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Cindy (00:00):

Things are things and things can be replaced and rebuilt, people cannot. So we wanna make sure our clients are safe, having our claims team, having conversations with clients who are breaking down on the phone just sobbing because they've lost everything.

Julie (00:21):

All right. Well, welcome to the Risk rundown. Thank you so much for joining us. Today we have the OGs back in town we have Cindy Zobian and Tyler Banks. Thank you for joining.

Tyler (00:31):

Hi Julie.

Cindy (00:32):

Hey, Jules.

Julie (00:33):

We are gonna talk today a little bit about what to expect with the unexpected, right? How to think about risk, um, in the coming year.

But before we do that, we kind of have to look back at the previous year. So,

Cindy (00:46):

hey, you couldn't have a better group for expect the unexpected 'cHey, you couldn't have a better group for expect the unexpected,ause you never know what Tyler and I might say. So it's kind of fitting, if you think about it.

Julie (00:57):

It's very fitting actually.

Tyler (00:58):

No filter. No filter here. Julie, I'll tell you, 2025 was something else.

I can only imagine what 2026 is gonna look like.

Julie (01:05):

Alright, so first and foremost, what was the one lesson that we learned from last year?

Cindy (01:13):

Never think that you're gonna get off the year to a quiet start. 'cause it doesn't happen.

Tyler (01:19):

You know, Julie, I'm thinking about, you know, this time last year out here in California, we're just coming off of the worst wildfire that they've had in Los Angeles history.

So I think the one lesson that we learned is that you don't really need to be near the fire to fill the heat. So what happened here in California wasn't, you

Cindy (01:36):

don't like that

Tyler (01:36):

It wasn't localized. You

Cindy (01:37):

go, Tyler,

Tyler (01:39):

You like that wasn't localized in California. You know what happens in California doesn't stay in California.

Just like what happens in Vegas doesn't stay in Vegas. You know what happened in California was felt throughout the rest of the country, and I think that was a good lesson to learn from last year.

Cindy (01:55):

Absolutely. I, I think every market, regardless of where you sat, felt the repercussions. And not only from an insurance standpoint, but just from a human standpoint.

You know, everybody was aware of what was happening in California because it was devastating to see a community just completely go up and smoke and, and see the, the human effect that it had on individuals. So, you know, I think just from that emotional standpoint, people really felt it. And then from our standpoint, on a professional side, we really felt it on, on the insurance side of the house.

Julie (02:34):

How did you see it? How did, how did you perceive it on the insurance side of the house?

Cindy (02:38):

I think you really saw the difference, that human relationship, that one-on-one conversation can make with someone who is dealing with. In the, in the thick of, of the aftermath of the fire or even during the fires, you know, we did a lot of proactive, you know, reach out to our clients.

We were actively monitoring the fires with our risk management team and, you know, we had a team of people, I swear, I don't think they slept. For five days because they were constantly monitoring, you know, our software to determine where the fire is, the direction it was going. Okay. Because things are things and things can be replaced and rebuilt, people cannot.

So we wanna make sure our clients are safe. Then dealing with the aftermath and you know, having our claims team, having conversations with clients who are breaking down on the phone, just. Sobbing because they've lost everything. They've lost all those mementos that you can't get back. So you know, seeing that side of it as well, it makes a huge difference. And I think our clients felt it because we were so intimately involved in their journeys.

Julie (03:52):

You know, and honestly, I, I mean, we, we, us three have been in this business for decades each, right? And it's

Cindy (03:58):

Scary

Julie (03:59):

and not to age any of us, but we have. Um, but I think this, this, that's the time where we, we really take pride in our, in our profession.

Insurance isn't always the, the most attractive profession that people think of when they think of great professions, but it really truly is because we really, truly are actually helping our clients when they need us the most. All right. I'm gonna ask, what are some of the biggest myths that we've seen that have been debunked this past year?

Tyler (04:29):

Probably the, the biggest misconception that I've seen over the past year is that a client will often say, I haven't had a claim. I'm safe from disruption. Right? So earlier when I, when I said that, you know, you don't have to be, you know, next to the fire to feel the heat, I think that we're starting to see, you know, the industry isn't localized to just one specific place, whether it's hurricanes, whether it's, you know, convective storms, but you know, the entire insurance industry.

Feels the pain, whether you are someone in Des Moines, Iowa and you're wondering, why am I, why is my rate going up? Um, that's probably one of the big biggest misconceptions I think people have is that I haven't had a claim, I should not have been dropped or I, my insurance premium should not be increased as a result.

