“It’s really a series of strategic asset acquisitions with substantial expertise in a few plan areas, and they work for large plan sponsors, for payers and for providers,” John Greenbaum said. (pictured), Executive Vice President at Risk Strategies. “Over a period of five years, we looked at the assets very carefully and acquired a group of them that fit together perfectly. It’s a bit of a puzzle; we have different coins, but we finally have the right collection of assets in place to combine them into a single entity that we can then bring to market.
“I think the first acquisition of these companies was somewhat fortuitous. It was early in our acquisition process and we hadn’t really considered the concept of Risk Strategies Consulting. But as we started to coordinate other asset acquisitions over the years, it became a path that really got us to the point where we were able to collectivize them and launch them as single entity.
Risk Strategies Consulting will provide the following services:
- High-level advice and cutting-edge analysis, strategy and advice (encompassing health and wellness with deep expertise in pharmacy as well as mergers and acquisitions);
- Actuarial services for plan sponsors, providers, and insurers (encompassing captive and self-funded programs, long-term care, Medicaid, Medicare Supplement/Advantage, supplemental health, life insurance, disability income , reinsurance and stop-loss, healthcare and network provider advisory and actuarial and P&C advisory services); and
- Benefits audit services (including employee benefits and claims audits; stop-loss services; and review of plan documents, policies, and claims).
Breaking down advisory silos
By merging the collective specialties of each consulting and actuarial firm, Greenbaum said Risk Strategies Consulting can further support clients with expert, holistic consulting experience to address complex challenges and offer advanced, proprietary tools to predict and plan for their future success.
“Much of the consulting world operates in silos,” he told Insurance Business. “Some only offer actuarial services, while others focus on auditing or consulting. We saw the opportunity to combine and leverage an integrated suite of services and capabilities, and curiously, when we looked at each company’s respective customer lists, there were quite a few overlaps. We were doing auditing for some of the same clients that we were doing actuarial work for, and so was consulting – but each firm offered those services independently.
“Thanks to Risk Strategies Consulting, we now have a high degree of interdependency between entities, so any client can enter at an entry point, such as audit, and then seamlessly transition to actuarial services and of advice.”
To achieve this merger, Risk Strategies has developed an exclusive certified high-trust data warehouse, where all entities will have access to the same information and work in the same environment.
“One of the primary goals of Risk Strategies Consulting is to provide data-intensive services,” Greenbaum said. “We want to deliver proprietary, predictive and prescriptive models that provide customers with actionable data they can use to make better business decisions. We’re talking about very large companies on the plan sponsor, payer and provider side – Fortune 500 companies that make important business decisions based on the information we provide.
How will the Risk Strategies Consulting activity relate to brokerage?
Risk Strategies Consulting will operate independently of the firm’s brokerage activities, ensuring complete separation of client activities and autonomy of consulting work.
“The two companies have a completely separate corporate structure,” Greenbaum explained. “The advisory activity must be independent of the brokerage activity, and we have put in place structural elements to guarantee this. We are very aware of the potential for conflict between advising and brokerage. Our consultants may recommend the use of various risk management tools which may involve insurance, but ultimately we must maintain independence between the two operations.
The main areas of work that the Risk Strategies Consulting team engages in are: medical, prescription drugs, life insurance, disability insurance, dental and workers compensation – which are also areas of expertise important on the Risk Strategies brokerage side, Greenbaum pointed out. Consulting and brokerage firms may share data information and potential referrals, carefully disclosing common ownership.
“Ultimately, our insurance brokers and our brokerage team can and are already beginning to rely on advisory services to provide them with insight into their clients’ requirements and to be able to help guide their clients,” said said Greenbaum. “One of the things we’re learning is that our clients on the brokerage side span a wide range from the startup world to very mature, large industries, whereas on the consulting side, for the most part, our clients are from really big plan sponsors and big insurance companies we really try to translate some of our learnings from the big market [in the consulting business] to the middle market and create differentiated tools for our brokerage business. »
What future for Risk Strategies Consulting?
Following the integration process of combining and renaming all entities, Risk Strategies Consulting is looking to add new staff and will hire its own independent management team. The company is currently run by Greenbaum on an interim basis.
Moving forward, Greenbaum envisions “substantial economic growth” for Risk Strategies Consulting. He believes the traditional consulting market is “ripe for disruption” and that the company’s data strategy will differentiate it and “allow us to offer clients services that they have truly never seen before.”
Other brokerages that house consultancy firms include global behemoths like Aon, Marsh and WTW – and although they’re bigger than Risk Strategies, Greenbaum said his team “comes up against them every day”.
“Our top teams regularly compete with their brokers, and I believe our advisory business will create a distinctive model that will allow us to compete more effectively with them at all levels,” the executive vice president said. “It was an important step for us in the maturation of our business. We were a company with a strong ability to acquire, but we did it not only to buy assets, but also to build a company that had the right assets to be competitive in the larger universe. The conglomeration of assets we have formed in Risk Strategies Consulting has been very intentional and will support our growth as a business as a whole.
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