DECIDING ELIBILITY

TRANSCRIPT

[Bruce Silverman] Hey, everybody, welcome to another episode of "Managing Risk for Tomorrow, Today." He's with Jeff Kleid, I'm Bruce Silverman. You can reach Jeff at 818-968-1353 and jdkleid@eliterisk.com. And the website iseliterisk.com. Jeff, good to see you once again. Thank you for not laughing through the entire introduction.

[Jeff Kleid] Glad I could help.

[Bruce Silverman] Yeah, well you're helpful. 

[Jeff Kleid] Thank you. 

[Bruce Silverman] it's your show. I'm just living in it. Topic of the day - how do you rule in or out a client as a candidate for risk? Or do you transfer them to self insured program or a hybrid?

[Jeff Kleid] That's... it's a lot. It's a mouthful. Um, so I mean, that's the hardest thing. I think. We work with a lot of brokers. I was a broker. So as a retail broker, so that means you're on the front lines, you're selling insurance to everybody who comes to you, you know, you start out like everyone else, right? You do one or two things, friends and family, or open up a phonebook. Right? That's how you do it. I opened up a phone book, once I sold the policy from that ones, I never opened up that phonebook again, because I hated it so much. I didn't do that. But I did work with a lot of hard to place risk and a lot of hard to place people. So the hardest thing that happens in the world that I'm in for brokers right now is they're still in the mindset of what I just told you, which is, we want to help everybody that comes to us, because a) we don't want to look bad to the people that refer us. Right? b) we don't want to miss an opportunity. See, we want to make the money if we're successful, right? I mean, it's really simple stuff.

But at certain points, especially when you're talking about higher level clients, some clients just aren't, you just can't, you can't help or you can't change from what they're doing. And so you have to look at what is it that they really need? You know, and you also have to understand that if somebody comes to you and says, "My broker didn't have me taken care of," you have to remember that chances are, if and when they leave you, if you do get them, they're gonna say "my broker didn't have me taken care of." So then you have to see, okay, do they really have an issue? Are they really just trying to cut costs? Or are they trying to do things? And I don't want to get into like trying to start, you know, buy it, find a client one on one, you know...

[Bruce Silverman] This isn't the episode for analytics

[Jeff Kleid] No, it's not, it's not that. But with that said, if you have a client that's paying about $250 grand or more in insurance, and and they basically are frustrated with it, which anyone would be, but they're frustrated, because they're paying it for no reason, in their minds, because the premium just keeps going up, even if they have some losses or whatever. Most brokers are able to explain to them clearly why it's happening, but the client doesn't necessarily see it. So if you have someone like that, by giving them the second bucket and saying, "Okay, I can't change the first bucket, because I got three quotes." And they all are similar, and they're all same coverages and whatever, right. But if you want to take some risk, or your you, you think your business should take risks, let's look at alternative B and C, which are you take a little bit of risk. Maybe you even form a captive insurance company, which I don't talk about, you know that but at the same time, we have access to it, and we partner using Victoria for it. But it's really that transition when you figure out do they have it. But the hard part, again, for a traditional broker is it's out of their lane, because as brokers we're taught by the places where at the places we work at that we have to sit within the system of products that we were given. Now, as a broker, you get more products than if you're with like, I don't know, if they have State Farm in Florida, I would assume they do. Or maybe they don't, but

[Bruce Silverman] I believe they are still in the state

[Jeff Kleid] Yeah, so like a State Farm or farmers and all state or, you know, any any of those old companies or anyone that traditional companies that everybody would know growing up or whatever. A broker has, you know, 50 to 100 different companies that they use for different things. But in this case, you're actually creating a whole new bucket and you're saying, Okay, I'm trying to help the client take control of their risk. It's going to possibly it's going to most likely it's going to cause me to lose some income because I'm now giving them some of the risk back so I can't get paid on that. Right? So that's a hurdle for most brokers. But the upside is, if you find the right fit, whether that's true risk transfer into, you know, a company like Victoria, where we look at 100% of the risk, and we go, all right, well, we'll reward you, if you're don't have the losses, if you truly believe that, you're not going to have those losses, and your pain insurer had traditional insurance $250,000 or more, and that traditional insured doesn't give you any of that money back, well, we'll build a model in Victoria, where we'll give you a certain percentage of that back. Because you're you've proven your losses, you've proven your model, you're, you know, your broker is working with you to do risk management strategies, you're, you know, you've got a third party administrator in place, you've got all these pieces, like we're not trying, we don't want you to stay at us. And we don't want to take you from the mainstream market, because that's not what we're designed for.

But if you want to figure out how to grab control, that's what you assess, is when the, if the client says they want to grab control, the broker has to drill down and say, what does that mean? Does control mean, you want to take some risks financially, just control me, and you just don't want to be told no, to control me, and you want the insurer to pay those claims, does control mean, you don't want the insurer to pay the claims, you want to fight them more aggressively. Whatever the clients you have to give to really drill down. So there's a way you know, we get a lot of, we get a lot of brokers that come to us and tell us, my client is ready to move, they're ready to go, we're gonna do it. And we're gonna do it. Quite frankly, we don't practice quoting, we're not, we're not fans of that. So we really drill through, and sometimes a few pass through where we don't get to speak with the end user.

