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00:00:00Good afternoon, everyone. We will get started with today's webinar in a moment. I'm going to
00:00:06give our audience a moment to get into the actual webinar. Mike, Joel, Malgoja, how are we doing
00:00:14today? Great. How are you, Allison? Doing well. Excited to listen to this. I can tell everyone
00:00:22from our prep session, there's a lot of content today and I'm very excited to go through all of
00:00:27it. So I see that we are getting into a minute past the webinar start time. So I'm going to jump
00:00:35right into housekeeping items and then we'll have our panel introduce themselves. Welcome, everyone.
00:00:42Today's webinar topic is Welcome to the Risk Era, Insurance Solutions that Actually Work,
00:00:50presented by Procter Loan Protector. Now, before we dive into today's content, I have a few housekeeping
00:00:55notes. This is meant to be an interactive webinar. We have a poll question for you in the beginning
00:01:00of the webinar, a poll question for you at the end of the webinar, and we will be taking audience
00:01:04questions at the end of the webinar. You can submit questions for the panel at any point in time by
00:01:10using the chat or by using the Q&A icon at the bottom of your screen. And if you miss anything
00:01:17or want to revisit any part of today's conversation, you will be able to do so by rewatching the recording,
00:01:23which we will release later this week. So with that, today we are joined by a panel of industry
00:01:29experts. Joel, let's start with you. Hi, everybody. Joel Sulkis. I am a Senior Managing Director at
00:01:36Brown and Brown, and I have been in the insurance industry in one form or the other for 30 years now.
00:01:43I'll go next. I'm Mike Demas, Procter Loan Protector. I am one of the Senior Vice Presidents
00:01:49of Sales here. I've been with the company now 19 years. I guess an important point to note is
00:01:55Procter Loan Protector is a wholly owned subsidiary of Brown and Brown, which works very nice when we
00:02:00talk about this kind of holistic view of insurance coverages and requirements from the FI space. So
00:02:06I want to make note of that. Thank you for having us, Allison.
00:02:08Hey, everyone. My name is Magosha Stella. I am the Senior Vice President of Compliance at Procter Loan
00:02:15Protector, and I've been with Procter about 14 years. And before that, I was an attorney that
00:02:21specialized in banking and insurance. Thank you all for introducing yourselves. Now we are going to jump
00:02:28into a quick little audience poll. So you are going to see a poll question jump up onto your screen.
00:02:37Within your current role, what is your biggest concern when it comes to insurance issues for
00:02:42your institution? Is it cyber insurance, coverage availability, environmental risks, or regulatory
00:02:51compliance and audit? Or is it something else entirely? Let us know what is your biggest concern
00:02:58when it comes to insurance issues for your institution. All right. We have some polls coming in.
00:03:05I'm curious if anyone has any predictions. Mike, do you think it's going to go one way or another?
00:03:11You know, it's always a coin toss, depending on who all was able to join. Cyber is always at the top
00:03:17of the list. And then you got regulatory, which is sitting on everyone's shoulders constantly. So
00:03:21it was kind of interesting when we were thinking about doing this, you know, what's relevant
00:03:26information we wanted a feedback loop on. And so it'll be interesting to get the results.
00:03:30Okay. Well, I have a little plot twist for you. So it looks like the biggest response was
00:03:42coverage availability. And the second most popular response was regulatory compliance and audit.
00:03:50So I was half right. Half right. Half right. All right. With that, I think we are ready to jump
00:03:57into today's content. So I'm going to pass things over to Joel.
00:04:04Great. Thank you, Alison. Really great to be here, everybody. So just a little bit of a background
00:04:11on Brown and Brown. Got some of our stats up here. Brown and Brown is now the sixth, actually maybe the
00:04:18fifth largest insurance broker in the country. We just went through our largest acquisition over the
00:04:24summer of Ascension risk strategy. So some of these metrics are actually a little bit outdated,
00:04:30but, you know, by and large, we place close to $50 billion now between the two organizations
00:04:35of insurance into the market. And we've got 35,000 employees now globally up from 17,000. So
00:04:44we're, we're, we're a big, we're a big, we're a big broker. What I would say is in the part of the firm
00:04:52that I sit in the retail part, we represent our clients in the insurance markets. We advocate for
00:04:58them in the insurance markets. We do not represent the insurance companies. And I lead the FI practice
00:05:06at Brown and Brown comprised of our banking, our asset management, our insurance company,
00:05:11our reinsurance company, our fintech clients. And as we just said earlier, work very closely
00:05:17with our colleagues at Procter Loan Protector, Mike and Malgosia to serve our financial institution
00:05:24and our banking clients. We're really excited to be participating in this event. Our understanding
00:05:31is that the audience today is comprised of some banks and some non-bank lenders. And within those
00:05:38institutions, there may be some of you that are focused on or have an interest in the enterprise
00:05:43risk of your institutions. Along with those of you that are customer facing, maybe portfolio managers,
00:05:50loan officers, salespeople, thinking about the customers of your institutions that you lend to
00:05:56on real estate assets. And so, you know, what I would say to sort of frame the discussion is that I
00:06:03preface by saying two things. The first is that the insurance markets are not a monolith. And the
00:06:10corollary to that is that different parts of the insurance markets are constantly going through their
00:06:16own idiosyncratic profitability cycle. So in terms of the poll that we just had, coverage availability,
00:06:24the interest in coverage availability will be really something we focus on and talk about
00:06:30throughout this discussion as we cover off on the various different insurance markets. And so,
00:06:36you know, our goal today is to give you all a better sense of some of the more relevant markets
00:06:40that bear on banks and lenders and where those insurance markets currently are in their profitability
00:06:47cycle so that you have that context when either thinking about your firm's enterprise risk or when
00:06:54you're working with your lending customers. So first off, the insurance markets are not a monolith.
00:07:03You know, there are different pools of capital, different markets for different risks, different
00:07:08sectors and different products. And as we think about risks facing banks, non-bank lenders, other types of
00:07:16financial institutions, you know, we can just break these up across enterprise risks and lending and
00:07:24counterparty risks. And so, you know, if you're thinking about the enterprise or the operational risk of the
00:07:31institutions for which you work, there are a number of very robust insurance markets. There are insurance
00:07:39markets that can help your institutions hedge or manage your litigation risks. So think about security
00:07:46class actions against your board of directors or your management. Think about customers suing your
00:07:53institutions for failing to live up to the delivery of financial services as promised, as advertised.
