Scott Bailey, Partner and Captive & Alternative Risk Insurance Sub-Line Leader, Carr, Riggs & Ingram (CRI)

In an interview with Invest:, Scott Bailey, partner and Captive & Alternative Risk Insurance Sub-Line leader at Carr, Riggs & Ingram (CRI), discussed economic uncertainty, evolving risk management strategies, the role of AI in professional services, and talent development. “When there’s a lot of uncertainty, what people really want is somebody to help them try to read the tea leaves,” Bailey said.

What changes over the past year have impacted CRI, and in what ways?

There have been a lot of changes in the markets, and we have been trying to roll with those. Local business opportunities continue to grow as we continue to see population-fueled growth in our primary markets, though inflationary pressure and other factors have occasionally had tempering effects.

Many of the underlying economic factors that resulted in a higher interest rate environment are still present. That is impacting where and how we see economic growth.

I operate primarily in two sectors. One is infrastructure construction, and we have continued to see growth in that market. Many of these projects are planned years in advance, which can provide some insulation from lighter economic fluctuations. Road and bridge projects, for example, can have funding allocated five to 10 years ahead of time. We have also seen emergency projects arise due to natural disasters, which create additional demand through reconstruction efforts.

The other market where I operate is insurance, which has experienced many of the ups and downs shared by other industries during recent years. We went from some of the hardest property and casualty markets you could imagine a few years ago to some softening as a result of broader economic conditions. 

If we want to understand what is going to happen with the economy, we should look at what is happening with insurance. Insurers have lots of data; they are looking far out on the horizon, and they are trying to anticipate risk. It is not a perfect correlation, but it is generally a fairly good indicator of where underlying economic risks might be.

For us as CPAs, accountants, and advisors, uncertainty creates demand, particularly from an advisory perspective. Our traditional services remain strong. But when there’s a lot of uncertainty, what people really want is somebody to help them try to read the tea leaves.

What is driving interest in captive insurance and alternative risk solutions?

People are looking for new ways to manage risks, whether they are existing risks or new ones emerging in the market. Alternative risk solutions give organizations more control over how those risks are managed.

In traditional insurance models, companies pay premiums and transfer risk to a carrier. Over time, many organizations feel that being a good risk manager does not always translate into the realization of benefits to an insurance program. Alternative risk structures allow businesses to take on a little more responsibility while potentially retaining more of the rewards associated with effective risk management.

We are also seeing these structures used to address unusual risks where commercial insurance products may not be readily available or economically feasible. In those cases, alternative risk solutions can provide an effective framework for managing exposure.

There are several factors driving demand. Companies like the idea of retaining some of the underwriting benefit generated by their insurance activity, and we are seeing interest not only in the United States but also globally. Commercial carriers and brokers are also embracing these models as a way to strengthen client relationships. While captive insurance remains a relatively small corner of the broader insurance industry, it is receiving a significant amount of attention.

What factors are most important in building a strong risk management culture?

The organizations that are best prepared tend to be forward-thinking. They have an eye on the long term because these efforts require investment, strategic thinking, and a willingness to stay committed.

It also requires the discipline to stay the course when things do not go exactly as planned. Organizations that know where they want to go and remain committed to that direction are generally better positioned to manage uncertainty.

The best risk managers recognize that all companies are ultimately made up of people. People are generally well-meaning; it’s when they interact with systems and processes that things sometimes go sideways.

Understanding the human element is critical. Whether it is motivating people to work more safely or enabling coworkers to effectively manage the pressures of work, leaders need to understand what drives behavior. Successful organizations tend to be the ones that understand that dynamic and build it into their approach.

How are technology, AI, and automation impacting the accounting and advisory profession?

You cannot have a business conversation these days without AI coming up. One thing I think is important is separating pop culture from reality. When people think about AI, they often think of an entity or a being, but what we are really seeing is advanced computing.

That perspective changed the way I think about AI. In the next five to 10 years, the opportunities around automation are significant.

Every business is made of people and designed to serve people. AI is going to change how we deliver services, but it is not going to change the fact that there are people providing services or receiving those services.

What we are seeing today is a continued desire for human interaction. When people connect face-to-face, they feel they are getting something genuine, and there is a level of trust that comes from those interactions.

As an auditor by trade, I see automation as a tool that helps us get to answers faster. It can help us process information and sift through data. But what we do as accountants and advisors is that we act as financial storytellers.

AI can help gather information, but what it is not particularly good at right now is contextualizing a human story. That remains an important part of our role, and I think clients value that perspective.

How is CRI approaching talent development and retention?

We have always been proactive about maintaining talent and strengthening relationships with our people.

Our local office recently relocated, and one thing that became clear during the design process was that we wanted to create a space that felt more like a hotel lobby and was more welcoming than a traditional office environment. If you want people to come into the office and be part of what you are trying to create, the environment needs to be inviting and engaging.

That reflects a broader philosophy around talent management. It is about creating a place where people want to be and where they can interact in a positive way.

We are a people business. The most important thing to us is working with talented people and building strong relationships. The working relationships in a public accounting firm are a circle of trust: our clients trust me to provide them with the most responsive and accurate service possible, I trust my team members to take responsibility for performing those services, and my team members trust our clients to provide what is needed to get the job done.

Our goal is to train people well, help them grow professionally, and create a culture that people want to be part of. In the end, it is about making people feel like they belong.