Episode #71: Be an Expert in Your Space with Sean Kent

[00:00:00] Guy called for home insurance and he had this was a local this was close by and he's like I need insurance okay. He has a pool in the back. I'm not joking. I hope I can get the picture. Maybe I can make it work. Yes, a slide from the the roof of the house. Awesome. Into the backyard. Where's this guy live? Like a minute from me. Cool. And we'll bring a six or Natty Bo's. Yeah, we'll do a live remote show. Is it like an open slot or a tube but an open like half, you know, that

[00:00:29] So it's like a slide like you could slide out. Yeah, completely. Oh, you had to exit out of like a dormer window and climb on the roof and then down and then onto the slide. But he called me for insurance and I'm like, I don't I don't think you're gonna have to screw that dormer show. Yeah. Welcome to the podcast dedicated to real estate insurance and building your business. Join us as we take you along our own business building journeys with a

[00:01:05] additional wisdom from our network of local and national experts. Welcome to Bricks and Risk. Hey, everyone. Welcome to another episode of Bricks and Risk. I'm Tim Garrity. And I'm Sean Mooney. Today, Sean, we got one of your homeboys on. Yeah, we have Sean Kent, Senior Vice President at First Service Corporation. How you doing today, Sean? Good. Stoked to be here. Thanks for coming in.

[00:01:36] So background on Sean. Sean is a national expert in community association insurance, serving the insurance needs of more than 8000 condo HOA and co-op communities throughout the US and Canada. He is the SVP for First Service Financial and FS Insurance Brokers, the largest financial insurance services provider for the residential property management industry.

[00:02:00] His responsibilities include leading FFI's insurance, managing general agency, and insurance distribution operations. As an insurance veteran with 20 years of experience, Sean is also a published author and a regular contributor to national media outlets on topics related to property and casualty insurance. Right up your alley. He's a LaSalle High School, excuse me, LaSalle College High School graduate with Mr. Mooney over here.

[00:02:29] Better get it right. College High School. And he went to Hobart College, played lacrosse. So did your paths cross at LaSalle High School for lacrosse? Yeah. He was much younger, but yeah. He was, you know, you were his mentor? Yeah. Yeah. And you're married with two girls. What were you mentored? Yeah, right. Yeah. All right, cool. Let's not get into it.

[00:02:50] Um, so here's, here's a great question. So have you always been in corporate America? And if so, how did you rise to the senior vice president position that you hold today?

[00:03:03] All right. That's a good starting question. Uh, so no, no, I haven't. I, uh, so I graduated college in 03 and, um, moved out to Southern California in San Diego where I had a college buddy who was in the mortgage business. Uh, so if you think back to 2003, 2004, 2005.

[00:03:25] I was in back then too. Years, good years. Option arms. Yeah. Four or five points. Swinging, man. I cut my teeth in mortgages. Yeah. Um, so it was super fun. I mean, you know, we were 23, 24 years old. Um, and, uh, it was very entrepreneurial. Small Sterling Funding Corporation was the name of the company.

[00:03:45] Okay. And, um, yeah, it was basically me, my buddy and another guy who were, were leading, more or less leading the operation and, uh, fun times. But, uh, in 2006, we kind of saw the writing on the wall. We went like a couple months without making any money where like it was gangbusters up until that point. So we, we kind of saw the bottom drop out. Um, in advance, in advance of the, uh.

[00:04:11] Yeah. Yeah. Because I mean, that was the epicenter of it. Right. It was like there in New York where like depreciation just was not in anybody's terminology. Right. So, um, so I decided to, uh, I, I kind of thought I wanted to move back this way. So I had a couple opportunities with, uh, either commercial real estate, banking and insurance. And, uh, I took a job with an insurance company called Crum and Forster in 2006 and went through an underwriting training program.

[00:04:41] Uh, it was great company, great experience, uh, was living in New York and North Jersey at the time. And then in 2008, I decided I wanted to get into the brokerage side of the business. Uh, and I, I went to work at a local firm called JKJ. You guys probably know a lot of, a lot of those guys.

[00:04:58] Yeah. Awesome firm. I was there for seven years. Um, great, great experience. Awesome culture. Still, uh, I can't say enough about, about that firm and all the people. So I've stayed tight with them, but, um, was recruited for the role I'm in now. Uh, I got hired as a vice president. So they were looking for somebody to really build out the insurance division. And that was, uh, 2014, I guess it was.

[00:05:24] Okay. So, um, so yeah, I came to first service, um, and it was a lot of fun. Uh, it still is. It's, it was very entrepreneurial at that point. And, um, you know, I was tasked with, uh, with essentially building the insurance business, mostly on the East coast and, and in the Midwest and certain parts of the Midwest. Um, I had a, a partner, uh, who was responsible for the banking division.

[00:05:51] And we were kind of a tag team and just, we were on trains and planes every week and building relationships, uh, doing deals with brokers, which is a lot of what I do now is manage relationships with brokers and specialize in kind of HOA. Yep. Um, and just grew tremendously. So at that time, I think we had maybe 10 employees total across us and Canada. And we're, I mean, I think we're 65 associates now. Yeah, it's growing, uh, in, in about 11 years.

[00:06:21] So was it like keys in a blank check that they said, Hey, we're looking to grow, come on in and get to work. Um, yes. Good answer. I mean, listen, it's, it's a great culture and we can, uh, maybe we can get into that part of the conversation a little bit, like in terms of empowering one, hiring the right people, right. You get the right people in, like you have to have trust and faith that they're going to do the right job.

