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Specialty Podcast: The Construction Industry Landscape and How Contractors Should Manage Their Surety Portfolios

By Alliant Specialty

Michael Cusack, Senior Managing Director, Alliant Specialty, and Chris Murphy, Managing Director, Surety, uncover the construction industry landscape and how contractors should manage their surety portfolios in today's insurance market.

Intro (00:00):
You're listening to the Alliant Specialty Podcast, dedicated to insurance and risk management solutions and trends shaping the market today.

Michael Cusack (00:08):
Welcome back to another Alliant Specialty Podcast. I'm Michael Cusack, and I am the head of the specialty practice at Alliant which consists of 13 national industry verticals. The largest of which happens to be our Construction Services Group and we've spent the last decade in construction hiring the best talent we could find across the country. And we've hired hundreds of top-tier brokers across the United States. And the latest addition to our staff has been Chris Murphy. Chris was a 30-year travelers executive in the charity space, and we pursued because he had such a unique insight in the business, great acumen around construction, and a real passion to serve clients and develop solutions that would be valued by contractors across the country. So, Chris, happy to have you with us today.

Chris Murphy (00:55):
Thanks, Mike. Happy to be here.

Michael Cusack (00:57):
So, Chris, after 30 years of being a Travelers executive and in my view, I think you're probably next in line to run the Traveler’s organization and your stature in the industry. We thought it'd be interesting for our listeners to hear some of your insights on both the construction industry and actually the decision driving you to join the Alliant organization. So, let's just start with the decision to move to Alliant. I mean, there are a number of brokers across the United States and a number of brokers, frankly, that you have pretty healthy, long-term working relationships with across your particular region. What in your view made Alliant different and what made Alliant kind of the next employer of choice for you to hopefully complete the balance of your career in the industry?

Chris Murphy (01:42):
And it's a risk of talking about myself, you and Alliant convinced me that joining your team was the right thing at the right time. For me, as you said, I had a great thing going at Traveler’s Surety. I loved my job. I loved the people I worked with and that includes some truly fabulous construction companies. So, in any case, I wasn't looking to become a broker because I was so satisfied with what I had. But when I started thinking about what really mattered in terms of fulfillment, it was helping contractors be successful. And for me doing that in the role of a broker, represented a clearer half doing that.

Michael Cusack (02:20):
When I think about it, I've been a broker for decades, but being on the front line with the contractors, not necessarily in that credit role and maybe in the home office, I think helping them on a real-time basis to solve problems, address challenges and develop solutions has always been really exciting for me. And I think you're going to find working more directly and closely and intimately with contractors. You'll find that to be probably a very exciting part of your new role here with us at Alliant.

Chris Murphy (02:47):
Yeah. You were asking earlier about, what's most exciting about my new role, and I would say it is that clear half when I was a surety guy, a company guy, I had success when our team presented a better experience for contractors and their brokers. That was true fulfillment. But for every time that happened, there might have been five times that I couldn't get traction either because of the contractor or the broker, or even my teammates, no blame there, but each person has his or her own priorities Being a broker and being in the leading brokerage team in construction surety, I feel that my ability to show folks how good their experience could be is in my own hands. I don't know how effective I'll be, but I'll look in the mirror if I'm not, and the support of the Alliant team is really a differentiator. Alliant became a wide margin Traveler's largest construction surety broker. And it was because of the talent of its people, which led more contractors to turn to Alliant, which led to more growth. And the power of compounding is compelling. The more good well-run construction companies that choose Alliant only strengthens the contract and Alliant network and strengthens our ability to provide insight and industry expertise. So that's kind of how I would sum that up.

Michael Cusack (04:08):
Well, thanks. I appreciate that insight. And we do try to be different, and we have a different model. We operate under a national industry practice group under one P&L across the country, and what we think that that really creates for us. It drives intense collaboration of all of our colleagues across that construction vertical. And I think that that really pays some very large dividends for our clients. And I guess when we talk about differentiation, what are some of the, I guess, larger or more significant differentiations that you see that we provide for clients and our employees?

Chris Murphy (04:42):
I think Alliant has gone all in on talent. If you ask any of the surety companies and certainly your Alliant clients, they would say Alliant really stands out in that way. There are no soft spots in the Alliant lineup. And that really matters the people at Alliant, have the nature to get things done for clients and the talent to affect the right outcomes. There was a risk in the strategy. Alliant could have increased its expenses and the hiring of that talent, and the industry may not have responded, but clearly, the industry has fully embraced Alliant as it's represented. As I mentioned, our clients benefit collectively from being part of the Alliant team. And because of the position Alliant has carved out in the industry, clients benefit from that market leverage too, which is no small thing.

