ISA’s Siegel: Future of human/social services business at the mercy of legislation and social inflation

The future of the human and social services insurance market will be dictated by a number of external factors, including legislation and social inflation, with the CEO of Irwin Siegel Agency (ISA) warning these could impact the stability of the market.

The future of the human and social services insurance market will be dictated by a number of external factors, including legislation and social inflation, with the CEO of Irwin Siegel Agency (ISA) warning these could impact the stability of the market.

Speaking to The Insurer TV from his office in New York, Howard Siegel said: “I think legislation is going to make a big difference and I think social inflation and how the courts and people start to react to awards [will too].”

Siegel references the recent changes to the Adult Survivor Act (ASA) as an example of legislation that could be problematic for the space regarding the ability to “bring back the past”.

The ASA now permits any individual who was the victim of a sexual offense that occurred when they were 18 or over—but which is currently time barred—to file a claim between 24 November 2022 and 24 November 2023.

“Legislation that brings forth the ability to bring back the past, depending on how that does, that capacity, is going to be an issue. And depending on whether and what happens with the supply chain, and if the country and the economy gets a little bit more stable, are all factors that will weigh in.”

He added: “Because we're Medicaid funded for the most part, if the state and the federal government starts to constrict based on the economy, then the funding cuts, then you're going to see a huge problem within our space. So, I worry a little bit about the future stability, to

some extent, because there's a lot of external factors.”

However, according to Siegel, many of these human and social services organisations appear to be “resilient and figure out ways to even fundraise separately and provide services sometimes, where it would be almost impossible. They figure out how to do it,” he said.

Market opportunities

ISA - which was acquired by Ryan Specialty Group in 2018 - provides insurance services and risk management solutions within the social and human service field, insuring service providers in all fifty states.

The business designed the very first property and casualty insurance package specifically for non-profit providers serving individuals with disabilities.

Siegel provided some further details on the company’s growth plans by expanding into new classes of business.

“We took over a program from Munich, which is a smaller program in the social

service band. So, we expanded our classes and now we do child care, we do home hospice,

we're now doing a little bit of daycare, summer camps, as well as foster care and a parent liability product.

“So, that's kind of an exciting piece for us,” he said.

Siegel also confirmed ISA’s position in the middle of an E&S tower and the positive impact that is having on the group’s growth potential and ability to price and accept risk.

“One of the things that's extremely important right now within our spaces is a lot of consolidation,” he said.

“What we're seeing on the addiction treatment side is venture capital money coming into the marketplace and these large organizations that are becoming multi-state require a different set of coverages in the admitted market than in the past. As these organizations grow and staffing issues occur, they have claims, and the claims are such that you can't get the right pricing in the admitted sector, so the E&S tower is a huge positive for us and for the marketplace.”

He added: “I think that there's a space for excess umbrellas with abuse and professional because everybody's layering those coverages now, and we can fit ourselves right in the middle and provide our expertise, as well as appropriate pricing.”

The Insurer TV talks to Howard Siegel, CEO of Irwin Siegel Agency (ISA)

Watch the 20-minute video to listen to Siegel’s thoughts on: