In this episode, we dive into the world of property and casualty insurance for high-net-worth families with Landon Davis from NFP. We examine the evolving risks and market shifts that make insuring valuable property particularly challenging. We also talk about Landon’s journey into the insurance field and how great brokers do more than manage policies—they become trusted advocates when challenges arise.

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Welcome to Financial Planning for Oil and Gas Professionals, hosted by certified financial planners Justin Brownlee and Jared Machen of Brownlee Wealth Management, the only podcast dedicated to those of you in the oil and gas profession to help you optimize investments, lower future taxes, and grow your wealth.

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Welcome back to another episode of FPONG Financial Planning for Oil and Gas Professionals.

This week on the podcast.

Excited to welcome Landon Davis from nfp.

Landon, thanks for joining us.

Thanks for having me.

This conversation is really going to be about insurance and insurance is just fascinating.

I would love for you to start by telling us a little bit about you and how you kind of got into this world.

And I know you're in NFP's private client group, so I'd love for you to talk about like what is that and what do you do and how are you helping clients?

Sure.

Quick Background I'm from Magnolia, Texas, just outside the Woodlands.

Spent most of my childhood there, went to Texas A and M Mays business school, graduated, got married right after I graduated.

Didn't really know or have an understanding of what I wanted to pursue.

Met a guy at the career fair who is a fellow Aggie and was in the insurance world and so that was my first introduction to insurance as a whole.

And so went to work for a life insurance firm.

Didn't last very long because I was newly married.

My wife was getting her doctorate.

It's a good grind for the people who have the network and whatnot to succeed.

Early on.

I didn't quite have that because I was new to Dallas.

We moved to Dallas right after we got married.

So I pivoted early on, stayed in insurance.

I found pnc, which I wouldn't say I fell in love with, but it was a great opportunity just because it's a very practical need that I think a lot of people kind of look at PNC and it's the redheaded stepchild of insurance because it's a necessity.

It's challenging, it's frustrated, the markets are ever changing.

I was like, I can do that.

I'm decent with people, I can build a network, I can do this.

So pivoted, long story short, worked for a smaller firm.

Realized that there was a need in the high, ultra high net worth for really good PNC brokers.

And so I met my now partner colleague Craig through just a family office here in Dallas.

We got coffee and he hired me on the spot and it was time to make a transition anyways and so I'VE been there for about four years.

NFP is a wonderful firm.

I sit in the private client division.

So all that means is I sit solely in the personal world, working with successful families, ensuring their personal assets from homes, cars, jets, yachts, and then arguably kind of nowadays the most important aspect, which is liability and understanding where your liability exposures are, understanding the need for an umbrella and or excess policy.

Incredible.

Yeah.

I think the work you do is so important and so thankless.

There's probably very few people that wake up when they say, oh man, I really should get my property and casualty documents looked at.

But it is one of those things where if you have a life event or if you're adding a home, it's really, really important.

It is somewhat thankless.

And I think kind of through all of it, I try and be very technical and very good at pnc.

But beyond that, as you and I have discussed, it's really hard to find good people who do good business, who you can trust, who you like doing business with in the high, ultra high net worth space.

And so as I tell a lot of people, you have the family enterprise here and you have all these spokes on the wheel, from trust and state to wealth advisory to family governance and so on.

Well, PNC is one of those spokes.

And so, yes, my job is to be an expert in this area of expertise.

But then beyond that, it's a matter and it's a function of, okay, how do I get to know and build relationships with all of those other spokes so that I can be a resource to either the family or to guys like yourself who are growing their networks, growing their business?

How do I take what I do practically and just kind of go beyond that to be a resource to people I do business with?

It's a coordinated effort, it's never one thing.

But working with professionals you like and trust and respect matters hugely.

I feel like it's funny you said you've been in the insurance industry for four years.

I feel like you must have lived multiple lifetimes.

