. You know, once once I figured out that the advocacy we were doing resulted in people getting cheaper flood insurance. That was when I wanted to take that experience and turn it into a career. And it made a lot of sense to connect that to the insurance discounts that we were able to help people get, you know, over time that evolved into a career in insurance and then in specifically in the flood insurance, and now into the MGA and wholesaler that I run today.
Kurt Thoennessen:Wow, that's awesome, man. So this is really a passion project for you.
Joe Flood:Man, it's been it's an aspirin. So
Kurt Thoennessen:I'm curious. The advocacy, the advocacy, what got you started wanting to do that?
Joe Flood:Well, you know, it's a funny story. And it's kind of come full circle. Recently, and we have time we can get into why but the when I started in the town of Marshfield in 2010, I was running for public office where I did not win in the I was going to school and graduated from Wentworth Institute with a degree in architecture. So the town of Marshfield saw a young guy who was active in politics and who wanted to be involved in town and just that, that recently, around that time, a piece of our coastal infrastructure had collapsed in so Marshfield being a coastal community. It's kind of in the name with Marshfield. So we, they appointed me to the seawall Committee, and the seawall committee was a new board they had formed and I was thrown in as not just you know, remember, I'm still actually in school at this point. And I had just been thrown into this committee, and then I was made Chair of this committee, and it was such a hot topic. We had 100 people in the room, every meeting. It was just really, really big issue in the town and then eventually, about two years later the town. The issue was sort of resolved through some funding. And the town wanted to move on from the committee, but I didn't want to move on from what I was doing. So once that committee had kind of been, you know, passed on, or or moved on from what it was, I started a nonprofit in town called the Marshfield citizens coastal coalition. And that was in early 2012 Biggert waters hadn't been passed yet. But as the year went on, and we were kind of still advocating for coastal infrastructure, somebody, one of our board members, who's actually still a board member of now, the Massachusetts Coast coalition, walked into the room, put a pile of paper down on the desk at our meeting and said, this bill will kill affordability for homeowners. And that was my introduction to the Biggert waters act. And that started my advocacy with the group I had formed where we were just a local group that had advocated for coastal infrastructure into a statewide and at times national group that was advocating for overall flood insurance affordability. So that is where the advocacy really started. That's
Kurt Thoennessen:amazing. So this is really a mission for you and has been for a long time. So you're sure as you're not that old? So you were in college? What, like 10 years ago, 1520 years ago? Yeah.
Joe Flood:20 Oh, God, I'm dating myself now. 2011 is that? No, no. 2011 is when I graduated. So this all started in 2010, when I was about 21. So, you know, this is I'm 35. Now. So this has really been something I've done for a long time, but started, you know, along, I guess a long time ago.
Kurt Thoennessen:Yeah, that's incredible. Such a great story. And, you know, I'm sure we would love to get further into the details on that. But you got so much other details to share with us on this flood, flood topic. So I know in a previous conversation we discussed, you know, you one of the reasons why you started this agency, which now I know further detail about that. But one of the reasons you started the agency was because of a frustration that you felt, and you experienced at a different agency that you were at. Can you talk to us about that frustration? Sure.
