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PODCAST OPENER
Welcome to the Inside Insight podcast presented by CR Solutions. At Consolidated Risk Solutions, we are taking our expert knowledge of the insurance world and using it to innovate the industry using technology, groundbreaking thinking and a personal touch. Join us as we talk to masterminds both inside and outside of CR Solutions about how the world of insurance is changing, and how we can be sure to grow along with it. If you have to manage insurance in your work, then you can benefit from the interviews, conversations and insights we’ll be exploring to elevate your business’s success.
INTRO (00:42 – 03:23)
Trevor Casey: We’re back again with another episode in 2024.
Beau Lunceford: Well, I’m glad to be back. I feels like it is a good year. I think we’re going to start off strong. We’ve got a lot of people lined up to do some really great conversations about what’s happening right now in insurance, what’s going on how things are developing, I am pretty jazzed, and I’m especially jazzed about this conversation that people are going to hear today with Bryson Hammer of “Innovative Risk”. It’s going to be so much fun. I cannot even wait.
Trevor Casey: I’m stoked to have Bryson. Some of the things that they’re doing over there at “Innovative Risk” is super innovative. And it’s really cool to see what is happening in the capital space. So I was really excited to be able to speak with Bryson and learn a little bit more about what they’ve got going on.
Beau Lunceford: What’s funny is that the conversation really just flows out of him. Clearly he knows what he’s talking about. It’s very cool to hear. I did not know what a captive was going into this conversation.
Trevor Casey: Interesting. He definitely will teach you what captive is.
Beau Lunceford: By the end of the conversation, like I kept waiting, so for the people who may not understand, can you tell me about what a captive is? And then he just hit it right off the bat. And say, “Fantastic. I’m so glad that we got that out of the way.” And I did not have to sound like an idiot in front of everyone.
Trevor Casey: Bryson is super sharp. He made sure that he dumbed it down, I guess for lack of a better word for the people who have no idea what a captive is. But he also hit some of those high level points for people who work in that day to day so that there is a little bit for everyone in this podcast.
Beau Lunceford: Especially what’s specifically going on with innovative risk? So Bryson is a great guy, you’re going to hear more about him. A little bit of his background though. Bryson completed his Bachelors of Business Admin at the University of Northern Iowa in 2007. He began his insurance career in 2008 by joining an independent agency. In 2011, Bryson moved to the Captive consultant role, and he’s been working in the Captive realm ever since. In addition to serving as the Captive consultant, Bryson’s spent seven years as a broker dedicated to developing captives for business owners across the country. With over 95% of his book “Comprised of Captive Clients”, Bryson was able to learn and appreciate the roles of both the broker and the consultant in the captive process. In 2017, Bryson started a construction Captive and grew that company prior to his partnership with innovative risk management. Bryson holds an associate in Risk Management and Construction Risk and Insurance Specialist designation. Well, Trevor, Bryson clearly has so much to offer, has so much to teach us about what is involved in a captive, as well as the amazing things that they are doing at Innovative Risk Management.
Trevor Casey: Absolutely. Well, I’m excited to hear this conversation. So let’s get into it.
Interview (03:26 – 22:54)
Trevor Casey: All right, everybody. Welcome back to another episode of the Inside Insight podcast. I’m your host, Trevor Casey with my co-host, Beau Lunceford. Today we have the honor of bringing Bryson Hammer of Innovative Risk in for an interview. Bryson, we really appreciate you taking the time and blessing everybody with a little bit of knowledge and telling us more about your company and what you guys do?