00:08:01Think about employees suing your institutions for discrimination or unfair treatment. Fraud is another
00:08:09massive operational or enterprise risk committed either by insiders of your institutions or external bad
00:08:17actors. Each of your institutions has a corporate footprint and so therefore is exposed to
00:08:23physical risk of loss, physical damage. Think about your offices, your data centers, your disaster
00:08:30recovery sites for certain larger institutions, and the follow-on potential business interruption or P&L
00:08:38impact. And then lastly, cyber technology risk is just another really large operational risk domain
00:08:45that can encompass a spectrum that can encompass a spectrum of risks. Think network security breaches, think
00:08:52privacy losses, data leakage, system failures or platform failures, the follow-on business interruption. And again,
00:09:01customer litigation, if your institution is actually provisioning technology services to your customers. And then on the right side of the screen,
00:09:12there's also a lot of the screen. There's also a lot of the screen. There's a lot of
00:09:16risk of non-payment or credit risk. There's a lot of risk of non-payment or credit risk, the risk of default. There are risks surrounding compliance and servicing risk for servicers. There's a minefield of regulatory state GSE requirements imposed on
00:09:32communicating with and servicing loans with your borrowers. Now, Gosha and Mike are going to talk quite a bit about this.
00:09:40And then there's hazard risk on loan collateral. So think physical risk to the loan collateral from catastrophes, etc., that bear on your institution's credit risk profile.
00:09:51And so when we talk about the state of the insurance markets and we think about the availability of coverage, it's really important that we frame this from the from these vantage points and are thinking about this across the relevant products and solutions and those those relevant market dynamics.
00:10:10So the second sort of lever in terms of framing the discussion is that insurance markets, these different insurance markets, go through their own idiosyncratic profitability and underwriting cycles.
00:10:27And so what I'm really talking about here is the flow of capital into and out of the insurance markets and the profitability of these different insurance markets.
00:10:40And so from a profitability standpoint, insurers really only have two levers to pull to be profitable.
00:10:48On the one hand, they can make money from the premiums they charge for their products on the liability side of their balance sheet.
00:10:55So are they good at what they're supposed to be doing? Are they good at underwriting risk? Do they have good loss ratios?
00:11:03And then secondly, they can make money from how they invest and put those premiums to work on the asset side of their balance sheet or as Warren Buffett would call the float.
00:11:13So on the liability side of an insurer's balance sheet, there are macro variables that impact underwriting profitability, such as the impact climate is having on our planet in the form of physical risks, such as hurricanes, flooding, drought, wildfires, these acute versus these chronic risks, which we will be talking plenty about during the course of the discussion.
00:11:39Geopolitical events are other factors that impact product offerings and corporate strategy for insurers.
00:11:46Social inflation increases the cost of litigation.
00:11:50So our tort system, legal system abuse, inflation around medical costs, all of this bears on insurer and underwriting profitability.
00:11:59And then on the asset side of the balance sheet, interest rates and inflation impact profitability and the flow of risk capital into the insurance sector.
00:12:08So, you know, in a low interest rate environment, for example, we tend to see more capital coming into the insurance sector in that sort of classic search for yield.
00:12:18And the opposite tends to be true in higher interest rate environments where we see capital less quick to move into the insurance sector versus into other asset classes.
00:12:30And so in any particular product line, in any particular insurance market, there is this constant tension, this constant push and pull.
00:12:39Investors look to time their investment into the insurance industry when factors are favorable, when there is underwriting discipline and insurers are making an underwriting profit,
00:12:50or when interest rates are low and the range of yielding opportunities is more limited, that entrance of new risk capital inevitably results in overcompetition,
00:13:02a lack of underwriting discipline or a softening of the insurance markets in question until the next macro event changes the profitability dynamics,
00:13:12resulting in a harder market and the entrance of new risk capital and potentially new classes of insurance risk capital.
00:13:19And so as we go through the discussion today, these will be some of the underlying concepts that you'll see as we overview the state of the various insurance markets
00:13:30that are generally of the most interest to banks, lenders, and other financial institutions.
00:13:37And so we will start with the commercial property insurance market to sort of set the stage here.
00:13:46And this is what people tend to read about in the papers.
00:13:49This is kind of headline risk.
00:13:51It's not exactly the homeowner's market, but there are definitely corollaries.
00:13:56This is the insurance market for commercial real estate assets.
00:14:01And so, you know, you can really see here on this slide, I think it spells it out pretty clearly,
00:14:08the steady build of increasing losses from catastrophes over the last seven to eight years, really starting back in 2017.
00:14:17So, A, here with Harvey, Irma, and Maria, and various wildfires in California, which generated at that point $100 billion in losses to the property,
00:14:30to commercial property insurance markets in 2017 alone.
00:14:34In 2018, we saw more large-scale hurricanes in Florence and Michael in the southeast, hitting Florida and the Carolinas,
00:14:45and we saw more wildfires in California.
00:14:48And so the market, again, in 2018, took on another $25 billion in losses, catastrophe losses.
00:14:55The pandemic came around in 2020 and added $40 billion in additional catastrophe losses to the insurance, commercial insurance markets.
00:15:07Things like event cancellation insurance and business interruption claims from lockdowns globally, along with civil unrest claims.
00:15:15And then really, after that, the tipping point for the commercial property market was in 2022 with Hurricane Ian off the Florida Gulf Coast.
00:15:27You might remember Hurricane Ian.
00:15:28This was a $60 billion singular event to the market at a time when inflationary factors post-pandemic were really driving up property values and claim costs.
00:15:42And so, you know, this was really, you know, the perfect storm, really, no pun intended there, hitting the commercial property market,
00:15:50which ultimately drove a much-needed massive correction.
00:15:55And so post-Ian in 2022, everything I just described happened, massive amounts of losses off of a series of catastrophes,
00:16:06inflation creating the cost to make repairs to properties go up, increasing the demand for insurance.
00:16:16Interest rates were also now up, forcing insurers to mark down the bonds on their balance sheet,
00:16:23therefore shrinking the size of insurers and decreasing supply.
00:16:26And so all of this led to a massive supply-demand imbalance with demand-outstripping supply that drove this massive rate correction
00:16:37and a six- to seven-month corrective and extreme hard market for all property risks,
00:16:44regardless of whether you had losses or even catastrophe exposed.
00:16:48The rule of thumb was double-double-half.
00:16:51So insurers were doubling retentions, doubling prices, and halving limits, halving limits.
00:16:59And so ultimately, it was that medicine that drove rate growth up by over 200 percent.
00:17:07And this did the trick.
00:17:08This ultimately corrected for these years of outside catastrophe and attritional losses in an underpriced market.