I'm just thinking about like the California wildfires, all the articles in Florida about like, it's uninsurable, premiums are going up.

I feel like you've lived probably what feels like decades in insurance because that space has changed so much.

I'd love for you to just kind of talk about that change and I guess a good place to start the conversation, especially in the demographic you work in.

Are there any price points or geographies that are just particularly hit hard or difficult or that kind of like impossible to insure right now.

I don't know if I'd say anywhere is impossible to insure.

I think largely speaking, we could find a contract for just about anything.

The more challenging places to do business are California, Texas and Florida.

California, you have the fires.

Florida, you have the hurricanes.

Texas, you get fires, hurricanes, freezes, tornadoes, all of it hail.

The markets have changed and the dynamics of the markets have changed over the last 10 years, primarily due to inflation, cost of labor, cost of goods.

If you look at somewhere like 30A in Florida outside of Destin 15 years ago, the kind of makeup of that community was very small beachfront homes.

It was a bungalow style community.

Over the last 15, 20 years, that economy has just blown up.

And so you have, it's a vacation spot now from people from Dallas, Chicago, Scottsdale, New York.

Everyone wants to be in 30A.

And so over the last 20 years, I use this as an example, the tear downs of the older homes have happened and then now you have, you drive down 30A and it's like, great, you have a 20, 30, $40 million home.

Every other home.

Well, that has changed the dynamic of the insurance world there because insuring a four or five hundred thousand dollars home on the water is far different from insuring a $20 million home on the water.

And that's just 30A.

So you know, if you kind of zoom out, that has happened across Florida, it's happened across Texas, it's happened across Colorado and California.

That fundamentally kind of changes the insurance world, what carriers are willing to take on from a risk perspective in each of those places.

And so it's just, we've seen premiums rise really even since COVID we've seen loss ratios change and go up quite a bit.

And loss ratio is just simply how much a carrier earns in revenue compared to how much they pay out in claims.

And so it's a little bit counterintuitive, but as the consumer of insurance, because we all are, we want to see the carrier be profitable so that premiums level off.

We're beginning to see it now, but really over the last five years, they've taken losses on an annual basis.

And so that has created just this, I was going to say steady.

It's not steady.

A pretty dramatic increase in premiums across the board for middle market carriers to the high net worth carriers like Chubb, Pure, Cincinnati, AIG and so on.

So would you say this is kind of a, hey, my risk exposure, If I'm insuring 200 different $10 million plus properties in Destin.

My risk exposure as an insurer is very different than it was those same properties, assuming there's a bungalow on each is insurers kind of get used to this.

Is this just like a transition period where they're trying to figure out how to re rate this risk?

Or you think this is the new normal where like going forward premiums are just going to be higher cuz houses are bigger and there's more climate risk that's being perceived on the coast.

I won't use any specific carriers.

There were some carriers that kind of saw this coming.

They were proactive around their appetite and their risk measures and what they were willing to insure, call it four or five years ago.

And so those carriers now are far more open, if you will, to doing business in some of these places than carriers who were not proactive in taking measures to kind of mitigate some of the losses that were coming down the pipe.

Is this the new reality or is this a short term kind of insurance market figuring itself out?

I think it's a little bit of both.

I mean, I joke about it a little bit.

At the end of the day we're probably not going to see decreases in premium because carriers like revenue.

That being said, I think as in the kind of the market forecast, as these carriers become better and better at rating contracts and rating risks, we'll see a level off of premium.

And along with that, as they become more profitable, I think we'll start to see their appetites open up a little bit more, which is a great sign.

And then we'll start to see premiums become a little bit more competitive.

I'll give you an example.

Like take a house here in North Texas and take a family who's moving to North Texas and trying to buy a purchase a home here, right?

And let's say it's a three or four million dollars home.

What we'd like to see is okay, if we go to market now and try and find a solution for it and take X premium on an annual basis and then in two years the goal is to see that premium in two years be somewhat similar to what we're seeing now.

