Risk Matters
Make Risk Management Smart

The critical task of risk being assigned to projects and operations in the captive insurance arena raises the need for professional assistance in the risk management process, especially for companies outside the Fortune 500. “We saw an opportunity to assist with risk identification, prioritization, and alternative financing models for upper middle market companies and wanted to make risk consulting relevant and simple enough for them to drive change and tangible results,” asserts Lamont Thurston, President, Risk Matters, LLC.

The challenges in providing innovative risk solutions in such an active market involve constraints on clients’ internal resources, competition for those resources, and strategies to best allocate for both dollars and time. However, Thurston reveals the real barriers to successful enterprise risk management arise from tradition and inertia. Risk Matters moves past that by delivering solutions that eliminate steps and information that don’t deliver value.

“Before we can offer alternative financing solutions, we must first educate clients about their own risks and about how the traditional insurance industry functions,” states Thurston. “To help educate managers of functional areas within a company about the importance of risk and risk management, we have also developed a card-based game with applicable risk scenarios. The comprehension that is gained and the stories that emerge from this process are compelling.’’

Backed by an extensive professional and technological expertise, Risk Matters has developed their smart risk analysis software tool, R3, which provides process discipline and actionable recommendations for CIOs and other key stakeholders. “We only discuss and analyze data that could keep clients from meeting their strategic objectives. While each client is different, the process we follow using R3 remains constant,” Thurston points out.

It is a simple 4-step process which includes Risk Assessment, where areas of risk are discussed with the client’s senior leadership team and scored for likelihood and impact, which then moves on to Data Visualization, where the risks are heat-mapped for priority.

Our mission is to understand our clients’ corporate goals, to uncover the risks that could negatively impact those goals, and to recommend the most cost efficient and operationally sustainable strategies for addressing those risks’’

The next step is analyzing the quantitative and qualitative information through the Protection Platform to analyze gaps in coverage and opportunities for alternative financing methods. The final step is the Economic Analysis, during which Risk Matters collaborates with third-party actuaries to quantify the highest priority risks, recommend potential financing models, and estimate the ROI for them.

One such example involves a group of small independent regional hospitals struggling with the cost of their medical stop-loss programs. “We performed a financial analysis of their various contracts and losses, which resulted in the formation of a group captive insurance company,” explains Thurston. “This both lowered each hospital’s pricing volatility and provided the members with an opportunity to capture underwriting profits.”

We firmly believe in the saying ‘chance favors the prepared’. Cash flow is the lifeblood of any company and we would never want a client of ours to have to walk into their board meeting and say, ‘well, we didn’t see that coming’. “Our mission is to understand our clients’ corporate goals, to uncover the risks that could negatively impact those goals, and to recommend the most cost efficient and operationally sustainable strategies for addressing those risks,’’ affirms Thurston.

Looking to the future, Risk Matters is set to launch their 3.0 release to the market by the middle of 2018. “Our plan is to offer this through top-tier consultants and brokers in every major metropolitan market,” says Thurston. “This will greatly enhance their benchmarking capabilities for insurance, losses, risk analysis, and alternative financing, which is something that the market is clamoring for,” he concludes.