00:17:15And so, you know, following this classically, after about seven months of this extreme hard market, what did we start to see?
00:17:27We started to see capital, in this particular case, from within the insurance and reinsurance industry,
00:17:34chase yield and reallocate itself over to the property markets, away from other lines of coverage to stabilize the market.
00:17:42You know, we didn't see new classes of insurance capital or new insurers necessarily form in this time period,
00:17:51but we did see a massive reallocation of capital from within the industry to the property markets.
00:17:56And so over the course of 2024, even with Hurricanes Holine and Milton at the end of 2024 generating sizable losses,
00:18:07we saw after a seven-month hard market that the market was starting to lose discipline.
00:18:14The market was starting to become competitive again and was bordering on profitability.
00:18:18And so, you know, now in 2025, when we think about the commercial property market,
00:18:25we're looking at a market that is completely digested, Hurricanes Holine and Milton at the end of 2024.
00:18:32Most insurers, just as a side note, really didn't even receive reinsurance proceeds
00:18:37or have any impact to their earnings from those two big events.
00:18:40We're now halfway through 2025, and the industry year to date has already sustained $80 to $100 billion of losses,
00:18:50which, by the way, is sort of the highest level of losses heading into a hurricane season.
00:18:55So, you know, earlier in the year, we had the L.A. wildfires.
00:18:58We've had tornado outbreaks.
00:19:00We've had severe convective storms, more of which we'll talk about.
00:19:03And so, the industry has already, halfway through this year, sustained quite a bit of losses.
00:19:09But none of this is yet impacting availability.
00:19:13We've gone through our two reinsurance treaty renewals over the course of the year.
00:19:18They were uneventful.
00:19:19The expectation is, honestly, that the commercial property market could now sort of sustain $150 billion in annual losses
00:19:29without impacting insurer profitability.
00:19:31And so, with all of this going on, that correction that we talked about that happened on the back of Hurricane Ian is still holding.
00:19:44I think all eyes are on the balance of the year and the balance of hurricane season.
00:19:49But as of right now, it's a pretty competitive buyer's market for commercial property insurance.
00:19:54And so, I think this sets the stage for what, you know, many of you may be interested in, which is the lender-placed insurance markets.
00:20:01This is the area where we are really seeing a large uptick of interest due to the challenging homeowner's insurance market
00:20:08and the lack of availability or the lack of adequate limits.
00:20:12And so, to frame this, you know, this is the part of the discussion that's directly on point in terms of how this group should think about protecting your institution's balance sheets
00:20:22as the lender-placed markets provide contingent coverage and servicing solutions to your institutions with regard to the collateral supporting your commercial and your residential lending.
00:20:34And so, with that, I will pass it over to Mike.
00:20:38Thank you, Joel.
00:20:40It's always interesting when you get into insurance and we've got such an array of different folks within different FI practices that are interested in it.
00:20:48But as Joel mentioned, lender-placed insurance has become a hotter topic, especially over the last couple of years for many reasons.
00:20:57One, the regulatory piece, which Malgosha will talk to shortly.
00:20:59But just the availability and access to coverage, as Joel just mentioned.
00:21:04What I thought would be good, just kind of start with that high level.
00:21:07What is lender-placed insurance?
00:21:08So, think of it when a lender makes a loan, they have three requirements.
00:21:13Pay your mortgage, pay your taxes, pay your insurance.
00:21:15And sometimes you do that in one payment to your mortgage servicer.
00:21:19As part of that responsibility and part of the guidelines is to track and monitor that all of the insurance policies
00:21:27on each of the loans is in good standing.
00:21:30So, A, is there coverage?
00:21:32And B, is there enough coverage?
00:21:34So, flood, primarily more on that side.
00:21:37And there's three traditional coverages within that.
00:21:39Your hazard insurance, which is your homeowners, flood insurance, and your REO.
00:21:44REO, for those who don't know, it's when a lender takes a property back through foreclosure.
00:21:48So, those are kind of the three main principles.
00:21:51So, Joel, if you want to go to the next slide, we'll talk about when and identifying an issue that leads to lender place.
00:22:02You see my first box, we have the pre-expiration.
00:22:06So, to us, that is the work that goes into trying to procure or find the policy that we need to pay on in the coming 30 days or so.
00:22:14So, Jane Smith's policy is coming up in 30 days.
00:22:18We don't have a renewal policy or we don't have an invoice to pay on.
00:22:22Our job is to find that through many methods that we have on our side.
00:22:27So, regardless if you're outsourcing your insurance tracking or managing it internally, the process is the same.
00:22:33So, you're looking for policies to pay on.
00:22:35Usually, obviously, that's when there is an escrowed situation.
00:22:38If it's not escrowed, that's the responsibility of the homeowner.
00:22:41Second is we leverage a bunch of tools and data to try to obtain the insurance policy.
00:22:46So, whether it's electronic information, APIs into carriers, whatever it may be, agents, carriers, using all the tools available to us where we can try to track down that policy before we have to notify a homeowner.
00:23:00As part of the regs, once that policy expires and we don't have a new invoice or a new policy to pay, we must make notice to the homeowner.
00:23:08That's done via letters. It can be done through other methods.
00:23:11But by law, we must send a certain amount of letters in a time frame that's reasonable.
00:23:16At the end of that process, if they've still not complied and provided us new insurance, we must place, lender place, you might hear it called force place.
00:23:25They mean the same.
00:23:26That protects the asset for both the lender and then any of the equity or money bought down on by the homeowner.
00:23:34So, traditionally, you're looking for that replacement cost coverage.
00:23:36So, in the event of a loss, when the homeowner didn't provide their own coverage, everybody's protected because we have now stepped in and provided this coverage.
00:23:45What's important to note here, this isn't a light-for-light coverage from a homeowner's policy, meaning we don't cover contents, we don't cover liability, it's the structure itself.
00:23:54So, while the coverage isn't as adequate or full as a traditional homeowner's or voluntary homeowner's policy, we're still meeting the requirements.
00:24:03But what's important here is that we are protecting both the lender, the homeowner, but also then if they've sold a loan, if it's a government GSE loan, there's some requirements that support that.
00:24:14So, there's a little bit of background there.
00:24:15Before I go on, I thought I'd pass it to Mel Gosha to jump into some of the regulatory content and pieces of this.
00:24:21So, Mel Gosha.
00:24:22Great.
00:24:22Thanks, Mike.
00:24:23Hello, everyone.
00:24:24So, my name is Mel Gosha Stella, and I am the Senior Vice President of Compliance.