[00:06:47] Um, and at that time, the, your, our key associates were, were those people, right. We didn't have much support backing us up because we were doing it all. Um, and, uh, and, and it was like a sense of empowerment that like, we're just going to get things done. Right. And I, you know, not, I guess I could probably say like, I'm a ask for forgiveness later kind of person. And my partner who was doing the banking side was also like, was also like that. Does that align in the insurance industry?

[00:07:17] I would say so. Not on the underwriting side, I don't think. No, no. Yeah. But, uh, but yeah, it's been a fun ride. So I, I mean, to, to, to your question, like, how do I get here now? I, I listen, I have an unbelievable team, right? So I've been really blessed with, uh, having the right people on my team, having a great leadership who has been super supportive. And, um. Yeah.

[00:07:44] Because you don't find that everywhere is people to believe in you to say, Hey, here you go. Go make this work and grow this. And that's not always the case. Yeah. I mean, it's a, it's a balancing act, right? Like, um, ironically, I was, I was reading this book that was suggested to me last night, uh, called, um, beyond entrepreneurship. Um, this is like the second edition of it, but what the chapter I was reading last night was all about leadership and kind of like what's effective leadership.

[00:08:12] And it has all these case studies from companies like 3M and all these other places. And it's, you know, it's like the, the Steve jobs of the world who were early at Apple, who were like, kind of like the genius with a thousand helpers, um, is not that effective long-term, maybe short-term, but like long-term you need to have trust and put faith in the, the, the people who you're putting in key positions. And it talks about like a bus, right?

[00:08:39] So you have to fill all the seats of the bus with people, you know, are, are high performers are going to do the job for you, especially when you're gone. Right. And I think in many respects, that's kind of how we built first service financial. And we've just been, we've been lucky in that regard. Nice. Um, all right, let's go back to 2006. I didn't know you were in the mortgage industry. What was your experience back then with, uh, slinging mortgages to, uh, I mean, it was definitely slinging to people in a hot market. Yeah. In California. In Southern California. Yeah.

[00:09:07] It kind of reminded me like not the mortgage side, but the, uh, the real estate side, it kind of reminded me of like 21 and 22 where it was just so hot. Like everyone's trying to buy a house. Like everyone's tripping over each other. But this time around the financing was conservative, you know, they weren't doing any of the kind of loans that were around when you and I were in the industry. And what was that experience like? Yeah. So, you know, again, I was young, right.

[00:09:35] And we were young and it was, it was a young industry out there. Uh, particularly there were a lot of, a lot of people that were really cutting their teeth in real estate. Um, so it was, uh, when I say it was a good experience, I mean, just in terms of like cutting your teeth, it was a grind in terms of cold calling, right? Like we had, you had to cold call. That's, that's how we got business. And then from there, I mean, you, you had some relationships and, and some referral based

[00:10:03] business, but for the most part it was, it was cold calling. Right. So it was, it was a good experience as a young professional, just like trying to figure things out. Yeah. Um, from there it was, it was, you had to sell, like you had to be a competent salesperson to get the deal across, across, uh, the finish line. So, you know, you had the buyers and refinancers that we were selling to, and then you had your appraisers and everybody and the banks and everybody else that you had to line up. Mm-hmm.

[00:10:32] And the financing to your point was, was kind of the simple part. Like there was, there really wasn't, again, like I said, it was all about appreciation. No doc loans. So negative amortization loans. I mean, you know, it's, it is wild to think about that. People can't even like fathom, like remember no doc loans. So we're going back a little bit. Uh, basically it's like, as long as you had a really high credit score and I can't remember

[00:10:59] what the job history requirement was like, it didn't, you just verbally did an application, which everything was pretty much over the phone back then or in person. Yep. And, um, it's a, yeah, cool. You got, you got a mortgage, like no bank statements, no tax returns, no pay stubs, no W2s. And like, what a risk for the lenders that were offering that. Yeah. I mean, listen, the no doc loans at that's like, that's one part of it.

[00:11:27] The other part are the people who really should not have qualified for those loans. Right. So, uh, and then it was all about loan to value ratio. And like, if you could make sense of it and you could sell that to a bank, then guess what? They're getting qualified and like they're qualifying for an interest only or negative amortization loan. Oh, by the way, as, as the borrower, like you can choose what you're going to pay and guess which one they would always pay. Explain. All right. So for our listeners and watchers, cause I know what a neg, a neg am loan is, explain

[00:11:55] what a negative amortization loan was. Well, you might, you might do a better job, but, um, so it basically, you pay less than an interest only monthly payment, which tax on principle to your loan. Yeah. So if like, if you had like a payment and it was like a thousand dollars a month in interest, like you could pay 800. Yep. Which meant you were adding 200 in interest to your principal balance. Yeah. And some of these loans had very low down payment options.

[00:12:22] I can't, were there a hundred percent negative amortization option, uh, arms? I can't remember. You might've had at least 3% or five, but still like think about the risk of that. Well, there just wasn't enough regulation around it. And I think looking back on it, like it was all the writing was on the wall, right? Like, because, you know, you could call an appraiser, if you needed a value on a home, you knew who to call. Yep. Right. And that's, you know, get me this number.

[00:12:53] This is your own. Billy knows how to get that value. He's good with comps. Yeah. That was really what happened. But the whole system was kind of broken too. It was, yeah. So, so when, when we're talking about, so like most, uh, what's the average, how much does a mortgage broker earn today? A point maybe? Uh, like a one to two. Yeah. One to two. Okay. Well, if you, if you were selling an option arm, you could make five points. Oh. Right. So think about that.

