Larissa Akrawi on Member-Owned Group Captives and Betting on Yourself

Anthony Codispoti (00:00)
Welcome to another edition of the inspired stories podcast where leaders share their experiences so we can learn from their successes and be inspired by how they’ve overcome adversity. As you listen today, let one idea shape what you do next. My name is Anthony Cotus Bodie and today’s guest is Larissa Accrawe, senior vice president and captive executive at captive resources. They are based in Etasca, Illinois and help mid-sized employers cut insurance costs.

by joining member-owned group captives. The firm partners with 1,500 broker offices, supporting more than 50 captives, 7,500 member companies, and stewards over $5.5 billion in written premium. It is known as the top consultant in the group captive arena and posts a 98 % member retention rate. Over 27 years, Larissa learned every angle of captive insurance.

supporting the launch of new programs, including the first medical stop loss captive, which was used as the catalyst in developing nine benefits programs and ultimately taking the reins of a 32 year old workers comp captive. Today, Larissa runs a specialized program serving 151 staffing companies nationwide using deep loss analysis, boots on the ground risk and nurse triage to cut claims and lower premiums.

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All right, back to our guest today, Senior Vice President of CAPTN Resources, Larissa, thanks for making the time to share your story today.

Larissa Akrawi (02:33)
Thanks for having me. I’m so excited to be here.

Anthony Codispoti (02:36)
So early in your life, you went to junior college and you were working in restaurants like a lot of young folks do. But then you took a receptionist position at an insurance agency that would eventually open up all kinds of doors for you. What skills or habits helped you eventually move from answering phones there to more substantive insurance work?

Larissa Akrawi (03:00)
I think it was more, I asked a lot of questions, right? ⁓ So I was answering phones, I was filing. At the time we did batch printing. So people who are old insurance folks ⁓ remember what that was. ⁓ So I was basically responsible for the spool printing. I would print up everything and deliver it to all the ⁓ customer service folks in the office. And I would just read everything. ⁓ I was inquisitive, I asked a lot of questions. ⁓

And I was fortunate in that people around me gave me their time. So I did have a lot of early mentors that really took the time to explain things to me. And then eventually, the marketing manager needed an assistant. He asked if I would come on full time and help him with marketing. I didn’t have any idea what that meant or what I was doing. He taught me a ton. So I think it was really two things. One,

wanting to learn but also having those resources of people who were willing to teach.

Anthony Codispoti (04:06)
you were curious and you had great mentors. So I love this story because this is an example of, you for some skills, a lot of folks go to college, right? They spend time, university, there’s a lot of debt involved there, you know, trying to pick up these skills. Like, I mean, you went to junior college, but like all of your like, technical experience came, yeah, came from on the job training.

Larissa Akrawi (04:08)
Yeah, yeah.

life will. ⁓

Yeah, I didn’t have the opportunity to go to a big school. actually had to pay for my junior college on a credit card of all things. so it was a tough situation, but I knew I needed to have some type of

piece of paper, right? Like a lot of places. ⁓

want that piece of paper. So I did my two years and I was on my own. I moved out at 17. So I was working two jobs. I was trying to do this junior college deal. When I finished my two years, I was learning more out in the working world than I was sitting in a classroom. So that’s when I decided to really pursue the insurance industry rather than another two years at a university.

Anthony Codispoti (05:17)
And so you got pulled into helping with marketing at this job. And did you take to marketing as well as you took to insurance?

Larissa Akrawi (05:26)
I did, and it was marketing. When we talk about marketing and insurance, what happens is the salespeople, they go out and they try to find the clients. They bring them to us in the office. We put together the submissions. We go out to market, right? So when we say marketing, it’s not like business marketing that we’re accustomed to in this realm. It’s more your…

packaging together submissions to go to different carriers to get quotes from the carriers, put together a proposal. You have to present that proposal to the client. They select which option they want to go with. So in that I learned all about carriers. I learned all about different markets, ⁓ who does certain kinds of coverages, who don’t. ⁓ He recommended that I go take some classes. So I took some insurance classes. I got

licensed as an insurance broker. So it was just honestly just those little steps that at the time I didn’t realize where they were taking me. I was just happy to do good work. I was just happy to you know to be involved and engaged and have people come to me and ask me questions. It was it was really cool so I just embraced it.