Joe Flood:So when I was at, you know, my in my previous life as kind of the, you know, running the flood insurance department for a very, very good agency, Rogers Gray, who's still a great partner of ours here at Joe flood insurance. We what I found frustrating is we would, we would get a lot of big commercial risks. And there weren't a lot of flood insurance companies, specifically flood insurance providers that were offering insurable values higher than maybe 10 or 15 million. And that was really frustrating when you had to really dig now, certainly, there were property carriers that were looking to throw in flood or there may be, you know, a handful of them out there that would look at large T IVs. But it wasn't something where you could go and have your pick of which company you'd like to submit the risk to. And then of course, there were flood quake programs. So there was there was really a I felt a gap or I had the frustration of of having these large risks and constantly getting denied. So in the other thing that frustrated me is that these companies lacked creativity, when it came to trying to insure these risks, there just wasn't a back and forth underwriters would say, Nope, it's too big or nope, too risky, or it just banks weren't ended. So when I started Joe flood insurance, and we got our own program, and we have the pen for Chubb European group, and soon to be Lloyds of London, we started to build a program that could look at insurable values of 500 million. And we could look at, you know, we could we could model certain risks and try to figure out what the what the risk profile was, and how we were going to rate that and then come up with creative deductible structures, you know, look at those high net worth homes and come up with creative ideas. I just give you a quick example. When we look at a risk portfolio, we will throw out what we call our risk based deductible, we model everything. And if the risk scoring is higher, at some locations, we offer a higher deductible if it's lower in other locations, we offer lower to document you know, these were things that in I still run into or if the BI is, you know, driving the cost, we can supplement that bi within the within the coverage. So, you know, where were we we really tried to have that interaction and we pride ourselves on on giving what I like to call smart declines, right? If we're going to decline something, we're not just going to say no, we can't do it. We're giving you the reason we'll even include the text from the underwriters that decline it, and we'll send some type of data so that you can inform your client on why it was declined. So we really liked that creativity and kind of, you know, the frustration I felt tight think has been felt by others, because we get a lot of people who come to us that say, Yeah, this is great, I'm going to share it with my client, thanks for allowing me to, you know, send this over and so on. That's
Kurt Thoennessen:awesome. So I mean, I love the fact that you are being creative. And you've brought that creativity to the flood industry. And the fact that you can do that in insurance is phenomenal. And so you, you've been in this business a long time you started the agency, because of this frustration, you couldn't get the limits you wanted, there was lack of creativity. That was years and years ago. How would you say the state of the flooded market is today? How has it changed since you started?
Joe Flood:Well, you know, the interesting thing is as difficult as the market has been, and continues to be, because can't capacity in any market right now is limited. There's more people looking to get into the space, which I actually really appreciate. And the reason is, because as there's more wholesale, and there's more, you know, mgas, and there's more people focused on flood that actually brings more opportunity. And there are certainly times when we'll compete with another wholesaler or another NGA, and so on and so forth. But what's happening now in the space is that when you need 2540 50 million and flood, especially on these commercial accounts, we Rick, we rely on our carrier competition to actually be partners with us in layering together. So our program, which can layer with just about any program out there, you know, adds that capacity to the requested limits that we're going out there to try to get so it's actually in that innovation is actually making it an exciting time to be in this space, you know, capacity, people are looking to get involved the way that we're folding markets together. It's a lot of fun. I mentioned we're bringing in Lloyds, as part of our program, I mean, we're going to be able to go from 5 million primary 10 million access on coverage to 10 million primary 15 million access. And, and that is exciting for us to see that that's out there. And then with our partner companies that we would that we bring in the on the wholesale side, I mean, we're able to go up to 2530. Up, you know, in some cases 50 million in coverage. And so, you know, the I guess I would say that while it's a tough market, the evolution of the other markets coming into the space is making it actually a really exciting time.
Kurt Thoennessen:Yeah, I totally understand that. And I think it makes a lot of sense, you have a lot more interest in flood insurance today than there was five years ago, there's been unfortunately, there's been a lot of cat catastrophe events that have led people to be more aware of the need for flood insurance. And so hence, there's new entrants into the market and a lot more awareness around the topic. So I agree with you, I think it's a very good thing. Now, you know, you're talking about, you know, the new entrants in the market, we'll talk about your mga in a minute. Because, you know, that's kind of a separate thing. You have the agency, where you work with retail brokers, as a wholesaler, and then you also have a separate NGA, we have, you actually have a flood product that you developed through Chubb European. So we want to talk about that. But, you know, for private client risk and resilience, obviously, we're dealing with high value homes, high value property, and you obviously you do both large commercial and large, personally owned property. And so, you know, you mentioned layering, what are some of the challenges that you see in the high net worth space when you're trying to provide a, you know, a large flood portfolio for property?