Contrast that to seven years ago.

If we were to try and find a solution for it, that same home, it would be far less expensive.

Like I said earlier, it's a combination of inflation which we have no bearing, we have no control over, but then it's also a function of the profitability of these carriers.

It's kind of like inflation where like premiums really aren't going to go down.

The goal is for the rate of growth to kind of match just general cpi.

Like everybody's like, oh, inflation is slow down.

That doesn't mean deflation.

That just means we're at a more normalized kind of growth level.

So in addition to kind of these interesting markets and these price points becoming more difficult to insure and kind of the premiums going up dramatically, is there any other like big changes that you've seen in kind of the what I would call more luxury insurance markets such as property and casualty for just higher priced assets?

I don't think so.

I think there's just a larger need than really ever for PNC brokers to service their clients.

Well.

I'm not to speak ill towards any of my competition in the marketplace now, but the biggest thing that we see in the marketplace is just a lack of service.

And I'm not entirely sure where that stems from.

But the vast majority of what I do is emailing clients back, calling them back, making sure that their needs from a PNC perspective are taken care of.

I think the biggest change that we want to see is service from a contractual standpoint.

It just simply goes back to okay.

Carrier's appetites are becoming very strict, very tight.

There's nothing that we can do about that as brokers because we're beholden to what the carrier says and the decisions that it makes.

And so all we can control as brokers is service.

It's calling the clients back, making sure their needs are met.

And so transparently, my partner and I, we win a lot of business by way of broker of records because clients are frustrated with the service that they've been given, whether it's they purchase a new car and they need to make a car change or they go through a claim and their broker isn't in their corner.

And so we make it a priority to communicate very effectively and very timely.

And so I give my sell to all my clients and they ask us, hey, listen, when you need anything, just text me.

I have an iPhone.

Texts are blue.

Great.

When you need anything, let me know, I'll get back to you.

And so that's missing from the marketplace now in regard to Dynamics, it's ever changing.

Carriers change, they change their quote unquote appetite, what they're willing to write, what they're not willing to write on a weekly basis, really, it seems like.

And so as the broker, we try and stay up to date with those as best as possible.

Because we're working for the family.

Yes, we're insuring their homes and their cars and whatnot, but we're working for them as a part of this larger wheel, this larger kind of family enterprise unit.

And so service is just the fundamental aspect of business, in my opinion.

And then when it comes to pnc, it's the fundamental aspect of pnc.

It's just service.

It's making sure that you take care of your clients.

That's the thing.

If the dynamics are ever changing, like Property and casualty is not a moment in time because you need to reprice that risk on an ongoing basis.

If I get the $5 million house in Destin insured, the number of carriers that are playing in that market might be fewer than it is two years from now.

So I might be able to get a more competitive bid two years from now.

So I definitely agree with you that service matters and it's not a point in time.

And you talked about something important.

That's claims that I kind of want to lean into.

Right.

Because it's like, it's one thing to have an insurance policy that says, hey, if my $5 million home in Breckenridge is ever destroyed by a forest fire, I'm going to get it.

The true replacement cost of that, which is probably way higher than their basis in it.

It's a whole nother thing to actually have that event and have a claim happen.

So I'm curious, like, how do you kind of work with clients on claims?

And then I'm curious if you have any ideas of, like, how do I know if I'm hiring a.

Or if I'm working with an agency that's going to fight me on my claim or really kind of be an advocate as a consumer kind of trying to navigate that.

It does go back to service.

As I mentioned a minute ago, from a claims perspective, the ask to our clients, our families that we serve, is if something happens, let us know and we'll be in your corner.

And so at nfp, we have a great claims team that handles all of the claims that we submit to them.

That being said, the nature of who we work with, we want to be involved whether it's a pipe burst due to freeze, whether it's an auto accident, whatnot.

As the broker, we want to be involved so that it goes smoothly and so that we retain the relationship, we retain the client.

