Private Client Risk & Resilience
Private Client Risk & Resilience
Hard Market Insights and The Mission of the CIPC with Richard Kerr, CEO of Novatae and CIPC Founder
In this episode, Kurt Thoennessen, CAPI, Founder and CEO of RiskRevu, discusses with Richard Kerr, CEO of Novatae, various challenges and solutions within the high net worth insurance space. Topics range from overcoming the hard market, networking strategies, the significance of quality submissions to underwriters, and the importance of specialization in the insurance industry. Kerr also delves into the foundation and goals of the Council for Insuring Private Clients (CIPC) and shares insights on the upcoming conference.
Highlights:
- Challenges in High Net Worth Insurance Space: Discusses specific regional insurance challenges like finding hurricane coverage in Florida and fire coverage in California.
- Networking and Support: Emphasizes the importance of reaching out and networking within the industry, particularly through organizations like CIPC.
- Novatae's Strategy: Kerr details Novatae's approach in the insurance market, focusing on acquisitions and service improvement.
- Importance of Quality Submissions: Kerr stresses the need for agents to provide underwriters with clear and complete submissions to secure capacity.
- Council for Insuring Private Clients (CIPC): Discussion on the foundation and objectives of CIPC, highlighting its role in education, advocacy, and networking for insurance professionals.
- Upcoming Conference Details: The conference takes place May 1 and 2 in Dallas, TX at the Warwick hotel. Key themes include artificial intelligence in the high net worth space, capacity finding strategies, and building effective teams in the high net worth sector.
- Professional Development: Highlights the Certified Personal Risk Manager (CPRM) designation and its benefits for professionals in the industry.
For more information or to register for the CIPC conference, visit the Council for Insuring Private Clients website: https://privateclientcouncil.com/.
For more details about Novatae, visit their website: https://novatae.com/.
For more details about the CPRM designation visit: https://www.scic.com/programs/cprm/
Welcome to the private client risk and resilience podcast. My name is Kurt Thoennessen. And I'm your host. I'm also the founder and CEO of risk review. And risk review is a software platform that helps agents and brokers streamline the data gathering process with their clients, and others to improve the client experience. So welcome to the show, everybody. I'm glad you're here. And I'm very excited about our conversation today, because we're talking to Richard Kirk. And Richard curry has got an amazing career in the insurance industry. So I'm excited for him to share some of that with you, especially in today's world, where we're dealing with a lot of challenges in the high net worth space, talking specifically about the hard market, whether its challenges with placements in California, dealing with non renewals in Long Island, or trying to find hurricane coverage down in Florida on the coast. Richard has a lot of experience with this. And I'm excited for him to share some of his insights with us. And the other thing I'm excited about, which we'll learn further throughout the show, is, you know, one of the things that's one of the strategies I use, and I think a lot of people in our business use to help when we're in difficult situations like this is to reach out to other people and network. And so that's where we're gonna jump in talk about another organization that Richard founded, that I'm very excited about. And so welcome to the show, Richard.
Richard Kerr:Thank you, Kurt. Glad to be here.
Kurt Thoennessen:Thank you very much. So I thought we'd just start off with a little bit about yourself. And so if you don't mind, could you tell our audience who you are and tell us a little bit about your career in the insurance industry.
Richard Kerr:Great. Appreciate that. So again, yes, I'm Richard Kerr. I am the Chief Executive Officer of Nova de risk group. And I merged my company market Scout into Nova Tei, almost a year ago, and took over the reins as CEO. We have made 15 acquisitions of various types of specialty wholesalers mgas, program managers and Lloyd's cover holders. We put them together on a platform, which will enable us to grow and better service our retail agency clients. So we're going from there. Prior to being prior to merging market Scout into Nova Tay was Chief Executive Officer at Lambert Fincher GS holdings. And before that, I was president on the retail side of the group called Sedgwick, which later became Marsh. So I've been a retail agent, the wholesale agent, an mga have formed and own TPAs, and various other entrepreneurial upstart.com, high tech companies and things of that nature. And I served for eight years as an underwriting name on various Lloyd's syndicates in the London market. So try to use all that expertise and experience of making a lot of mistakes along the way to deliver good solutions for our client friends. And in this time, the best thing we can do, especially in the high net worth, personal land space, has helped people find capacity, do deals, find out where you can get wind capacity in Florida, or brush and wildfire capacity in California and all places in between. Because the capacity is so dear today, and whatever you have, you normally can sell. So the point that you made earlier, Kurt about the CIPC is a good one, because insurance underwriters are now really wanting to work with retail agents that know their game. It doesn't matter if it's high net worth personal lands, or you're insuring hotels or windmills. They want people that know they're, that have the expertise in that particular field. So that's why I think it's very appropriate to for you to make reference to the Council for ensuring private clients, because that's the place where people go to Network, learn, get educated, provide advocacy, and you make connections with people that are smart, that know what they're doing. And those kinds of connections lead on to other things that will help you as a retail agent, do better for your client 100% agree.
