D&O Insurance with Danny Hojnowski

David Wright: 0:00

My guest today is Danny Hojnowski, SVP for Trans re runs, D&O, E&O, cyber treaty and Fac departments in the US, Danny, welcome to the show.

Danny Hojnowski: 0:09

Thanks very much.

David Wright: 0:10

So I want to start I like thinking about claims when I tried to learn about coverages. So maybe you can tell us about your favorite or most instructive claim story?

Danny Hojnowski: 0:20

Yeah, sure. Well, I would say the one that I probably learned the most from, was back in my facultative days here at trans race. So we're going back to probably 2007 2008. Right leading up into the financial crisis. It was e trade financial, they had a nasty D&O claim, it was a renewal of ours. And the writing was on the wall that we were heading into a financial crisis, I thought about getting off of it multiple times. It was with a clientele that we did a lot of business with. And I ended up staying with it ended up it was my first two and a half million dollar claim, which was the most we were putting up back then the biggest claim I'd ever written to date at that point, and everything and my instinct told me, I should probably not be doing this account, we're heading into financial crisis. And these guys some of the stuff that I was reading in their 10 Ks, the 10 Q's, that were given out loans for yachts, loans for yachts heading into a financial crisis, what could go wrong, right. But uh, you know, like I said, it was with a ceding company we did a fair amount of business with reality is keeping a relationship in mind, I probably should have pared it back to maybe a million and a quarter cut the line in half did something like that. But I stayed with a two and a half million. And I'll tell you, within four months of writing it claim was in there was concerned that E trade wouldn't even exist, any more potential bankruptcy claim came in and that claim was paid. I like to say there's typically on public D&O, a five to seven year tail, we got to reserve up on that one within a year and a half. So I would say, was one of the worst ones I've wrote, but But I learned from it, you know, what I really learned was, you got to trust your instinct when you're underwriting and you need to be willing to have that tough conversation with your clients and say, Look, I get it, I get the overall relationship. But to some extent, I can't go down this road with you. And I should have been more constructive and working out a way to go forward with that.

David Wright: 2:12

What did they do wrong? Because, was it a D&O claim?

Danny Hojnowski: 2:15

It was a D&O claim, right? So just because they were over leveraging themselves, the trade was doing loans. Like I said, they were loaning people money for yachts. But they were also letting people leverage their own accounts internally, for their trading. They were into the mortgage business heading into the financial crisis. So when everything blew up their stock, I don't remember exactly where it was trading, but it fell to, you know, pennies, and all the investors came in, filed a suit. And next thing, you know, it was a limit loss. So that was investors, alleging that management did what investors alleging mismanagement by the directors and officers saying that you should have had better foresight, you should have hedged yourself better, you shouldn't have made so many loans to people who couldn't afford to pay them back, which in hindsight, makes a lot of sense. But if you look at it, just about every bank back then was doing the same thing. They fell into the same trap. And that's why we had some serious losses in that. Oh, nine block in the D&O world.

David Wright: 3:18

So there's a question in this business. There's a security class action lawsuit.Is that what that was correct that security class action. So so this is where the the investors, the irony behind in these things are investors are owners of the company, and they're suing the company that they own to get money from the company that they own

Danny Hojnowski: 3:39

when they're getting the money from the insurance of the company? And typically, it's not the investors who are getting the money on the tail end. It's the lawyers. Yes.

David Wright: 3:46

Okay. So what is what's right here? I mean, the D&O world works a certain way, right. And we have this pattern of behavior, which has gone on for a long time of when a company's stock goes down, they get a class action lawsuit filed against them. It's some kind of securities fraud, I guess. Is that what it is? What like, what's the what's the wrongdoing? And and is it do you think it's right?

