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For 22 years, the Florida Association of Insurance Agents has been led by Jeff Grady, president and chief executive officer, who admits that when he started all those years ago he did not expect to “fall in love with insurance agents.”
Grady joined FAIA from the banking world in 1998 and said he quickly learned about – and came to greatly respect – the work done by the 116-year-old association’s 2,000 agency members across the state.
“Honestly, I just didn’t think that I would like it this much. I didn’t like banking that much, and I really didn’t think I would fall in love with insurance agents,” Grady told Insurance Journal in an interview ahead of his retirement from the association on Aug. 31. “They’re the epitome of America’s small businessperson.”
Throughout his 22 years at the helm of FAIA, Grady has experienced a number of natural catastrophes, navigated Florida’s complicated political waters and been a part of making history with the association, to cite just a few memories.
In this interview with Insurance Journal, Grady recalled the top 10 moments during his leadership and how those moments also shaped the insurance landscape in Florida.
Grady’s career started in banking, and like so many others, he fell into the insurance world. He was executive director of the Community Bankers of Florida when he was hired by FAIA in 1998, a move that was a surprise even him and one that didn’t go over well with some Florida agents. They were still angry about the Barnett Bank v. Nelson 1996 U.S. Supreme Court decision that allowed banks to sell insurance from branch offices in small towns and they blamed banking associations for the outcome.
“It was an odd beginning; I think they hired me due to search fatigue. They had gone around and tried to find a few people and struck out,” Grady said. “The members were not real pleased… several of them resigned that day when they heard that a banker had been hired because the battle was so fresh in their mind and they had lost at The Supreme Court.”
Grady said the ironic part is banks turned out to be “great valuation multipliers for agencies,” but it was still a strange beginning for him.
“I was young and didn’t have the experience that you might expect, and I went into a situation that was not exactly as it was represented, but it turned out great.”
In his early days leading FAIA, Grady said he quickly learned the harshness of the Florida political world thanks to a former insurance commissioner, Tom Gallagher, who he said made sure it was known how “the system” worked and that the insurance industry was tightly regulated.
Grady said in his experience, there are few politicians there for the right reasons, and he has witnessed that firsthand.
The insurance lobby and agents are a powerful influence, however, and a hard-working group at the Florida Capitol. FAIA has worked to support and build relationships with candidates to have a positive influence on the industry.
“You’ve got to take that stuff seriously and FAIA does. We have a huge political action committee; we go hard with lobbyists,” he said. “And when you walked into that room for the first time, it can be a little stark. I was naive, I didn’t really know, but I was glad that I never got used to it. I did it partly myself early on, and then we hired good lobbyists and they were the real people on the ground and I was the Monday morning quarterback.”
After Hurricane Andrew in 1992 and the subsequent collapse of the Florida property market, the residual market – the Florida Residential Property Casualty Joint Underwriting Association (FRPCJUA) – was created.
Grady said lawmakers began pushing to have those policies taken on by the private market, but there was no form of agent ownership for those policies. FAIA was instrumental in establishing ownership in the government run market and eventually helped with the creation of the state-backed insurer Citizens Property Insurance Corp.
The process didn’t go completely smoothly, Grady said, but FAIA fought hard to fix things with Citizens so it worked better for agents.
Now, “[Citizens] is well-run, they respect agents as a partner of the company rather than a problem,” he said.
One of the hardest moments Grady faced as head of FAIA came near the beginning of his tenure, but it changed his world ultimately for the better, he said. Noting that he “wasn’t very good” at dealing with his internal job responsibilities just yet, Grady was thrust into a negative personnel situation with an FAIA employee that began before his arrival and ended up in an employment practices lawsuit in federal court with Grady named as the lead defendant.
“I’m telling you, it made me pay attention to personnel from that point forward,” he said. “They weren’t necessarily my sins I was defending but I knew I didn’t want to create more of them.”
After that experience, Grady said he got to work building a better culture and a set of values at the association.
“It’s a weird thing to include in my top 10, but it changed everything,” he said. “A negative became a real positive in that it affected us in a positive way to manage our people going forward. We have a great team and our staff is some of the best around, so this is one of those moments that shaped that.”
Grady described this moment as the closest he came to losing his job, as the association rarely took big positions in a political race. However, in this case “we went all the way to the wall.”
The candidate, Alex Sink, was a “dark horse” running for the first-time statewide office as Chief Financial Officer (which oversees the insurance regulator) as a Democrat at a time when Democrats were getting smeared in Florida, Grady said. FAIA, however, thought she was the best candidate, one who understood the state’s property market, and the association had previously been “betrayed” by her opponent, Republican Tom Lee.
