Risk Management Strategies: Transforming the Broker Partnership
Unparalleled Episode 010: Dylan Lomax, LineSlip Solutions
Risk management strategies play a pivotal role in navigating complex insurance challenges. The partnership between risk managers and brokers serves as a cornerstone for making informed decisions and crafting effective strategies to safeguard businesses against potential threats.
As a fitting finale to the first season of Unparalleled, we embark on a compelling exploration of this pivotal relationship.
Fostering Collaboration on the Evolving Risk Landscape
Dylan Lomax, an expert in both the brokerage and private equity space here at LineSlip, will be joining our host, Laurie Solomon, for a conversation on the evolving nature of the relationship as the risk landscape continues to change.
Laurie provides insights from the risk management perspective, while Dylan offers insights from the brokerage side as this is where he spent a part of his career.
Evolving Role of a Broker
Undoubtedly, the landscape of risks has undergone substantial changes over the last decade or two in terms of complexity and diversity. As a result, the role of brokers has transformed to being strategic partners.
Currently, the view of brokers being strategic partners is more embraced by the middle and upper markets, where insurance programs are more complex and sophisticated.
But as the risk landscape continues to shift, brokers are primed to emerge as quintessential allies for their risk manager clientele. This paradigm shift underscores the trajectory toward an era of deeper, more profound partnerships.
Consultative Approaches over Transactional Relationships
As brokers adapt to become more strategic partners, they also adopt a more consultative approach rather than a transactional one based on getting the best pricing.
Brokers with this approach take the time to understand their clients’ organizations and their unique set of challenges. They then work with risk managers to provide insightful guidance, help them anticipate potential risks, and offer tailored solutions.
In general, this consultative approach fosters trust and builds a long-term partnership based on mutual goals.
Laurie chimed in to say that during her time as a global risk director, she viewed her brokers as an extension of her own risk management team. She would always look to her brokers when it came to placing her insurance coverages or when it was time to make other strategic decisions.
Since the marketplace has been shifting so dramatically, the relationship between brokers and risk managers has become of the utmost importance.
They have to work closely together to find creative ways to navigate the landscape. This can often be done through joint goal-setting sessions. Unquestionably, brokers play a pivotal role in helping organizations navigate the challenges of a rapidly changing risk landscape.
The “Correct” Ways to Approach Risk Managers
In the conversation, Laurie asked Dylan to share his thoughts on how brokers should engage with risk managers.
Dylan shared that in the earlier stages, brokers should simply be listeners rather than tellers. Brokers need to take the time to understand the risks the organization faces and how they are currently managing or mitigating those risks.
They need to ask open-ended questions to get a full grasp of current strategies and gauge the risk appetite of the risk managers they’re working with.
Once equipped with a comprehensive understanding of their client’s risk management practices, they can offer tailored solutions and advise them on strategies that are aligned with their goals and challenges.
Reflecting on her own experiences, Laurie recounted that a salient factor contributing to her sense of comfort with new brokers stemmed from their ability to exhibit a deep-seated understanding of her programs and the business, even before their initial meeting.
It demonstrates to her that they’ve done their homework and are heavily invested in the success of the company as well. Even if they don’t have all the pieces of the puzzle, she appreciated it when they asked insightful questions about what’s going on with the company and its future endeavors.
Risk Manager/Broker Relationship is a Two-Way Street
Historically, brokers are responsible for advising risk managers. Yet, Laurie and Dylan emphasize the significance of two-way learning between risk managers and brokers since both players are experts in their respective arenas.
Brokers provide risk managers with industry insights, market knowledge, innovative strategies, data analytics, and new InsurTech solutions.
On the other side of the coin, risk managers offer brokers operational insights, industry-specific risks, continuity planning knowledge, and awareness of internal stakeholder dynamics.
This exchange of insights creates a holistic and effective approach to risk management, allowing organizations to better address and mitigate potential threats.
“Brokers and risk managers have truly distinct areas of expertise and learning from each other can really lead to just a more holistic and effective approach to risk management.” — Dylan Lomax
Laurie shares that she found the most value from her brokers when they could help her anticipate what’s to come.
For example, if her company were to start a new business venture, her brokers could use their industry knowledge to advise her on what kinds of risk, retention, insurance, or internal preventative measures she should be considering.
She found that these insights made all the difference.
The Power of Open Communication
Clear communication channels and transparency form the bedrock of a successful risk manager-broker partnership.
Both Dylan and Laurie stress the importance of open and regular communication. This means sharing insights, concerns, and updates about the organization's risk landscape.
By doing this, risk managers can trust that the broker has a full understanding of their company, and the broker can ensure that they have an accurate understanding.
Laurie’s main advice to any risk professional is to not sit around and wait for their brokers to call them and, instead, call them directly if they have any questions or concerns.
They are their partners, after all. Laurie shared that her strongest broker relationships were always with the ones where there was two-way communication. She shared that throughout her risk management career, she had regular lunches and phone calls with her brokers to keep both parties aware of what was happening on both sides.
Undeniably, a proactive approach to collaboration ensures that both parties stay ahead of emerging risks and deliver the most value.
In the rapidly changing world of risk management, it's imperative for both risk managers and brokers to stay proactive and embrace change.
Brokers are at the forefront of helping organizations navigate new challenges and find innovative ways to protect their clients' assets, manage risks, and achieve goals.
As the landscape continues to change, brokers need to embrace a consultative approach, foster open communication, and share insights. Together, risk managers and brokers can navigate the complex landscape of risk management to create a more resilient future.