Julie (05:21):

Cindy, do you have any myths

Cindy (05:23):

When you look at insurance as a whole? I think that there's myths out there that, you know, insurance is all equal. There is definitely so many different levels of insurance that you can purchase, and one carrier is not the same. One. Homeowner's policy does not equal another, and you really see that when you have these catastrophic events and you see people in having a good experience versus a bad experience.

And I think that's brought some validation to what it is that we do every day and the importance of being with the right. [00:06:00] Carrier and the right broker because you see the difference when that intangible product that you pay a lot of money for, which is literally just a bunch of words on a piece of paper, but they're important words that matter.

And when you have something like the fires or you have a deep freeze or you have, you know, an ice storm in Texas or whatever it might be, where everybody's affected, you see the difference. That intangible product and the promise that it's bringing to you.

Julie (06:34):

 Right. And I mean, to your point, there are words on a paper, but they're a promise.

Right? So we kind of talked about the other events that are happening across the country and um, things that. You know, are affecting capacity and rate and the insurance company's decisions. Um, what do you think are some early indicators that, that we could see that might shift kinda what insurance the insurance industry might look like later in the year?

Tyler (07:04):

So I started this conversation talking about wildfires, but you also look at what's happening with freezing. Frozen pipes. I mean, water is still the main driver of losses across the country. Um, and especially for the insurance carriers. So, you know, when we have a freeze in Texas or in the Northeast, we don't expect that to impact us out here in California.

But what's interesting is I, I think that risk mitigation. Is gonna be at the forefront for this year. So we had a client in Newport Beach that is, was required by the insurance carrier to put in a low temperature sensor. The client's like, I don't know if it gets below 60 degrees at my house. They're still required to put a low temperature sensor in their home so that if you know it's gonna be below freezing, that you gotta heat up the house.

So those type of risk mitigation efforts are going to be mandated across the board, and I think that's good investment for our clients to make because we want to prevent a loss and understanding what we need to do to create a good risk profile for our clients, I think is gonna be at the forefront this year.

Cindy (08:13):

 I don't disagree with you, and I think you can even take it a step further. Risk management, I think, is huge with existing homes, and it's also really important when it comes to new builds. You know when when people are building a home, they don't think about, are my pipes on an outside wall? That's just not the number one priority that they're, that's really on the top of their mind.

They're thinking about bathroom fixtures and tidal, and my importing aunt from Italy or what I'm doing, they're not thinking about the placement of the pipes. But this winter has shown we've had record low temperatures, not only for a day, but for weeks and. You are having pipes [00:09:00] freeze in some of the most well-built homes out there because the temperatures are just so low and, and, and outside wall.

Even with the best insulation, you can still have that happen. So it's, it's talking through these things and involving people in at the right time as people are building new homes, doing renovations, and anything else that can affect. They're home in the safety of it. So that's a huge focus of it for us, you know, in 2026.

Julie (09:31):

Well, and I mean to both of you, rose's points tho the, all those losses add up to a catastrophic loss. Mm-hmm. It doesn't have to be, be just one event of a wildfire or a hurricane. The, those types of events with. Burst pipes or water damage, or maybe the hail in the Midwest, those are considered catastrophic events in the insurance world.

Um, and a lot of people don't necessarily think about that because to your all's point, it's not happening in, in their zip code. Right?

Cindy (10:00):

Right.

Julie (10:01):

So switching gears for a second. For our high net worth clients. The, there's all this external stuff going on, but I, we act actually, I see, and I know that you all have too, that our high net worth clients are actually, to your point, taking an active role in their insurance program and, and their exposures are shifting because they're taking higher deductibles.

They're trying to be more creative. We are beco becoming more creative with their, uh, their insurance program. So have you all seen any other kind of ways that the high net worth, you know, segment has been, uh, shifting their exposures or becoming a little bit more creative? 

Cindy (10:37):

I think what you're seeing is you're seeing a shift.

I think one of the, the, you know, the attractive things years ago with high net worth insurance was, is that it included everything. All the bells and whistles were included. You got all these additional add-ons, and now people are saying, you know what, strip down the stuff that I don't really need. Yeah. I don't need to pay for those bells and whistles anymore because the [00:11:00] cost of the basics and the, the.

What I actually need, the coverage that's important to me. That cost has skyrocketed so much and maybe I can do away with some of the things that don't matter as much and I'll, I'll self-insure for those.

Tyler (11:13):

And, and I'll add, you know, the word that comes to my mind is resiliency. I am absolutely encouraged with our business and our industry with the resiliency that they're showing in this marketplace.

I think there's stability in the marketplace if the risk is well managed and presented properly. I think there's options for our clients. So it's not a hard market across the board. It's a differentiated market and I think we're starting to see strong risks are getting good results, but unmanaged risks are getting very restricted options.

