BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.
To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.
To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.
Mike Christian is CEO and founder of specialty insurance brokerage Risk Strategies Co. He recently spoke with Business Insurance Editorial Assistant Joyce Famakinwa about Risk Strategies' year of big acquisitions, what Risk Strategies looks for in a potential acquisition, changes in the industry and goals for the year. Edited excerpts follow.
Q: What were some of the major challenges Risk Strategies faced in 2015?
A: We are in what's known as a soft market, particularly in the property and casualty arena. There's a lot of capacity with the insurance carriers, which leads to a fairly competitive environment, which leads to lower premiums and lower revenues for us as a broker. So, being able to maintain our growth is challenging. I think another one that is more reflective of our industry is being able to recruit, attract and develop younger employees, because the baby boomers are beginning to retire and our business is dominated by people in that age group. We are having to look at succession planning and developing newer and younger employees.
Q: What do you see for the future of the brokerage industry?
A: I think it's no longer transactional. I think it's an industry that will become a little more bifurcated because of the emergence of technology. However, I do think that the business will evolve even more to being more of a consultative type of business. There's a lot of competition with how the global aspect of our economy has transformed businesses. So, they come to brokers, they come to Risk Strategies Co. more and more for advice and for solutions to how they deal with and manage the risk within their own businesses.
Q: How have acquisitions helped Risk Strategies?
A: We've transformed the company into more of a specialty organization. Over 85% of our clients fall into our various specialty categories, and those categories, are employee benefits, private client personal lines. We do a lot with health care, higher education institutions, professional liability and real estate. We also work with private equity firms. So, we have some very distinct areas of expertise, and we've evolved more into a firm that really leads with that expertise and has refined the approach that we have to clients and refined, actually, the clients that we work with. I think if you look at the six sort of acquisitions that you have here, Re-Solutions and Welbel and MacCorkle and Dubraski, and a couple of others, they all fall within one or more of those categories that we have. So, at the lowest level, the acquisitions have certainly increased our size; in the qualitative aspect of our business, we've added more expertise.
Q: Any more acquisition plans?
A: Yes, for sure. We've recently brought on a new financial partner, Kelso & Co. It's a private equity firm based in New York City. Our real aspiration is to build a national platform with significant resources and enough geographic scope to be able to offer a broader array of services and advice to our clients. We anticipate 2016 to be as active as or maybe even a little more active than 2015 was from an acquisition standpoint.
Q: What makes a company a good acquisition candidate for Risk Strategies.
A: If a company is in an area or has an expertise in one of the areas that we have a client niche, that certainly makes a good candidate. Maybe the most important thing is the culture of the company, or it's how do they view their interactions with their clients? Are they more consultative or are they more transactional? Certainly if we see a firm that is consultative and values being able to solve problems for clients, that would be a good candidate. We would like to expand geographically, but that's not at the top of our list.
Q: What are some of Risk Strategies' goals for 2016?
A: Our strategic plan includes four or five key points, and one is to focus on employee development, staff development, succession planning. I think that a big goal for us, particularly in 2016, is to ramp up our development program, our staff development program. We will continue to make acquisitions. And I think to expand our resources for our clients is another pretty keen objective for us.
Kristen Peed is the Cleveland-based director of corporate risk management and cyber security expert for CBIZ Inc. Ms. Peed discussed the landscape of cyber risk today, as well as what to expect in the future, with Business Insurance Staff Reporter Donna Mahoney. Edited excerpts follow.