Executive Insights: A global perspective, a homegrown touch
CLIC Risk Retention CEO Chris Payne’s career spans continents and decades, but his focus remains unchanged: Helping businesses do exciting things.
It was the early days of businesses launching satellites, not long after government agencies opened up space for commercial enterprises. Chris Payne, at the time a junior broker at Lloyd’s of London, was part of a team watching a rocket launch.
Unfortunately for the underwriters and their client, the satellite failed to deploy, turning the telecommunications equipment initially worth 100s of millions of dollars into an interstellar paperweight. For the terra firma-bound Lloyd’s Syndicates that covered the risk, it was a massive problem that would need some out-of-the-box thinking to solve.
Explaining the satellite’s policy was in place from the moment it launched to the time it deployed, Payne, currently CEO of CLIC Risk Retention Group, Inc., said the incident cemented his passion for the business of risks.
“Being good marine underwriters, the insurers said ‘let’s call NASA and see if there is a way to grab the satellite and salvage it,’” he told PropertyCasualty360.com. While hiring a U.S. space agency to recover a lost item might seem like a crazy idea, but that is exactly what the insurers did. Payne said it was at that moment he saw how creative the industry is and how flexible the minds that shape it are.
“That’s the moral of the tale for me: This is a creative business that helps people do exciting things,” he said.
A history in handling unusual hazards
Having started his insurance career with Lloyd’s of London following graduation from Kings College, London University, Payne’s background is steeped in covering uncommon perils.
“I was lucky starting at Lloyd’s because we got to see all kinds of unusual risks, and I really got to see the creative side of the business,” he elaborated.
Fast-forward a few decades, and Payne is still covering unique risks as the founder of CLIC, a captive insurer designed for the ever-evolving cannabis industry.
“We started a few years ago as I was seeing a real need in the market after Colorado legalized cannabis,” he said, explaining at the time, there was very limited coverage available and premiums were high.
“The cannabis market hasn’t been tested, and there isn’t a lot of data available. When that happens, people form captives to improve costs and safety,” he told PC360. “Seeing this, I decided to launch a captive for the cannabis market. I promptly received an education on getting banking and financial services for this industry.”
He explains that while many banks will take money from the cannabis industry, very few do so openly.
“We are a licensed insurance company working with the same rules as everyone else. Everything we do is regulated. Everything has to be transparent to regulators and customers,” Payne said. “I took that transparent approach to God knows how many banks. We were just trying to launch a captive like we would for any other industry. Eventually, we found some banks to hold our capital and give us access to checking accounts to do daily transactions.”
The key for working in the cannabis space remains being upfront about the business and completing the necessary disclosures, “lots and lots of disclosures,” he said.
Old school flair through modern models
While his career spans 40 years, Payne approached his newest venture with the mindset of a start-up.
“Technology and disruptive distribution is giving people the ability to do things online or through apps rather than bits of paper the old-fashioned way, and that is a great opportunity for us,” he said. “We have the opportunity to dispense with a lot of paper, and there are many service providers out there that can help us do that and keep costs down.”
Payne also took to new models when building out his current team, explaining the initial group comprises individual contractors with every imaginable skill needed. Doing so allows CLIC to keep costs down while still providing clients with the necessary services to run their businesses, he explained.
Although his firm is embracing digital advances, Payne continues to find time spent with clients immensely rewarding.
“Cannabis is an emerging business, so we need to spend enormous amounts of time with our clients and risk management people going through the operations on the ground, so we really understand what their risks are,” he said. “It can be difficult for large insurers to do that, but a small company like us has a tremendous opportunity to show how creative and flexible insurance can be.”
As a captive, CLIC has the advantage of having policyholders on the board, Payne said, explaining this gives critical insight into the client’s world, its risks, and how to accurately price and underwrite policies.
This merging of digital tools and soft skills is perhaps the biggest opportunity being presented to the next generation of insurance professionals, according to Payne.
“I look at some of the people I do business with that are in a younger generation, and they are really good with staying in touch and making sure you got what you wanted,” he said. “If we can continue training the next generation of leaders to focus on customer service, and this has to come from the top down, I think they will be incredibly successful.”
Noting insurance is a business built on good faith and an obligation to serve clients with integrity, Payne stressed that stats and analysis are just what underpin the industry. At the end of the day, it really comes down to understanding your client’s world and their business needs.
“We are the oil in the engine of commerce. Without insurance, people would really struggle to raise capital to finance risk,” he said. “At the end of the day, it’s about helping people do what they do.”
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