So, you know, just, just taking into consideration when, when clients are buying homes. Right now we are advocating do a risk profile first. See what the insurance market will bear before you go on and purchase a home. That could [00:12:00] be on, you know, on a beach that's been hit by hurricanes in the past. If it's in the brush and there's wildfire exposed.

Um, these are things that our clients are now taking into consideration when they're looking at, at an investment like a home.

Julie (12:12):

All right, let's think positive for a second and let's think about what's gonna be happening in 2026.

Tyler (12:19):

I think, you know, just generally speaking, property rates are down. Especially on the commercial side.

And so I do think that that has been stabilized. Um, and I'm starting to see more carriers enter what were originally really restricted markets. Um, you know, I'm surprised, you know, a year after the wildfires, whereas having carriers now starting right in some of these places that had mandatory, um, moratoriums on.

So I do think that the, the property environment is, is loosening up a bit and that only means good things for our clients.

Cindy (12:53):

I think you're seeing there's, there's more capacity that if it hasn't entered the market yet, it's kind of waiting off to the side just to kind of give it a little bit more time.

But it's waiting there, ready to come into the market, which is a positive thing. That has a, a good effect for our clients because it gives us more capacity for placements, which sometimes we're limited in certain zip codes or even certain buildings, um, to find capacity. But two, it also can have a slight effect on rate.

You're not gonna see a huge impact on rate because, you know, there's still a lot of, you know, unknowns out there and people are going to be very cautious in it. But any new capacity that can come into the market is welcomed. 

Julie (13:42):

Those are both like really good. Comments, and not to be Debbie Downer, but the one, and I just thought about this, but the one line of business that I've seen a lot of increase is excess liability.

The rates are, are increasing dramatically on the liability portion. That, and, and that's across the board. It doesn't really really matter with which carrier. 

Cindy (14:00):

Mm-hmm.

Julie (14:01):

Any thoughts on that of, I mean, I have my thoughts, but I'd love to hear your all's thoughts about why besides am never taking a rate increase for the last 15 years.

Cindy (14:12):

I, I, I think there's a lot of factors that are influencing that. I think one, social media, I think that plays a huge impact on what's happening from a liability standpoint. You know, everything is exposed today. Nothing is, you can't consider anything to be private. Because everything is going to be caught on video, posted, whatever.

I think too, if you just go back and historically look through the, the judgments within the courts, yeah. Judgments are outrageous and in these carriers are forced to pay them in addition and paying defense costs. So everything is a rising cost. Therefore it's having an impact on what the judgments look like, which therefore is a cost back to what the carriers are paying out.

It, it, it's no different than anything else, you know, supply and demand, 

Julie (15:06):

which by the way, I'm very, I feel very, very lucky that there wasn't the social media and the videotaping when I was, that when I was younger. So,

Tyler (15:17):

Julie, I, I can only imagine

Julie (15:19):

all my stupidity would've been known for everyone to see. To kind of wrap this up, let's kind of talk about what we learned from last year, right?

And then what we're hoping for this year. What we learned from last year, honestly, is that the insurance landscape is ever changing. It's always changing and there's, there's really not much that we can predict when we think that it's going left, it's going right, and when we think it's going up, it's going down.

So what do you think in 2026 that we should learn with the industry, but then also us as. Agents and, um, advocates for our clients. 

Cindy (16:00):

There's so much talk in the industry and and on many different levels outside of just insurance about AI and what AI can do for you. The one thing everybody needs to fully understand, AI cannot replace.

AI cannot replace that human empathy, that ability to be able to be on the phone with your clients and being able to talk them through things, so you may be able to go on and quote something and AI can spit back information to you and all of this. It's never going to replace when you have water pouring through six floors of your home and you need to talk to someone to get guidance onto what to do and who to call and how to fix it, and all those things.

It can't do that. And I think that people need to remember that there is a benefit to that human interaction that cannot be replaced by anything else. The more you can talk to your clients and the more relationship you can build with them and be that asset for them, the better off things are going to be for you.

Tyler (17:00):

Yeah. Julie, I've, I've got a couple of ideas. I think number one, lean into your annual risk reviews, not just renewal quotes. The annual risk review at a minimum is important to kind of understand what insurance policies you have in place. Um, second, I would say treat mitigation spending as return on an investment.

When you invest in protecting your home, that's only gonna come back as a better risk profile and more options for, for you know, your insurance carriers. And lastly, build relationships. Relationships with your carriers, relationships with your broker, those are very important. I do think there's something to just say when you are, you know, with an insurance carrier for an extended amount of time.

I think that that can benefit you in the long run, um, as long as you, again, are taking those other steps necessary to make sure you're a good risk profile.