Anthony Codispoti (06:44)
What kind of insurance were you doing at the time?

Larissa Akrawi (06:46)
Property casualty. So ⁓ we did a lot of ⁓ companies, some of our trucking, it’s any commercial type of risk. ⁓

Anthony Codispoti (06:57)
Okay. And

then how did the opportunity to join captive resources come about?

Larissa Akrawi (07:03)
⁓ so I, in insurance, there’s just a finite number of paths that you can go, right? You can, ⁓ become a sales person. You can work up to, you know, some kind of management role within an agency or within an insurance carrier. ⁓ I didn’t really know what I wanted to do, but I knew that this small agency I worked for, there weren’t really a lot of future career development opportunities for me.

So I called up a headhunter. He sent me on three interviews. One was another smaller insurance agency. One was a large nationwide brand, Downtown Chicago. And then the third was Captive Resources. ⁓ I interviewed with the two founding members, the two founding owners of the company. And I immediately knew this was something I wanted to do. I didn’t know what a captive was. So that was even more.

enticement for me to like, let’s try this, right? I don’t know what I’m doing. So you might as well like try it. Um, and I knew I needed to be here. They just had a great culture. had, I mean, probably like 40 something employees at the time. And I just really got a good vibe from the two founders of the company. Um, and then that was it. I knew this is where I needed to be.

Anthony Codispoti (08:26)
So was really the two owners that were like, there was an energy to them that that plus the fact that you’re like, I have no idea what a captive is. And, you know, how many months ago, I didn’t really know what insurance was either. And so.

Larissa Akrawi (08:30)
It has.

Yeah,

it was about a year and a half after I started really tinkering with insurance. And I did come in as an entry level employee. Like I didn’t know anything about anything. So I was entry level. And at the time, we were such a small organization that the training program was basically sink or swim, right? You just figure it out as you go. I think that’s the environment that I really do well in. ⁓

So it was kind of a perfect match.

Anthony Codispoti (09:08)
Okay, so for those listening who don’t know what a captive is, think back to 27, 28 years ago when you first got started. What was the explanation that helped you wrap your mind around it, help others get up to speed?

Larissa Akrawi (09:20)
So I mean, the easiest definition I can give you kind of the high level elevator definition, it’s an insurance company that provides insurance to and is controlled by its owners. So those are some pretty important words in that sentence because it is insurance, right? We still wanna be able to manage the risk and the liability of the clients that we serve. ⁓ So it does provide insurance.

but it’s also controlled by the owners of the captive. What that means is that us at Captive Resources, as an independent consultant, we do not have a vote in how the captive, in the direction of the captive. It’s really the board members that control the direction of the captive. Our job is to facilitate that on behalf of the board. So when you think about how insurance works, you know, these insurance carriers are making

billions and billions and billions of dollars. ⁓ And basically it’s on the flow. They are collecting premiums, they’re holding premiums, they’re investing premiums, and they’re gambling that they’re not gonna have to pay out those claims on those premiums. Some of those claims can last three, five, seven years. So in the meantime, they’re sitting on that premium, they’re earning investment income. If they win the gamble,

They make profit, right? They’re not paying out as much as they collected. If they lose the gamble, they’re paying out more than what they collected, but they’ve earned all that investment income throughout those years that they sat on that premium. What the captive does is puts the member in the driver’s seat. So the member is the one that is earning the investment income. The member is the one that’s recapturing that profit. So best in class companies who find themselves paying

well beyond their premium or well beyond their claims for premium, they’re just making the insurance companies all that profit. Whereas they could be put in that seat and recapture that problem.

Anthony Codispoti (11:26)
That’s interesting. So it’s still insurance, right? But instead of paying all this money to another third party that gets to sit on that money gets to collect the float from whatever profits happen from the investments that they’re doing. Now, I’m one of the owners of this captive and it’s still being run in a similar way where those premiums are being invested. Yes. Okay. And you’re hoping for, you know, return on those monies.

Larissa Akrawi (11:51)
Yes.

Anthony Codispoti (11:56)
⁓ But now you get to take part in whatever those profits are.