Bryson Hammer: Thank you guys. Thanks for having me, Trevor, about background myself. So I’m in the Captive insurance industry, which seems to be a buzzword these days. But I got into the industry, probably about 13 years ago. I’ve lived in Des Moines, Iowa, and it’s a really big insurance hub. And so coming out of college, I didn’t really have a desire to be in insurance. But it was a good opportunity to get into a good business. And I’d like to live in Iowa for a couple of years where I was bounce around, and I actually got introduced to a gentleman who ran a large private brokerage firm in the Moines called “Holmes Murphy”, really well known really good company and always wanted to get involved with that. And kind of throughout some time, I ran into a gentleman who started a company inside of that organization called “Innovative Captive Strategies”. I actually coached his once on the baseball and so I kind of joke that’s how I got into the industry. One day, he reached out and said, what captives are? And I had no idea what they were and how to spell it, or anything like that, but wanted to foot into the company because it was such a good company. So, thankfully, I got an opportunity to come in there and I spent just shy of five years with that that portion of the company, just learning what group captives were and how they operated. The last couple of years of that time there, I got into the sales side of things. And so I was mostly in the Midwest, but going across the country working with other independent brokerage firms to help grow their captive platform. And that same gentleman that convinced me to come into ICS, or I guess I convinced him, he said, “Hey, you should be a broker.” And I was like, “I have no desire to do that.” I, actually, right out of college was a broker and love the company. But I was just like, “Oh man, I was making cold calls.” And it was a really hard transition out of college to go from hanging out buddies, and then you’re getting hung up all the time making cold calls. And I’m like, I’m just not tough enough to do this. And so I didn’t want to do that. But he’s convincing. And so I took that leap, and I loved it. And so for just shy of seven years, that’s all I did. And I use my background of the Captive space. And so what I wanted to do was calling like, kind of quality in the captive arena. So I called on contractors all over the country. And thank goodness, it worked, the first year was rough and then it took off. In 2017, would have been kind of my second year in that role. We started a captive with four prospects of mine. And that was awesome, like that captive is still going on today. And I felt pretty cool that I was able to do that and then kept going, and ultimately really didn’t think that. I felt like my path wherever. I was going to be with the company, really good operation, and good people and could do everything I want in my career. My last company that I worked with, I sold into a gentleman. Most people in the construction insurance industry have heard of his name is Bill McIntyre. He has a Captive called “American Contractors Insurance Group”. And the Captives that the company I used to work for this company has really, really big, just didn’t fit, so I was able to get permission to go outside and find a solution. And I had spoken to Bill two years prior to that, because he had this unique path to that no one really knew what it was and how it operated. And I was like, “This is amazing.” I called on some of his clients by accident. And everyone’s kind of a unicorn. So as luck would have, and I was able to put my prospect in a captive, it was just kind of lightning the bottle because they’re capped at 40 companies, they had some owners sell their business. And when I got an inside, look at that, I was just in awe of what he had built. And I already knew he was kind of the goat of the industry. And I said, “Man, that is something I want to be a part of.” And so meeting him at the board meeting and spending more time with him, I said, “Hey, I think we could do something creative together with our Homes Murphy in them.” And he said, I think there’s an opportunity in the space. And ultimately, he introduced me to Stuart Stagner, who founded our company, which is “Innovative Risk Management.” And there was a unique opportunity for me to come over here and really work in the large construction space for the rest of my career. So kind of a unique path and how it all worked out. And I didn’t plan on leaving and came over here and really had a chance to look at and see how this company was built. And it’s really unique. Those two guys have been doing captives for probably almost 80 years combined, they were doing them before they were cool. And they have really built something unique. And so I feel pretty, pretty blessed to be a part of something where those guys have built something very unique in the industry really well known. And I’m just saying you’re trying to hopefully make it better and grow.
Beau Lunceford: Well, so tell us a little bit about what makes innovative risk special. What are you guys doing that is influencing the insurance in the construction space right now?
Bryson Hammer: I kind of backing up to more about what we do. So, Stewart, he founded the company in 1991. And Bill was actually a mentor of his. And so it’s kind of a fun story. Bill, mentor me and both of them. I work with them on a daily basis but I still consider mentors. They’re so smart and what they’ve done. But he saw how Bill built ACIG in a unique model they did and he kind of modeled his company after that. And so because of that, Beau, to your question, what we’ve done? So a lot of people in the insurance space, you’ll hear like a captive consultant that’s running the insurance company. So captive, for those that don’t know they’re listening is it’s where the insured owns the insurance company. So think of ABC Construction Company, they say, “I’m tired of paying half a million or million dollars a year to name the insurance carrier.” And so they actually become a shareholder. And they own a portion of the insurance company. And so I call it. I always say between 55 and 65. In some cases 70 cents of the dollar is there, what’s called “Lost Bond”. And if they don’t have losses, they can return that as profit plus investment income. So it really heightens their level of performance and then they have other business partners that they’re accountable to. And if it’s done right, it works very, very well. And this space is growing