Kurt Thoennessen:And, and I want to jump to the CIPC in a minute, but before we do, I want to talk a little bit more about Nova Tei. And, and the excess markets that you've been involved in for a long time because, you know, market Scout before Nova day and then Nova day and then you mentioned these different acquisitions, you know, I'm curious just as to you know what But what's some of the things you've seen throughout your time in the access markets? Because you were on the retail side before that. And now on the wholesale side? What tips do you have potentially for the audience for finding that capacity, you know, when you're looking for, you know, the wildfire coverage are the wind coverage.
Richard Kerr:Right. And the capacity is there, it's just being very diligently parsed out. So all the way from an admitted market carrier here in the United States over to a Lloyd's syndicate or maybe a German reinsurer, the capacity is there. So this is the best thing that I think we can all do is not waste the time of our underwriters. And it seems so mundane and so great school 101. But the quality of the submissions, and the ability to bind is really critical. So if you have limited amount of time and a limited amount of capacity, you're going to deal with those folks that don't waste your time. So these underwriters are looking at it like that, if it comes in and they know it comes from Kurt and Kurt has always done a great submission, and we bind with him whenever it comes, that's the one that's going to move to the top of the stack. That's where you want to do you want to do anything you can to get to the top of the stack to get access to that capacity. So be it through Nova de or any of our other fine competitors, they're all going to do the same thing. They want to work with someone that doesn't waste their time, and has a quality submission, because then they go to their underwriters or their own facilities. And it's going to be measured based on what's the ratio of the Submit to quote, and the, quote, demand. And if those ratios are high, you go to the top of the stack, and you get the capacity as opposed to someone else. Yep. It
Kurt Thoennessen:makes complete sense. I it makes complete sense. And do you think that it's that that philosophy has become more pronounced? Of late, you know, during the hard market?
Richard Kerr:Yeah. Oh, absolutely. The hard market is exacerbated that philosophy very much. For instance, we just reloaded one of our contracts for capacity in southern Florida. And we picked up another billion dollars in capacity, which sounds like a lot, but it's it goes quick, it's not that much. So we're very judicious on that. And we want to use it for those folks that we know, that will give us good submissions. And if they say the roof is new, you can take it to the bank, the roof is new, quality agents quality submissions, deliver and if claims come, that's fine, but we all do it. We all had good information. So that's that's what we're doing. And I know a lot of our competitors are doing the same thing. So that relationship building is really important. spending the time with your markets, either your direct markets, or the markets via wholesalers or mgas, or cover orders is really important now more so than ever.
Kurt Thoennessen:Thank you for that information. I think that's extremely helpful and to the audience. So I do want to jump over to talk a little bit about the CIPC. Because, you know, this is an area that I'm very passionate about, like I said, as far as connecting with other professionals in the business. Can you tell us a little bit about the Council for ensuring private clients and how it all started? And what motivated you to start that organization.