“People in the industry thought we had lost our minds, but we really did our homework,” he said. “We read that one right; she won.”
Grady said he was in the war room with her the night she won, which he described as “exhilarating.”
“We said, ‘Let’s back her and see if we can make a difference in this race,’ and we did,” he said.
Governor Charlie Crist, then a Republican, who was elected in 2006, “made his popularity out of beating up the insurance industry,” Grady said, in explaining this moment.
After the 2004-2005 hurricane season and collapse of the state’s insurance market, Crist made the insurance industry the bad guy even though it had supported his campaign.
“We didn’t expect him to be our pal and do special favors or things like that, but we didn’t expect him to make us the bad guy. And he did it, absolutely did it, and it made life miserable for the insurance industry for those four years,” Grady said.
Crist signed controversial legislation that included lower cost reinsurance for insurers that was supposed turn into rate savings for consumers. The bill also froze the rates of Citizens Property Insurance Corp., thus expanding the market and exposing it to a bigger liability in the case of a bad storm season. According to Insurance Journal archives, property owners were promised rate savings of as much of 24% and state insurance regulators closely scrutinized carrier rate filings.
Grady called the bill “probably the worst piece of property insurance legislation ever to be passed in any state in the country,” and FAIA spent several years working with Crist’s successor, former Gov. Rick Scott, to undo it.
“Much of it has been rolled back, but in chunks. You get this piece off, you get that piece off… thankfully the wind did not blow hard for 10 years almost, and we worked ourselves out of what was a real financial problem,” Grady said.
In 2004, FAIA celebrated it’s 100th anniversary and the association decided to go all out, putting on the biggest convention it had ever had. With entertainment, training, inspirational speakers, and more, Grady said the event was a special week that “changed the trajectory of our operation.”
FAIA still holds the convention yearly but scaled it back this year to a virtual event because of the coronavirus pandemic. Grady said it was only the second time in the FAIA’s history that it didn’t hold its annual event.
When Grady started in 1998, all he heard about was Hurricane Andrew, the 1992 storm that changed the Florida property market. While the association had done a lot since that storm to set up protocols that would help agents in the event of another large catastrophe, nothing like it had yet to happen.
Then Hurricane Charley hit as a Category 4 in 2004, the second major hurricane of the year, followed by six others between then and 2005. Everything FAIA and agents had done to prepare was put to the test.
“It was such a hectic time, but we did show up and we helped agents either by delivering aid or assistance to them or shuttling some company assistance or other personnel; some agents were volunteering from another community that wasn’t impacted,” he said. “And that agent was a member for life at that point … that’s a very connecting moment.”
The association bought a 40-foot motor home to use as a response vehicle so that it could respond to future events.
“We were ready, and we have responded many times after events like that,” he said. “Those eight hurricanes just back to back to back made us pros at trying to handle the recovery effort.”
The events also again changed the Florida property market, Grady said, with major national carriers pulling out and dozens of domestic carriers cropping up, carriers that now dominate the state’s market. Florida also wen through an 11-year hurricane drought after 2005 that allowed the market to get on more stable footing.
“Had we not had that, it would have been a far different story about what Florida has in terms of debt load, because we had some huge [Citizens’] assessment potential,” Grady said.
Being part of the Florida property insurance market during that 2004-2005 hurricane season was very different than what post-catastrophe response would look like now. In 2005, the claims process wasn’t dominated by technology and there weren’t carrier drones or Google maps to view the damage.
Instead, Grady was asked to ride with the insurance commissioner on a Blackhawk helicopter to assess the damage with actuaries sitting nearby calculating the losses from the air.
“I was just some guy from FAIA – I would have never had that opportunity, it was really cool,” he said. “FAIA afforded me that kind of view over and over and over again.”
He said connecting with important people in incredible places – from the war room with the next CFO on election night, to meeting with the speaker of the Florida House or member of Congress, or viewing hurricane damage from a helicopter, “it was just always a privilege,” Grady said.
Anyone in insurance has heard this statement before, Grady said, and he used to just pass it off, but he says now it’s been the best part of his job.
“No question about it – it’s the people you get to work with – from both the agent side to the staff side to the company side,” he said.
He has made some lifelong relationships and gone to incredible places with incredible people. Though he is retiring from FAIA, he plans to still show up somewhere else in the industry. “Those relationships, whether or not I come upon them in my next chapter or never do again, they’re life lasting. It is a people business, it’s absolutely that and I’ve enjoyed it.”