FAIA Chief Grady Says Goodbye, Shares Top Moments in 22-Year Career

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. Grady recalled his top 10 moments in an interview with Insurance Journal. The following is an excerpt of that interview, which can be viewed in its entirety online.

His “Unexpected” Hiring

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 to 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.”

Exposure to the Underbelly of Florida Politics

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.”

Governor’s Betrayal of Insurance Industry

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 to lead to 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.

The 2004-2005 Hurricane Seasons

When Grady started in 1998, he heard all about Hurricane Andrew, the 1992 storm that changed the Florida property market. The association set up protocols to help agents in the event of another large catastrophe but 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,” he said.

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 went 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.

The View from the Top & Industry Relationships

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.”

Grady said ulimately the industry relationships he’s formed have been the best part of his job.

“No question about it – it’s the people you get to work with… It is a people business, it’s absolutely that and I’ve enjoyed it.”