00:24:28And so, today I'm going to be providing just a brief update of where we are with the regulatory landscape and the compliance landscape as it relates to lender place insurance and some insurance requirements in general.
00:24:41So, just for a little bit of a background, I'm going to start with the regulatory framework.
00:24:45The CFPB was tasked with the obligation by the Dodd-Frank Act to develop the RESPA rules, which it did.
00:24:52So, for the past 12 or so years, maybe more at this point, the CFPB has been the entity that all financial institutions received their guidance from with respect to RESPA, which, as Mike mentioned, there are very specific rules that are provided by RESPA that include the content, the timing of notifications, when lender place insurance is considered reasonable, and refunds must be issued.
00:25:19So, the CFPB was the regulator everyone feared for a very long time, and that was partly due to the fact that it had what it seemed like unlimited staffing and unlimited resources.
00:25:30Well, if we were doing this about a year ago, I would say that was the case, but there has been a significant change in the structure and in the operation of the CFPB in the past nine months.
00:25:40So, to start with, there's been an announced shift of priorities.
00:25:45The CFPB announced that it's going to shift its focus from purely technical violations to now more focused on actual and tangible consumer harm.
00:25:55So, they want to make borrowers whole.
00:25:57They want to make consumers whole, rather than just throw out penalties because it was a punishment to lenders.
00:26:03Additionally, there was a shift in the number of exams that were going to occur or that have occurred in last year.
00:26:12The CFPB has done about 50% less exams this year over past year.
00:26:17So, it's a significant shift in priorities, significant shift in activities of the CFPB.
00:26:22Now, a lot of that comes from the new administration's effort to curtail the power of the CFPB.
00:26:30And then, in 25, in January of 25, there was an announcement by the new administration that they were going to cut the CFPB staff from about 1,700 people to about 200 people, which represents a 90% decrease in the number of staff.
00:26:48And, of course, there was a legal challenge.
00:26:50So, you might have been hearing in the news about what was going on with that.
00:26:53But, just recently, in fact, about a month ago, the D.C. Circuit Court of Appeals overruled the lower court ruling, which the lower court said the CFPB is not allowed to fire all these individuals.
00:27:07The D.C. Circuit Court of Appeals actually reversed that.
00:27:09And, unless that decision is appealed or there's a petition for rehearing filed by the plaintiffs, the CFPB is going to be free to eliminate about 90% of its staff, which is significant.
00:27:23So, then, additionally to that, the one big beautiful bill act cut the CFPB funding about 43%, which, again, is huge.
00:27:33I mean, even without the initial mandate to reduce staff, the funding cut of 43% is quite a significant blow to the CFPB, making it much weaker than it was just a year ago.
00:27:43So, as we see the CFPB take a step back a little bit, it's one of those situations where I think everybody is realizing that we might have been a little bit more careful what we wished for, because we see a greater surge of oversight come from the state level.
00:28:02We have seen many more audits and legislative actions come out of the states, and that includes attorney generals and banking departments.
00:28:11We see laws being proposed in states such as New York, California, Massachusetts, Illinois, and others among those that are also adopting what were considered traditional CFPB mandates that included UDEP, so the Unfair Deceptive Acts and Practices.
00:28:29States are actually adopting that as part, or they're trying to, at least, they're proposing to adopt that as part of their laws, which means that state departments and the banking departments, attorney generals, are going to be enforcing those much more than they were in the past.
00:28:45It's almost like we're going back to before the CFPB was in power, where states were much more active.
00:28:49In addition to that, there is a coordinated supervision trend right now.
00:28:57So what that means is that we have a group called the Conference of State Bank Supervisors, or CSPS.
00:29:05They launched what is known as the One Company, One Exam Rule, or the initiative, in 2024.
00:29:12And it's been brewing for a little while, but it's really started to take a little bit more of a center stage in the last year.
00:29:21And the goal of the One Company, One Exam is to streamline multi-state exams and to build a platform.
00:29:31In fact, they have developed a platform where states can go in and join resources, share information.
00:29:39So if states want to coordinate their exams, they can certainly do that through this One Company, One Exam, which, again, means more money for states to audit and more data sharing, which is going to be more complex for servicers.
00:29:59Right now, I believe the focus is on servicers are operating in 10 or more states.
00:30:04But again, that's just for the current status.
00:30:08So I also wanted to move on to flood now, because I feel like when you talk about insurance compliance, you can't talk about flood.
00:30:17So flood insurance has always been a big topic for the past, goodness, I can't even remember how many years, probably 40, 50 years.
00:30:27And the Flood Disaster Protection Act, just for a little bit of background, that's the law that requires lenders to ensure that borrowers maintain the appropriate amount of flood insurance coverage when they make a loan, a federally designated loan, and they are located in a flood zone.
00:30:45And we see, of course, a lot of audits on this, and those audits come from a lot of different federal regulators.
00:30:53The issue we're having with the Flood Insurance Act in general, I guess, other than just audits and just maintaining compliance, is that in the past, gosh, since 2017, we have seen 33 short-term extensions, which, of course, causes some instability in the system.
00:31:12So there's always the fear that the authorization is going to expire, which is actually about to expire on September 30th, if I believe there's a vote going on today.
00:31:21And if we don't get an extension, again, probably another short-term extension, the program is going to expire, which leaves a lot of lenders in limbo.
00:31:28And, you know, there's always the fear that if the program is not extended, there's going to be a lapse.
00:31:34And then once it does get reinstated, which, you know, at some point it would be, hopefully it does go back to the date of the lapse because it creates all sorts of organizational nightmares for lenders when they try to then comply with loans already made during that time and borrowers who are in flood zones.
00:31:51So the other issue I want to reference regarding flood is because of the recent, I guess, resurgence of insurance as being a really important topic, and again, that's due to environmental factors, a lot of the big losses that occurred in the last few years.
00:32:08A lot of questions have come up on whether the NFIP, which is, you know, the National Flood Insurance Program, whether it actually provides enough coverage or whether lenders are requiring enough coverage.
00:32:22Because, as you probably know, the requirement is the lesser of the three, the lesser of unpaid principal balance, replacement cost, or the NFIP max, which it's currently $250,000.
00:32:33And with the cost of rebuilding, the cost of claims rising so dramatically, the minimum purchase requirement doesn't even come close to requiring what's going to be required to build the property.
00:32:47So the question comes, then, can lenders require more?
00:32:50And technically, yes.
00:32:51So the federal regulator said, yes, lenders can absolutely require more.
00:32:56However, it's not very common right now.
00:32:59So, you know, it would be more of an unusual side if lenders did require more than the minimum.