Larissa Akrawi (11:59)
Correct. You’re

betting on yourself, right? So ⁓ in the traditional insurance environment, you know, we say about 50 % of your premium is going to the expenses of the insurance company, right? They have to pay for offices, they have to pay for employees, insurance, everything that they need to pay for. ⁓ And then the other 50 % is what gets invested to pay out future losses. In the captive,

We still have expenses. Our expenses are about 35 % of each dollar. So our expense overhead is much lower on the member own group captives because the captives themselves do not have offices. They do not have employees. Everything’s done via service provider and we are a service provider to the captive. So we can keep those expenses low on behalf of the captive. ⁓ But we also, that other 65 % that gets paid in this premium goes to that member’s investment account.

So if they outperform their premium, you’re exactly right. They’re getting that investment income and they get a dividend back out of the money that they did not use for claims.

Anthony Codispoti (13:09)
So if I’m a member of the captive, it’s going into my company’s investment account or…

Larissa Akrawi (13:14)
No, no,

so we do an investment account. So our captives are domiciled and grand came in the ones that we we put together for our members. So it goes into a it’s called the Captive Investors Fund. It is a almost 10 billion dollar investment portfolio that was created back in 1995 just for the investments for our captive members. So we did structure it to benefit.

a member-owned group captives in that you really want to have preservation of capital, you really want to have diversity in your investment portfolio, so that the members are getting the best investment results on those dollars.

Anthony Codispoti (13:59)
So are all captives, ⁓

do they contain multiple members or does it ever like one company? Okay.

Larissa Akrawi (14:05)
No,

ours do. So we don’t do single parent captives. The captives we consult for are all multiple member-owned groups. So we have a couple different types of captives that we work with. ⁓ One of them would be a heterogeneous captive. So what that means is that it’s a member-owned group captive that has all different types of companies in it. So they could have manufacturing, distribution, retail, all housed in one captive where they all came together, built their own program.

Then we have ones like the temporary staffing program that I handle where it is a specific captive for a specific type of industry. We find that industries like staffing, trucking, heavy construction, those industries really have a difficult time out in the insurance marketplace because they’re difficult to control risk. So when those types of industries come to us to say, can you help us build captive? Those are the ones where we

say yes, but it’s going to be with other staffing companies or other trucking companies. ⁓ So it just depends on the type of risk. We find that the ones that have a harder time are the ones that really benefit from being in an industry specific group because everybody has the same pain points and it just makes it easier for the captive to run smoothly when they all understand the same business.

Anthony Codispoti (15:31)
So Larissa, you specifically work with staffing companies for workers comp. And we’re going to get into more of the details on that because I’ve got some questions to better understand it. But first of all, as we look at captive resources, the full company, what types of insurance do you guys do in these captives?

Larissa Akrawi (15:35)
Yep. Yep.

So it depends on the captive. So the one that I work with is only workers comp. ⁓ Our other captives do. So it’s basically casualty, right? GL, auto, workers comp. There’s a separate property captive. So you wouldn’t really have your property in the same captive that you have your GL work comp and auto in. So we have a property captive. And then we also work with nine different medical stop loss captives.

⁓ So it just depends on what the captive decides its risk tolerance is. So each captive is really going to behave differently. We have a second staffing captive that’s different than the staffing captive that I run because it’s different owners. So when we say the control is with the board, the control is with the board. You’re not going to have the same ⁓ processes or rules ⁓ or growth.

objectives or strategies because it’s all different boards. So it’s going to be different depending on which captive you’d want to be a part of.

Anthony Codispoti (16:57)
You mentioned that there’s nine different medical stop loss captives. What is meant specifically by that?

Larissa Akrawi (17:01)
Mm-hmm.

So medical stop-loss, those are employee benefits. So companies that are doing employee benefits for their employees, ⁓ their medical coverage, dental, vision, that kind of stuff.

Anthony Codispoti (17:17)
⁓ Okay, so let’s come back to specifically what you work on Larissa. How did you first get involved with the workers comp and the staffing combo?