Danny Hojnowski: 4:09

Yeah, so I'll take the wrongdoing. First. The wrongdoing these days, it can typically be anything. I read Matt Levine a lot. He writes on Bloomberg. And he coined the phrase everything is securities fraud. It seems like these days, almost everything is securities fraud. If you look back historically, we used to have about, you know, 150 to maybe 200 security class actions in the year. If you look at the 16 to 19. Block we were having almost 300 cases a year excluding any sort of merger objection or noise around it. And it really became anything with securities fraud. Boeing had planes crash as well, that securities fraud to peloton had a treadmill that a baby climbed on and was injured. Well, the stock goes down the next day. That's securities fraud. So you have a cyber breach that securities fraud so the plaintiffs bar really got into anything that happened that had an ad adverse effect on a company. They were filing a security class action lawsuit and seeing what stuck to the wall now, is it right? Some cases? Yes. Some cases? No. If there's gross mismanagement, things like that, then yes, it's right. And they should be held accountable. And that's why our insurance product does exist in the D&O world. But there is definitely some excess that's going on right now, and has been going on for the past number of years, with overzealous plaintiff attorneys coming after just everything and seeing what they could get to stick.

David Wright: 5:35

So they're violating their duty of care as officers of the company of some kind,

Danny Hojnowski: 5:39

correct? Yes, you have a duty of care and fair representation to your shareholders. Okay. So they're violating they are allegedly violating that. Right. Right.

David Wright: 5:49

And, and one of the things that Levine says I read him a lot, too, is he says, You're allowed to screw up, you just have to tell us, the shareholders when you screw up while you're doing it.

Danny Hojnowski: 5:57

Correct. And you know, what, if that's the case, then if things were disclosed properly, then you shouldn't have a claim. But it's really it really comes down to those disclosures when those disclosures are improper. That's when you run into problems. I mean, Silicon Valley Bank is a perfect example. No one, you know, go back two months, no one thought that they could potentially be going out of business, but they were they just weren't lining up their assets and liabilities correctly. There was no way to tell from their financial statements that that was going on. Interest rates went up. That's a legitimate DNS to the mind. Not

David Wright: 6:31

Yeah, interesting. I mean, I'd probably agree with you there. And that I had never looked for a second at Silicon Valley Bank or thought about it before a month ago, right. And then suddenly spent a lot of time thinking about it. And the the revisionist history anyway, that I read, says, Oh, well, they should have known all along, because they're just, you know, way out of whack on their interest rate risk. Was that something that was clear in advance that this was something that was going wrong, do you?

Danny Hojnowski: 6:56

To me, that would have been really tough? And if you look, I mean, I just about the entire industry was on that you had some of the smartest ePHI, underwriters out there who looked at that bank A year ago, and thought everything was fine. I think a lot of what happened with Silicon Valley Bank, you had the depositors, a very concentrated group, most of them, venture capitalist backed companies, private equity backed companies. And in today's day and age, you know, it was a traditional run on the bank back in the day, a run on the bank, you need to go line up, get your money out, now you push a button, the money's gone. And you could pull it out within a day. So Silicon Valley had a traditional run on the bank. Yes, they did not match up their assets and liabilities the way they should. But at the end of the day, their downfall was a traditional run on the bank.

David Wright: 7:46

And is this going to change how you look at other financial institutions? Like what are the lessons learned from this for you as an underwriter?

Danny Hojnowski: 7:53

Yeah, the lessons learned are as a reinsurer, we're supporting the people who are doing this. So we're talking to all of our clients right now. All the insurance companies and their FYI, underwriters about what they're doing, and really what we're hearing out of them, everyone's asking a lot more questions. Who is your customer base? Are they all owned by the same venture capitalist companies? How many are above the FDIC? $250,000 limit? How are we hedging our interest rate risk? So I would say that the market has very quickly figured out what went wrong and is now underwriting to that risk. The interesting thing though, you're right D&O policy, it's a year long policy. There are a lot of other regional banks who could potentially be in trouble, who you have policies in force. So there's nothing you can do until that policy comes up for renewal.

David Wright: 8:42

Yeah, yeah. And first of all, first republic. We're recording this on May 1, I think, is that right? Yeah, that is May 1. So first public, was seized this past weekend? They are

Danny Hojnowski: 8:52

going to JP Morgan. Okay. So yes, there. There's already a security class action lawsuit in them. And the reality is, the depositors are going to be fine, which is the most important thing. But the shareholders and bondholders are first republic, they are being close to wiped out, they're done. And they will be filing suits against the D&O policy to recover that money.

