The National Association of Mutual Insurers (NAMIC) held its 2023 Annual Convention on September 17-20 in National Harbor, Maryland. During the convention, AAIS sat down with Neil Alldredge, President & CEO of NAMIC, to discuss the biggest challenges facing the industry, how mutual insurers are overcoming these challenges, current legislation/regulation concerns, what’s on the horizon at NAMIC, and more.

Biggest Challenges Facing Mutual Insurers Today

Alldredge believes the state of the economy, inflationary pressures, and reinsurance capacity issues are three of the top challenges facing mutual insurers. “We are in a new era of risk,” he stated. “There are a number of challenges facing the industry all at the same time, affecting virtually every carrier in every line of business.” All of these market factors converging at the same time are creating challenges for the industry that are different and more real than some of the previous challenges faced. “[But] I'm confident we'll get through it,” Alldredge assured. “The industry always does.”

Overcoming Difficult Market Conditions

According to Alldredge, the industry is doing what it has always done, which is adapt. “The one thing about this industry is that it's mature,” he said. “[Around] 60 percent of the NAMIC members have been around in business for over 100 years. You think about all of the things in the course of human history that have happened in those times… inflation, wars, depressions, and every other kind of event you can think of. Mutuals have always figured out how to solve these problems.” Alldredge cited that mutuals have been able to survive for as long as they have due to their ability to change. “And they're going to change again, here now,” he claimed. “We'll see more merger activity going on; there'll be more consolidations. Mutuals will also look at their underwriting and the rating and all those kinds of basic ‘insurance 101’ kinds of practices, and they'll make the changes they need to make to navigate the set of circumstances we have we're facing today.”

Legislation & Regulation to Watch

There are a number of challenges on the legislative and regulatory front, but Alldredge specifically pointed out the need for reform in certain states. “We've got California, [which] has a set of circumstances that we really need to get our arms around when it comes to the wildfire risks there,” he said. “California is not the most friendly place for legislative involvement from an insurance industry perspective… [and] I'm concerned about potential regulatory mischief as we look at new rating and underwriting technologies.” The industry and consumers are demanding new ways to evaluate risk, and Alldredge believes all the new risk-based pricing technologies will attract regulatory attention.

What's on the Horizon At NAMIC

NAMIC continues to be the shield and the sword of the industry. While they are an advocacy organization first, they’re also looking at new ways to provide value to members. “We have a new strategic plan that's got a number of new initiatives in it, where we can find new ways to provide value to member companies,” Alldredge revealed. “We’re being more active in the compliance and judicial advocacy space than we have been in the past.” NAMIC also may be offering new data-related products to member companies in the near future.

To view the full interview with Neil Alldredge, please click the video above.