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Brady Young—Captive Insurance Person of Interest

Brady Young-SF
January 31, 2018

We recently caught up with Brady Young, president and CEO of Strategic Risk Solutions (SRS) captive management firm, and asked him to share his views on the captive industry. Read his comments concerning captive growth in Europe and Asia and his thoughts on talent acquisition.

You've been involved in the alternative market space for a long time. What led you to specialize in captives, and why did you decide to form SRS?

The appeal of launching SRS was as much about wanting to control my own destiny and not work for a big company anymore.

SRS started life as a broader alternative risk business within Arkwright Mutual and then Winterthur/Credit Suisse. The key moment in the conversion to what the company is today was in May 2002, when Credit Suisse told us that they were shutting down SRS. I asked if I could buy the platform, and they agreed. So, 3 months later—the same day my employment ended—SRS, the pure play captive management firm, was born.

I believe the subsequent success speaks to the entrepreneurial power of backing yourself and putting the control in the hands of the people who can most influence the result—our employee shareholders. Our timing was also good, and we had some luck!

Given your long association with captive insurance, what has most surprised you over the last 30 years in the captive arena? Conversely, what have you been least surprised about?

I continue to be surprised (in a positive way!) at how captive use continues to evolve to solve different risk issues and add value to captive owners. Captives have gone from being used in the "old days" for reinsuring property risks, to shifting in recent years to primary casualty risks, and now enterprise risks of all types, including employee benefits, cyber, and terrorism, to name a few. Captives are the ultimate utility tool—being part of the solution to a wide range of risk financing issues.

I have not been surprised that the major brokers continue to dominate the Fortune 1000 captive management market. Thankfully, this is slowly changing, as younger people come into the business and are more open minded and willing to challenge the status quo. Inertia is a powerful force!

SRS has made a number of announcements concerning its European operations. Do you view the European captive market as more likely for expansion than the US market? If so, why? Or if not, why not?

Like North America, the European captive market is mature, and as such I see slow growth in terms of new formations. That being said, there are some very large and sophisticated European captive owners that are innovative and need partners that can help them achieve goals that don't have inherent conflicts of interest.

For that reason, we are excited about our growth prospects in Europe as we think our model of offering value-added consulting along with solid domicile and administrative support will be well received. We also think our independence will be more highly valued in Europe in the future.

Along those same lines, what are your views on the Asian captive markets, particularly China? Without giving away any strategic plans, do you see SRS expanding in these markets as well?

Multinational companies, regardless of the origin of the parent company, need captives to help them optimize their global risk financing strategies. Just as we have seen interest from other countries outside the United States, I expect Chinese companies and other companies based throughout Asia will want one (or more) captives to support their growing global operations and risk footprint. SRS will look for opportunities to partner with these companies and find the best ways to be in those domiciles where quality companies want to locate their captives.

As a captive manager, what do you think are the most salient attributes for managers? And a corollary question: How has the role of the captive manager evolved over the last 30 years?

The most important attributes captive managers need are responsiveness and consistency in meeting the ever-changing needs of their clients. Clients want to know that the day-to-day operations of their captives are under control but also want a partner they can trust to give them unbiased and thoughtful advice when issues or problems come up. 

There can be no organizational barriers that make it difficult for captive management staff, those in the trenches doing the work on a day-to-day basis, to be able to focus on clients and deliver consistently excellent service.

In terms of how a captive manager's role has changed, it has become more strategic and less tactical for many of our clients. They expect us to suggest new ideas and keep them informed of best practices that can be applied to their captive operations. 

We've written about what we've termed the "war for talent." What are your views on the ability to attract and retain key professionals in today's environment? Also, have you changed anything about SRS's culture in order to make it more attractive to millennials?

We have done quite well over the past 10 years in attracting talent, as many captive professionals like the fact we are a "pure play" captive management firm. Our focus is 100 percent on one business and trying to improve it, which I think is attractive to many employees who find it hard to relate to the goals or mission of larger employers doing a wide range of things.

Our culture continues to evolve and reflects the eclectic mix of personalities and cultures that have been attracted to SRS. It's a great place, in my view, for younger people new to the industry to learn and grow at whatever pace they want. That is not new—it's been that way since the beginning.

We've talked about the past; let's switch gears and talk about the future. How do you see captives evolving over the next 10–15 years? Are there specific lines of business that you think are well suited for captives?

I see captives evolving in the future to be more of an offensive tool to support overall corporate strategies to serve customers and generate incremental profits. I also think captives can and will do more to reduce organizations' overall cost of risk and squeeze out more of the inefficiencies of the traditional commercial insurance market where non-loss costs are still over 35 percent. 

In terms of specific lines of business or growth areas, captives will help solve the mismatch between the demands of companies and industries that have new risks and service models where traditional insurers struggle to provide the needed solutions. 

In talking with your clients, what are the issues that keep them awake at night?

Fortunately, very few of them are captive specific, although some of the issues create potential opportunities for us to be part of the solution. For example, the ongoing challenges with health insurance are a major concern for those that employ large numbers of staff. Cyber and terrorism are two others where no one can ever get too complacent given the world we live in today.

Any advice you would offer current risk management graduates concerning the captive insurance market and why they should consider a career here?

It's a great business to be in—helping clients solve problems and issues that constantly change and vary from client to client. It's never boring, and there are tremendous growth opportunities as people like me will be retiring at some point, and we need the next generation to step up and take our industry to the next level.

Any closing thoughts or comments that you would like to share with our readers?

Focus on the clients and take care of your people, and the rest will take care of itself!

Thanks, Brady.

Brady Young, pictured above, is a principal owner of Strategic Risk Solutions, Inc., and the firm's president and CEO. He is responsible for the overall strategic development of SRS. During his time with the firm, he has established SRS in a leadership position in the captive market.

Mr. Young has more than 25 years of captive insurance experience and has worked with US and European companies in most industries to assess the need for and optimize the role of their captive insurers. He has been involved in the formation of numerous captives and has provided strategic and operational consulting to many of SRS's clients.

Prior to joining SRS, Mr. Young spent 8 years with Tillinghast-Towers Perrin. As principal in the firm, he managed the London, Boston, and Toronto risk management practices and worked on a variety of risk management- and captive-related assignments for corporations and groups covering a wide spectrum of risks and industries.

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