he insurance market is changing rapidly in Alaska.

Chris Pobieglo has seen this change up-close. Pobieglo, president of Anchorage-based Business Insurance Associates (BIA), has been in the Alaska insurance market for more than twenty years. BIA provides a variety of coverages to businesses in the state and in the Lower 48. It’s one of the few locally owned insurance companies left in Anchorage.

Pobieglo remembers when Anchorage had approximately twenty other brokerages doing what BIA does. That was twenty years ago. “Today, it’s probably five, if that,” he says.

The relatively small insurance market of less than 800,000 Alaskans, coupled with inflation and worker shortages, pushed some companies to cut back on coverage, sell to larger corporations, or leave the state altogether.

One area particularly hard hit is commercial property insurance, according to Pobieglo. A combination of aging buildings, high operating costs in Alaska, and extreme weather make quality insurance for commercial property hard to provide.

Bill Troupe started his first job in insurance in November 1998. A commercial account executive for the Ketchikan-based insurance company DBI, Troupe used to work at the Ketchikan pulp mill. When the historic mill shut down in 1997, he switched careers but stayed in town.

Hundreds of others chose to leave Ketchikan.

Even though the mill is closed, there are still reminders of its presence. Ketchikan has what are called the “towers.” The multi-story housing complexes were built in the ‘50s to house mill workers.

Insurance companies need their own insurance, also known as “reinsurance.” Reinsurers underwrite insurance companies, meaning they may cover all or part of a large payout. If a broker can’t find someone to reinsure a potential claim, then it can’t insure that claim either. Consequently, without reinsurance, there is no insurance.

The older Ketchikan’s towers get, the more likely an insurance claim will be made, so reinsurance is a losing bet. “No one wants to sit there and write [the towers], so they’re going to become uninsurable,” Troupe says.

The towers aren’t the only aging buildings in Ketchikan. “Our buildings are getting older,” says Troupe. “People are getting greedy… They’re not putting money back into their businesses, into their buildings right here. We’re getting a lot of dilapidated, very uninsurable type structures in Ketchikan. It gets worse and worse.”

Uninsurability is a barrier across the state. Pobieglo sees it in Anchorage and the Matanuska-Susitna Borough. “There are tons of buildings built in the ‘50s, ‘60s,” he says. “If you’ve got a building with a roof over fifty years old, you might not be able to find anybody who wants to insure it—or if they will insure it, they’re going to charge you a lot for it, and they’re going to exclude a roof collapse from the weight of ice and snow.”

The past two winters saw more than a dozen roof collapses in the Anchorage area. The municipality estimates between 500 and 1,000 commercial buildings in the city have the type of roof trusses that are an immediate concern. Structures built before 1990 are at a particularly high risk of collapsing under the weight of snow.

“You need to make sure you’re properly maintaining these systems because this property market right now is going to be really difficult to get good coverage in if you’re not,” Pobieglo says.

Several factors make Alaska uniquely expensive. One of them is geography; 86 percent of communities in Alaska cannot be reached by road.

Pobieglo provides coverage to some of these communities. Around 15 percent of Pobieglo’s Alaska clients are outside the Anchorage and Matanuska-Susitna Borough. For instance, he works with a lodge in Kodiak, a grocery store in the North Slope, and a bar in Adak. Some of these places have no local fire department or, even if there is one, it has a limited supply of water for firefighting. “Basically, you’re looking at a building that, if it catches fire, more than likely it completely burns to the ground,” Pobieglo says. “So you have to have that as a factor: the remoteness and, of course, super high replacement costs.”

Remote communities are also more liable to incur damage due to climate change.

Nationwide, insurance companies are adjusting to severe weather events. For example, State Farm announced in March it wouldn’t renew tens of thousands of policies in California due to devastating forest fires. In Hawai’i, Universal Property & Casualty Insurance Company left the state after the Lahaina fire in 2023. Companies are also leaving Iowa and Florida because of tornadoes and hurricanes.

In Alaska, the triggering event is landslides. Heavy rains have caused more frequent and severe landslides in Southeast. In November, six people were killed and one injured by a landslide in Wrangell. The landslide destroyed three houses, according to the Alaska Department of Natural Resources Geological and Geophysical Surveys, and the same storm caused landslides in Prince of Wales Island and Ketchikan.

“Now it’s a lot harder to get landside insurance and nearly impossible in these higher risk areas,” says Alex Ditcharo, the office manager of the Malia Hayward State Farm Insurance Agency in Juneau.

“The cost of insurance has gone up dramatically here,” Troupe adds. “In the last five years, property rates skyrocketed… material costs, labor costs, lack of labor. A lot of these things are factors and the reason why the cost of insurance just gets steeper… I don’t think it’s going to get any better anytime soon.”

The Malia Hayward office sticks to low-risk clients, according to Ditcharo. Hair salons, accountants, and restaurants are their “bread and butter.” The agency stays away from mechanic shops and welders, which have more liabilities.

“Since we don’t insure these high-risk operations, we don’t have as many claims as a lot of other companies,” Ditcharo says. This allows the agency to keep prices low.

Troupe leans into the freedom that comes with working at an independent company.

“We have several markets that we are privy to right there that we can get to, whether it’s the direct to the carrier, which would be like an Allstate or a Safeco… or we can do it through brokers, like The Insurance Center up in Anchorage or one of our brokers out in Seattle,” he says.

In contrast, larger corporations are often “captive agents,” meaning they are tied to a single company and have very little flexibility.

But surviving for the long haul takes more than just a method or philosophy. The insurance industry is heading toward a major worker shortage, according to Pobieglo.

“Our industry has seen a massive bleed off of talent in the last ten, fifteen years,” he says. “Tons of people with forty, fifty years of experience have left, and they haven’t done as good of a job as they should have in bringing in new, young talent.”

BIA hired three new employees in the last two years, and Pobieglo considers that to be an exception to the trend. Some companies are just throwing in the towel.

“These guys make their decision based on numbers,” Pobieglo says. “At the end of the year, they’re going to look at how much premium they wrote, they’re going to look at how much claims they paid out, and if it’s not a favorable trend, or if it’s been something that’s been happening, then they could very well make a decision, ‘You know, we’re out of here, this isn’t a good environment to write property coverage.’”