Larissa Akrawi (17:29)
I was assigned. I was just, started the company and they’re like, this is what you’re going to do. ⁓ Again, there was really no full training program. So I just learned every day, asked a lot of people, a lot of questions. ⁓ I did start on two different captives, the staffing captive and a nursing home captive, which that really, that other nursing home captive didn’t last long. It was kind of a, a tough program, but

It’s always been the staffing captive and then another program. So when we look at our bench strength here at captive resources, we really want to make sure that each captive team has enough levels of bench strength at the time we’re small. being able to be a kind of, I would consider myself a lower level support person on two captives was manageable. ⁓ So at one point,

You know, it was only on the staffing captive. They had come to me and asked me if I’d be interested in helping to launch a heterogeneous captive. So we did that. That was evolution that was launched. Oh gosh, I’m dating myself here. I feel like it’s been, I think it was in like 2000, early 2000, maybe 2001, 2002, we launched evolution. And that was amazing. Cause then I got to learn.

how these captives start, right? When I already started on the staffing program and had already been five years old. So to work on a captive from its infancy and really, and it did bring me back to that marketing experience that I had because when you’re starting a captive, you have to collect up all the data from different potential companies that wanna be part of the founding fathers of the captive.

And then you have to send it off to different carriers to figure out who wants to help you launch this captive. You’ve got to go get them licensed and set up in the Cayman Island Monetary Authority. So there’s a lot of pieces that I had no idea existed until I was offered to work on this launch. then I, again, everything was, sure, I’ll learn more. know, it was kind of like I was.

Whatever you guys want me to do, I will do, I’ll learn more. So then once we got that program set up, we got it moved over to a different team. They ran it from there. I was still on the staffing program, worked on a couple other startups that ended up not getting off the ground. And then they came to me with our first medical stop loss captive called Well Health. And they said, hey, do you wanna work on this startup?

I’m like, don’t really know anything about employee benefits, but sure. Worked with the team, the sales team, again, got that launched. It was just really cool to see them launch. And now that captive has 300 companies in it. So when I was going through my evolution here, I just didn’t say no to things, right? Like, I just want to, if it’s something new that I can learn, then sign me up.

And then it just kind of went from there.

Anthony Codispoti (20:50)
You mentioned that you worked on a nursing home captive, but it didn’t really work out. What was the challenge there?

Larissa Akrawi (20:59)
So that one was tough because it was an association down in Kentucky, an association of nursing homes that wanted to build their own captive. we were brought in to help them build that program. Small premiums, high losses. that makes it difficult. And when you have an association that has the say in the captive, I think there’s just too many competing interests when you get

in association and then a captive setup. And then you have, yeah, the high losses, the low premium nursing homes is a tough environment. You’ve got combative patients. You’ve got back injuries, slip trip, fall injuries. The GL was tough. So it just didn’t make sense.

Anthony Codispoti (21:47)
Just did pencil out. Okay, so let’s talk more specifically about workers comp. First, a baseline, explain what workers comp is.

Larissa Akrawi (21:55)
So Workers Comp is taking care of your injured employees, right? We have employees. ⁓ The TISL, the staffing captive runs $6.5 billion of payroll across the country. That’s a lot of people working in a lot of environments, especially in the staffing world where you can have multiple clients, ⁓ know, different folks in different environments.

at any given day of the week. So it’s very difficult for these staffing folks to really manage those environments where they’re putting their people. We wanna make sure that if we do have an injured employee, that they are compensated for that injury, their medical bills are taken care of, their time off work is taken care of. So that’s basically what the workers comp is. It’s your employee injuries managing that.

Anthony Codispoti (22:44)
If an employee gets injured on the job, here’s some compensation for lost wages, injuries, the medical expenses.

Larissa Akrawi (22:46)
job. Wages,

medical expenses. You know, even if it’s somebody that got severely injured and they have a family, then, you know, if they’re the head of households, then workers comp would then address loss of income to the family. Again, medical benefits, if you need shoulder, you know, surgery, any type of amputations. I mean, we

I’ve seen so many different types of workers comp injuries. So it runs the gamut.

Anthony Codispoti (23:20)
So the benefit of somebody being a member of your captive in the staffing space for workers comp is kind of what you were touching on earlier rather than, you know, your operating expenses being around the 50 % mark there at around 35%. So there’s already like a 15 % quote unquote cost savings. But then that 65 % that when what’s left over gets invested into the captives investment vehicles. Yeah.