at a rapid rate. Because contractors take risk every single day the idea of a captive them taking the risk and It really doesn’t scare him, other industries are catching up, you’re seeing a lot more industries getting the captive game. I mean, it’s just rapidly growing. But when you look at what we do, and so we’re not just consulting the captive, like running it for them because the captive doesn’t have employees, and these owners aren’t going to say, “Hey, let’s bring a workforce in to run the insurance company, they employ us to run the insurance company for him”. And so part of the vision is we want to have a high level of alignment and accountability not only for the members, but across all the partners in the captive. So it could be the fronting and reinsurance like a CNA, or Archer, or whoever it may be. But you also have your loss control, and your TPA, your accountability with your partners or consultants. And so we were a program administrator. And so we take on a few more roles in that process. So not only are we running the insurance company for the clients, but we also have our own actuary underwriting, we have our own claims on TPA operation that’s been going on for 20 plus years. We do all loss controls. We have boots on the ground, which is unique in the industry. We’re actually out there working with the broker’s teams and the client, making sure they’re at the highest level of safety they can be. And then one very unique piece of our operation is we have our own reinsurance company. So we believe in that true alignment of we want to be aligned with the client, so we take risk with them. So if it hurts them, it hurts us. And so we’re kind of having to put our money where our mouth is, as part of these insurance companies so that way we’re bringing in the best and the brightest in the industry. And then we’re actually helping them become better. And if not that we do pay for that. When I’ve been on both sides of it, and when I was at my old employer, I thought we were pretty impressive, and I really liked how they do it, I think they do a nice job. On this side of the business, it does look a little bit different for starters. We do things in tranches. So we want to keep our premium sizes in different charge levels by the captives that we run. Most of the stuff we do is for larger contractors, but we group them in premium sizes, and that really aligns the captive from a premium standpoint. But the risk that they’re taking, you’re not having a small member take risks, that’s really an excess of their funding, which then can lead to what’s called risk sharing and distribution, which you have to have. But if we can do it at a minimum, it just makes our captives more profitable. The second thing is, I kind of always describe after being on the company for a year and a half. And that was our design is to be an inch wide and a mile deep. So everything we do, we want to have very unique offerings and structures in there that benefits the contractor, but also pushes them from an accountability standpoint. And so a lot of our captives will see broader limits. So we’ll provide a $5 million limit in the captive, but we’re also let the client take risks in that full $5 million layer. And so that would mean that it’s very contractors that are spending a lot of premium dollars every single year but we want to keep growing that offering. Well look at additional lines of bringing the captive, and we’ll think differently on how we can broaden that offering, where when we get 30-40 contractors, they’re getting the best model in the industry, that’s all about them. And that kind of goes back to what I told you the beginning, when you talk about what Bill started back in 1981, I believe it was. And that’s where he did a whole study and with 10 or 15 contractors, three of which said, “Hey, we’re in.” And he said, “Great, I’ll set the captive up for you.” And they said, “No, no, no, you’re involved in the risk. Because if this goes down, we want you to go down with us.” And so I think that’s just what I would say is kind of quickly what I believe just seeing kind of all ends of it. There’s other models that are really good, but we are just very intent on bringing in really, really good contractors that are not afraid to take risks, and holding ourselves and our partners accountable. Not only financially but just on a day to day basis.
Beau Lunceford: It sounds like you guys are doing something that nobody else is doing. I mean, generally like, there’s captive and there’s risk management going on. But it sounds like the way that you guys are approaching it is completely different from how other people are taking this on and doing the job that you guys are doing.
Bryson Hammer: I’d say in the majority of our construction captives, yeah, especially for our larger accounts that would be the case. Yes, it’s different. I mean, part of it too is, we’ve got skin in the game. So that’s a different avenue. When you look at some of our with a smaller premium captive offering, I’d say it’s a little bit more in line, but we do still take risk in that. And so that has forced us to hold our members more accountable. My title was Director of Captive Growth, and we’re captive development and it makes it hard to grow that platform when there’s a super high level of underwriting and it takes time. So as a fully broker, what I’m talking these guys I said, this is going to move a little slower than what you and I are both used to and the industry is becoming pretty turnkey. They do a nice job but how you really underwrite that and the most important thing is you get it right or you put the captive, the contractor in position and if it is a little bit off that you can help them I’m quickly get back up to the top of the mountain from a safety performance standpoint to do that, but I would say that’s our big differentiator. And so, will we ever have hundreds of different captives? I would say the answer is no, that’s not what we’re looking to do. We’re looking to find unique solutions which, honestly, is how I got introduced to Josh and your team, how do we create a CCIP SDI type model within our large account strategy captives that can support these big contractors that want to take more risk? And you know, by the way, they spend tons of money on those lines of insurance. And so we have to think creatively, and we have to work to develop those new types of lines of coverage that can go on there. So I think in some regard, we do have some a big differentiator in the industry.