00:33:05But additionally, there are at least two states right now that specifically prohibit lenders from requiring more than the unpaid principal balance.
00:33:13And those states are New York, which just recently passed legislation this year, and Massachusetts, which has been around for quite a while.
00:33:20But those two states have determined that they do not want their borrowers to be mandated to carry more flood insurance, even though it actually protects their interest in the property.
00:33:31So that's kind of where we are with the flood.
00:33:35And I also want to mention Fannie and Freddie, the GSEs, right?
00:33:39They have really had insurance under a microscope in the last, I would say, year and a half, two years.
00:33:46And again, this is partly due to the fact that we've had such significant losses and huge weather events.
00:33:52So the GSEs have updated the rules and have even updated the way they're interpreting the rules, even though maybe technically the servicing guide didn't quite change.
00:34:04They are now really focused on how a lender or a mortgage servicer confirms the borrower is maintaining the appropriate amount of coverage.
00:34:13And to do that, the lender and servicer are required to confirm what the replacement cost is or that the policy provides replacement cost adjustment.
00:34:23And, of course, that's, you know, there's a whole bunch of issues with that.
00:34:28You know, in the origination side, of course, you have much more ability to require documentation and to, you know, set the stage for what you expect from a borrower, whereas during servicing, you know, that becomes much more difficult.
00:34:42And it does present an issue to a lot of servicers to confirm that.
00:34:45But, again, it's not dying down at all.
00:34:49This has been an issue that's been going on for at least a year and a half.
00:34:52And more recently, we've actually seen this more and more being applied to flood, which is somewhat unusual because on hazard side, we've seen that for a while.
00:35:00But now it seems like it's really spilling into flood and the auditors are really looking to see how do you know how much it would be to repair that property and bring it back to the condition prior to the loss.
00:35:14So, again, something to watch out for.
00:35:16If you haven't already dealt with it, it's definitely coming.
00:35:18All right.
00:35:21We can go to the next slide.
00:35:25All right.
00:35:26So, what does that mean?
00:35:28Again, federal oversight weakening, state and GSC enforcement is rising.
00:35:33But the bottom line is compliance obligations still remain.
00:35:37In fact, Reg X, it's still out there.
00:35:41It's still a rule.
00:35:42States have their own rules.
00:35:43I believe that in the last nine months, we actually have seen more complexity in compliance obligations rather than lessening of compliance obligations due to the weakening role of the CFPB.
00:35:56So, it's going to be interesting to see, you know, what happens next few years.
00:36:01But if the trend continues, you know, our concern is that you're going to see a lot of, you know, different requirements come from different states.
00:36:09And, of course, each state has their own specific, you know, flavor of how they do things.
00:36:14So, it just adds more complexity.
00:36:16So, it's, again, more important than ever probably to have a good compliance management system.
00:36:22And that includes having actually written policies and procedures.
00:36:26So, sometimes, you know, those things just get put off to the side and they might not be reviewed on an annual basis.
00:36:34Strongly encouraged to review your policies and procedures.
00:36:36You are going to be required to provide copies to the auditor.
00:36:40We've seen that even on the state side or when the states are auditing where they do require lender place insurance procedures to be examined.
00:36:48And then consistency between your policies and procedures.
00:36:51Again, when you update one, make sure you have the flow down of, you know, change management.
00:36:56And then I also want to point out to monitor complaint trends because as much as we don't love getting complaints, it's one of those things where it's a very valuable resource that you have.
00:37:09And use that in order to build up your program and figure out, you know, things that where you might be at risk.
00:37:16Then proper documentation, you know, make sure that you have copies of those letters that you're sending to the borrower.
00:37:21Again, RESPA is still in play.
00:37:23You know, states are enforcing it.
00:37:25They're going to look for copies of those letters and monitor state-level developments and absolutely prepare for multi-state exams as they're coming.
00:37:36And then finally, work with your lender place insurance provider because you probably have seen it all.
00:37:41We see a lot of this stuff and we're a good resource to try to help you work through it.
00:37:47So, all right.
00:37:48Thanks.
00:37:49Back to you, Mike.
00:37:50Thank you, Malgosia.
00:37:51Very timely.
00:37:52So, a couple things I just kind of want to jump into here.
00:37:56And I'm using the full year of 2024.
00:38:01We'll update it through end of 2025 here.
00:38:03But what's interesting about this, and I think about this quite often, and I'm sure most insurance folks have some sort of debate or discussion, even in their personal lives, about these impacts and what it means to us.
00:38:16And anywhere across the United States, we're seeing an increase, which we'll get to in a second on homeowners coverage, your auto coverage, et cetera.
00:38:23But I thought this was always an interesting graph to kind of just put some perspective around what's really caused it.
00:38:28So, if we look at the perils, my losses in 2024, most people would assume it's your big hurricanes, your big fires in California that create a lot of this.
00:38:39And the story is often told quite differently.
00:38:422024 is even a little bit more.
00:38:44But if you look at the biggest population, it's severe convective storms.
00:38:47So, this is your wind, hail, losses, your other events not associated to some of those bigger headline risk type events like your hurricanes.
00:38:57So, I say this because nobody is immune to any of these losses.
00:39:03I don't care where you're at in the country.
00:39:04We are experiencing losses on all magnitudes, big and small.
00:39:09But when you add it all up, the story is told a little bit differently than you might think.
00:39:13So, I always find this kind of a valuable snapshot of actually the reality of losses.
00:39:19We can go on to the next one, Joel.
00:39:21And these next two slides are very interesting and telling.
00:39:25And you think of your own personal insurance purchases over the last few years, a lot of people have significantly seen this drastic change.
00:39:34And others might have not noticed as much.
00:39:35But when you look at the reality of it, it's pretty significant.
00:39:39So, this snapshot is 19 through, at the time, year-to-date 2024.
00:39:43But what I want to call out is if you look at that aggregated 19 through year-to-date 2024,
00:39:48five of the top 10 homeowners insurance carriers has increased rates by over 50%.
00:39:55And you can just look at 23 to 24 in the red circle there, the significant increases.
00:40:02And it tells a pretty detailed story of where we're at.
00:40:06And it goes back to the original point of coverage availability.
00:40:09So, they might be able to find coverage, the homeowner, but how affordable is it?
00:40:16And I think kind of the two go hand in hand.
00:40:18We see oftentimes now where people say the availability, but it's really the affordability.
00:40:25And it's increased so much.
00:40:27You know, you tell the story about grandma who's been in her home in Florida for 25 years,
00:40:31bought the house at $200,000.
00:40:33Well, and the insurance was $500 a year.