David Wright: 9:15

And what will it work you think? I mean, it gets your you don't want to talk against your book here.

Danny Hojnowski: 9:21

I want to talk against my book. But when you have something of this magnitude, it's hard to see your way out of it. It's hard to see your way out of it just the headline risk alone with all these banks that were seized, I think that they're more likely than not going to have some sort of

David Wright: 9:36

settlement. So what what would happen if they didn't buy the you know,

Danny Hojnowski: 9:39

the directors and officers will be on the hook themselves for any potentials?

David Wright: 9:43

Do you think that will really happen? With the go after individuals?

Danny Hojnowski: 9:45

You know, I've seen it happen once or twice in my career. I've been doing this over 20 years. And Ron, they went after some individuals Worldcom you know, if you think back to the Earl had dinner, and they had the you know, but they pulled out the top of it. Oh, And in some cases, there was just such egregious behavior when it came to an Enron or WorldCom. Right. Where there was no D&O coverage for some particular individuals, there was coverage for the entity coverage for the outside directors. But in some cases, if there's just blatant fraud, things like that, you would be able to go directly after the director themselves.

David Wright: 10:19

Because theory out there, which I don't know how much I believe it, it's not zero, I believe some of it, which is that insurance kind of creates its own outcome, right. So by the fact that you have insurance in there, you're not actually harming anybody, quote, unquote, it's, you know, the plaintiff attorneys are like, well, let's just go take the money just sitting there waiting for us.

Danny Hojnowski: 10:36

Well, I think yeah, I mean, I'm probably with you on that. I believe some of it, I don't believe all of it. But look, there's deep pockets. And at the insurance level, you know, if you're a plaintiff lawyer, and you say, All right, well, I know that this company buys a $500 million tower. It's a lot easier to go after that$500 million insurance tower, versus trying to seize a CEOs house.

David Wright: 11:00

Yeah, right. Right. And you got person there. And that's the faceless financial institution. Right? I mean, yeah. And people are a little less sympathetic. I mean, they're not like they're massively sympathetic to a very rich CEO of a comfortable lead to a company. So if you on the current kind of levels of insurance, if you sort of reduced all the insurance available by 50%, let's say, Do you think that claims would claim costs would go down?

Danny Hojnowski: 11:26

No, I don't? I don't think so I think you would almost need to reduce it considerably more than that to get claim cost down. Right? I think, you know, just to play in as far as made such a good living off of pursuing D and L claims, that that the genies out of the bottle, I don't see that stopping anytime soon.

David Wright: 11:47

I know you you're focused entirely on the US markets. But I'll ask you a fair question. Does this exist anywhere else in the world?

Danny Hojnowski: 11:55

A little bit in Australia, we're seeing it, they're starting to pull together some security class actions. We have seen some collective actions out of London, things like that. But on the level that exists, nowhere is anywhere near the US.

David Wright: 12:09

So what's the what's the alternative legal theory for wrongdoing there. And those other in those other jurisdictions? I mean, stock markets all over the world, right. So the company, just their stock dropped because of some poor decision making by the directors and officers shoulders who like, well, because we lost that one.

Danny Hojnowski: 12:27

Yeah, I think you're talking more about a cultural issue here versus a specific D&O issue. Yeah. Because if you look at GL losses, if you look at all the losses, umbrella losses, we are much more litigious here in the US than anywhere else in the world. And I think that's what's driving it. It's not D&O specific. But I think that's fair across all lines where the US, you're just getting higher settlement after higher settlement.

David Wright: 12:54

Right. So we want to blame somebody else, and take their money,

Danny Hojnowski: 12:59

pretty much. Right? Well, that's a great way to distill it down simply

David Wright: 13:04

is, do you get a sense for whether other countries are? I don't know, like, I'm trying to think of like, what the balance of what's missing there? Right? Is it? Is it just a cultural thing that the lawyer is not there? Or are they just not as powerful? Or, you know, like, are there other clues, we can look for that that are sort of similar to this?