Trevor Casey: So looking at you guys is client base, where are you kind of focusing these captives? Is it regionally? Is it just when somebody reaches out to you is trying to source a captive or how does that work for you guys?
Bryson Hammer: I mean, first and foremost, we were horrific construction captives. We’ve got a heterogeneous captives. We also run programs students, so we’re not just only in the construction space, I would say it makes a while more than half of our business, and we’re most entrenched in that space. But what we look for is, out of the gates is there certain types of criteria for the types of contractors, we will work a lot in the general construction, the sub trade and the GC world, and then you can kind of branch off of those contractors. But when you look at captives, what I’d say just from learning in the industry from guys that have taught me in years past is, first and foremost, you want to have a spread of risk by type of contractor and by good contractors. And so we won’t just look at my state and that kind of stuff, we’ll look for the types of construction we want. And as long as they’re hitting the premium thresholds, and they meet the type of construction we want, that’s great. A high Residential Contractor in New York is not a good deal, or really in any city for that matter. That’s not the type of risk you’re looking for. Because you want to have the stability and control for the client and the captive. So kind of first is that type of contractor we’re looking at. The second piece is the lines of insurance that you’re writing. So a lot of our captives were focusing on the Work Comp G on the Auto, and it’s going to be heavily driven by the work comp. So how can we have a contractor where we can influence that risk in a positive manner. So because of that we’re going to look for that type of business that fits model. But the last piece is you have to have geographical dispersion. So we have to have good geographic spread, we don’t want to have a lot in one specific state in certain areas, some are more litigious than others. And so you got to factor that in, because there’s a lot of contractual risk in this with the contractor and how those, that risk is passed down. But I learned early on in my career with a captive that was heavily based in the Upper Midwest, and they didn’t want to grow, and then 08 and 09 hit, and it really hurt back that they had to grow to stay stable. So that was something that I saw a time I didn’t really understand. But now as we go into some economic times, that can be a little difficult. We want to make sure that we’re really saying, “Hey, we can’t just be in the West Coast, we can’t just be in the East Coast, we’ve got to find good contractors all over the country in those areas.” And a lot of times they know each other their peers. And so that’s usually how we do it. We want to make sure that we’re spreading ourselves in the right way, by the contractor, the line of insurance, and then where we are operating.
Trevor Casey: So talking about these contractors, are you usually going and finding them or they find you? What qualifies a contractor to you?
Bryson Hammer: Man, I wish they were finding me at all times, that’d be great. That’s a salespersons dream. A lot of my tasks and my counterpart, Brian Ricci, we’re out there working with broker partners. A lot of what I did throughout the years was called direct to the client. And so what we do is, there’s broker partners across the country that we work with and looking to grow that network of saying, “Hey, here’s how we operate. Here’s what makes sense for us.” For example, we created a captive, that’s the main reason I came over here that was to kind of replicate ACIG, they’re a phenomenal. I consider them the gold standard as with anybody. And I had a client or a former client that said, it is just unbelievable. I mean, when I saw that I was like, “This is unreal. It’s what led me to take the leap of faith to come over here.” But we’ve done something, they’re close peers of ours, we’re communicating with them a lot. And so we felt there was a need in the industry. And so we launched one, actually, we had two members in it in 2019, COVID hit, and then when I came over, we’ve grown that and we’re already up to eight members, and we’ve got a healthy pipeline of those that are interested. But you got to be spending $2 million a year for those lines just to get in that. So that’s a big contractor. Trevor, to your question, your general contractors are going to have some sort of self-performance or as we look to launch that CCIP SDI line that was part of the deal, and then we get into our specialty trades, a heavy settles in the sobs that is where I see a lot of those coming. But anyone I’ve talked to in that space that any brokers is has been interested because it’s just not out there. And we’re already given a $5 million limit and grill on that. And we’re pretty proud of what we put together, it’s a unique deal. And I’m excited where we’re going to go, it’s still in its infancy, and we’re looking to find the next three to four this year that come in. And then as you go down, it falls in those premium levels. So we start 750 to 2 million, and then we go 400 to 1.5. And then we have kind of our smaller premium size strategy, all of them have unique offerings from a limit perspective and from a risk perspective. And so a lot of my day is on the phone trying to find brokers out there that fit, hopefully get them to feel and understand what we do and why it’s different. And I got to differentiate ourselves right now in the industry, because everyone’s looking for a captive. And what we want to do is try and find that upper quartile. When we look at insurance company, carriers got really good a third of their business, a third of its okay and a third of its bad. Well, we want to push those okay and bad to the side. And we’re trying to find the upper quartile that we can really focus on and say, “Do you fit? Are you big enough? And are you willing to take risk on yourself?” Because we’re not for the faint of heart here and it’s a unique model. But those big contractors, it really works well. And like I said, from what I’ve seen in my years of experience, it’s a pretty cool deal.