00:40:36Fast forward 25 years now.
00:40:39Insurance is $10,000 a year now.
00:40:42But the property value has also increased so significantly.
00:40:45So, you're insuring more of a home at a higher rate.
00:40:49And this is where it becomes kind of the affordability issue that we see potentially coming.
00:40:56There's a lot of discussions around a lot of this.
00:40:58What will happen is kind of an unknown.
00:41:00Well, we jokingly talk about the crystal ball or the eight ball and what the outlook might
00:41:05be.
00:41:05And it's still difficult to predict, but you see the impact just at these carrier levels.
00:41:11Then the next slide, Joel, digs into the top 10 states of increase.
00:41:16So, again, I talked about no one's immune.
00:41:17If you look at the top states, they're all kind of obvious.
00:41:20You're California, Texas, Florida.
00:41:21But then you get into New York.
00:41:23Okay.
00:41:24Pennsylvania, Illinois, Ohio, Georgia, and Michigan are all on this list.
00:41:29And you see the significant increases.
00:41:31Again, these top states, cumulative rate changes over 50% over that six-year period.
00:41:36And then you look at 23, 24.
00:41:38Again, massive, massive increases.
00:41:43So, from what I have been able to distill, we're still seeing increases, not to this magnitude,
00:41:50but it is still ticking up.
00:41:52You know, Joel talked about the commercial market.
00:41:53This is more of your homeowner's market.
00:41:55So, we are seeing that it's still moving in the wrong direction.
00:42:00However, it does seem to be coming down in a percentage basis, at least into 2025 so far.
00:42:07Okay, Joel?
00:42:07So, next, I always like to kind of give some general principles around insurance tracking.
00:42:14And, again, this is regardless of your smaller community banks that might be doing this tracking
00:42:18and monitoring of policies in-house or outsourcing it to a third party.
00:42:23And historically, there's been two methods of this.
00:42:26One is what we refer to as negative tracking.
00:42:28And that was more of a reactive program.
00:42:30So, basically, you would issue a loan, collect coverage at time of close, and you wouldn't
00:42:36react until you received a cancel or a non-pay or some event that triggered something at some
00:42:42point.
00:42:42You weren't actively tracking and monitoring the coverage.
00:42:46I think that, for the most part, has been set aside.
00:42:49And I use the term, or we use the term, full tracking.
00:42:52Again, whether you're monitoring that in-house or through a third party where you're actively
00:42:55monitoring it.
00:42:56Meaning, every year, you're looking for a new policy, whether that's escrowed or non-escrowed.
00:43:00Escrowed's obviously a little bit more important in the way of obtaining a policy so it can be
00:43:06paid to that appropriate carrier.
00:43:08Next slide, please.
00:43:11So, I think it's always interesting to talk about the principles because I think some of
00:43:14these get forgot in the process.
00:43:16And to Malgosia's points around policies and procedures, sometimes this stuff matters.
00:43:22And one of the ones I always initially talk about is the mortgagee clause.
00:43:26And it's one of those things that if you don't do right, it can have a lot of negative
00:43:30downstream impact.
00:43:32So, if your mortgagee clause is not correct, maybe you have multiple occasions, maybe there
00:43:36was an acquisition of another bank or servicer and things weren't appropriately updated, or
00:43:42you don't have a procedure or process to capture that in real time as you obtain or find that
00:43:48there's a misrepresented mortgagee clause.
00:43:52Because if you're not getting those policies, then ultimately, you might believe that there's
00:43:56no insurance.
00:43:57You might start sending these notices or making these phone calls.
00:44:01Now we've got an upset borrower.
00:44:03Their issues now turn into complaints and nothing leads to anything positive when you don't get
00:44:08that basic thing right.
00:44:10Which ties to your mail.
00:44:11How are you processing your mail?
00:44:12Do you have good OCR technology?
00:44:14Are you leveraging any AI availability?
00:44:18How do you manage the mail to make sure you're processing those documents in a timely manner?
00:44:23Sometimes that matters more on when you're in the lender place process and you receive
00:44:29a voluntary policy that you just didn't get prior to, to turn around and post that.
00:44:35And part of the reg is to refund that money into the escrow account within 15 days.
00:44:39So you need to make sure that the mail process is adequately quick, but also updating the
00:44:44right procedures and policies to make sure it flows back through.
00:44:49Electronic data, this can be as simple as EDI, right?
00:44:52So a lot of that is actually driven off the mortgagee clause.
00:44:55So another reason it's important.
00:44:57But obtaining as much insurance data as you can electronically will only speed up the process,
00:45:02both from the receipt of data, but also if you can disperse the escrow premiums back
00:45:07through the process.
00:45:09A tracking tool, whether again, that's through a third party that's built and designed technology
00:45:15around this specifically, or if you're using just your loan servicing platform or some other
00:45:21tool that you might be have built or leased, make sure you've got a good process to track
00:45:26those expiration dates.
00:45:27You're following up both pre-expiration and post-expiration, making sure the letters and
00:45:32notices are going on time.
00:45:34All those things are critical.
00:45:36Escrow.
00:45:36You know, it's one of the key components to anything that we do, whether you're servicing
00:45:41it or you're outsourcing it yourself.
00:45:44You know, our responsibility is disperse those payments so that the payments are made timely
00:45:48so the policy is in force and there's not a lapse.
00:45:51There is a lot of talk now about, and some carriers are being far less forgiving on if you
00:45:56pay a policy post-expiration, what they're willing to do on a backdate provision.
00:46:02Your lender place process.
00:46:04Are your letters going timely, especially around flood?
00:46:07Do they have the required CFPB language?
00:46:10Are you able to prove to an auditor or an examiner that the date they went?
00:46:15All these things are critical to passing or failing audits.
00:46:19Call center.
00:46:20I think this is one that probably gets overlooked a lot, too.
00:46:25Insurance is a very difficult subject if you're not an expert in it to explain to a homeowner
00:46:31that just knows they need to buy insurance.
00:46:33So one is the education of your call center and being able to respond accordingly to a
00:46:40homeowner, but also the empathy and everything that goes behind the support, because I will
00:46:45tell you, and our head of call center folks will tell you, not many calls are pleasant into
00:46:51a insurance call center, right?
00:46:53Something had occurred that they're probably aggravated with and just want corrected.
00:46:58So to have the empathy and give the tools to those reps to be able to first call resolute,
00:47:05but also then actually drive the change that fixes the problem on behalf of the homeowner
00:47:09will significantly not only reduce the complaints, but it also is in that bar experience kind of
00:47:16mantra to where when they do go to refi, when they do to go to get a home equity loan, you
00:47:23want that recapture ecosystem where you're now have built this incredible experience.