Larissa Akrawi (23:48)
Yep, yep. And then, you know, from a workers comp standpoint, you know, the name of the game is keeping your people safe, right? If you have less injuries, then you are protecting those, that asset. You’re protecting those dollars because you’re not having the injuries. So we do work with members on prevention. How do we have our people go home with all their fingers, all their toes, everything in the same order that they were sent out to work in?

And if not, how do we make sure that they get good care so that they can get back to

Anthony Codispoti (24:21)
And so can you talk a little bit more about those programs? Because it sounds when we first started talking about this, I’m like, okay, yeah, I get the idea of a captive, I get what you’re doing in workers comp, but you’re going beyond the insurance component of it, right, to try to prevent the injury from happening in the first place.

Larissa Akrawi (24:39)
Correct. So all of our captives have a loss control arm to them. Part of your premium gets you a loss control consultant who will work with you on that prevention. I mentioned that I just came back from a trip. I was at a risk control workshop last week. So we do twice a year continuing education for safety. So this is a two day safety workshop. have guest speakers, people share.

information, they share best practices. We also have a group purchasing program where we’ve been able to really use all of our members to get discounts on safety items such as non-slip shoes, know, prevention programs, any type of, know, we do have two, three trucking captives I think now. So a lot of prevention in the trucking industry.

So it’s any type of safety items we have within our group purchasing program that all members have access to. We do monthly safety webinars for all of our 7,500 members across all of our captives, safety training tools, anything from ergonomics, forklift safety, OSHA training. You know, it’s really important that members have those resources to be able to keep their people safe.

You mentioned nurse triage early on. So yeah, you’ve got a claim, right? All the preventative measures you put in place, you’re still going to have a loss. But once that loss occurs, you want to be able to manage it well. Nurse triage has been great for our groups because it’s immediate on the phone with a nurse. They are trained nurses. The calls are recorded. So you’re getting that very immediate recollection of exactly what happened, when it happened, how it happened.

And that’s really been able to help our members combat a couple different things. The probability of a fraudulent claim. You we see that a lot. I’m still an optimist when it comes to people. I really truly believe that nobody wants to get hurt. Nobody’s blocked out that day expecting to lose a finger. How do we make sure that they’re taken care of?

But that doesn’t mean I’m naive to the fact that there are predators out there. So we want to make sure that we’re protecting our members from predatory behavior. Triage helps us do that because what ends up happening in workers comp, you can get a situation where somebody bumped their knee. Now all of a sudden it’s my back and my neck and you know, their neighbor has a cousin who’s a lawyer. You don’t want it to get to that point. You want it, you want to be able to help that injured employee manage their injury.

get back to work, but you still need the kind of boots and suspenders of different programs to be able to protect the group from suspicious activity.

Anthony Codispoti (27:41)
So that recent conference that you were at Larissa, ⁓ what’s one thing that you either learned about safety or maybe was a good reminder?

Larissa Akrawi (27:52)
⁓

Well, it’s interesting because we had a speaker, and I’m blanking out his name right now, ⁓ who kept showing all these videos of these very hazardous situations and how it’s people who are the, how did he put it, who are the weakest link in safety. And how do we make them a stronger link in safety, right? You can have the same person doing the same process for 20 years, and then one day just lose a finger.

Why? Were they distracted? Did they cut corners? What was going on that this seasoned person had this injury? It’s these small little things that I think we take for granted every day as we’re going through our process, because we’re so dialed into these processes, that we don’t realize, maybe I just skipped a step. Maybe I wasn’t as diligent. But he kept showing these videos that were just, you know,

We don’t put people in those environments in our programs. The members aren’t allowed to do like dynamite, manufacturing people in mines. He kept showing people falling from things. Like nobody’s allowed to do this kind of work. So hopefully we never have that issue.

Anthony Codispoti (29:07)
He was really going over the top to try to make some points, huh? Yeah.

Larissa Akrawi (29:10)
He was,

he was so, and if you look around the room, the room’s filled with safety professionals. So I mean, we’re all just like covering our eyes. Like we didn’t even want to Yeah, no, we we didn’t want to look, but it is true. It’s, it’s, you know, I went, so I, I grew up in Chicago. I went to a vocational high school. So I worked on machines as a 16 year old, as a 15 year old kid.

