Insurance Hour with Karl Susman - Syndicated talkshow radio host

Published Date: 10/15/2023

Title: The Turbulent State of Insurance: Insights from Karl Susman on Market Shifts, Affordability, and the Path Forward

In the constantly evolving landscape of insurance, few voices carry the experience and balance of insight that Karl Susman brings to the conversation. As a seasoned insurance broker and radio host, Susman operates at the critical intersection between insurance carriers and consumers — a space where financial realities, risk management, and human needs collide.

His observations shed light on one of the most pressing challenges in the insurance industry today: the widening gap between what insurers can sustainably offer and what consumers can realistically afford. This isn’t just a matter of company policy or consumer preference — as Susman puts it, “This really isn’t politics. This is really just math.”

That statement captures the essence of the insurance dilemma facing millions across the country. Behind every policy, premium, and claim is a careful calculation — a formula balancing risk exposure, claim costs, market competition, and regulatory oversight. When one side of that equation shifts dramatically, the entire market feels the strain. And according to Susman, that’s exactly what’s happening today.

The Auto Insurance Squeeze: Rising Costs and Shrinking Options

One of the clearest examples of this strain lies in the auto insurance sector. Susman notes that insurers are increasingly hesitant to write new business — a troubling sign for both drivers and brokers. “They literally say, ‘Don’t write, please,’” he explains, describing the restrictions many carriers have placed on agents.

Several factors contribute to this phenomenon. Rising repair costs, elevated accident rates, and what Susman calls “increasingly bad driver behavior” have combined to create a perfect storm for insurers. Each claim costs more to resolve, each risk feels more volatile, and the margin for profit narrows.

From an insurer’s perspective, these rising losses make it difficult to justify taking on additional risk — especially in states like California, where rate adjustments are subject to lengthy approval processes and strict regulatory oversight. As a result, some carriers are tightening underwriting standards, withdrawing from certain markets, or even ceasing new business altogether.

For consumers, this translates into fewer options and higher prices. Some companies may demand full payment upfront instead of offering monthly plans, while others may simply refuse to insure higher-risk drivers. The outcome is a shrinking pool of affordable coverage — a situation that leaves both customers and brokers like Susman in a bind.

Homeowners Insurance: The Coverage Crisis

While the auto insurance situation is troubling, the homeowners market is in even deeper distress. According to Susman, homeowners are now “lucky to find adequate and affordable coverage.” When shopping for quotes, he sometimes finds only one or two options — or none at all.

The reasons for this are multifaceted. The escalating frequency and severity of natural disasters — from wildfires and floods to hurricanes — have driven property claims to unprecedented levels. Insurers, facing billion-dollar losses, are reassessing their exposure and withdrawing from high-risk areas.

This retreat has created a scarcity of available policies. As Susman points out, when there are fewer insurers competing for business, prices inevitably rise. “When there’s less competition, you end up with the carrier that charges higher rates,” he explains.

The ripple effect of these dynamics extends beyond individual homeowners. Entire communities can feel the impact as reduced access to insurance threatens property values, complicates mortgage approvals, and discourages new construction. Insurance availability, once taken for granted, has become a major factor in regional economic stability.

The Role of Government and Regulation

Recognizing the mounting crisis, some state governments have begun to step in. In California, for instance, the governor recently issued an executive order aimed at “expanding choices and stabilizing existing markets.” The order calls for reforms such as improving rate approval processes, strengthening the California FAIR Plan (the state’s insurer of last resort), and accelerating the implementation of new policies to stabilize the system.

While these measures are steps in the right direction, they also highlight the delicate balance regulators must maintain. On one hand, consumer protection remains paramount — no one wants to see unchecked rate hikes or predatory underwriting. On the other hand, insurers need the flexibility to price policies in a way that reflects actual risk and market realities.

Susman’s insights suggest that without such balance, the market risks continued instability. When companies can’t charge sustainable rates, they simply stop offering coverage — leaving consumers with fewer, more expensive options or none at all.

The Broker’s Perspective: Navigating Between Two Worlds

As a broker, Susman operates in the middle ground between insurers and insureds. It’s a position that requires empathy, knowledge, and adaptability. Brokers like him must navigate the shifting demands of both sides: advocating for clients seeking fair prices and adequate protection while understanding the financial constraints and risk models that drive insurer decisions.

This dual perspective gives Susman a clear-eyed view of the industry’s challenges. His comments reflect the growing sense of frustration among independent agents who are watching markets contract before their eyes. But they also underscore the importance of brokers as educators and problem solvers.

In times of volatility, consumers often turn to brokers for guidance — someone who can interpret the fine print, explain market trends, and identify creative solutions. Whether that means exploring surplus lines, bundling policies, or leveraging state-backed plans, brokers remain the crucial link connecting people to protection in an uncertain world.

What Does “Stabilizing the Market” Really Mean?

One of the most pressing questions Susman raises is: What exactly does stabilizing the insurance market look like?

True stability requires more than government intervention. It demands a fundamental recalibration of risk, pricing, and consumer expectations. Insurers need the ability to adjust premiums in real time to reflect changing realities — whether that’s inflation, repair costs, or climate-related risk. At the same time, consumers need transparency, trust, and access to coverage that won’t bankrupt them.

This balance won’t be easy to achieve. But understanding the underlying math — as Susman emphasizes — is the first step. Insurance isn’t arbitrary; it’s a system built on data, probabilities, and financial discipline. When losses rise faster than premiums, the system falters. When regulation lags behind market realities, the imbalance grows.

To restore equilibrium, stakeholders across the board — regulators, carriers, brokers, and consumers — must engage in open dialogue and collaborative problem-solving.

Moving Forward: Building a Sustainable Future

Susman’s observations offer both a warning and an opportunity. The warning is clear: if current trends continue, affordability and availability will continue to erode, leaving more Americans underinsured or uninsured.

But there’s also opportunity — to modernize regulatory frameworks, embrace data-driven risk modeling, and promote innovation in how coverage is delivered. For instance, usage-based auto insurance, parametric disaster coverage, and AI-enhanced underwriting tools all hold promise for making insurance more efficient and equitable.

Ultimately, as Susman’s comments reveal, the path forward lies not in political debate but in pragmatic solutions grounded in math, fairness, and foresight. The insurance market, like any ecosystem, thrives on balance. The sooner we align our policies, pricing, and protections with reality, the closer we’ll come to true stability.

Conclusion

Karl Susman’s perspective cuts through the noise to reveal the underlying dynamics shaping today’s insurance industry. His words remind us that at its core, insurance isn’t about politics or emotion — it’s about numbers, risk, and responsibility.

Whether you’re a homeowner searching for coverage, a driver renewing your policy, or a policymaker crafting regulations, understanding this balance is essential. The challenges are real, but with thoughtful leadership and informed dialogue, the insurance market can regain its footing — and continue serving its ultimate purpose: protecting people, property, and peace of mind.