Richard Kerr:So we started almost 12 years ago, I believe this will be our 11th or 12th session. And the reason we started it was because there there just wasn't a collaborative group for education, networking and advocacy in this emerging private client planet or space. It's certainly different than traditional commercial. It's very much different than traditional personal lines, because very wealthy people have extremely complex risks. It's not unusual to have personal lines accounts, well in excess of $500,000 in premium a year. Many, many are over a million dollars, and they have many moving parts with all sorts of problems. So in order to be a good advocate for your client, you really need to understand the space in a different way. Just as we've been discussing, homeowners and cat coverage is one thing but these wealthy clients have yachts they have trains and planes and boats and toys and all different types of complex situations. And many of them have family offices that you must integrate with. So we wanted to put together a platform where people could come together and say, I have a problem with this, or does anybody know what the answer might be. And as we began doing that, in networking was some of the boutique and larger High Net Worth practices, it became very clear that there was a strong pent up demand for this. So that's when we formed the CIPC. And we put together a fantastic board of directors, which we still have ongoing, with some of the best and brightest minds in the country. So we do that it's supported by most of the large admitted market, insurance companies, Lloyd's of London, the cover holders, the Lloyd's syndicate settled and the likes. And it is a wonderful networking position, not only at the annual conference, which takes place, well, this year, it's my first and second here in Dallas. But each year, we do that. And then as the year goes on, there's a networking collaborative approach to everything. If you have a big problem on something, you can go to the CIPC group, and they'll help you solve it. One of the other points was in doing that, there needed to be an educational format, to where you really learn the business and share that kind of information. So that's quite a large lift. And we wanted to do something that wasn't, you know, you show up and do a couple of multiple choice questions, and you get a designation, we wanted something with some real meat on the bone. So we partnered with the National Alliance for insurance, education, and developed the certified personal risk management program CPR and the National Lance are the folks that do the CIC designation. So they're well positioned to do that. And it is a five part battery of essay exams. Each exam is preceded by two and a half day in person or online course curriculum. It's a collegiate level examination. It's SA, it's difficult, you'll be very proud of it once you achieve it. And then you are you'll be part of a networking group of folks that, that also have the similar type designation. So the answer is we saw need for networking, advocacy and education, and a lot of people that were really interested in it. And the industry as a whole was just circled around it. And we just had so much support from the industry, and from smart, evolving people like you, Kurt, that have helped us get where we are.
Kurt Thoennessen:Now, that's excellent. And what a great history. So, and I was particularly interested in the CPRM designation. I think that that is a very worthwhile endeavor. And something that a lot of people have already benefited from, I think I saw on your website, there's over 1200 people that have gotten the designation. I don't know if that's still accurate. But I I've talked to many people who have it and said that it was a very worthwhile endeavor. And so that along with the annual conference, and along with the the ongoing networking opportunities throughout the year, I mean, this is a this is a pretty big organization at you know, outside of, you know, all the other things that you do. So you're doing a lot for the industry. So I thank you for that. And if you look back over the history of, you know, your focus on the CIPC maybe in the last 10 or so years, you know, what would you say are some of like, the milestone, or big events? Throughout that time that, you know, you can recall that, you know, you think the audience would be interested to learn about
Richard Kerr:I think the biggest thing was is the recognition of a group of folks that really are in the game and are dedicated to bettering themselves. And the milestone there is we literally have underwriters who come to us and say, Okay, this is a new agent that you want to start providing capacity to, who are they? What's their commitment? So, there's so many, you know, every, every agent is going to stumble on to a $40 million home once in a while and try and figure out how to do it. We don't in our underwriters don't want to work with those one off situations, we'd rather work with someone that is dedicated to that process. And so that has amplified that position so that I guess it's really more or less created a barrier to entry. You're either in the game or you're not. If you stumble out of a $40 million home and think you're gonna come into the market and get a lot of attention. You're probably mistaken because you will fail with that. Yeah, we're gonna put folks are looking to go with, you know, some of the really great retail agents that are highly focused, you know, people like I mean, there's many of them Sterling Lockton. You know, Baldwin risk different people like that are really good at those type things. And that's, that's who most of the underwriting capacity wants to work with. It's
Kurt Thoennessen:very interesting. And I went, let's talk a little bit more about the the annual conference. So like you said, it's coming up in May, I will be there. I know, you'll be there. I know, a lot of my friends will also be there. But wanted to ask, what are some of the key themes that are going to be discussed at this annual conference, and, you know, truth be told, I will be running one of the panel sessions, which I'm very excited about. And I'll just mention that real quick, we're going to be talking about artificial intelligence in the high net worth space, where we're going to delve a little bit into the use cases, you know, compliance matters, responsible AI use all kinds of things. And I'm excited to bring that topic to the to the field. But what are some of the other things that are going to be mentioned during the conference? Yeah,