Anthony Codispoti (29:21)
Like you’ve already got our attention. already paying, you know, we know this is important. Yeah.

Larissa Akrawi (29:40)
And the concept of the instinct to stick your hand into a machine, something goes in, you wanna grab it, right? That’s where people come in as far as being the weakest link in your safety. You have to retrain your brain not to stick your hand into that machine, not to walk in front of the forklift, right? So again, I don’t think people go out to work to get injured.

They’re just trying to get through their day and then skip these small little steps that could lead to serious injuries.

Anthony Codispoti (30:16)
Gotcha. So somebody wants to be a member. How do you price out their premium?

Larissa Akrawi (30:22)
So somebody wants to be a member, they go through their broker, because we are not licensed brokers. I am not a licensed broker. That’s not our role within the captive model. So they would have to come through us through their insurance broker. What we do then is we ask their broker for their last five years of premium, payroll, and losses. So what we’re going to do then is we’re going to take that information. We’re going to look it over. I do a lot of pre-qualification of companies.

I want to know who’s going to be part of the captive. I underwrite them from the top down. So I’m going to be asking a lot of questions about the owners, the C level, the bench strength, how do they manage their losses? What kind of clients do they have? If they pass that kind of first level of pre-qualification, then we can move forward. We send their information to the actuary. What the actuary is doing is basically trying to predict their future based on their history.

So the actuary is going to look at their numbers and they’re going to say, okay, we are going to need X dollars to fund their expected losses based on their historical information.

Now we know this is what our funding number is. We add to that the expenses and that becomes the premium. That funding number is what members have an opportunity to get back. That’s what goes into their investment account. That’s what earns investment income. And the name of the game is outperforming the actuary. We want them to prove the actuary wrong. We want them to do better than they did in the past because that’s how you drive down your costs. And if you have resources and you’re part of a best in class group,

you’re going to perform better. Just by virtue of the fact that these are all it’s high personality business owners, very competitive, they want to be the best ones. So when you put them into this environment, they end up doing really well because they want to be the best ones. They want to get the safety awards. They want to get the big dividend checks. So there’s something just innate about once you get them into this kind of group.

It really does change their perspective of insurance because now they’re not just a buyer, they’re really an owner and they get to really control the destiny of their insurance program.

Anthony Codispoti (32:43)
So how do the actual funding mechanics work? Is this like, okay, here’s the funding amount. This is all due upfront or

Larissa Akrawi (32:50)
So a couple of things happen with this staffing program and with all of our captives, they pretty much have the same base model mechanics. So well, our goal is we want to set up a structure where we are retaining frequency claims, but transferring severity losses. Right. So you really. So what that means is the severe the frequency claims are going to be your everyday bumps, bruises, you know.

Anthony Codispoti (33:11)
What does that mean?

Larissa Akrawi (33:19)
your basic everyday claims. So we consider those any claim under $125,000. So those are going to be a staffing company, any company’s typical claims are going to run within this 100 to 150, ours is 125, our frequency layer. That’s going to be the predominant level of claims that most of these companies have. But what we also want to do is protect each member and the group from a catastrophic loss.

⁓ In some states, workers’ comp is unlimited, which means the insurance carrier could be paying $10 million, $15, $20 million on a workers’ comp claim. We want to insulate the members from those types of catastrophic, bless you, bless you, from catastrophic losses. So when we look at funding, we’re looking at these two primary levels, frequency severity, frequency zero to 125.

severity is 125 to 400,000. So that’s with all in the captive layer. Anything over $400,000 gets transferred to our insurance reinsurers. So we have Zurich North America as our paper. not only do they handle the policies, they also handle the reinsurance. So if the captive has a million dollar loss, we’re only responsible for the first 400,000. On a member specific basis, their frequency fund is gonna take the first 125.

their severity fund is gonna take the 275,000. If they can’t handle their own claim, it gets shared amongst the group. So we have different levels of accountability depending on the types of losses that you’re having. If you have a lot of frequency claims, that’s where it’s gonna hurt because frequency can be controlled, especially in staffing. People think that it can’t because they don’t control their environment. ⁓

Anthony Codispoti (35:13)
Right,

they’re placing their workers at another company’s work site.