If it's a referral from a family office, we retain that relationship.

I see a lot of brokers, I think I hear stories of families who, you know, they filed a claim with their broker and that claim was immediately just sent off to the claims team and they forget about it.

I think that's a little bit of a miss, just simply because if you want service to be the priority, then stay involved from start to finish.

Make sure it goes smoothly so that when everything is said and done, the client's happy and they're made whole.

From a carrier perspective, I would say there are probably at least in Texas, three carriers that we love from a claims perspective that are really, really good from a claims perspective.

And that's pure Cincinnati and Chubb.

They're fantastic.

And that's not to say that other carriers aren't super good at paying claims.

It's just a different experience.

If you compare a claims experience from State Farm to a chub, it's going to be drastically different.

And so I have a lot of conversations with potential families that are currently insured with State Farms.

State Farm's a great insurance company and it serves a need in the marketplace.

If you own a four or five plus million dollar home, I think naturally you've kind of outgrown what State Farm can offer you from maybe even just a contract perspective and, or service perspective.

And so I think the need there is a carrier.

Take pure, for example, it's a carrier that it's guaranteed replacement cost on the home offers higher umbrella limits, excess liability limits.

When something goes wrong, they're in your corner.

Sure, it's a business that they want revenue, they want to be profitable as a business, but at the same time they care about service and making sure that their clients are taken care of and made whole.

When something goes wrong, we obviously as brokers are the middleman between the family and the carrier.

But at the end of the day, it goes back to service.

We're in the family's corner making sure that they're made whole in the event of something going wrong.

Yeah, it's kind of nice to have like an advocate when that moment strikes, because everybody theoretically talks about this idea of service, but when stuff hits the fan, the rubber's gonna meet the road.

It's either gonna be an uphill battle or hopefully not, and ideally a downhill battle if you have an advocate in your corner.

You talked about umbrella and one of the things we've seen is as people try to get higher umbrella limits because they have what I would call more at risk assets.

Right.

Things that aren't protect retirement plans or a homestead.

Right.

Things that are kind of potentially fair game in the event of a lawsuit is that number goes up.

State Farm, you know, if you say, hey, I want a $50 million umbrella policy from State Farm.

It's going to be hard to get.

I don't think you can get it.

So I'd love for you to just kind of talk about umbrella insurance a little bit.

And of course not a recommendation, but it's just general framework for how somebody should think about that.

Right.

Like If I have $15 million in a brokerage portfolio, should I do dollar for dollar or just any feedback or general rules of thumb as people can kind of think through that question.

It's not a silver bullet.

It's not black and white.

It might be dollar for dollar.

It might not be, at the end of the day, the umbrella policy that you have in place, your excess liability policy, it's probably the most important P and C contract that you can own because it protects you when you go through litigation.

Any instance in which you are personally liable and someone decides to sue, you want your access policy, you want your umbrella policy to protect you.

And so in regard to limits, it just depends a little bit.

The risk exposure of a family worth a couple billion but lives very humbly.

They don't have children, they have one home, looks very different from a risk standpoint than a family worth 50 million that has four houses, young kids, driving, they have a boat and a skydiving business.

Well, it'd be a commercial but skydiving hobby.

Right.

And so those risk exposures look very different from an insurance carrier's perspective.

That being said, I think maybe starting out from a perspective of dollar to dollar makes sense as a starting point.

At the same time, if you're worth 500 million, it's very challenging nowadays practically to have a carrier write you a umbrella contract for north of 100 million.

And even a hundred million is somewhat challenging just because of the landscape of the culture that we live in.

We live in a very litigious society.

We've seen loss ratios go up dramatically.

And so when you start combining these factors over the last, call it five or 10 years, it's become not impossible, but it's become extremely challenging to get these higher umbrella limits.

And when I say higher, I mean, you know, north of 50, north of 100 million.

Yeah.

