WSIA’s President Talks Wholesale, Top Trends and Career Advancement
Joel Cavaness’ journey to insurance was a no brainer; with a father who spent a majority of his 89 years selling insurance, Cavaness knew he wanted to follow a similar path.
“I grew up in insurance,” he said. “I started out underwriting general casualty and business.”
From there, he navigated his way into the excess and surplus space. He loved the industry because it provided him with the opportunity to be creative.
“Nothing was in a box. Everything I saw had unique characteristics that couldn’t get placed into a standard market environment,” he said.
“It gave me a platform and the ability to be creative with my approach.”
That creativity led way to Risk Placement Services, a managing general agent and nationally-focused wholesale insurance broker, which Cavaness co-founded in 1997.
Cavaness sat down with Risk & Insurance during the 2019 WSIA Annual Marketplace in San Diego to discuss his time at RPS, the growing trends in the wholesale space and what it’s like to be president of the WSIA.
Risk & Insurance: You assumed the role of president of WSIA this past February. Can you tell us what the last few months have been like?
Joel Cavaness: It’s been busy, but great. A role like this takes a commitment of time.
I’ve spent a lot of time on industry work — how to better portray our industry, because it’s grown so big in the last 15 years. We’ve been working on making sure we continue that growth, focusing on the professionalism of our side of the industry and taking out some of the mystique surrounding it when we talk to our clients. We want to show how financially secure we are in the market partners we have here at this convention.
R&I: What are some of the initiatives you’ve been a part of since acting as president?
JC: We’re continuing to grow initiatives surrounding legislative change, education, and our diversity and inclusion.
Particularly with that last one, the demographics have changed within the insurance industry to be more reflective of the overall demographics of our country. I would say that attendees here today are about 40% women, which is not something we would have seen even 10 years ago.
We still have some work to do; but we’re putting our focus into making sure we’re bringing in a diverse demographic of people as we continue to grow.
Our industry allows for flexibility and creativity. It doesn’t matter if you’re 25 or 55, our industry is looking at what you bring to the table.
R&I: You mentioned education as one of WSIA’s main initiatives. Could you tell us more about that?
JC: The Foundation is working on developing a college-level offering in E&S to bring that type of coursework to colleges and universities that have a risk management program.
We’re showing students we’re the fun side, we’re always challenging ourselves to be more creative. We’re specialized and more value-oriented in our products. If you show that to college students early, they get hooked on it.
Our continuing education is second to none. It’s career-based and takes you from the second you walk into the industry all the way through an executive seat. Training steps are there all along that career progression. We continue to think about what’s next and add more courses.
R&I: What has been your proudest moment/biggest achievement since taking on the role of WSIA president?
JC: I’ve been on the board a long time. I’m proud that I’ve been able to give back to the industry that’s given me so much. I think giving back time and support, ideas, or even the things that work for you to others is really important in this industry.
Another thing I’m proud of — WSIA navigated a big merger successfully [in 2017]. A lot of people deserve credit for that. It was a pivotal time and it could have blown up, but it didn’t. And I think that’s evidenced by the fact that we have 5,000 people here [at this conference] today.
R&I: We’re at the WSIA’s Annual Marketplace as we speak. What would you consider the most rewarding aspect of the conference?
JC: WSIA lets us get a better pulse of what’s going on in the industry. That’s what we’re supposed to do, after all. We’re supposed to tell our customers what’s going on in the marketplace and give them a heads up. We can get a lot of that information really quickly here.
This is a very efficient way to bring lots of parties together to exchange information, exchange knowledge, exchange experiences and get an update.
When you go from meeting to meeting to meeting, if you operate this in the most efficient way, you can have 12 meetings in a day. And if you look at that over three days, it’s a very effective use of your time.
R&I: What are some top trends going on in the wholesale and specialty market that you’ve been keeping an eye on?
JC: There are two very common themes. One is, of course, pricing. Rates are firming a bit. Though I wouldn’t call it a hard market; it’s a developing market. It is still a little bit all over the board; more of the catastrophic risk, loss-exposed classes of business are continuing to see market evolution and rate elevation.
I think the other theme is people shortening limits. Where people were putting out a hundred million dollars, they are now pulling those limits back to utilize their capital in smaller tranches across more businesses, which gives them a better spread of risk.
R&I: You co-founded Risk Placement Services Inc. in 1997 and now act as the company’s president. What has been the biggest change in the industry since then?
JC: The biggest thing that I’ve seen over the last 20 years is major consolidation in the marketplace. If you look at the MGA space, it was very fragmented. It was handled by a thousand MGAs across the country that did general binding business.
It used to be everyone was territorial. A GA would be in one state and he would coordinate with 40 other MGAs, because they didn’t compete. They were locked into one geographical area.
But over time, people like me have looked at that market and said, ‘I really like that business, why don’t we merge them together to get business and to get scale.’
R&I: Could you tell me a little bit more about starting up RPS? What were the goals for your company?
JC: When we started the company, the goal was to survive, to model ourselves as an independent provider of specialty products. Along the way we fell into other areas. We started on the brokerage side, and within a year of starting out, we moved into the binding side with our first merger.
We were really one of the only firms at that time that was specializing or trying to grow in that space. Today, there’s a lot of interest in the space.
R&I: What advice might you give to someone now starting up their own business?
JC: There are a lot of ways to be successful within this industry, and as the old cliché goes, there is no substitute for hard work.
The ability to find the right people to fit the personality of your company is key. A top goal should be to build it foundationally correct. In my experience, if you get the foundation right, you can survive the test of time.
Hire smarter. Surround yourself with people who are smart — even smarter than you. I may not be the smartest guy in the room, but I am smart enough to know to hire smart people.
R&I: What would you say are some of the bigger emerging risks today?
JC: We’re all going to have to keep an eye on the development of cyber. We’re not even seeing the tip of the iceberg when it comes to cyber exposures.
A lot of firms across America, especially a lot of small firms, can’t afford a cyber attack. It will put them out of business.
Fortunately or unfortunately, depending on how you look at it, we are governed by 50 different laws and regulations. Every state is developing its own protocols and its own laws on cyber. Navigating the laws and regulations across each state can be difficult without the assistance of someone who knows those laws.
R&I: Where would you like to see the industry going in the next five to 10 years? Or in other words, what goals do you think the insurance industry should have in the coming years?
JC: I think in the coming years, I would expect growth to continue because of the specialized things we bring to the marketplace.
People need specialized solutions; the world continues to get more complicated. Form and knowledge of industries is going to continue to narrow, where you’re going to specialize in more specific bands of insurance solutions and risk management.
I think that’s something we’ve been able to do as an industry, and we will see that continuing as more and more people become specialized in their own niches and be one of the experts in their field.
R&I: We recently ran an article describing why risk management and insurance is a great career. What advice would you give to a high school student or an undergrad interested in the profession?
JC: I am very lucky; I have a daughter, a nephew and a niece that work at RPS. From a general standpoint, you should never bring any family members into a bad industry. So, as evidenced, I believe in this industry. I believe you can have a lot of fun in it, and you can be as creative and successful as you want to be.
My advice, then, is don’t hook your career to an industry or business that’s going backwards. Growth is always important. Always. If you’re attached to a company that’s growing, you’ve attached your career to growth opportunity.
Any time someone interviews for a job, yes they should sell their talents, but it should also be a two-way street. What are the questions they’re asking that will show that the company they’re about to attach their career to is a growth company that’s willing to invest in mutual success? &