Danny Hojnowski: 13:26

I mean, I think it's just pure litigation reform and the way that our court systems work, and the awards that have been granted here, I think once you start down that road, it's very hard to reverse it. Other countries have never really started down that road of having formal class actions. Even on individual actions here, it's, you know, people talk about social inflation all the time. You could argue how relevant it is in professional lines, but we see it all the time. On our traditional casualty book, you know, you have an auto accident. Next thing, you know, you know, million dollar claim. And next thing, you know, there's some sort of ACO claim that runs for 10 $20 million that's on there. And I mean, some of these claims, they're absolutely horrific. med mal as well, some of these claims are horrific, but they're paying out, you know, 10s of sometimes even hundreds of millions of dollars. So I think we've gone down a road. And I mean, the only way to really walk that back is complete litigation reform. And I don't think with a political system that we have right now, that that's really at the top of anyone's mind.

David Wright: 14:38

Is their D&O and crypto.

Danny Hojnowski: 14:40

There was D&O for crypto. You know, it's funny, it's it's very tough to cover that. One of our standard exclusions on our treaty is typically cannabis and crypto. There are some companies out there who do write crypto, we do pick up a small amount. Here a treasury we're trying to be very careful with it but there is We have an emerging market for crypto D&O coverage and Kryptos. Here, it's here to stay, whether you like it, whether you don't like it, whether you think it's real, or you think it's fake, it's going to be here for a while. And there are people sitting on the boards of these companies, they need coverage. So the markets responding to that,

David Wright: 15:19

what are the companies, this will be the company that's issuing the token, the company

Danny Hojnowski: 15:23

issuing the token, you know, FTX had a D and O tower. FTX. Obviously collapsed. They they had a small D and O tower, but the tower is on the crypto side, they're nowhere near what they are in traditional D&O, because capacity so scarce, whereas you might have a $500 million tower for a decent sized company, traditional bank or someone like that, for a crypto company, if you could cobble together 10 $20 million worth of capacity. That's a lot for one of those companies.

David Wright: 15:51

So we have maybe are going through a natural experiment where we can test our little theory of if you dramatically reduced the dino limits available, what would happen to the claims,

Danny Hojnowski: 15:59

you know what we might see that FTAs might be the canary in the coal mine for that. And so they're definitely going to be having a Dino, I say they are definitely having a D&O loss. And they have nowhere near the tower, that some of these other banks that we talked about, have

David Wright: 16:14

any other losses or, you know, claims bonuses on those that you're aware of,

Danny Hojnowski: 16:18

on the crypto side, no, not not much. But again, we don't do much in that space. So I'm probably not the best person to go through that.

David Wright: 16:26

Yeah. Well, I mean, I have to think that you'd be watching it pretty carefully. Because I mean, I don't know if crypto, we don't talk about it anymore. And I can't find me to try and find a way to any to bring generative AI into this conversation. I'm not sure where do you know comes in? Because that's something everyone, including me. But, you know, crypto would have been the thing we were talking about a year ago, or even six months ago? Yeah. Right. So if it comes to stay, there will be more.

Danny Hojnowski: 16:49

Right. There has to be? Yeah, there has to be. And I think what you see in crypto right now, that market is behaving much like the market for IPOs. And Spax. did two years ago, in the traditional D&O space. You know, you used to be able to put together an IPO tower, you know, million dollar retention, you know, get a primary five or primary 10 for someone, you know that they might charge a 10 rate online. And that would have been a big number two years ago, when do you know losses really started to run through and the market started to correct itself. You are seeing people putting up two and a half million in excess of a 5 million retention for a million dollars. And that's it was almost cost prohibitive, but you think about it. In order to attract someone to sit on your board, they're going to mandate that this coverage be in place. Because otherwise you can go someone can go after their house. So this coverage is almost forced placed by the people sitting on the boards. So you're getting the same thing with crypto. I mean, there's these are still people sitting on the boards of companies, their personal assets could be applied. So they will buy this coverage.

David Wright: 17:59

And how did the SPAC IPO story play out? I mean, probably looking at a year or so out of it now. So Did it have the mark? How did the marketplace behave there? Because I remember you're hearing how tight it was?