Julie (17:54):

I think 2026 is gonna be a good year, y'all.

Cindy (17:57):

It'll be fun. And as long as we're all together, it's gonna be a great time.

Julie (18:00):

Exactly, exactly. Hone. As long as the OGs are the OGs, then that's, that's all.

It'll be fun no matter what. But I wanna thank you both for joining. Um, the, the risk rundown this, it's always. Good to have these conversations, but it's even better to have it on an anniversary. So this was our anniversary of our, our one year starting the podcast. So I wanna thank you both for being by my side and as always, stay safe and stay protected.

00:00 — Opening perspective: The human side of risk
Cindy opens the episode by emphasizing that while homes and belongings can be rebuilt, people cannot. She reflects on the emotional impact of disasters and the importance of ensuring clients’ safety first when catastrophic events occur.

00:21 — Welcome to The Risk Rundown
Julie welcomes listeners to the episode and introduces returning guests Cindy Zian and Tyler Banks. She sets up the discussion around how to expect the unexpected and how risk may evolve in the coming year.

01:05 — Lessons from the past year
Julie asks the group to reflect on the biggest lesson learned from the previous year. Cindy notes that the year rarely starts quietly, while Tyler highlights how major events like wildfires can impact markets nationwide.

01:19 — Wildfires and nationwide market impact
Tyler explains how catastrophic events such as the Los Angeles wildfires affected the entire insurance market, reinforcing the idea that risk and pricing are not confined to one geographic region.

01:55 — Emotional and human impact of catastrophic losses
Cindy describes how communities and clients were deeply affected by wildfire losses and explains how proactive outreach and monitoring helped support clients during the crisis.

02:34 — The role of relationships during disasters
Cindy shares how close communication with clients during emergencies—from monitoring fires to assisting with claims—demonstrates the value of personal relationships in insurance.

03:52 — Pride in the profession
Julie reflects on how moments like catastrophic losses highlight the true purpose of insurance: helping clients when they need it most.

04:29 — Myth: “I haven’t had a claim, so I’m protected”
Tyler discusses a common misconception among clients that a clean claims history should prevent disruptions such as premium increases or policy changes.

05:23 — Myth: All insurance policies are the same
Cindy explains that not all policies or carriers are equal. Differences in coverage and service become clear during catastrophic events, reinforcing the importance of choosing the right broker and carrier.

06:34 — Market forces shaping insurance decisions
Julie transitions the discussion to broader industry factors such as catastrophic events across the country and how they affect insurance capacity and pricing.

07:04 — Risk mitigation and prevention trends
Tyler discusses how insurers are increasingly requiring mitigation tools such as temperature sensors to prevent losses, highlighting a growing industry focus on proactive risk management.

08:13 — Risk considerations in new home construction
Cindy explains that design choices—such as pipe placement—can create future risks, particularly during extreme weather events like prolonged freezes.

09:31 — When everyday losses become catastrophic
Julie explains that widespread events such as frozen pipes, water damage, or hail can collectively create catastrophic losses across the industry.

10:01 — How high-net-worth clients are adapting
Julie notes that many high-net-worth clients are taking a more active role in managing their risk by adjusting deductibles and restructuring coverage.

10:37 — Shifting coverage priorities
Cindy discusses how some clients are removing unnecessary policy add-ons and self-insuring smaller risks to manage rising insurance costs.

11:13 — Resiliency and risk profiles
Tyler highlights how well-managed risks are still finding strong options in the insurance marketplace, while poorly managed risks face limited choices.

12:12 — Positive outlook for the property market
Tyler explains that property rates are beginning to stabilize and that more carriers are slowly re-entering previously restricted markets.

12:53 — New capacity entering the market
Cindy notes that additional insurance capacity is waiting on the sidelines and may gradually return to the market, which could benefit clients.

13:42 — Rising excess liability costs
Julie raises concerns about dramatic increases in excess liability premiums across the industry.

14:12 — Why liability risks are increasing
Cindy attributes higher liability costs to factors such as social media exposure, rising legal judgments, and increasing defense costs for insurers.

15:19 — Reflecting on an unpredictable industry
Julie summarizes that the insurance landscape is constantly changing and rarely follows predictable patterns.

16:00 — AI vs. human relationships in insurance
Cindy explains that while AI can assist with data and quoting, it cannot replace the empathy and guidance clients need during a crisis.

17:00 — Advice for clients and advisors moving forward
Tyler encourages annual risk reviews, investing in mitigation, and building strong relationships with carriers and brokers.

17:54 — Looking ahead to 2026
The group ends on a positive note, expressing optimism about the coming year and celebrating the one-year anniversary of The Risk Rundown podcast.