Larissa Akrawi (35:14)
they’re placing people. Correct.

So this is this is one of the things I think that the general insurance marketplace doesn’t really understand about staffing. So yes, you know, it’s a transient workforce. They don’t control the environment. Both true. But really good staffing companies are really good at recruitment, knowing exactly who to put where and why and how and partnering with their end client to make sure that that is a safe environment for their people to be in. So

In investing class staffing companies, they’re already doing that. They’re really dialed into what kind of environment their clients are in. ⁓ You know, does the end clients have good safety and policies and procedures in place? ⁓ Are they cooperating when there is an accident and allow the staffing company in to do a post accident investigation? ⁓ Are they treating their staffing?

employees the same as they’re treating their regular employees, right? So these are all the things that staffing companies can control within the environment of their client relationships. And then also with recruiting who they’re hiring. You you don’t want to put somebody ⁓ that is, you know, not physically able to do a job up, doing it, lifting 50 pounds every day or going up

on maybe a small step stool or a ladder or something like that. So they’re really good about making sure they’re putting the right people on the right spots, because that will really drive your frequency is all those zero to 125 losses.

Anthony Codispoti (36:54)
So who’s a good fit for your captive, Larissa? Obviously staffing, but particular sizes, maybe particular types of staffing, geographies that work better than others.

Larissa Akrawi (37:06)
⁓ so we do have two staffing captives because the one that I work with Tissell is they really decided a long time ago that they did not want to work in high hazard industries. So again, back to the control, right? The board gets to decide these things. they did not want to work in high hazard industries. So we did have companies that worked in industries that Tissell did not want to do. So

They came to us and they said, hey, can you start a captive for these industries? More like oil, gas, construction, trucking, stuff like that. So in 2014, we did start a second staffing captive for those types of companies. We don’t really track revenue. I would say from a premium size, the minimum premium for both staffing captives is $250,000. Our average premium is probably about $900,000.

You want to have enough funding to cover your basic losses. know, once you start to get to a smaller premium size, you want to make sure that you can cover, you know, your own claims and you’re not kind of bleeding out to the rest of the captive. And I’m trying to think as far as geography, no, we have members. ⁓

Anthony Codispoti (38:28)
any states that

have rules that sort of make them undesirable.

Larissa Akrawi (38:30)
Yeah, we don’t do monopolistic

states, but that’s pretty standard in insurance where we’re not doing monopolistic states. ⁓ So those are states like Ohio where you can only get insurance from that state. So that’s, you know, they control the workers comp within the state of Ohio. I think North Dakota, ⁓ Washington. I could be missing one. But yeah, so we can’t we can’t we don’t write coverage in those states.

Anthony Codispoti (38:37)
What is a monopolistic state? What does that mean?

Larissa Akrawi (39:00)
you have to get the insurance from that state.

Anthony Codispoti (39:02)
Gotcha. So somebody who’s got a million dollars in premium a year, what might they expect to save by moving into your cap?

Larissa Akrawi (39:06)
Mm-hmm.

It depends on their losses, right? Are they a million dollars of premium, but are running a 40 to 50 % loss ratio? They’ll do really well. What we’re looking for, when you look at the insurance industry overall, you really have, if you were to lay out an insurance company’s book of business, you’re gonna end up seeing that the top 20 % subsidize the bottom 20%. And then in the middle, they kind of flesh out.

We’re really looking for those top 20%, right? We want those companies that are engaged, that really manage their claims, manage their risk, are best in class companies. So it really, you know, when I mentioned underwriting, I’m underwriting the owners, I’m underwriting the company, the culture, those are really what we’re looking for, the right people to be in the club. I don’t have an ultimate say on who comes in.

I have to present every candidate to the underwriting committee, is members of the captive. They are the gatekeepers. So, you know, we can pull together all the information. We can go to them and say, we believe that this is a good candidate to join your group. And then they ultimately have the say on whether they join or not. But for the most part, if I think it’s a company that doesn’t, that’s not going to be a good fit. ⁓

then I wouldn’t bring it to them. So it really comes down to the quality of the company, how well they’re doing things, more than premium, because the goal is to have the premium come down. If you can manage that risk, your premium’s gonna come down.