[00:13:20] I mean, all you had to do was sell like one $300,000 loan in a month and you're making pretty good money. Like, let alone like 10. Yeah. Like I think I took one month off because I had a good month and like bought a bunch of surfboards and right. Right. You know, it was, but, uh, yeah, it was crazy. That is crazy. Yeah. That's like. You had a boat in Southern California that said option arm. What was the name of the boat? Crap. Imagine that though. Like you have like a credit card and you go out and you spend a thousand dollars and

[00:13:49] the interest on that is, let's just say like a hundred bucks and, and the credit cards like, ah, just, just pay me like 50. I'll tack on 50. Yeah. Like just the math of it. Well, per, uh, per Sean's point, I think where it was back then is that really residential real estate had never really experienced any kind of depreciation, not on in a way that was a risk to like mortgage bankers all over the country.

[00:14:18] So they basically looked at it was like, we kind of can't lose because of the very least we can still sell the house. If they stop paying us, it'd be a little bit of equity from maybe like their small down payment. And if they added on some, uh, interest to their principal, like we'll, we'll break even whatever, whatever their thinking was, what they didn't foresee was real estate values going down a lot quickly, uh, quickly over a multi-year period from 2000.

[00:14:48] 2008 to two, to 2012. Like there were some markets that lost like 50% of their value. And it really was because of the mortgage financing that was given and the high default rates of people. They're like, I just lost my job. I got this option arm. That's adding principle to my balance. And the property's worth 50,000 less than what I paid for. So it was like a perfect storm of like people were losing their jobs, property values going

[00:15:18] down. And then again, when you sell real estate, sell residential real estate, like there's a cost to sell. That's a perfect segue into, um, Sean's experience with insurance in 2020. You were just chopping at the bit to get to insurance. I just don't. I was happy to be talking real estate. Let's talk about that. Um, so what is going on right now in insurance? Hmm. What are you seeing? So, so you have different, yeah. You're in different segments of the insurance.

[00:15:47] Yeah, but it's a, it's a whole title. I have some crossover. This whole thing is, is a title way. Industry-wide. Yeah. And it, it could be, it could be down in Texas. It could be in Florida. It could be California. Give us your perspective on what's going on insurance. Yeah. So, well, to your, to, to your comment, I mean, um, I'm technically in commercial insurance, right? Because we, we work with commercial, um, insurance companies that specialize in large condo associations, co-ops, HOAs, right? So it's called habitational.

[00:16:17] Um, in the commercial insurance business, but that's, that's my focus. Um, because of many of the market trends, there's much more crossover now when it comes to, uh, people living in condo and HOAs, um, and the impact that the commercial insurance or the master policies for their communities have on their homeowner's insurance or their out-of-pocket deductible expenses if they get assessed, right? So, so there is a lot more crossover now.

[00:16:44] And I think that, um, uh, you know, homeowners insurance companies within the past couple of years, and I saw this particularly in Texas when, after the big freeze a couple of years ago, they've gotten a lot smarter, right? Where they acknowledge that. Was that when their power system went down? Was it like the ice storm? Is that? It was the, yeah, I think the power, yeah, I think the power system went down too, but there were just massive losses due to freezing, right? And then they had a certain percentage that were solar and the, and the solar went out

[00:17:13] because of the free, the whole, uh, multidimensional, uh, problem down there. Yeah. But we know what happens when things freeze and in places where the buildings aren't built to sustain it, right? It's like major water losses. So, so I think like that's, that's one event where I realized, and then there's been others too, especially with wind hail in the Midwest and Texas and other places where homeowners insurance companies were getting whacked, right?

[00:17:39] Because the deductibles for the hat, for the commercial policies continued to rise. And when they have a claim, they have to assess that deductible back down to their homeowners, either through a deductible assessment or, or through their annual budget by increasing their fees. Yeah. Like if there was like a $10,000 deductible, I mean, what's normal in like an HOA, like for one of those things? Oh, $10,000? Yeah. I mean, I have no idea. That's like seven years ago.

[00:18:06] Um, well, it depends on the cause of loss. You and I were talking about the one, remember this one we were talking about? It was local. Yeah. Yeah. Yeah. Oh yeah. It was around here. Yeah. Yeah. And it was, uh, it was a, a 1% on a 10, $10 million or even more. Right. It was like $15 million. Like a hundred, 150 grand deductible. Yeah. So, so for no more than that. Oh yeah. Yeah. Gotcha.

[00:18:33] Um, so for like wind hail named storm, we're talking anywhere from, depending on your location, anywhere from 1% to 10% in some places. Wow. Of the total insured value. Yeah. Right. And then you were saying that like, so when the HOA, the homeowners association would get whacked with that, they would go back to their, their condo owners and either special assess maybe or increase the budget to say everyone's condo fees now have to go up like 10% or 20%. Yeah. Because we need to pay for this thing.

[00:19:03] What would you rather do? Would you rather I ask you for a check now or would you rather I just work it into like a monthly billing? Exactly. Or both. Yeah. Or both. Yeah. So, and here's a, here's another, like on that point, here's another crossover between homeowners insurance, uh, lending and the commercial insurance. Right. So you might be selling a, you might be selling a condo unit or you have a, you have a purchaser of a, of a condo unit. Uh, let's say it's a large condo building.