Joe Flood:I think the biggest challenge we see is exposure. You know, what I mean by that is, you know, the perception that I'm in an ExOne. And, you know, I, this should be an easy read, I actually had an agent tell me that they thought that the risks they sent over should be easy to find capacity for n get a quote on but you know, unfortunately, what their perception might be and what the reality is of that risk are two different things. And we model everything in house. We provide that data on request to agents that come to us for quotes, and I'll tell you that a lot of the times had ExOne property or in the Hamptons, near the beach, is actually subject to category one storm surge and it makes it extremely difficult to find that first layer where we're relying on the NFIP, but of course on a residential structure that's only 250,000 That's really not gonna that might cover your your wine cellar. And that's about it, you know, so we're, we're running into the the idea of exposure, perception versus reality, and then getting that coverage. You know, every time there's a storm, the East Coast just had a massive storm, tons of historic rainfall and surge, it doesn't take a hurricane to have these big losses. And every time that happens, it just not only reinforces the conversation around this, but it also brings attention from the catastrophe providers to say, look, you know, how did the US you know, if you're a London carrier, how did the US Fair in this most recent storm? How did we fare How did the losses come in? So? Yeah, it's it's something where it's that perception versus reality. And then when you find out that you're, you've got a finished basement that's subject to category one storm surge, you know, how are you going to put together a layer where it's so exposed and that is really the challenge that we confront on a daily basis. And we've come up like I mentioned, we do we do try to get creative with these. We, you know, we have on the wholesale side, we have a parametric option, which is not perfect in every scenario, but it's certainly an option that's different. Our program, you know, through Chubb offers, you know, unique deductible or self insured retention deductibles. You know, we actually can aggregate the NFIP. So for example, if you've got a guest house and your primary home, well, you got 500 grand and and NFIP, you can purchase and we'll use that as the deductible is for our access program. So we're, you know, we're just getting it's that's the challenge that we've run into on high net worth and large exposures.
Kurt Thoennessen:Yep, that's very interesting, and so much to unpack there. And one thing that stood out to me is that you do model each risk individually, and you have a proprietary in house modeling formula that you use, can you talk to us a little bit about that process? Yeah, it's
Joe Flood:it's, we've we've got done a lot of this. So so we have a program we use, that kind of gives us a sketch of what's going on, it doesn't tell us a ton of stuff. It just basically says, Here's your location, here's your elevation, we get all we can get elevation, you know, estimated elevations, you know, and here's the the expected potential exposure, then based on that result, we can we can kind of triage, you know, is this going to be a fit for us? Is this going to be a fit for another program? You know, are we going to have to spend a bunch of time modeling this going through, for example, tell us if there is a surge exposure or not. So that's a really helpful triage, is there a riverine exposure or not, we then bring it over to our modeling company which sends we send it off, they send it through a program that gives us surge heights at different storms, riverine return periods, meaning how often will that river potentially flood estimated base flood elevations current base flood elevations distance to the, you know, water source, so all of the stuff, we need to make our conclusions in detail about the risk and so you know, if it's really exposed, meaning that we're in in or large enough portfolio, we then need to send those off for an even further in more detailed modeling basically give us some ACLs, you know, average annual losses and probable maximum losses, which we get some of that in house, but you know, London and chug, like to look at those in more detail if it's super exposed. So that's kind of our process that we go through, which allows us to kind of move these forward a little bit quicker, because we're able to get that data without having to really use outside sources. That's
Kurt Thoennessen:fantastic. I mean, there's so much value in that little blurb of process that you described, you know, because as a broker working on these things, you know, you'd have to ask a client for an elevation certificate, you'd have to go get a zone determination, you have to go and gather all this information. And some of it you can't even get like that surge, dis detail that you mentioned. So it sounds like you have tremendous access to data. And it's at your fingertips. It's quick, and which helps with lowering costs and the time that it takes to place a risk. Is that an accurate assessment?
Joe Flood:Yeah, and it helps us get that backing and capacity that we need. So, you know, if it's a good risk, we were able to get more coverage. And if it's not a good risk, we're limited. Excellent.
Kurt Thoennessen:So let's switch gears and I just want to touch briefly, you have the wholesale agency, you deal with retail brokers like myself, and then you also have an mga where you have developed a product with you know, other capacity providers, can you tell It's about your your MGA.