Trevor Casey: Great. Well, that’s awesome. I really appreciate that information. And honestly, this has been a super insightful interview and conversation. I feel like we’ve learned so much more about captives as a whole. I felt like my knowledge was very minimal and I feel like I have a much better grasp on it today after this conversation. So we really do appreciate the time that you’ve taken. For anybody that’s listening to this that wants to learn more about innovative risk or even just learn more about you or connect to learn more, where can we kind of point people to, so they could connect with you or just learn more?
Bryson Hammer: A couple of different areas you can go to as we made our website. We’re part of the 180 intermediaries companies. And so if you guys put that in the show notes, there’ll be a link that kind of shows some high level stuff. It’s meant to be high level, there’s not a ton of detail as far as the complexity of the captive. My LinkedIn page, so part of the stuff and other stuff we do in the industry beyond there, and then you’re happy to put my email address too. So we want to make sure we’re educating our partners on what we do and how we do it, and how we can support their not only clients, but their prospective clients. And usually, from there we provide additional detail on each captive, the breakdown of how that works, what it means to them and their client, and how I can support them. So those will be the areas to get a hold of us.
Beau Lunceford: Great. And we’ll include all of that in the show notes so that people have easy access to get in touch to learn more, and to find out how they can connect with “Innovative Risk”.
Bryson Hammer: Awesome.
Trevor Casey: Sweet. Well, I again, appreciate you taking the time today. And thank you so much. We will again drop everything in the show notes. And we’ll catch you next time.
Bryson Hammer: Thanks, guys.
OUTRO (22:58 – 24:30)
Beau Lunceford: I really like talking to Bryson. He has just such a wealth of knowledge. And I think that’s actually universally true for anybody that we have on here. They bring so much to the table, which is why we’re having this conversation with them.
Trevor Casey: Yeah, absolutely. You can truly tell when he’s speaking how much he loves the space.
Beau Lunceford: Oh, yeah.
Trevor Casey: And I mean, just his wealth of knowledge that he has, it’s really nice to hear somebody like that who’s just overflowing with knowledge, and just excited to tell other people about it.
Beau Lunceford: As well as like his history in experience with both the construction side, the insurance side and the captive space. It really just shows the kind of things that they’re doing differently, which I always love to hear is how are you approaching this space differently? How are you doing something different than what other people are already doing or have been doing for a long time that makes you guys so special? And I think that it really hits the nail on the head here. So I really hope that everyone enjoyed this conversation that there’s something to learn here. If you want to learn more about what it is that Innovative Risk Management is doing, please, all that information is going to be in the show notes and reach out to Bryson, contact innovative risk and get that conversation going. Because I am sure that if any of this really piqued your interest, there is more for you to gain out of it.
Trevor Casey: Absolutely. And again, thank you so much, Bryson for taking the time to speak with us. We really appreciate it. We know you’re busy man. And as, Beau, said, all his contact information and stuff that you can find information about innovative risk is going to be shared in the show notes. So with that, we appreciate it and that’s another episode. Stay covered.
PODCAST CLOSER
Thanks for tuning in to Inside Insight presented by CR Solutions. If you like anything that you heard today, subscribe, follow and rate the show so that other industry pioneers like yourself can find it. Maybe even share it with someone you think might benefit from this episode. Do you have a question that you want answered or a concept that you need explain, you can email us at info@c-r-solutions.com with the subject line “Podcast Question”, and maybe your question, we’ll make it onto one of our episodes. You can also submit a question via our website at c-r-solutions.com/podcast. There are no dumb questions, only opportunities to learn something new. Now that’s a wrap on this episode. Join us next time on Inside Insight presented by CR Solutions. Stay covered.
