Welcome to RIMScast. Your host is Justin Smulison, Business Content Manager at RIMS, the Risk and Insurance Management Society.

 

In this episode, Justin interviews James Swanke, Lecturer in Risk and Insurance at the University of Wisconsin-Madison’s Wisconsin School of Business. He currently serves as Director of the Risk Management and Insurance MBA program. Justin and Jim talk about his 42 years of experience in Risk Consulting with Willis Towers Watson, and his specialties there, particularly with captives. They discuss the University of Wisconsin-Madison Risk Management and Insurance MBA program, what the students learn, and the competitions they have won in the last year, and they look forward to winning this year.

Also, Jim tells of disc jockeying in college, from Classic Rock to Polka.

 

Listen to learn about captive design, how to prepare for emerging trends, and who wrote the best music of the ’70s.

 

Key Takeaways:

[:01] About RIMS and RIMScast.

[:17] About this episode of RIMScast. This is our special International Podcast Day episode because it’s released on September 30th. We will be joined by Jim Swanke. He’s a lecturer in the Risk Management Program of the University of Wisconsin.

[:46] Jim started his career in broadcasting, and he still has the voice. We’ve got a lot to talk about today!

[:54] RIMS-CRMP Prep Workshops! The next RIMS CRMP Prep Workshops will be held on October 29th and 30th and led by John Button.

[1:06 ] The next RIMS-CRMP-FED Virtual Workshop will be held on November 11th and 12th and led by Joseph Mayo. Links to these courses can be found through the Certifications page of RIMS.org and through this episode’s show notes.

[1:23 ] RIMS Virtual Workshops! RIMS has launched a new course, “Intro to ERM for Senior Leaders.” It will be held again on November 4th and 5th and will be led by Elise Farnham.

[1:39 ] On November 11th and 12th, Chris Hansen will lead “Fundamentals of Insurance”. It features everything you’ve always wanted to know about insurance but were afraid to ask. Fear not; ask Chris Hansen! RIMS members always enjoy deep discounts on virtual workshops!

[1:58 ] The full schedule of virtual workshops can be found on the RIMS.org/education and RIMS.org/education/online-learning pages. A link is also in this episode’s notes.

[2:09 ] Several RIMS Webinars are being hosted this Fall. On October 9th, Global Risk Consultants returns to deliver “Natural Hazards: A Data-Driven Guide to Improving Resilience and Risk Financing Outcomes”.

[2:22 ] On October 16th, Zurich returns to deliver “Jury Dynamics: How Juries Shape Today's Legal Landscape”. On October 30th, Swiss Re will present “Parametric Insurance: Providing Financial Certainty in Uncertain Times”.

[2:39 ] On November 6th, HUB will present “Geopolitical Whiplash — Building Resilient Global Risk Programs in an Unstable World”. Register at RIMS.org/Webinars.

[2:51 ] We’re very excited that today is International Podcast Day! Before we celebrate, I wanted to take a moment to acknowledge and mourn the passing of Todd Cochrane. Todd was a podcast pioneer.

[3:06 ] I’ve linked in this episode’s show notes to a wonderful obituary from Podnews®, about his career, starting with his time in the Navy up to launching his own podcast, and writing Podcasting: The Do It Yourself Guide, from Wiley Publishing in 2005.

[3:25 ] Over the last couple of months, I’ve had the pleasure of communicating with Todd over email for the Podcast Awards, and it was only last week that I saw the unfortunate news of his passing, which occurred suddenly on September 8th.

[3:30 ] Our condolences go out to his family, friends, and the greater podcasting industry.

[3:47 ] On with the show! This is our special International Podcast Day episode, and I am delighted to be joined by James Swanke, the Director of the Risk Management and Insurance MBA Program at the Wisconsin School of Business at the University of Wisconsin-Madison.

[4:06 ] Jim spent four decades at WTW, specializing in financial and strategic planning issues, as well as captive insurance company design.

[4:18 ] Jim was recently quoted in a new professional report, available on the RIMS Risk Knowledge page, and sponsored by LineSlip Solutions, titled “The Future of Captive Insurance: Governance, Technology, and Performance Optimization.”

[4:32 ] Jim got his start at the University of Wisconsin in broadcasting. We’re going to talk about his career path and how being a disc jockey led him to where he is today, educating the next generation of risk professionals. Let’s get to it!

[4:50 ] Interview! Jim Swanke, welcome to RIMScast!

[5:38 ] When Jim was in high school, he competed in forensics, in extemporaneous speaking. He did very well. He did well at the University of Wisconsin-Madison, and it got put in the newspaper. WLDY, in Ladysmith, Wisconsin, saw it in the newspaper and contacted him.

[6:03 ] They were looking for a radio jock to “spin vinyls,” do some DJing, and read sports and news. That job helped Jim get into the University of Wisconsin-Madison.

[6:21 ] Jim studied actuarial science and risk management. He went into the Bachelor’s program, the MBA program, and the graduate program in risk management, insurance, and corporate finance.

[6:40 ] Jim was hired by the Wyatt Company and did lots of feasibility studies. After 42 years at Willis Towers Watson, he retired. Now he teaches at the University of Wisconsin-Madison.

[6:57 ] Broadcasting set Jim on his path. He says that everything about what we do in the captive and risk management area is about communication. If you’re not communicating, listening, helping out, and building stuff, you’re not going to be a success.

[7:28 ] When Jim was a DJ at WLDY, they played different kinds of music. On Sundays, he played polka music. On Saturdays, it was country western, and Monday through Friday, it was rock music. Rock music is what he enjoys. At the top of every hour, he did the news and weather.

[8:13 ] Justin recalls his own career. He was just waiting for podcasting to be invented, then he was able to make it all work out.

[8:31 ] Jim worked with captives at Willis Towers Watson. He is quoted in a new LineSlip paper, “The Future of Captive Insurance: Governance, Technology, and Performance Optimization.” Justin saw his name there and thought it would be good to have him on RIMScast.

[8:53 ] Jim described captives as a lifeline during extreme market conditions, comparing today’s hard market to the turbulence of the 1980s. Jim tells what makes captives effective under hard conditions. Captives allow organizations to control their own destiny.

[9:20 ] When you’re in a hard market, having a captive allows you to take premiums that you normally pay to a commercial insurance carrier and put them into your captive insurance company. A captive is a subsidiary of the captive owner.

[9:41 ] Most of the Fortune 500 companies in the United States have a captive. It allows them to arbitrage whatever’s going on in the insurance marketplace. When we’re having a difficult market, they put more of their premiums into the captive and rely on the captive more.

[9:58 ] When the market softens, carriers may provide insurance at premiums that are lower than the expected losses. Organizations will buy commercial insurance all the time when the premiums are less than their projected losses.

[10:14 ] Depending on where it is in the market, a captive has a role in an organization’s risk management program.

[10:27 ] Jim says a lot of organizations have looked to captives since 2020. We were in the midst of the pandemic, with all kinds of economic hardship. The insurance industry was in despair, as well. A lot of insurance companies cut back on the limits they were willing to offer.

[10:49 ] Insurance companies put additional exclusions onto their insurance, so organizations had to rely on their own sophisticated ways of financing their losses. If they hadn’t set up a captive, they set up a captive. If they had a captive in the past, they re-engineered