Michael Cusack (05:30):
We do try and position ourselves differently. And everyone says we're the biggest or we're the best or we're or, whatever that singular attribute is that they're trying to project in the marketplace, ours is all about talent, and it is all about that collaborative spirit, marshaling the talent together to solve any of our client's major issues and develop creative solutions and bringing the collective IQ of 750 people together to really focus on any major client issue that that really does make us different. And we feel good about that. And I think our clients value it. You've only been here a couple of months now, just I guess, from your perspective, what do you see that we do? Well, I mean, what does Alliant construction from your view?

Chris Murphy (06:17):
Broadly, I see competence and confidence, and a drive to take great care of clients. I see Alliant giving candid and thoughtful counsel to clients and assuring those clients that we will deliver market solutions to that client's objective. I think that there's a nuance there. It's not if the client says jump, we just say how high, rather, it's let me listen. And to the extent you're open to this, let me share my perspectives, but the client should rest assured I will deliver a solution and market support for the plans of good construction companies.

Michael Cusack (06:54):
In my interaction with all our customers. I mean, we underscore the fact that we work for them. They are the client, but we try to give them the best advice we can objectively. And at the same time at the end of the day, really push us and the organization to achieve whatever the outcome or goal is that our clients would set for themselves and the organization. That's a key distinction. We always work for the client first, that's what we do. And that's our mission and our passion around the business. I'd like to touch on a couple of, industry issues, construction issues, and challenges that our clients are facing in the marketplace. I mean, how would you suggest that contractors prepare to manage the risk of say supply chain or the massive inflation that they're dealing with now in the marketplace every day?

Chris Murphy (07:40):
There's no easy answer to that or obviously, we would be sharing that across the countryside, but if you think of contracting, it's all about estimating future costs in this inflationary period. The challenges are pretty evident. You know, no one has a: Hey, here's exactly how that ought to be handled. But I think it's a type of conversation that's meaningful to a client when it's tailored to that client's issue. So, if we said, well, you ought to do this thing well, that might apply to somebody beautifully, but it may not apply to somebody else. So, it's very individualized, but trying to find ways to encourage balanced risk-taking and creative approaches to seek fairness with owners or general or trade contractors, that's an area I think we can be particularly effective in. I think in a lot of cases, we're just helpful in letting a contractor client talk through something that they're wrestling with, and it might be, we might have a nugget of: Hey, here's something that, you know, I'm aware of that was a successful and an area that might be useful to you. It might not be useful to you, but even if it's not, it might either affirm what they were already planning or give them just enough of a trigger to think of some alternative approach. And so those conversations, they don't come with a prescription typically, but the outcome tends to be pretty positive. But overall, I think our ability to earnestly listen to and understand, and then apply our experience and creativity to solutions is what we deliver in a way that clients may find uniquely valuable. I think it's a missed opportunity and not at least explore what we offer at Alliant, and then people can decide for themselves if it's for them, or not.

Michael Cusack (09:21):
I think particularly in these more volatile times with the economic challenges that we're dealing with, I think it's more important than ever for contractors to be highly organized and very disciplined and be being organized with purchasing up front and locking down kind of major suppliers, well in advance of the start of projects and really understanding when to push back on the owner and have the owner assume some of the risks of supply chain and some of the inflation factors that contractors are trying to manage cause volatility is right now at an all-time high. So, I think we appreciate that insight, great advice. You know, we're thrilled that you're with us at Alliant, we've been working together for over 20 years, and I certainly respect your acumen around the business, your insight, and all matters related to construction and share your passion for doing the right thing for clients and being there to answer the bell and provide kind of that really meaningful and insightful expertise and advice to clients at the times that they really need it most. I think you're going to enjoy your time with Alliant. We're looking forward to working with you, we're looking forward to having you lead our surety practice, and I have every expectation that you're going to do a great job for us and to have a lot of fun and enjoy another facet of your career for the next 20 years.

Chris Murphy (10:42):
Mike, thanks for those kind words. I'm extremely excited. I know I'm in the right place and I'm just really excited about what we can bring to clients. I think they will find this to be an obvious solution over time, so glad to be here.

Michael Cusack (10:55):
Awesome. So, I mean, we remain committed to continuing to hire the best talent we can find across the country. We started this practice, a short 11 years ago from basically a startup organization being the largest construction broker in the United States with about 750 people working on nothing but construction every day. So, we've built a great platform, but we see a lot of runways in front of us to continue to get better and to continue to be more impactful and more powerful for our clients. And we're focused on that every day. And again, Chris looking forward to working with you very closely as we go forward here. And I would like to thank our audience for listening to Chris and me today. Hopefully, you found the conversation to be interesting and informative, and we'll close with our Alliant tagline, Alliant, the more rewarding way to manage risk.


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