Kristen Peed, chief risk officer at Sequoia Benefits and Insurance Services LLC in San Mateo, California, took office as president of the Risk & Insurance Management Society Inc. on Jan. 1. Ms. Peed joined the RIMS global board of directors in 2018 and has served as secretary, treasurer and vice president. She first became involved with the organization when she joined the RIMS Northeast Ohio Chapter in 2011. Ms. Peed recently spoke with Business Insurance Deputy Editor Claire Wilkinson about her career journey and the effects of social inflation.

Q: How did you get your start in the industry?

A: It all started out with chicken potpie. I was working for BB&T, the bank, right out of college, helping out with some of the administrative functions, getting referrals to the right people in the insurance division. As part of that, we had to sit at the corporate headquarters of the sixth-largest insurance broker in the world one day a week to answer the phones. Our CEO at the time would come in, and I would always take that opportunity to speak to him and ask him how he was. One day, he asked me if I could help his wife, who was doing a fundraiser, sell some chicken potpies around the office. And I was like, of course, I can. So, I went around the building and took it upon myself to go and get all these orders. Well, it turns out I sold out the church, and they had to go back and make more chicken potpies to fill the orders I had sold. When that happened, the CEO just noticed me, and he’s like, “We should probably get that girl into sales.” That is when I understood that no job is too small; it’s about building relationships, building out that network, and understanding that can lead to something else. That led me to my first production role, where I was training to learn about commercial insurance. I started taking different classes through the Institutes and taking my career seriously. I worked for BB&T and BB&T Insurance for almost 11 years. That helped prepare me to understand what clients were looking for.

Q: Will AI change the dynamic of cyber risk?

A: Artificial intelligence is going to help empower risk professionals to make better decisions because we’re going to have more data in our hands. You’ve already seen some of this in play with predictive analytics. A lot of RMIS systems have that. And I think this is just that next step. It can almost be like another person helping you in the background, this artificial intelligence, but we need to get it trained. We talk about it a lot at our company. We’re a tech-enabled company. We only work with tech companies, and so we’re at the forefront. We talk about artificial intelligence and how it can help us better do our jobs, better serve our clients. And I think we’re just scratching the surface at this point, and I’m excited to see where we’re going to go with that.

Q: How are social inflation and nuclear verdicts affecting risk professionals?

A: It’s a huge concern. It’s going to impact pricing across the board if we can’t really start to put some caps on this stuff. It’s not to say that when parties are at fault, they shouldn’t be responsible for paying, but these nuclear verdicts are outsized as to what the actual loss is. Social inflation is going to impact lines across the board, and I’m hopeful that we’ll start to see some of that alleviate, but I don’t think we are. I think it’s going to continue to be an issue, and it’s going to drive pricing, it’s going to drive conversations, and as risk managers, we’re going to need to come up with solutions to help protect and mitigate against some of these things. But some of them I just don’t know if we’re going to be able to provide tools right away to our C-suites.

Q: Insurers cite social inflation as a driver of rising liability rates. Are risk professionals on board with that?

A: That’s why it’s important to have constant contact and conversations with your underwriting partners so that you can continue to develop those relationships. In the U.S., we seem to be a very litigious society, and we have to protect our organization’s assets against this kind of litigation. When they want to raise our rates based on industry trends, I do push back a little bit because we might be different. We might not be seeing those same kinds of results. I think it’s going to pose a major financial burden on both carriers and companies if we can’t come up with a solution for it.

Q: Companies are retaining more risk. What are some of the most efficient ways to do that?

A: Setting up a captive is an efficient way for risk managers to show their value to their companies. You can do that in a number of different ways. You can run a cell, you can set up a single-parent captive, and then you can grow your surplus in there and take on additional lines or additional limits within your captive as you hopefully mitigate your risk, and then you can invest that money, kind of claw back some of that underwriting profit that the carriers see, and really start to manage your own destiny by putting together a captive program. We’re going to have a new track this year at Riskworld, RIMS’ 2025 conference in Chicago, around captives and alternative risk financing. I think it’ll be a great way for risk managers who may not be engaged in this part of our industry yet to learn more and come back with great ideas to help their companies save money and maximize their risk management potential.

Q: How do you manage the corporate dynamic between risk retention and transfer?

A: It starts at the top and understanding what is important to your C-suite. I think it depends on what kind of company you work for. When I was at CBIZ Inc., I was at a publicly traded company. We had shareholders that we had to be mindful of and understand how we could bring value to our shareholders. I now work for a privately held company, and so it’s a little bit different for risk retention, risk transfer, because you’re dealing with a different perspective.