Richard Kerr:that's gonna be fun. I mean, this is a great time of the year, we have it in Dallas, it's a beautiful time to be here, all the cool kids will be there. So it's gonna be a fun place to be with. I mean, we literally have folks from all over the globe that come in, in different different capacities. But one of the, one of the sessions we'll be talking about, which is near and dear to everyone's heart is is where and how do you get capacity, looking for retail capacity. And so that's going to be a great kind of a panel situation led by Rob Lowe, rocket, Sterling risk, and we'll van and Hugo from Cincinnati will be on that panel in participating along with some other folks. So we'll start out with that. And, you know, we'll also come in and be a little bit entrepreneurial. CRPC has always had an entrepreneurial event, you know, it's our motto is, it's open to all everyone can come, we don't care who it is, if you know nothing, or if you're an expert, you're invited. And we'd like having all types of people there. All types of other wholesalers mgas and cover holders. So one thing with that entrepreneurial that in mind is we'll have a session on Hey, is now a good time to open up a new high net worth retail agency. And if I'm going to do that, what does that mean for me? Is it even possible? What's the barriers to entry? What would that look like? So we have a panel of three people that are going to be there. These are people that have both insurance company and actual retail experience in startups. So that's going to be a really great session, and it'll be led off that morning. So that'll be one of the other things we do. And of course, Curt, your session that you just mentioned, we'll be doing that one as well. And followed on by the the interaction with family offices. You know, that's that that session will be led by Kate Norris, and Kate as a firm that focuses specifically on that. So she'll give us some guidance and insight on what's going on with the family offices, that we do this in a fashion of half a day, half a day. And most people come in early and they have we'll have the first morning open, you'll do a half day session, followed by dinners and cocktail sessions, etc. Then the next morning is completely open, followed by another half a day session. The reason those mornings are open like that is people love getting together inside bars and networking. And having meetings with the markets, all the markets are there gives you a chance to catch up with your underwriters. And we're also busy and we're all a little bit a prime way. So it's hard for us to sit in a room for an entire day at a time. This way you can get out, do your business, come back meet with a bunch of underwriters or your other colleagues spend half a day. So at the conclusion of the Wednesday, May 1 afternoon, we go into cocktails and dinners and breakout sessions, people with all kinds of different dinners. And then the next morning, we start back up and we're going to have a really great section. Failed trim who is the president of marsh Barry is going to give us a macro economic analysis of the industry as a whole. What's taking place? What's taking place specifically as related to high net worth and the related marketplace and valuations on industry. You know, what's the m&a activity look like? Everybody likes to hear this and there's nobody better than failed to give us an update there. So we follow up with that And then we have a great team, a great session that's going to be led by Nick Ross from aperture. And it's going to be talking about how to build your team and the high net worth space. Because that's it's so difficult to get great people. Where do you get them? How do you get them? How do you convert a commercial or personal lines person into a high net worth individual, what's the learning curve, what's the path, and literally to a person, every senior member of any retail, wholesale or mga team is we need people, we need qualified people, and they're just so hard to get. So we're gonna talk about that, and how you can hurt someone and get them trained up to be a really meaningful member of your team. And on the second day, after networking breaks, then we're going to wrap up with what I consider to be probably one of the best solutions to our cat, cat situation into the future. And it's parametric coverage. You know, there's so many people that you can get the cover, but you can't get the wind cover or something of that nature. So parametric insurance has become a really prevailing an important component to the high net worth sector, and that you might have a home on the beach insured for 20 million, but it's x wind. So then you can go by parametric coverage, which will simply say, if the wind blows over 100 miles an hour, within 10 miles of your home, you get paid. If it's 120 miles, you get paid more. So you buy the limit, maybe that limit $2 million. If the wind blows 100 miles an hour, you get 200,000, that blows 150 miles an hour, you get a million, and there's no that's it, there is no claim submission, nothing, you're gonna get paid or you don't. So that's taking place there, it's taking place with wildfires, hails convective storms. And it's just an alternative way to provide some cat capacity, that sometimes I'm much more competitive, right. So that will wrap it up. A lot of people stay over after that. Like I said, Dallas is great place to be in May. And so they continue and be having meetings with their colleagues and markets and things of that nature. So that's the complexion of the CFTC. And what will be happening in May. That's
Kurt Thoennessen:excellent. That is a very interesting agenda, with relevant topics to today and things that we can all use in our daily lives. So very, very exciting. Thanks for sharing that with us. The other aspect, and I've gotten to the conference several times. The other aspect of it that I really enjoy are the sponsors. Some of the vendors that that you have, they're very interesting. They bring their perspectives, their tools, their solutions, specifically for the high net worth to the attendees. So I wondered if you could share with us, you know, some of the sponsorships and some of the vendors who will also be there and, you know, different ways the attendees have benefited from those in the past.