And if we don't get to speak to the end user, it's harder because we understand that the average broker that's coming to us, it's an 80/20 thing, right? It's one of their top clients, they don't want to lose it, they got upset and plant and their clients by telling whatever you need to do we need to do it. But when you really peel back the layers, are you going to put up your money? where your mouth is? Are you going to be in this for the long haul? Are you looking for just a solution? Because you're you're looking to sell your company need to cut your costs? The average broker doesn't necessarily it's not that they're not qualified. It's not that they don't ask the question is that their focus is, if it's working, why would I want to change it, and I'm not, I'm not trying to take put down or take away from anyone's credibility and how they work. But that's really the bottom line is why rock the boat. Like if you have a client, if I'm paying you to do podcasts, and you say, we're going to do this many, and that's my cost. And that's what I get for the year. If for some reason you keep hounding me and I don't get to those podcasts, you're going to be like, "Jeff, here's, here's what you have the access to," right, so you're not going to change that, and you're going to want me next year. So you're gonna want to do your best you can, but you can't control what I do.

[Bruce Silverman] And I think it also goes to the point where elite risk and Victoria, they know their lane, you guys have created a niche for yourself. You just mentioned some of those legacy names, like farmers in State Farm and, and others, but you, you talk about a lot and your associates do as well, how you only take one or 2% of the business that comes your way. And that is a very, very different approach to this business. Obviously, you know, it works because you've been in business for a period of time. And you also have become a trusted partner and relationship with your clients. Because you know, the high risk business so well, and you up, you evaluate the risk so well that you know what you can and can't take on as your own risk.

[Jeff Kleid] We try. We try, I mean, yes, we do. And I would have to say it's a really hard thing to balance. Because the other side of that is we get a lot of people that come to us and say, "we've got this great idea. You know, we're this great company we want you know, our client is this great company, and this is what they want to do. But before we get to it, you need to sign NDA, we're gonna sign the NDA, everyone's gonna sign the NDA." NDA is all around and all this stuff and we're like, okay, but based on what we see, we've done that five times. And this is why it hasn't worked. And they're like "we haven't done that" so you don't want to offend them. Right? But I offend people all the time. I don't mean to but sometimes, but not but not everybody but it's a real really delicate balance, because we kind of get penalized two ways.

One is we come up with a solution that usually the broker has been working on for months trying to find and then somehow they get to us, right. And then we fix, we call a solution quickly. Because we're a very flat organization, we literally, you know, I've had, and that works with me or Henry or someone comes to me with a risk, we go over it, we discuss it, we, you know, they've already looked at the loss runs, they've already looked at the thing, they've already got the understanding, or I get the loss runs, and I go through it, and we review it. And then we decide, okay, if we're going to do this, how would we parse it out? How would we make it work? You know, what's the client trying to accomplish? Then I take it, I go, Okay, this is what I feel comfortable with Victoria. Now, let me talk to Victoria and see if Victoria is willing to take on that risk. And then I talked to Victoria, Victoria says, "Yeah, we're willing to do it. But we want to change this, this and this." And then we go, you know, you know, we'll go okay, this is what we're comfortable in offering. And then we go to an actuary, and our underwriting team and say, "Okay, we're looking at it this way, what do you think of this", and then we'll go to the client with with, with what we call an indicative quote, you know, we'll give them we'll give them some numbers, we'll go, "if you'd like this, we can't necessarily guarantee the pricing, because that's not what we do. But we can guarantee that we're on we're willing to take it, we see the value, we're going to do it." If you commit to doing it, it won't be more than what you have. And if it is, you should be okay with it. Because you're saying there's no exposure, right? And then we're gonna charge them, you know, we're gonna, we're gonna pass through the costs of our actuary and underwriting and whatever.

And by the way, this is also why we will end and roll out people because if they want us to do all that work, like a traditional insurer, we're not set up like that. And we're not we're not made for practicing, we're not made for quoting, we're not made for doing that. We're made for solutions that they've already been through the whole process. And so it's, you know, so yes, we're made for it. And yes, we understand it. But I'm also conscious of the fact that, you know, like, and I use this example a lot, and it's not for everybody, but you know, like that. It's Friday. We've been working on this since Saturday, you know, so we've had Saturday, Sunday, Monday, Tuesday, Wednesday, Thursday, now it's Friday, so we know what we're doing. I get on the phone with somebody, and I forget that they're on Saturday. Like they're still back at last Saturday, right?

Know what has taken me over the last 20 years, 25 years to get here. And we do try to dumb it down. We do try to work through it. And we do try to, you know, do whatever. But I will tell you on any given day, I have, I have highs and lows, I have some people that are like, I love it, I'm gonna go sell it, they go and they and they and they go, they go, and then they come back and and we we came up with a solution. So the person is like, Well, why did you come up? Why you want to come up with a solution? No one gave me a solution. How come you're giving me a solution? And so that's the one side and then the other side is? Well, what do you mean, you're not going to code it? What do you mean, you're not going to compete against the other people? What do you mean? Well, it's not that we don't want to compete against the other people. But we don't have that made. We don't know what that looks like. And we don't want, we don't have a big enough staff to practice and give you something. So you can go to the other guy. That by the way, if there's a traditional carrier that's in the mix, chances are if that's what you're looking for, we're going to be out. Why would we do it?

So it's a really interesting balance for us. I mean, we we love helping people, we love being involved. And we you know, we develop some amazing relationships with brokers. But I will say it's kind of like, even though I'm a farmer, by nature, like cultivate the land and do what I do, when it comes to stuff like this where miners because we're like, no, no, no, no, no, no, no, no, no, no. And yes, yes, yes. You know, so we're able to give them the answers really quick, yes or no. And once we do that, we want to know that they're really at that same mental state, and they're not just shopping or they're not just thinking about so we we go through a lot of, you know, kind of underlying stuff to figure out if it's the right client and when the right fit.

[Bruce Silverman] If you're wondering if you qualify by all of those measures that Victoria insurance and elite risk take in, in terms of evaluating their clients give Jeff a call at 818-968-1353, jdkleid@eliterisk.com,  eliterisk.com. is the website. He is Jeff and he is managing risk for tomorrow today. Thanks, Jeff. 

[Jeff Kleid] Thank you.