[00:19:29] They have a per unit water damage deductible of $25,000 per unit. Wow. Which is pretty common place these days. So, um, Fannie Freddie have an insurance requirement that stipulates that the deductible cannot be more than 5% of the total insured values. Oh. Okay. Okay. So now that comes into play all the time in like places like Minnesota where there's a large wind hail deductible, say a 5%, that makes sense. Right.

[00:19:59] Like it's, it's just. Because they have a problem. Right. But, but it, it's, it's just become kind of more, um, prevalent in terms of like water damage deductibles for condos in Philly, for example, where they may have to restructure the, their deductible structure to get below that 5% just to have somebody qualify either for a refinance or a new purchase for a Fannie Freddie loan. So that affects the saleability of condos and people being able to do that. And the market values. Yeah. Market values.

[00:20:27] If you're somebody living in one of those communities, you're freaking out. If you're a board member. Yeah. You're looking at your insurance people. You're looking at your lenders and saying, you guys need to figure this out because this could, this could be a big thing. Now, the problem is the appetite for insurance companies right now is such that they're not willing to bend if there's been significant water damage losses or significant wind damage losses and they just can't justify it. So, um, there are, you know, there's a fair amount of communities out there that are not

[00:20:55] able to, uh, have, you know, owners or, or prospective buyers qualify for Fannie Freddie because of these issues. It's crazy. Yeah. It's, um, so I've owned a condo myself. Technically own two. I had one in Florida at my, my Sarasota, my Sarasota special. That investment. And then I had one in, uh, Roxborough and, um, so the one in Roxborough, this one's interesting. Um, I won't name the community, but, um, it was, I think it was the first master planned

[00:21:25] condo association in the state of Pennsylvania, which was like somewhere around like the mid seventies. Um, so, and you know, Manioc Roxborough is like hills, you know, it's like, this is a hilly area of the city. And this place is built on a hill. Like my condo unit had a, you know, 25, 30 foot boardwalk that went to my front door. Cause I was on the second and third floor, but I had a unit underneath me in the topography of the land. I think you just gave it away. Anyway, if you're not local.

[00:21:54] Um, and because it was so old, like you probably see this with like older HOAs. Like what was interesting is that the gas usage and the water usage were both included in the condo fee. So some of the older condos, like buildings downtown, they have this too, where some of your utilities and those go up every year. Like your utilities are always going to go up over time. So what kept happening is like, Oh, we got to raise it 2%. Oh, we got to raise it 3%. And we got to raise it one and a half percent.

[00:22:22] You do that over a 40, 50 year period. And I had a three bedroom condo there that the time I sold was about four years ago. My HOA fee was over $600 a month. And this was a $200,000 condo. In Roxborough. In Roxborough. And I think part of the reason the values were, let's say stunted compared to like a three bedroom row home in Maniaca, Roxborough in the neighborhood was because of the condo fee. You know, you buy a, you buy a home in the center of town. There's no HOA. You don't have that expense.

[00:22:52] So the value will go up a little bit more. But to your point, if you have a high HOA fee or you have a poorly run HOA or you get storm damage, like whatever it is, those damages have to get put back on the members of the HOA, which are the condo owners. So it's either going to be through your monthly fee or they'll say, you know what? You owe us five grand each and you got six months to pay.

[00:23:20] And that's a downside of owning a condo from like a real estate standpoint is you have this risk always hanging over your head of like, what's the HOA going to do? How are they going to handle their business? And I, I've, I have found, cause I'm actually, uh, my house now in Flowertown is part of an HOA, but it's very, very low key. It's not, and it's not condo. Same for me. Yeah. So, um, it depends on like how involved your HOA is in your community.

[00:23:48] Like you can literally, like you said, you can devalue properties if your HOA is poorly run or God forbid it's weather related or something. Well, isn't that Florida right now? Yeah. Florida. There you go. But the way that... Tons of condos down there. Yeah. But specifically right now with the assessments and the inspections of what they're, um, pushing onto the, uh, and it's, it's driving the real estate market down there, meaning people are leaving and the values are just totally out of whack. Yeah.

[00:24:16] There are, I think there are a lot of people leaving for kind of what you, what you talked about. We call them halfbacks. They come halfway back and go to South Carolina, North Carolina. Nice. But, um, yeah. So you're spot on, I think, uh, and you, and you kind of touched on it, right? Like it needs to be like, the problem is you have, these are business entities, right? The condos, co-ops, HOAs, they need to be run like a business yet. You have volunteer board members who are the ones who are responsible for it. I was an HOA board member.

[00:24:46] So happy. Congratulations. Yeah. Me too. Thankless jobs. Yeah. Um, I can, uh, I can, I can, I can go deep on that one if you want, but, uh, but it's so important to have, uh, a property manager who's, who's going to help you navigate through all of that. Right. And like, so first service residential is a property management firm that I'm attached to, um, the best, biggest and best property management for condo HOAs, right? We're very big in Florida, for example. Right.

[00:25:16] So what you're talking about in terms of those things that over time add up and impact your monthly HOA fees are things like deferred maintenance. Yep. Um, deferred maintenance for sure. Insurance claims, not handling insurance claims properly or not having, you know, the right team involved, uh, not having access to the right lending products, not really not managing your money well, right? All of these things. Right.

[00:25:41] So, um, having a professional management company to help you through that is what you pay that management company for as a board member. So when you have the perfect storm, no pun intended in a place like Florida where insurance premiums have skyrocketed, by the way, we're seeing some relief in Florida, uh, shockingly on the insurance. Yeah. A little bit. So, uh, this, this year will be interesting, but you know, you have insurance premiums going up.

