Risk management is an ever-present factor in the business of sports. Too often, it is overlooked, perhaps because it is not as sexy as the game, itself.
Bucking that trend, Hackney Publications recent sought out Dave Dwortz, President & CEO, Helmsman Management Services LLP, who specializes in the sports industry and influential board member of Sports and Entertainment Risk Management Alliance (SERMA®). What follows is his interview.
Question: How does your company intersect with sports?
Answer: Our connection in sports starts with clients like Disney and Comcast, right? Both of whom have very deep involvement in the sports and entertainment industries. We also work directly with a few teams directly. We’ve got a few of the NFL, MLB, and NHL teams, primarily from a workers’ compensation perspective.
Q: How did your relationship with the sports industry influence your decision to participate in SERMA and why SERMA?
A: Taking advantage of the opportunity to engage in SERMA and why SERMA are really closely tied together. SERMA offers a unique opportunity to combine deep personal and professional interests. So that certainly was a plus. But the real reason that I decided to join SERMA is the founder of SERMA, Rich Lenkov. Anyone who knows Rich knows that he’s just a force of nature. He has endless energy. So, when Rich asks you to join something, he asks you if you want to be a part of something, you know he’s going to put a ton of energy behind it.
And then he shared the quality of the other people that were coming together to form his advisory board, and it was incredibly compelling. When he described who was joining, I thought, ‘I would love to work and learn from these folks.’ We have some of the best risk management minds in the sports industry in SERMA. We have risk managers of the major leagues, some of the team’s iconic events and facilities as well as seasoned legal experts and claims leaders. And he creates an open and inclusive environment where folks are openly sharing ideas and their experiences. I mean it’s a pretty unique environment and really energizing to be a part of. It was pretty much a no-brainer.
Q: What are some of your company’s top initiatives in the sports industry in 2024?
A: In terms of top initiatives, three things really come to mind.
One, talent retention and development. There’s a talent war in a lot of industries, and in particular in sports. The battle for claim professionals is really no different. So, that’s really at the top of my list – talent retention and developing claim expertise. It’s not sexy. But it’s really the key to our success.
Two, we’ve been investing a lot in artificial intelligence and predictive analytics to help augment our claims people. And we are seeing the fruits of that labor in terms of creating efficiencies and making faster and better decisions. I see AI and analytics as a constant investment area, given how fast the technology is evolving. I have over 200 data scientists on staff to make sure that we’re keeping pace. So that is a big commitment from us.
Three is loss prevention. And this might sound a little counterintuitive coming from a claims organization who makes money handling claims, but from my clients, the best claim is the one we prevent from happening in the first place. I have more than 300 risk control professionals, and their job is to engineer risk out of the equation for our clients. In the sports industry, this can take a lot of different forms from helping to design policies and procedures to protecting the organizations and the people who work for them to structural design of facilities and the materials used throughout their businesses. It’s pretty far encompassing. But the best claim is the one that never actually happens.
Q: What are some of the trends that you’re anticipating at the intersection of sports and risk management in 2024?
A: Unfortunately, most of the trends I’m watching aren’t things I’m looking forward to happening. Honestly, they’re more on the negative side, which is kind of the nature of what we do. We’re always looking around corners for what can go wrong. How can we protect and help clients in all industries and specifically sports and entertainment? So, of the things that we’re really watching and trying to help influence, claim severity continues to grow. It’s across all industries, but specifically in sports and entertainment. Medical inflation is also gaining new momentum, which is adding to the problems. And then legal system abuses are on the rise and driving up the costs of doing business. The verdicts that are being handed down across the country are just really hard to understand. So again, a lot of industries are dealing with these, but they’re impacting sports and entertainment, and they’re having a material impact on everybody’s ability to put a product out there and to do business. And it’s making the role of the risk manager more and more complex.
Q: Can you elaborate on claim severity?
A: claim severity is really just the cost of claims. They’re becoming more and more severe, so more and more expensive. A claim that used to cost $10,000 is now 2X or 5X, depending on the type of claim. The cost of settlements, the cost of rectifying a situation, or certainly if something goes into litigation, are all types of situations are just becoming more and more severe.
Q: How did you get your start in the industry
A: I’ve been involved in the insurance industry in one way or another my entire career, spanning over 30 years. I spent the first ten years in the finance side of the world. I was a consultant and worked for Ernst and Young in the accounting industry, supporting and working with insurance companies. Then I joined Liberty Mutual in 2000, and Helmsman is wholly owned by Liberty Mutual. I became the CEO and president of Helmsman about seven years ago.
Q: What is the best part about your job, about your profession? What do you enjoy most about it?
A: This one is the easiest question in the world to answer. It’s all about the people, right? Whether you’re talking about the sports industry or you’re talking about the insurance industry, and in particular my lane of the claims industry, it is the people. It’s my colleagues, our partners, our clients, the relationships that you develop with some of the most amazing people. And then you get to work side by side to solve complex problems and share success. It’s extremely fulfilling.