So I guess to kind of like say back to you what you said to me, it's like a function of, hey, what are my at risk assets?

But also like, what's the probability of loss?

Right.

Like if I think about, like if I have a hundred million, there are claims for that amount, but the probability of a claim being for that amount's way lower.

So.

And I would say for the vast majority of people, and I could be wrong here, but this is just what I've seen.

I think for the vast majority of people, their biggest liability exposure is driving because they drive every day.

People ride bikes on the side of the road, people walk across the median and whatnot.

Obviously you don't want to hit someone and cause bodily injury or whatnot.

You don't want to get into an accident which you're liable.

But you drive every day.

I drive every day.

You do as well.

And so that's a very large risk exposure.

And so from a net worth perspective, you know, I think again, practically Speaking, in the 50 to 100 net worth range, it's a conversation that we have with the family around, hey, what is going to allow you to sleep at night?

And then two if it's 20, great.

If it's 30, great.

Along with that it becomes a function of how many losses do you have on your loss history.

Which is maybe another conversation we can get into here in a minute that changes the dynamic as well.

Got it.

So it's not just as simple as hey, here's the umbrella.

They'll try to inventory your lifestyle, especially for a higher policy.

And hey, what is, oh, you have had claims in the past and that's gonna move premium.

Kind of a circular reference where hey, I wanted the maximum amount, but there's constraints and premiums move up.

But that's, I think that's a really, really helpful framework.

I'd love for you to talk a little bit about the idea of like admitted and non admitted carriers.

Cause I think it's kind of an idea that's misunderstood and probably on the surface it sounds a little scary, the idea of somebody that's not federally insured.

So I'd love for you to just talk about that nuance because that is something that's interesting that I've learned since working with you that I think is something for people to be aware of as they begin to maybe move up market in the insurance space.

So without getting into the weeds, admitted carriers are regulated on a state by state basis.

Non admitted carriers aren't.

And so admitted carriers, they are beholden to the state regulations, so they're told what they can insure, the rates that they can or can't take, why and how they're allowed to tell someone that they're not going to write a contract for the house or whatever it is.

Non admitted carriers don't operate under the state regulations.

And so because of that when there are homes or risks that fall outside of the appetite of an admitted carrier, we can go to a non admitted carrier and say sharpen your pencil.

What can you do?

And so there's a little bit more negotiation that we can utilize.

And then I guess practically speaking, if you've got 20, 30, 40, $50 million place in Colorado, high risk wildfire or Florida, high risk for hurricanes or whatnot, well, an admitted carrier, they're not going to be comfortable writing that.

And so we can go to a non admitted carrier and say sharpen your pencil.

So it's the more obscure risks where hey, as an emitted carrier there are constraints, there are givens.

And because of that more isolated risk exposures are really tough to accommodate because they can't do it within the confines.

This has been awesome, super educational.

I'd love for you to kind of like, I want to keep it light and fun.

So I'd love for you to the extent that you can share what's like the craziest claim you've ever encountered, keeping.

It somewhat high level.

Home in California.

That was a lot.

I'd say north of 50, burned down.

That was a crazy one.

We've had some extremely expensive cars, exotic cars that we've dealt with from a claims perspective.

Jewelry, losing a very, very, very expensive watch, wondering how do you lose it?

It's a fascinating world in that there's a lot of money involved in these losses.

Working from a service mindset to navigate the frustration, navigate the inconvenience.

I think those are maybe overlooked aspects of what we do as PNC brokers because there's a lot of emotion involved when you're dealing with assets of that value.

And so not that you have to have a degree in psychology, but understanding how to navigate those conversations with clients who potentially operate at a different brainwave than you, it's pretty fascinating.

Yeah.

And I would argue anytime a PNC claim enters the picture, that brainwave moves up a few decibels for sure.

Of course.

So you talked about kind of watches, exotic cars.

Can you just add those as, you know, itemized things on the policy?