[00:26:06] You might be in a building where, um, they have deferred maintenance and that just compounds itself, right? Because you, you're, you need a new water riser and you, you didn't save for it. And guess what's going to happen to that water riser, right? It's going to cause an insurance claim. So, and there's, you know, whatever it is, facade of a building, you name it, right? All of these things add up or in the Midwest, if you haven't saved for a new roof and, and you've, you're a townhome community with, you know, 200 units, those are big roof lines. You're going to have to replace those roofs. Right.

[00:26:35] So, um, yeah, you're spot on. And I think that the, I mean, it's interesting that you said the first master plan community and maybe in Pennsylvania, but the community association business is, is beginning to age a little bit. Right. Right. So condos, HOAs, when they started really to get popular in the seventies and eighties, if you have not been run well and you haven't saved and you haven't reserved enough money

[00:27:00] to, to save for those capital projects on top of everything else related to the insurance and anything else, you know, inflation just in general, I think you could be in a difficult spot. So there are a lot of communities in Florida that are dealing with that right now. Um, California, you name it. I mean, it's, it's, it's pretty, it's pretty, uh, consistent across the country, depending on where you are, if you live in one of those tough geographical places. And where do you see it for now?

[00:27:26] So, so just to measure it out, can you just kind of give a comparison? Here we are 2025 and what's hitting your plate or your desk compared to what it was like in 2020, you know, just to kind of give our listeners a feel for just how dramatic the change has been in the last few years. Yeah. So, uh, 2020 was still super soft market, right? Obviously COVID hit.

[00:27:50] And I think to the, the lay person, like people just assume COVID had a significant impact on the insurance industry, but it really didn't. Right. There was like a little blip and. You could actually argue that it, that it was good for the insurance, uh, market and, and it was making companies more profitable during that time, I think. During that time. Yeah. Yeah. I could see that. Yeah. Less litigious, less liability exposure. Yeah.

[00:28:17] Less activity, you know, from, from an auto perspective, like driving was way down. Like there are certain metrics that you could use to, to, to argue that. Right. But the, the market, the insurance market remains soft up until really this year. Yeah. Right. Um, so we had a lot of good years there. I would say 10. Yep. I mean, 10 really good years where if you're, if you're buying insurance, any kind of insurance, it's very competitive. Right.

[00:28:44] And, and, and, um, you know, it's, I hate to say it to my personal lines insurance agent, but in many respects it was, it was a commodity. Right. And you could go anywhere and you could get competitive coverage at a competitive cost. So, um, I mean, last year was really the reset. Right. Right. So I've done a fair amount of interviews just on reinsurance and I'm not a reinsurance specialist, but I was forced to kind of dive in a little bit. And, um, Well, you have to know what that is in the equation.

[00:29:13] You have to know what the drivers are. Yeah. Right. And, and you, you just follow the money like anything else. So last year, reinsurance companies, um, increased their rates on renewals by an average of 40%. So, so for insurance carriers who are purchasing reinsurance, their policy renewals, their reinsurance treaties, all the above went up by about 40%. Right. Wow. So that had a lot to do with what we're seeing today.

[00:29:40] Well, more towards the latter part of 2024. So I think the bad news is insurance carriers got hit with that. And that was, that was a reaction by the reinsurance industry just saying, Hey, like there's something happening here. Right. Like the, the, the weather events are becoming super unpredictable. Right. So all of the modeling systems that they use maybe are not as predictable as they thought. And guess what? Like a lean in North Carolina, uh, California wildfires.

[00:30:08] Now that wasn't as much of a surprise, but the fact that it happened to such a significant degree in January, that's a pretty big surprise. Um, so I think it was them saying, we can't continue to lose money. We need to figure something out. And that, that was their way of trying to stabilize the market at which I think is going to, is going to bode favorably.

[00:30:28] So the couple insurance companies that I've talked to who went through their January one renewals, um, depending on now, again, I'm habitational, which is still a very difficult market to, to insure in. Um, but they indicated that, Hey, there were some increases, but you know, they have their next renewals, their, uh, big renewals coming up in April and June. And it, it was okay. I mean, it was modest, so it wasn't that bad.

[00:30:51] So I have to assume for homeowners insurance companies and keep in mind, like the deductible structures have just continued to go up over the last couple of years, like significantly. So, um, so in terms of like stabilizing the losses on their balance, on insurance companies, balance sheets, that, that probably is going to have a significant impact, especially in geographical areas like Florida, Texas, California, where they have these major losses, wind losses particularly.

[00:31:16] So, yeah, I, listen, I think it's probably, it's probably stabilized a little bit. Um, but there's a new norm, right? That's what it is. That's, there's a new norm for sure. You know, it better than I do on the homeowner side. Yeah. Um, it's not going back. Deductibles, premiums, you kind of hit that shelf where it's like, where there, there, there, it's, it's, it's an adjusted amount that's not going back. It's like, I agree. A lot of people say that about, um, you know, interest rates right now, you know, mortgage interest rates.

[00:31:44] And they're like, some people are like, oh, I can't wait until it goes back down to like around 5% or four and a half. And it's like, yeah, I don't think that's going to happen. I think the new norm, at least for the foreseeable future is probably six to seven. Like that's probably where it's going to hang because it was too low or too long. But that's a norm, like over history, that's pretty fine. And I think that that's the way with property and casualty is deductibles.