Danny Hojnowski: 18:10

Yeah, it was a very tight market. And I'll tell you, I was very concerned about two years ago, where I say as a reinsurer basically what I do, I'm an aggregator of risk, I support a company A, B, C, D, they could all be writing similar accounts, they will be writing the same account. So what specs My biggest concern was? Well, I have someone who writes the private company, I have someone who write this back, then I have someone who writes the DCE back. Next thing, you know, if there's a horrible lawsuit, could I potentially get hit on three separate policies that were written by three different companies that I supported? You know, with the Spax, it seems most of these are going to close up, return money to the investors. And I think as an industry, we're going to do very well, on the specs, the D specs, again, a lot of them are struggling to find us back in spec and maybe go through the terminology here for sure spec is a special purpose acquisition company. In its simplest form, what it is a bunch of investors get together, they give money to someone, and it is their charge to go out and find a private company to buy. So you list yourself publicly, all you are doing is looking for an acquisition of a private company. Once you find that private company, you acquire them. And then since you're a public company, that private company becomes a public company, it's a different way for someone to go public. The D spec is essentially what happens after the spec find its target. So the way the insurance works, you would write a two year policy for the spec once they found a target, that policy would go into run off and then you would buy a DCE back policy for the go forward company.

David Wright: 19:48

Okay. And so you said that you think it might turn out okay, I think

Danny Hojnowski: 19:52

dispatch will turn out okay, because the majority of them are just returning money to investors. So there's no law says, Hey, we went out we tried to find someone When the economy turned, here's your money back and their claims made policies and their claims made policy. So it's over, it's over. It's over, it's over. So the specs look pretty good. Um, the dispatch do worry me a bit more, because the companies that did find targets probably a year ago because most haven't been finding targets as of late. But those companies that took private companies that were probably not ready to go public whose financials just weren't as good as they should be. And you think about how many Spats we have, we had about 300 stacks, at 1.0 looking for targets. Reality is you overpaid for the private company, there's, there's only a finite amount of companies out there, and you want to find one, there was a bidding war on some of these, you had to overpay. And now those are typically trading well below what the acquiring value was. So I think you're gonna see some litigation around the DESE backs.

David Wright: 20:51

Right. So when you say they acquire the company at price x, and now the company is trading at x minus 10%, or 20%.

Danny Hojnowski: 20:58

Most of these are trading well below, a lot. These are trading in the single digits,

David Wright: 21:03

right? Single digit dollars dollars. Okay, so that means if you do $10,

Danny Hojnowski: 21:08

right, typical, right to take us back would be a$10. These companies are all trading around $1 $2 or so investors are sitting on 80% losses.

David Wright: 21:17

Ouch. Okay, yes, that's gonna go somewhere. So that would hit the DCE. Back, do you know that we'll

Danny Hojnowski: 21:22

hit back the correct there's been a number of cases where plaintiff attorneys have sued both the SPAC and DESE back policies, but where the case will is very much leaning, it's the D specs that are gonna be on the hook for those not the specs interesting.

David Wright: 21:37

And so what I wanted to play back here was kind of like the story of the time. So walking into this environment, we didn't know you didn't know which way that was gonna break. Because in principle, it could have gone either way, right? Very much.

Danny Hojnowski: 21:52

So yes. And that's why I said, if you asked me this question, two years ago, I would have told you I was scared to death this path, because I was I being cautious. I was concerned that I could potentially be getting hit on three separate policies.

David Wright: 22:04

Yeah. And now it looks like it would be one, it looks like it would be the DCE back policy. Right. And so what is this back once the D spec was the third one to

Danny Hojnowski: 22:11

do the D and O for the private company that was bought?

David Wright: 22:13

Oh, I see. So it was like the parallel to the spec, he joined in the D spec, correct. There's a really interesting case for like, let's look at insurance innovation here, right? Because you don't know in advance where the claim is gonna go. As you say we have a perfectly reasonable theory for recreation there. And it turns out, and now it's been resolved. And so now I imagine SPAC dinos going to be cheaper.