Joe Flood:Yeah, so So our mga our program is called upstream, which is actually going to soon move to a new branding that we're going to reveal because of its evolution into this commercial space. And, you know, this program was started by Chubb European, you know, with us, so a partnership, and they're the provider. In in in February, we're actually bringing on a full Lloyds of London capacity as well. So what that twofold capacity allows us to do is it allows us to write you know, right now we're limited, we can either write the primary or the access. And in the access layer, we can only write the one of the access layers. So for example, I just had a condo where they needed, you know, 20 million and coverage, but I can only write 10 of the 20, because I can only do 10 million within, at most within my program on the London paper, now we can actually write another five to 10 million. So we're going to soon be able to right up to, you know, 1520 on access five to 10 on primary E and actually do both in some cases. And that's going to be exciting, because we get a lot of requests, saying, hey, the property carrier dropped the coverage, and we now need to find 50 million and flood Well, you know, right now we kind of we got to get like five different carriers involved to get that capacity, we'll soon be able to write a lot of that and then go out and get that extra capacity to add on without asking our carriers, you know, hey, can you give me 10? When knowing that they might only be able to give five? Or can you give me five, knowing they might be limited to two and a half. So that's an it's an exciting time for growth right now within our program. Because of it extra capacity. Keep in mind too, that we're growing that capacity at a time when can't provide coverage or, you know, can't capacity in general, is kind of coming back. So we were able to do that in a unique time. So that's the program we've built. It's a lot of fun managing that program, we have a team of underwriters who underwrite that program. And then my job is to kind of manage what's going into the MGA. And then what other layers do we need on the wholesale side, to put a whole package together? That's
Kurt Thoennessen:incredible. And I like that you use the term fun, and that you're having fun, it's good. It's good to know that. And, you know, real quick, and then as we wrap up this conversation, you know, running an MGA is challenging, right. And one of the things I think we've discussed is that there's a common misconception that there's, you know, because it's an MGA, it's excess surplus, there's not any regulation. Can you clarify that?
Joe Flood:That's a great question, because we get asked that all the time about from from people that might not be used to or operating in the surplus lines market? You know, I get asked a lot, you know, is there admitted options and flawed and certainly there are out there. I mean, I'm of the opinion that at least in the flood space, that surplus lines is really the way that the industry is going to grow and evolve over time, which is fine. And what that basically means is that while our rates in forms are not regulated by the state, we as a company, and the way that we handle policies, filing them to make sure that the state knows that we looked at prior admitted options First, if that's applicable, to make sure that we've given the right disclosures to the insured all the way to filing taxes and fees, all of that is highly regulated. So it's something where the rates and forms aren't, but the rest of the business is. And so when I hear non admitted, and people say, well, it's not regulated, they can do whatever they want. It's probably one of the biggest misnomers, you know, it gives us the flexibility to actually offer additional coverages and offer coverages and offer that flexibility of deductibles and stuff like that. And it gives us the flexibility where we need to, you know, there are certainly times we do need to increase rates at a rate that admitted markets might not be able to, but it also gives us the ability to help our clients better. But we are regulated, just not in the same ways admitted companies are. Awesome.
Kurt Thoennessen:That's super helpful. I really appreciate that. And I really appreciate your time today. So just one last question. I mean, obviously, I know how to get in touch with you. But how can our listeners get in touch with you or your agency, if they'd like to? you inquire or get a flood vote.
Joe Flood:or so to get appointed, just email us at flood FL O D flood at Joe flood insurance.com. That inbox routes everything to everybody in the company. And that is definitely a way to get started with us here. And when you send in a quote we'd look at it generally from unless you are also a wholesaler who we do have many of those appointed with us as well for our mga side of the house. But when you send a quote in, we look at it from both our mga side in our wholesale side, so that we're always trying to provide the best option, whether it's us or somebody else from from the wholesale side. So we greatly appreciate our partners, and come and grow with us. We're excited for what the next couple of years brings.
Kurt Thoennessen:Awesome. Thank you so much, Joe, and I'll put the email address in the show notes as well. So this has been an excellent conversation. Thanks for your time today.
Joe Flood:Yeah, thanks, Kurt for having me. My
Kurt Thoennessen:pleasure. And thank you to everyone who listened in to this episode today. I hope you got the information that you wanted and that you needed, and I look forward to seeing you at the next episode. Have a wonderful day, everybody. Happy holidays. Take care.