Richard Kerr:Yeah, and again, this is really important to us, because this is a there's nobody's making money off of this event. We're all doing it to help each other out. So, obviously, market scatter notae have heavily sponsored and founded funded this event, but we've been doing it with fantastic support from the likes of AIG, which I guess is now private client services. Chub. Many other major carriers have Bishopsgate, which is a Lloyd's broker. We partnered with the National Alliance to do the same thing. And then there are a lot of vendors and different people from everything from flood resources to water shut off companies and the likes the sponsorships ranging from tiny wins all the way to great, great large ones that are very, very beneficial. But it's it's a part of what we do and have done in the industry as a whole is embraced it. And we really appreciate that. All the board appreciates it and they all hustled to try and help us get these sponsorships in because that brings more people to the forefront and helps us offset some of the expenses. So it's very much appreciated. Yep.
Kurt Thoennessen:Well, I know as an attendee, and as a previous vendor, I benefit on both sides. And ultimately, like you said before, it is the connections, it's the networking, it's the ability to meet people that are doing what you're doing, that are having the same challenges that you are to be able to connect with them in person, not just on Zoom or on the phone and have these deep conversations that that is the true value. Have these types of events. And so thank you for, for organizing. And thank you for putting it together and bringing all these people together. And I mean, your your career is a testament to how good you are at putting people together. And so that's it's pretty amazing. And I hope the audience, people who are listening to this, are excited, as excited as I am about it and would like to go to the event. And so I guess that's a good question is, if people would like to register for the event, how do they go about doing that,
Richard Kerr:you can just go to the website, which is private client council.com. And there's registration information right there, it's really easy. So, and it's not expensive. I mean, we purposely made it inexpensive, but I think it's $400, or they're about somewhere around there. And so it's, it's reasonable, that you can go to private client council.com. and do and do that. Or, you can reach out to any one of the board members that are listed on the website, which includes Euchre, right, so they'll help you get organized and get in the right position to come. So
Kurt Thoennessen:excellent. I'll include that, that website in our show notes as well. So people have easy access to it. But yeah, and Dallas is such a great place to fly into. It's so easy, most airports are, you know, straight shot directly to them. So super easy. And the hotels that you have these conferences in have always been top notch. You know, last year was the Warwick or last year was the Adolphus I think this year is the Warwick, which is a phenomenal hotel. And then there's amazing restaurants and like you said, you know, a lot of the attendees will get together for dinner, you know that first night to do some additional conversations. And one of my favorite places to go is called the monarch. And it's at the top of one of these sky rises, you know, downtown Dallas, and the food's Excellent. And one of my friends once said to me, it's like, you know, you'll always remember a good meal. And that's, that was one of those, and I always remember those.
Richard Kerr:That's a pretty bougie place. That
Kurt Thoennessen:was a Bougie place. And I remember the people who took me there too. So yeah, that was that was a lot of fun. So So Thanks, thanks for all this information. You know, I really appreciate your sharing your your knowledge and your your energies, you know, not only on this call, but in your entire career in the insurance space, because you've done a tremendous amount. So thank you very much for that. And thank you for your time today.
Unknown:Appreciate it. Thanks for having me.
Kurt Thoennessen:My pleasure. And thank you to the private client risk and resilience audience for listening in today. I appreciate it. If you have any suggestions for future future speakers for our show, please feel free to reach out. If you'd like to give us a review online. Please do so as well. I appreciate it. Thanks again, everybody. Take care and be safe out there.