00:47:28Whether it was a bad or a bad reason for them calling or not and turned it into a positive.
00:47:35So I highlight that one.
00:47:37Please make sure that you're spending time with those folks and then auditing controls
00:47:41tying back to what Mel Gosha stated.
00:47:44Are you testing?
00:47:45How are you testing?
00:47:46How are you proving that?
00:47:47Are you able to provide the evidence and then have it all documented?
00:47:51So again, sharing kind of what we believe are these principles that make the process.
00:47:58The evidence that make the process stronger in the event somebody comes asking the questions,
00:48:03which they will.
00:48:03Next slide, please.
00:48:05Just check through.
00:48:09Back one next.
00:48:10Couple other things and then a couple of comments here.
00:48:13So there are some other coverages that I think all organizations should think about.
00:48:17One is which we refer to as blanket policy.
00:48:20So this can be on your second loans, junior liens, HELOCs.
00:48:24Coverage is maybe not in the first position where including condos, both HO6 and the HRA
00:48:31master both have benefits.
00:48:34While there is a cost to the financial institution to buy these, you do have the availability
00:48:40to purchase them to protect that loan type without all of the minutia of the insurance
00:48:46tracking.
00:48:46So something to consider with whoever you're working with on your lender place insurance.
00:48:50I'm sure they'd be able to advise you on what's available if you don't already have it.
00:48:54And the second is the mortgage, you know, or you might hear it called impairment.
00:48:57This is if you think of it as the umbrella that sits over all of loan servicing, everything
00:49:03from taxes to insurance to to defaults, all of these things that could slip through the
00:49:10cracks.
00:49:10It is a inexpensive, sometimes inexpensive policy, but it also then gives you some authority
00:49:17on selling and buying things.
00:49:19Some some organizations and some of the GSEs require.
00:49:22So, again, just another comment.
00:49:24And I want to get a couple of comments.
00:49:27One of the things we talk about nowadays is there's no such thing anymore as a fixed mortgage,
00:49:32right?
00:49:32Your actual mortgage payment might be the same, but your T&I, your taxes and insurance have
00:49:38changed so much.
00:49:39This is the this is the epidemic that we're kind of now facing of, hey, my payment was
00:49:45fifteen hundred dollars five years ago.
00:49:47Now it's twenty five hundred dollars.
00:49:48I can't afford it on my Social Security check or I can't afford it with my income.
00:49:53So I want to remind folks here that.
00:49:58In this process, one of the most beneficial things that we can advise on is the education
00:50:02to the homeowner.
00:50:03That's both at closing of a loan, but any time you can communicate that through the servicing
00:50:09process of what all of this means and why it's important that they carry their own coverage,
00:50:15we think is a critical component to kind of helping shift the mindset of the homeowner
00:50:19of making this a critical component.
00:50:22They should be shopping it yearly.
00:50:23They should be looking for the best rates, the best terms, and then advising them on what
00:50:27those are.
00:50:28So the limits that are required and all the other things that are important to the servicing
00:50:31side.
00:50:32So I'll stop there, Joel, because I know we're we're really short on time here.
00:50:36So I'll pass it back to you.
00:50:38All right.
00:50:39Thanks, Mike.
00:50:40Yeah.
00:50:40So just keeping an eye on the clock here, we'll now just touch on two more briefly significant
00:50:48risks that any financial institution, bank, non-bank lender have to think about.
00:50:53These are definitely board level concerns, board level enterprise risks for for any institution.
00:51:00Cyber is just the topic these days and technology risk that you just cannot beat to death.
00:51:07And while this is a 2024 Bank of New York community bank survey, it's really, I think, indicative
00:51:13of the whole FI space.
00:51:15And you can kind of see the smallest banks out there are this deep into their digital strategies
00:51:21and technology evolution.
00:51:23It's truly thematic across the space.
00:51:2630 percent of community banks are looking at new new services like Insta payments.
00:51:31Twenty percent.
00:51:32And I think this is probably low, are collaborating with fintechs.
00:51:36Ninety percent are ready to implement digital transformations.
00:51:40Forty percent are looking at AI.
00:51:43Cyber security is the leading long term concern over the next five years.
00:51:50So you get you get the picture.
00:51:51You know, really what we're seeing is we're seeing financial institutions of all different
00:51:57stripes rebranding as technology companies.
00:52:00And so as we think about the cyber coverage, you know, this is this is now very, very board
00:52:09level insurance discussion for any for any financial institution.
00:52:14And the product really is pretty young still.
00:52:16It only goes back 20 years.
00:52:18It got very broad, very quickly, just as technology and digital transformation accelerated exponentially.
00:52:26In all honesty, the cyber insurance markets probably did not fully understand the breadth
00:52:32of coverage that they were initially offering through their first 15 to 20 years of existence.
00:52:39In 2017, you might remember NotPetya and WannaCry events, which were purely destructive attacks
00:52:46on companies.
00:52:47These were sort of the precursors to ransomware.
00:52:51In 2021, Accenture and Colonial Pipeline, those were like the big headline initial ransomware
00:52:58shutdown operations, ransomware everywhere, ransomware as a service, ransomware as a business
00:53:06of attacking other businesses.
00:53:08And so, you know, back in 21, 22, 2021 and 2022, the cyber market, similar to the commercial
00:53:17property market that we talked about earlier, went through their massive correction.
00:53:22The first really in the product and the market's existence, loss ratios eclipsed way over 100 percent.
00:53:30Pricing could not keep up with losses.
00:53:32The market hardened, the market hardened, everybody saw at least a 100 percent rate increase.
00:53:38Legacy markets were shedding their businesses, non-renewing, ransomware restriction, crazy 40-page
00:53:46applications, declining coverage if there was one bad answer in a cyber application.
00:53:51And with this overcorrection, there was actually an overcorrection.
00:53:58Capital flu, you know, sort of flowed right back into this product after a very short period
00:54:03of time, a very short, hard market.
00:54:05New insurers actually came into being to sort of take advantage of this short, lived, hard market.
00:54:13Markets like Beasley, Bowhead, believe it or not, there was an insurance market, a cyber market
00:54:18called Cowbell.
00:54:19New insure techs dedicated to cyber that started to bundle, you know, actually technology platforms,
00:54:29proactive monitoring services with incident response services.
00:54:35With insurance.
00:54:37So, you know, insure tech solutions like Coalition that provide all of the technology security
00:54:42monitoring and response.