Danny Hojnowski: 22:33

But there aren't any more Spats really going out. Yes, back to you know, has become cheaper. Yeah. And that's more a function of the market as well. You know, we had we had a supply demand imbalance. At one point in the D&O. Market, especially for the spec, the spec IPO, just like we have for the crypto which we were just talking about. Now, we've had so much more capacity come into the D&O market, as rates have improved, that we're really starting to see a softening especially on the public D&O. Do you

David Wright: 23:03

Was there some way you could have foreseen the way this kind of the legal case law would have gone? Is there something looking back? Because I mean, in retrospect, if you knew now, what you knew then or knew, then what you do now? You would have written all this back and get your hands on?

Danny Hojnowski: 23:18

Yeah, fair point. No, I don't think there was any. It wasn't really foreseeable. I mean, maybe you could have gotten some lawyers to go out there and look at policy. But this was a new, this was new territory for us. We specs have been around for a long time. But you never had the absolute volume that we had about two years ago. So there was very, very little litigation around them, for us to even think about or reference before this happened.

David Wright: 23:47

I get the feeling that cyber to a degree is gaining more certainty or less overtime about right, because there's so much innovation in that.

Danny Hojnowski: 23:56

Yeah, I think cyber is I think cyber has improved as a market tremendously over the past few years. And, you know, I think what the market really did a good job in cyber of an anomaly to talk about rates or losses or anything like that, where I think the market really stepped up and did a great job. We made the insurance better risks. Okay, if you were an insured, if you didn't have multifactor identification, if you have a bunch of open RDP ports to three years ago, you still could have found insurance someone with a just charge you a bit more told you, Hey, you got these, you should probably address it. But you still got coverage. Now you weren't able to get coverage. And one of the things talking to a lot of our clients that we see, they're working with their brokers, they're working with their insurance, they're doing scans, you know, 60 days, 120 days before renewal, saying, Hey, we're concerned about this that you have. We're concerned about this. And what we've done as an industry, we've made the underlying risk factor. I mean, similar to if you go back 200 plus a year years ago, property insurance for factories, we started saying, Hey, if you want insurance, you need sprinklers, you need alarms, you need this that we finally, as an industry in cyberspace, it got to a point where we've told the insurance, this is the bare minimum of what you need. And now the underlying risks, in my mind are much better than where they were two years ago when ransomware was so prolific.

David Wright: 25:23

That's amazing. And I have seen that too. The the requirements to gain insurance are very concrete and specific. Is there an equivalent in the EU? No,

Danny Hojnowski: 25:35

not really. No, that's great. But, ya know, I mean, everyone has a bit of a different appetite. I mean, look for do you know, you need audited financials, but every public company has audited financials, you know, but I've seen companies that are going concern, still able to buy D&O insurance, you know, people might just charge more, but you don't have that same level. And guess what cyber? You know, the cyber loss is going to come from someone trying to hack you. So you can first see, though, on the D&O side. Well, I mean, Boeing, for instance, I go back to that, well, they had a plane crash, but that turns into a security class action suit, as well, it's I guess it's just tougher on the D&O side, because the

David Wright: 26:20

operations are more diverse. Correct. Right. Even though even when you have a first party claim, or first party loss of a company, plane crashes? You're not gonna be also an aviation. Sure. Correct. Or aviation engineer? Right. Yeah. Any other lines of business where you think there might be room to impose these? Because, you know, how about that? Or maybe for specific, like classes, like, say, lawyers, you know, or something or Yeah, lawyers, you know,

Danny Hojnowski: 26:48

is a interesting market. You know, we've we've been in that market 40 plus years here at trends, Ray. It's tough. I mean, you look, it's especially, I'm talking about the larger law firms right now. And you look at the scope of work they're doing how complex it is, the dollar amounts involved in these cases. on the primary side, it's just been a really, really tough line of business. For us, once you get into the high access warriors. It's performed much better, but on the primary side, just with how complex the work that they're doing, and like I said, the dollars involved, if you get a claim, it's going to it's going to run you a fair amount of defense costs just to unravel what may have happened.

David Wright: 27:31

Right, right, much less be able to tell them in advance what's going to happen.

