Stan Payne, Executive Vice President and Director of Property & Casualty of Stephens Insurance, is interviewed by Frank Thomas in this episode of Stephens Viewpoints. Frank and Stan discuss the risk management industry, starting with the history of risk coverages, through the trends of today and for the future. Stan suggests actions to take now that may help listeners understand and mitigate the risks facing their businesses.
[:34] Stan has been in the insurance business for 22 years. He joined Stephens in 2009, at an interesting time for the financial services industry. He thinks it was a great move to join a privately-held firm that had a genuine interest in developing specialty services and resources for the risk management business.
[1:06] Stan observes that risk management clients are looking beyond traditional risk finance to the human capital aspect and the survival of a business. Threats are much more complex than weather or accidents, where Stephens has its roots.
[1:35] Reputational risk from social media exposures, and cybercrime, are at the forefront of Stephens’ clients’ minds.
[1:47] In the 1960s, loss control came into vogue, and became more specialized throughout the 1970s. In the ’80s and ’90s, employment practices along with directors and officers liability, became popular coverages because of litigation that ensued from how employers managed their workforce, as well as from shareholder actions.
[2:22] In the 21st century, two key elements have come into play. The first, from 2001, is terrorism, and how you finance that risk, or protect your business against it. Now, cyber risk is at the forefront of business.
[2:51] Stan explains why risk mitigation is more important than ever before. Business owners do not want to expose their investment to carelessly assessing risk. They want an inventory of risks to the enterprise, and a clear plan to thwart those risks, so in the event of a breach, they are seen as proactive.
[3:20] The speed of business and technology have made active risk management more critical. Thirty years ago, E. Coli at one restaurant wouldn’t have made national news. Today, in five minutes, people all over the world know of it, and watch your response.
[4:02] Stan talks about the Stephens process of bringing in experienced practitioners to counsel their clients. This is a concentrated investment in risk management professionals. Understanding the functional side of risk management within a client’s walls is important for implementing the right directives.
[4:42] Stephens owns and invests in many of the industries where they are managing risk for clients. Stephens has the buyer’s perspective. They understand the reality of implementing and managing the risk process, because they do it every day in myriad industries.
[5:19] Stan explains the role of loss control engineers. Loss control or safety engineers assist clients in developing action plans and coordinating resources for the prevention of claims, and the production of disaster recovery plans and other services.
[5:52] Stephens’ engineers have, in many instances, performed these duties in their past as clients, or on the insurance carrier side. These perspectives show Stephens what clients will encounter internally, with their own management and boards as they establish safety goals.
[6:21] Reality is in the implementation and perpetuation of sound risk management practices. The Stephens team has the experienced view of both perspectives.
[6:32] Additionally, technology has played a key role in the delivery of these resources. Stephens has a tool that allows them to deliver safety training to individual employees one-on-one, across the country, in several different languages. It also helps with OSHA regulations, and for managing reporting obligations.
[6:57] Insurance clients need to be planning for risks by consulting with their broker, and completing an enterprise risk assessment, in an ongoing process, that is fully integrated into their business plan.
[7:25] To our listeners, please continue to tune in as we explore more topics with experts from Stephens Insurance. For more information on the topic of risk mitigation, please contact Stephens Insurance at 1-800-643-9691. To listen to more Stephens Viewpoints, check our website at Stephens.com/podcasts.
Mentioned in This Episode:
Insurance products offered through Stephens Insurance, LLC., National Producer Number 8844362. Securities are offered through Stephens, Inc., Member NYSE, SIPC.
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