00:54:44And then if they fail, they actually eat the losses as an insurance company.
00:54:48These sort of things came into the market.
00:54:50And very quickly in 2023, we started to see decreases and more competition.
00:54:56And fast forward to today, we really see, it's quite unbelievable, a very competitive cyber
00:55:05insurance market.
00:55:06Again, terms, conditions, pricing, very, very favorable to financial institutions.
00:55:12Even CrowdStrike a year ago or so did not dent the market.
00:55:17By the way, that was not a security breach or a security incident.
00:55:20That was a push out of a system update by CrowdStrike, which triggered a Microsoft Windows crash,
00:55:27the blue screen of death.
00:55:29And the insurance markets, just as an anecdote, were fairly insulated from that event because
00:55:33most buyers of insurance, cyber insurance coverage at that point, were not buying system
00:55:39failure coverage.
00:55:40Something banks really do need to think about and make sure that and financial institutions
00:55:45and lenders need to be thinking about buying.
00:55:48And so, you know, that is kind of the state of the cyber markets right now.
00:55:53Very competitive, a lot of capital, good time to be sort of investing in your cyber insurance
00:55:59program as a lender because, you know, we're just sort of waiting for that next big headlining
00:56:06event that could sort of tip things over, generate losses that create a correction in this market.
00:56:12I'm just going to just, because of time, just kind of move through this.
00:56:19So our last market that we're going to talk about is, of course, directors and officers
00:56:25liability.
00:56:27This is, you know, used to be the biggest, most prominent insurance purchase that any
00:56:31financial institution or bank bought.
00:56:33Now, I would say cyber is right up there with D&O insurance.
00:56:37This is the product, of course, that's intended to protect your boards and your management for
00:56:41mismanaging your institutions, breaching fiduciary obligations to your shareholders.
00:56:47And again, this market at this point in time is very, very competitive.
00:56:54The last hard market for D&O insurance came in 2021 and 2022.
00:56:59There had been a steady uptick of security class actions.
00:57:04M&A objections were automatic on the announcement of any M&A activity.
00:57:08You might remember SPACs, the SPAC claims.
00:57:11All of this led to lots of losses and a correction in 2022.
00:57:20And that correction has held.
00:57:24It's a pretty balanced D&O market right now, still fairly competitive.
00:57:29On the back of that correction, you did have more capital flow to the D&O markets.
00:57:35And you had the creation of new insurers dedicated to writing financial lines and D&O insurance.
00:57:43Vantage, Falcon, Westfield, legacy players like Allianz and Everest allocated more capital
00:57:50to the financial lines in the D&O markets.
00:57:53And that market has really normalized.
00:57:57We're now in a very risk-on environment.
00:58:00SPACs are back.
00:58:02And M&A is back.
00:58:03And so an eye towards, you know, what and new crypto strategies.
00:58:09So, you know, an eye to how sustainable is this stabilized market?
00:58:17Will sort of the risk on paradigm that we're in, will this start to create more litigation?
00:58:24Will this turn the market at some point?
00:58:26But for now, very competitive.
00:58:29Good time to be buying up and investing in this program, too, if you are a financial institution.
00:58:34And so just looking at the time, we are close to time now.
00:58:40And yeah, we are close to time.
00:58:46So I want to just thank everybody.
00:58:49We have a QR code here.
00:58:51And if anyone would like to get in touch with any of us to further discuss, we'd love to
00:58:56continue the discussion with you all.
00:58:58So thank you.
00:58:59Thank you, Joel.
00:59:00I want to pass things over to Mike and Magoja for some closing thoughts.
00:59:05And then I have a couple questions that I want to jump in.
00:59:08I know that we're at the end of our, almost at the end of our time.
00:59:11So Mike, Magoja?
00:59:13Yeah, I'll be brief.
00:59:14You know, it's still a challenging time.
00:59:17Could partnerships matter in financial institution space, mortgage servicing, lending, anyone
00:59:22across your vendors, work with the right people that have your back and support you through
00:59:26all this?
00:59:27Because it's a lot.
00:59:28It's a lot of change coming.
00:59:29So thank you, Elson.
00:59:30Magoja?
00:59:32I just want to reiterate that, you know, I think compliance has gotten more complex.
00:59:38I think you have more sources of where your regulatory findings could come from.
00:59:43So definitely work with your provider to try to mitigate that as much as possible.
00:59:48And they are a valuable resource.
00:59:52And I want to jump into my first question, which is, where do you see the insurance market
00:59:57in the next few years?
00:59:58Maybe, maybe I'll take that.
01:00:03Yeah, like my crystal ball, you know, as we sort of discussed right now, we're in a moment
01:00:09of time where really all of the major insurance markets that financial institutions, lenders,
01:00:16banks have to sort of contend with are favorable.
01:00:18They are flush with capital.
01:00:22They've all sort of corrected their most recent hard markets.
01:00:27That being so, it's a good time.
01:00:29Like recommendation is, you know, again, now's the time to invest in your insurance programs
01:00:35while you can.
01:00:37I think we're all looking at the cyber markets and just with, you know, the acceleration of
01:00:42digital strategies every day.
01:00:45There's something new going on in terms of technology, digital assets, et cetera.
01:00:49And there's a lot of aggregation risk out there.
01:00:53And so if, you know, was going to be a betting person, the cyber markets are the ones that
01:01:01we're most watching to see how long the super competitive nature of that market can sustain
01:01:06itself.
01:01:07So, you know, can't predict number of years or how long, but that's the one to watch in
01:01:12our opinion.
01:01:14Perfect.
01:01:14And then I want to make sure that we touch on the CFPB piece before we leave.
01:01:18So I'm going to jump to that question with the uncertainty around the CFPB.
01:01:24Do you expect things to get easier or harder for financial institutions?
01:01:29So, yeah, definitely more difficult.
01:01:33Yeah, more sources of failure.
01:01:35Well, thank you so much for joining me today, Joel, Mike, Magoja.
01:01:41This has been a really interesting conversation.
01:01:43I know that webinar time goes by so fast, so I'm going to make sure that our audience has
01:01:47that QR code.
01:01:49And that is all the time that we have to for today's webinar.
01:01:53Welcome to the insurance risk era, insurance solutions that actually work.
01:01:57I want to thank our panelists, Joel, Mike, and Magoja for joining us today.
01:02:02Housing Wire will be sending a recording of this out to all registrants now.
01:02:05So if you want to send this recording to anyone who missed any portions or rewatch anything,
01:02:10you'll be able to do so.
01:02:11Thank you so much for joining us today.
01:02:13Bye-bye.
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