[00:32:10] Deductibles were not in line because the markets were so soft, right? They could get away with these deductibles that really weren't, um, paired to what the risk was, right? And so these carriers, uh, are having to have these insureds put a little more skin in the game. That is the new norm. That is where they should be. It's a more appropriate, uh, sharing of the risk.

[00:32:37] I would say, I think we're, and we're focusing on property more than anything else. Yeah. Uh, and you kind of alluded to auto liability, but, uh, I think on the casualty side. So for liability policy coverages, um, that's not getting much better. Yeah. Um, it's not, it's not the, depending on what kind of business you are, you know, what, how many toys you have as a homeowner, it's, it's not going to be your, your biggest line item on

[00:33:02] your insurance, um, renewal, but it's, you know, social inflation is the new, uh, like buzzword in the insurance industry. Right. So, um, what that means is there's just, there's a lot more litigation. People are more litigious. There are, uh, nuclear verdicts, nuclear verdicts. So nuclear verdicts are claims that exceed $10 million. Right. Which is why, like we can, I can talk about the umbrella market for condos, condos and HOAs for forever, just because it's gotten so challenging, right.

[00:33:31] Particularly in places like New York where you have labor law. Yeah. Um, but yeah, I think, um, most of what you'll read on the market trends indicates that because of social inflation, that, um, the casualty, the liability markets are not going to get much better anytime soon. Hey everyone. This is Tim, your favorite bricks and risk co-host, but don't tell Sean. I hope you're enjoying this episode and I'll get right back to it in a moment.

[00:34:00] Our audience grows through word of mouth. So if you would please take a moment of your time and give us a review on the platform you're on, that would be fantastic. Please also help spread the BNR word by sharing your favorite episode with a friend. We greatly appreciate your time and trust. Now back to the show. All right, let me shift a little bit. This is a great conversation by the way.

[00:34:28] Um, so you're a published author. Is that correct? Yeah, I won't say what I'm published in, but okay. Tell us a little bit more about, uh, writing on that level where you're actually putting some information out there in any kind of way. And it's like, you know, people can pick it up. They can read it. They can get your opinion. Like how'd that come to be? Yeah, I'll just give you an example. So, I mean, um, you know, a periodical for, uh, the HOA community.

[00:34:57] Um, I can't think of the name right now, but I, that I wrote a couple of years ago and it was on special event insurance, right? It was topical. It was, um, meaningful for the, for the audience. Uh, and I, I think I talked about a food truck vendor and kind of like what the exposure is. Um, right. If you think about condo. Like if they have an event for the, uh, community, you think about HOA communities and you want to have residence day, you know, you want to encourage, like you want to encourage the community to come out, right?

[00:35:26] Like you're part of the community and you have a, if you have a lot, if you're a large, you know, a large scale community, you have a lot of space to work with. So you want to bring food vendors, trucks, uh, food trucks, um, uh, you know, artists, that kind of stuff. Any kind of, yeah, yeah. Well, so that's what it was. I think, I think I talked about meat. So it was like a beef jerky vendor and they're selling bad meat. They didn't, if they didn't have insurance, they wouldn't be covered for the people that got sick. Right.

[00:35:53] So, so I think, uh, and that was probably like eight paragraphs. Right. So, you know, I think, uh, I'm a, I think I'm a decent writer. Like that kind of stuff comes relatively easily. So I think it's like, you, you try to keep it simple for the reader. Of course. You try to find a topic that people can relate to and you'd be analogous, right? Like you create an analogy that's going to, that's going to resonate with them and make

[00:36:21] it, um, easy for them to kind of absorb. That's great. Oh, you tell a story. We actually had one. Uh, we got a call from, it was a special event request from a client of ours, homeowners, where they just shut down the street and they were like, um, I think I need a special event policy. And I was like, oh yeah, what do you have going on? And it's just like, oh, this little street fair that, you know, our neighbors get together and we can drive through it anymore.

[00:36:48] And I said, uh, why do you think you need this policy? And they were like, well, we're renting, um, this bounce house, you know, sort of thing. And I said, oh, I said, bounce house. I said, who signed the rental agreement? And she's like, I did. I said, we'll get you that policy, you know, just for a day or whatever. Yeah. Oh, geez. Bounce houses are no bueno. Yeah. Trampolines on houses. Same thing. Uh, swimming pools.

[00:37:18] Like nobody, like one of the first, now they have, you know, uh, we get hit with all of the, um, we've talked about it before, but the, uh, drones and they do. They do the roofs to see, you know, how old they are. They're building all that data. But they also do pools. So they'll look for a pool and then, you know, tell you. Cracks in the pool. Well, no, but, uh. Green water. Diving, uh, diving boards. Oh. Like, not allowed. Like, cannot have. Oh my.

[00:37:45] So if we have, we have, there's like two insurance companies left who will insure a community that has either a diving board or a water slide. So think of places like Kansas, Missouri, Texas, where they, they love this fun stuff. Oh yeah. We've had so many communities have actually removed their slides or diving boards, um, sliding, no, dives, slides, water slides. Yeah. Um, because of that. Right.

[00:38:13] It's just like, we can't get insurance. And if we can, it's going to be expensive. And they're like, all right, we'll just, we're just going to rebuild. I'm going to give, maybe we can put it up. Uh, guy called for home insurance and he had, this was a local, this was close by. Yeah. And he's like, I need insurance. Okay. He has a, a pool in the back and I'm, I'm not joking. I hope I can get the picture. Maybe I can make it work. Yes. A slide from the, the roof of the house. Awesome. Into the backyard.

