Brett E. Dahl has transformed Montana's risk management mission since he became director of the state's Risk Management and Tort Defense Division.

Inheriting a liability fund that was essentially insolvent, Mr. Dahl and his team have reset Montana's risk management culture over the course of nearly 25 years, putting a far greater emphasis on loss prevention and mitigation.

Through the development and implementation of innovative loss-prevention training programs available to all state and university system employees, Mr. Dahl's division has reduced the number of general liability claims filed against the state to just 272 in 2013 from 900 in 2001, and has cut the number of auto liability claims in half.

Mr. Dahl and his brokerage team from Newport Beach, Calif.-based Alliant Insurance Services Inc. also have assembled a comprehensive risk-financing program for the state. Although Montana self-insures its liability exposures, which are limited under statutory tort liability caps, it buys commercial property insurance, terrorism coverage and cyber security insurance. Mr. Dahl's Helena, Mont.-based office also insures one of the largest collections of Western fine art in the nation, including paintings, statuary and drawings from such renowned artists as C. M. Russell and Frederic Remington.

These accomplishments, along with his division's quick response to help the state recover from several recent natural and man-made catastrophes, have earned Mr. Dahl a place on the 2014 Business Insurance Risk Management Honor Roll^®.

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“Brett's very much of an innovative thinker. He looks for ways things can be done differently and better,” said Tom Bryson, senior vice president in the Thousand Oaks, Calif., office of Alliant, who has worked with Mr. Dahl since 2005.

Mr. Dahl is also an excellent mentor who empowers his 18-person staff through training, delegation and succession planning to foster their professional development, with the ultimate goal of leaving a legacy that he hopes will continue to win national recognition long after he has retired.

“Brett is a great leader. He has a relatively young staff. The current average age in Montana state government is 48. Brett takes succession planning seriously,” said Sheila Hogan, director of the Montana Department of Administration, to whom Mr. Dahl reports. “He is developing the next generation of risk managers in the public sector.”

In a state as vast and sparsely populated as Montana, with just over 1 million people spread throughout 145,000 square miles of territory, “If we don't find people with the exact qualifications we are seeking, then we train them and develop their expertise,” said Mr. Dahl, who came to Montana 24 years ago from Texas, where he transitioned from hospital administration to risk management after discovering he had a knack for understanding risk finance, loss control and mitigation.

For example, he hired a state highway patrol officer with good investigative skills to be a claims specialist. In fact, nearly all of Mr. Dahl's 18-person staff are Montana natives. He creates “lead workers” and two-person loss prevention “teams” that are responsible for administering certain risk management business processes provided by his division, which is operated like a state-owned insurer.

He likens his department to a municipal insurance pool that charges assessments or “premiums” to address the myriad risks faced by 57 state agencies, 10 Montana university system campuses, 5,000 state properties, 22,000 state and university employees and hundreds of boards, councils and commissions. Mr. Dahl considers those agencies and universities to be his “clients” with the risk management division serving as the insurer and loss control consultant.

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As one of the nation's most prosperous states, due largely to its rich supply of natural resources, Montana is often viewed as a “deep pocket” by residents and others who file claims seeking compensation for injuries that often are due to their own negligence, according to Ms. Hogan. “We mitigate risk to protect the general fund,” she said.

Even though there are range laws in Montana in which drivers have assumption of risk, “people sue us because we can't keep deer off the highway,” Mr. Dahl said. “Montana is a frontier state. It's very sparsely populated. Boulders roll down mountains. Deer, moose and elk cross highways. These are hazards that we all know about.”

When Mr. Dahl joined the Risk Management and Tort Defense Division in 1990, total liabilities exceeded assets held in the state property/casualty insurance fund, which is made up of the assessments that the division collects from the state agencies and universities it serves. The assessments, determined through actuarial analysis, are based on loss experience and exposures, such as property values.

“We would have been insolvent if we were a private company. We had an unfunded liability of $33 million,” he said.

Mr. Dahl appealed to the Montana Legislature for funding to cover those liabilities, an especially difficult task because “there were legislative audit deficiencies in the way the program was run,” he said. “We didn't have a lot of credibility.”

But over time, by showing leadership and developing systems and programs to measure and mitigate risk, Mr. Dahl persuaded elected officials to provide his department with the necessary resources.

Mr. Dahl's programs have been so effective that he has also been given authority to add to his staff at a time when most state government offices are being asked to cut back. He is in the process of hiring an individual who will be given dual responsibilities for both training and loss prevention so that he or she can back up either function as needed.

It is part of Mr. Dahl's succession plan.

“My goal is to leave a legacy that goes on to win a few more national awards after I'm gone,” he said. “That's important to me. It's not about me being famous. It's about this being a vital and important process in Montana state government that should outlive Brett Dahl.”