Danny Hojnowski: 27:35

Correct. And you're dealing with lawyers fighting other lawyers. And, you know, no one's gonna want to settle that or admit any sort of wrongdoing or anything. So we find that that tends to spiral pretty quickly on a large law firm side.

David Wright: 27:48

Right. Do you get that? Do you think that the claims administration or claims adjustment process is harder for lawyers, you know, that other kinds of you know, just because all the lawyers everywhere is that course?

Danny Hojnowski: 27:58

Is it really? Absolutely, because, again, and you know, and in some cases, they could be the best client to have a claim with because they know everything? And in other cases, they could be the worst? Because they always think that they're right. Yeah. So when you start to get down to settlements, it does get tough. And we we tend to see those cases linger on for a bit longer and run up bigger defense costs bills

David Wright: 28:24

are, are the tough jurisdictions for lawyers. And you know, the same as for other clients end like same ones always come up. It's like South Florida. It's like, you know, New York or other places. Yeah,

Danny Hojnowski: 28:34

I mean, EPL private company D&O. When you're getting into this, when you talk about the large lawyers, most of these are operating multinationals. Okay. But when you're talking about the mid sized or small, it's always the same jurisdictions that are coming up California, New Jersey, Texas, they're the ones that are just always popping up as being more difficult jurisdictions,

David Wright: 28:57

and and are they popping up is in professional lines? Is it the same insane? No, not your department, but GL or liability? Like, you know, because I've one of the things that always surprised me was Florida is tough for property claims or hurricanes. But then you also have like a pretty nasty auto liability market there, which is kind of surprising. So obviously the that the the case of those two things would be linked. Is it the case of the professional lines as well? Yeah,

Danny Hojnowski: 29:24

I think in professional wines, what you have, it's just where you would have more sympathetic juries bigger awards on the professional side. I don't know how linked it would be on the casualty side but yeah, you bring up a great point about Florida. You have real issues with the hurricanes and and how those are adjusted down there. But then you have auto market that's very difficult as well. So

David Wright: 29:48

not is it the case in professional lines in Florida, Florida,

Danny Hojnowski: 29:51

it's I would call that on the yellow side. If we were to do in a traffic light here a green yellow red, I would call that more yellow than red. I'm on the professional side.

David Wright: 30:01

Okay, so we're actually running out of time, Dan, this has been a blast. I want to get I wanted to get a little bit to your sort of origin story of Danny and ask you how did you get into this kind of business? Where you're from?

Danny Hojnowski: 30:12

Okay, so I grew up in Bayonne, New Jersey. I got into this I went to college, played basketball on college wasn't really sure what I was going to do. I was an English Lit and philosophy major, not a not really the best thing. Now not really the best thing to get a job in 2001 when the world was being taken over by technology back then, as well. So I thought, you know, maybe I'll go to law school, but you know, I started playing rugby when I moved home, and the guy who played rugby one of them worked at Everest three is a D&O underwriter and other guy was a broker Aon. And next thing, you know, they got me an interview and, and I had my first job with AON I started in July 2001. Okay, or rather, my first job was at first. Okay, and what were you doing? I was a facultative D&O E&O, underwriter. So I've been doing D&O, E&O, my entire career

David Wright: 31:07

is that by happenstance, did you choose that in some way? Or is that just a job opening?

Danny Hojnowski: 31:11

That was the job opening that came up? And that's what that's what I got into totally random. Yeah, but you liked it. I loved it. It was a lot of fun. And I still say this. What I like most about it is the people. And I think that would be true of any line of business. What I like about our industry and reinsurance insurance, it's a relationship business. I don't think that's ever going to change to any great extent. I have some of my best friends who are in this business. I've made tremendous friends. And I mean, you know, guy, people who are my wedding party, I've met through this industry, and it's about the relationships. I like coming to work every day. And I'm like, I'm not sitting here running through spreadsheets. I mean, that's happening some days, but like, you know what, for the most part, I'm gonna talk to my friends. I'm gonna enjoy it. So that's really what kept me in the industry. Right.

David Wright: 32:03

We'll close there. My guest today is Danny Hojnowski, Danny, thank you very much.

Danny Hojnowski: 32:06

Thank you.