[00:38:43] Where's this guy live? Like a minute from me. Cool. We'll bring a six or a Natty Bows. Yeah. We'll do a live remote show. And I, I, and, and, and it dumps them. The, the, the, it goes down. Is it like an open slide or a tube? I think in the beginning, I think it's an open tube, an open, like half, you know, that's like a slide. Like you could slide out. Yeah. Completely. Like from the roof of, you had to exit out of like a dormer window and climb on the roof

[00:39:12] and then down and then onto the slide. But he called me for insurance and I'm like, uh, I don't, I don't think you're going to have to screw that dormer shot. Yeah. Yeah. So you just don't see, remember I, so I, I grew up going to Orleans swim club. Yeah. I don't know if you guys ever went there. I've never been. Flowertown country club. What's up? What's up FCC? Never been. And there was a high dive there too, right? There is. Yeah. They have a deep section. Pemberton had a high dive. Yeah. But you don't see it anymore.

[00:39:41] So like the one, I remember the one in Orleans and it was like, I mean, I was a little kid. It was so high. Yeah. I was visiting a friend in Louisville a couple of years ago who, you know, and we're finishing playing golf and we look over at the pool and there's like the tallest high dive I've ever seen. This is like two years ago. Wow. And I'm like, dude, who insures this place? That was going to die. Because that's impossible. Yeah. I need the name of that carrier. There's so much fun though. Oh my gosh. All right. So we did, we asked you a couple of questions before you came on, Sean.

[00:40:10] One question is, what do you love most about what you do? And you had said you love having national expertise and leverage. So why do you love being an expert like in your field, in your space? So part of the reason that I'm in this role and that I left the place I was at was in part because I realized that a lot of the people who've been successful in whatever they do

[00:40:38] are truly experts in one thing, right? Like they have one focus and they become the expert and they're the go-to people for whatever that may be. Um, so that's what appealed to me about this role when, when it kind of came to me and, uh, and it's come to fruition. I just think like, listen, it's, it's, it's comforting to know that you know what you're talking about, right? Like I might not be right all the time, but I'm probably going to know more than the other guy.

[00:41:05] Um, particularly because I kind of have that national, national scope, which is nice. Right. So I can tell you what's happening in California and I can tell you what's happening in Philadelphia for the most part. Um, so, you know, I think just having that scope is, is nice to have because it's, it's hard to come by. Um, and, and in that same vein, you know, what we do, like the size of our company, um, affords us, affords us the ability to have the leverage to get things done. Right.

[00:41:33] Whether it's, um, you know, we notice a particular coverage in a director's and officer's liability policy that we don't like. Like we can, we can have the right conversations, get to the underwriter and say, Hey, can you put this endorsement on here just to kind of carve that back into the policy? Right. Things like that. Um, so yeah, I just, it's, it's fun being able to execute on stuff like that, where if you're, you know, if, if you're not in the same position, it can be really challenging. Right. And, uh, yeah. So we enjoy it.

[00:42:03] That's great. Um, biggest struggle. It's one of the questions. This is the Ryan Garrity special. It's my brother. Uh, what a great question that we've been talking about with mostly all of our guests. Um, your biggest struggle, you put educating clients on the impact of industry trends. Why, why has that particular thing been a struggle for you? Um, I think it's because the market has been so challenging for a number of years now. Like everyone's pissed. Just everyone. We are the bearer of bad news nine times out of 10. Yeah.

[00:42:33] Um, now that doesn't mean that we don't add value in other ways, but we're in a pretty transactional business, right? Because board members are looking to save money however they want so they can, you know, profess those savings. Well, there's so much more pressure now too, right? So that, that, that the roof that they didn't put away for is even more expensive than they could have. So yeah, exactly. It's just more pressure on looking to the insurance provider to find something less.

[00:43:03] Yeah. So the anger is more. Yeah. Right now. Well, it's also like you receive premium increases for five years in a row. Naturally there, there begins a certain level of distrust. Yeah. Yeah. Just because- It can't be. It just, it can't be, this can't be the case, right? Now, I'm not saying that all of our clients are like that. We, we certainly have some great case studies where we've, we've delivered significant value and savings, but- Yeah. You have that trust.

[00:43:33] So they're less, they're less likely to pounce on you. Yeah. I just, I hate being dependent upon and, and having things dictated to me by market trends and by underwriters who are beholden to guidelines that really are hard to explain to clients. Does that make sense? Yeah. It does. Yeah. So, you know, we can do- You don't give the, your clients and the board members the phone to your underwriters?

[00:44:03] They ask, they ask for it a lot. But no, I think it's, what was I going to say? They, you know, there's, there's times when, for example, just, just in terms of timing, right? So like we start a policy renewal process 90 days in advance of the policy expiration date. Okay. We might not get that quote two days before the policy expiration date. We have to get the quote, potentially get other quotes, analyze them, put them in a

[00:44:32] comparison, schedule a meeting with the board, and then go through with the board to have them be upset that it's not the reason that number one, it's coming in late. And number two, it might not be the result that they wanted. Right? So I think those are the things that like, it's just out of our control, right? Which is like, I'm always talking to my team about like, focus on what we can control, forget about everything else. Right. Which is communication, mainly communication. Right. When it comes to that kind of stuff.