What's like the craziest thing that you've insured?

There's like anything fair game and like, because there's a lot that constitutes property.

For the most part everything is fair game.

I mean, I guess we could maybe insure your left thumb, we could figure out how to do it.

And everything is out there from a personal standpoint, you know, whether it's a private jet or a super yacht you know, worth 6, $700 million, whether it's a $100 million home, $200 million home, you know, there are solutions that we can go to market for to these carriers and say, sharpen your pencil.

You know, I think the benefit of nfp, an Aon company, we're a large organization and we have a lot of leverage, we have a lot of resources at our disposal.

That being said, I think the beauty of the way that our Dallas team operates is we have the leverage and the resources of very large and amazing firm.

But at the same time, we operate as sort of a mom and pop style team in that we truly mean it.

When you need something, let us know we're there.

Because we value service and we understand you value service because you know, as a family, you're busy, you've got a lot going on, and when your pipe burst, there's water damage on the third floor of your house and gravity does its thing.

You don't want to deal with that.

The way you describe yourself is how we describes ourselves, right?

It's like institutional infrastructure and like small business service.

That's a great way to put it.

Yeah, I love that.

So I'd love for you to just like as we wrap up, hey, where can people follow you if you want to learn more?

And then also too, you kind of danced around this, but I'd love for you to just kind of explicitly say like, how are you different than like a State Farm agent, like the captive versus the non captive.

And like maybe talk about the number of carriers that you use.

And I'm sure it depends on the market and kind of the difference between having an independent broker versus a captive one.

As an independent broker, we have a lot of different resources, a lot of different markets that we can go to for solutions for our families.

What makes us different service.

I kind of talked about it at nauseam here.

It's when you need something, let me know.

Here's my sell.

When you go through a claim, I'm in your corner.

When we do your annual renewal call and your premium's up 40%, we're going to go to market and we're going to go to the other carriers and say, hey, XYZ carrier, they're facing a large increase here.

What can you do?

Sharpen your pencil.

That's what makes us different.

And it sounds not cliche.

I mean it sounds very simple.

At the end of the day, people don't do it.

We were talking earlier about really since COVID picking industry, whether it's food and Beverage Entertainment, CPAs.

We've seen service plummet and I don't fully understand why, because it's not that hard to call someone back.

It's not that hard to answer your phone.

And maybe it's the back office work that people don't like doing at the end of the day.

Like I said, we're a part of that family unit in regard to the spokes and the resources that they use on a daily basis.

And so we just want to be really good at that.

That's what makes us different.

I love that.

So if somebody wants to learn more or they have some policies that they want you to look at or just kind of second set of eyes, where do they follow you, learn more about you or NFP or the work you're.

Doing, go to NFP's website and then, yeah, please.

I mean, leave my cell.

I genuinely mean that.

Leave my cell in the footnotes.

I'll give you my email as well.

My email, my cell.

If you just want kind of a sounding board or someone to talk to in the PNC world, shoot me a text, shoot me an email or call me.

I'll get back to you.

I mean, I'm more than happy to do that.

Awesome.

Well, we will link to all your contact info in the show notes.

Our small but mighty army of listeners.

Be gentle, don't go all in on them all at once.

But Landon, thank you for taking the time to come on and join us.

We appreciate you.

We appreciate your commitment to service.

So that is where we'll wrap it up.

Ideas for future episodes.

Love to hear from our listeners info@brownleewealthmanagement.com thanks.

We'll see you next time.

Thanks guys.

Thanks for listening to this episode of the podcast.

You can subscribe or connect with us at brownleewealthmanagement.com or send ideas for future episodes to podcastrownleewealthmanagement.com thanks and we'll see you next time.

This podcast is for informational purposes only.

Nothing discussed during this show or episode should be viewed as investment, legal and tax advice.

If you have questions pertaining to your specific situation, please consult the appropriate qualified professional.