[00:45:00] But so when it comes to educating clients, as I mentioned, I mean, and not to their fault, it's just board members are, are not educated. Yeah. For the most part, they're not insurance experts. Right. They're not CFOs of a company. Like you said, they're volunteers. Yeah. I'm a board member. And they're, and they're all well-intentioned, right? Yeah. For whatever reason. And it's difficult to, when you have five or six on every single board. So every single client, you have five or six people that you're essentially selling to and trying to win over.

[00:45:30] And next year it might be a new five or six. Great point. Great point. Like what you just took the time last year to explain, to get them on the same page, to understand the industry markets and trends and that. Now a new board's in next year. It's like, oh my gosh, I got to do this again. And that might, to make them comfortable with that risk might've taken two or three renewals to kind of have them understand what is going on. And then that changes.

[00:46:01] Yeah. And here you are back to square one with a new set of people that you're then trying to build that trust back. And maybe that new set of people during that, like before that transition took place, there's maybe a million and a half claim on their policy. Yeah. And they're going, well, why do we have a 5% increase? And we're going, well, that's actually really good considering the losses. So it's all those things. And it's just, you know, again, it's just, it's so much effort to try to get to as many people as you can and educate them effectively.

[00:46:31] Right. And that's kind of, that's the challenge. But like I said, I really think that communication and focusing on the process and just executing on whatever your standard operating procedures are is really important. Right. Absolutely. All right. So that brings us to your tip for our listeners and watchers. You said, show up every day and be a doer. And it was based on a book by James McGuire, who is the founder of Philadelphia Insurance Companies. That's pretty cool. Why is that a tip? Why does that resonate with you? Yeah.

[00:46:58] So I think I tried to put some context around it. It's, I'm, I'm pretty diligent in like reading all those kinds of books. And this one was presented to me. Actually, it's funny that Joe walking out was talking about the Irish American business chamber because that's where I got the book and I wouldn't think anything of it. But if you know the story of Philadelphia Insurance, Jim McGuire started that company years ago and sold it to Tokyo Marine for multiple billions.

[00:47:27] And on top of that, like great family. So the message is... Started as a retail broker. Yes. Yeah. Specialized. Yeah. So he had a, you gotta, I recommend reading the book. It's a very, if you're an insurance person, especially from the Philadelphia area, it's a good, easy read with some great lessons. Yep. Um, but the general message is like, you have to show up every day and everything you do.

[00:47:53] And, and he does a good job of kind of talking about the importance of staying healthy, being fit, being there for your family and like balancing all the above, right? Work, especially if you're an entrepreneur, like doesn't stop, but you have to prioritize all those things. So, you know, if you just think of that in terms of showing up, like that's really important. If you look at all the successful entrepreneurs or, or CEOs and business leaders, for the most

[00:48:21] part, a lot of them do it really well. Right. Um, so I just, I found that to be a book that really resonated with me and, and they're a great family. I've, I've had the privilege of getting to know Chris Jimson a little bit and they're just, they're just great people. Oh, that's cool. And your quote, your quote was great. You create your own reality. So hard to explain, but impossible to deny. Why, why'd you pick that one? Um, yeah, I think, uh, let's say it's the law of attraction, right?

[00:48:50] So it's, it took me probably, it was, I was thinking about this this morning as I was, as I was, it's mindset, right? So I was probably 30, 30 years old until like it really stuck with me. Um, I think like my, you know, my Bible is the book thinking grow rich Napoleon Hill. It's on, it's on my shelf. I haven't read it as Sean knows. I, I don't read much, but I do own books. It's a good one. That was that, that was like the, um. This Sean. Yeah.

[00:49:20] That was probably like the, um, you know, the, the first, like the foundational business first foundational business book on mindset and like law of attraction with, without actually getting into it. Um, but it's just crazy. I think if you're somebody I'm pretty goal oriented, right. And I think if you stay focused on your goals and, um, you're really mindful of it, like on a daily basis, it works. Yeah. Right.

[00:49:45] So, um, you know, your, your reality can be a world that is less optimistic and even pessimistic. And maybe you're somebody that feels like you're always unlucky. That's not how it works in my opinion, right? You kind of have, you have to set your mindset and make your own luck and things happen when, you know, when you do that. Well, there's another saying, this is luck is when preparation meets opportunity. Exactly.

[00:50:13] As much as you think people might be lucky, they're probably a little bit more prepared than the average person. So that's awesome, man. All right. So before we shut it down, Sean, uh, appreciate your time today. Thanks for coming in. It was awesome. Um, why don't you tell listeners and watchers where they can learn more about you and everything you got going on? Um, I'm not, uh, I'm not a big social media guy. Uh, I am on LinkedIn. We'll have to remedy that. Yeah, that's okay. This, this might be the, uh, the catapult that I need. LinkedIn though. We're pretty, uh, we're pretty, uh, active on LinkedIn.

[00:50:43] So we can be in on that. Group's active too. Yeah. Mostly LinkedIn. So that, that's probably the best, the best spot. And, uh, we have, we have an awesome marketing PR team. So, um, hopefully they like what, what they, they see in here today. Awesome. Um, but, uh, that's, that's probably the best way to find us. Cool. Yeah. Awesome. We appreciate it. So that's all we have for this one, folks. Thank you for tuning in again to another episode of bricks and risk. See you soon. Thank you for joining us on another episode of bricks and risk.

[00:51:13] Our goal is that you walk away with one or two valuable nuggets. And we greatly appreciate you sharing your time with us today. You can find all BNR episodes on Spotify, Apple music, YouTube, and anywhere else you get your podcast content until next time. Keep learning and keep growing.