Anthony Codispoti (40:56)
Is there a mechanism in place that allows for a member to be removed?

Larissa Akrawi (41:02)
We do have, and different captives again, have different mechanics because they’re all gonna be different based on what their boards decide. So for the one I work with, there are a couple mechanics. ⁓ If you don’t pay your bills, you don’t get insurance, right? So if you run into situations with ⁓ problems where people aren’t paying their bills, I can kick you out.

You know, it’s not free insurance. This is not how it works. And you’re just hurting the rest of the group. ⁓

intentionally and chronically breaking the rules, right? If everybody else has to follow the same rules with regards to what type of risks they can bring into the captive. We haven’t had to kick anybody out, but I have to have some pretty tough conversations where, no, you cannot bring on ⁓ window washers on skyscrapers, you know, or they just kind of, you know, I had one where they were just doing hazardous jobs without telling us or without pre-approval. ⁓

that was a difficult conversation where you either get it out of here or you have to leave. Like you can insure it somewhere else, but you can’t keep it. Right. And this was kind of before we started that captive. So that ended up working out where we can kind of, have, I think five members now that are in both programs. So in the one program they’ll put their light industrial medical, more professional risk.

Anthony Codispoti (42:15)
you’ve got another captive for those higher risk positions.

Okay.

Larissa Akrawi (42:33)
in the other captive is where their heavier risk is. So they’ve been able to kind of diversify their risk between the two captives.

Anthony Codispoti (42:41)
Larissa, can you give me an example of how you use lost data and on-site inspections to first identify common workplace hazards, but then propose fixes for them as well?

Larissa Akrawi (42:54)
yeah, so data, right? We love data. ⁓ Being able to data mine the information from the claims is a great resource. It can tell us if members are having more claims with a certain clients in a certain state, in a certain environment. So then we can really drill down to be able to help

our members identify which clients are causing them the most pain. You know, we had a client, a member of the captive who kept having all these, ⁓ they worked in a recycling facility. So we saw a lot of claims where they were continuously having cuts, small cuts. Okay, we identified the facility, we identified the injury.

let’s spend some money to get you guys better gloves, right? Like let’s make sure that the employees there have better gloves. If we identify that at a certain client site, ⁓ there’s a lot of slip trip and falls. Great, we partner with Shoes for Crews. Let’s get these people some better non-slip shoes. So it’s different things like that where we can see through the loss detail where that low hanging fruit is and identify trends.

Sometimes members don’t even realize that what they consider is their best client are the ones that are burning up their workers comp because they’re having more claims than what the member can bill for their rates. you know, it’s those kinds of conversations that really help members kind of dig through the weeds because they’re running their staffing companies. Every day they’re hustling. You know, sometimes it does take a different eye.

to kind of take a step back. Let’s really look at what’s going on here. And then you can really start making some better decisions on how to manage it.

Anthony Codispoti (44:58)
If there are dividends from the investments left over at the end of the year, Larissa, how do those get distributed? Is it based on a percentage of your premium? What was paid out in terms of ⁓ claims factored into that calculation?

Larissa Akrawi (45:12)
Yep. It’s whatever’s

left of your own money. So it’s going to be like, let’s say you, um, you are a billion dollar member, you know, and I’ll use round numbers just because it’s, it’s easier, right? So a million dollar member and we’ve got 35 % expense. That’s some cost to run the captive and all the service providers. So now you have, you know, $650,000 of funding and you only had a hundred thousand dollars of losses.

Now you have $550,000 that’s been sitting in that investment account. close the years after we start doing dividends after three years of that policy period expiration. once we crack, yeah, because workers comp has a long tail. So we can’t start giving back money after 12 months. I mean, there’s so much that can change with those claims. So what the group does is they’ll start doing partial dividend distributions after three years.

Anthony Codispoti (45:53)
⁓ expiration. Once it’s…

Larissa Akrawi (46:11)
with a full shutdown after five. So once we look at those numbers, back to my example, you have $550,000 left in your equity account, because you didn’t pay out those claims, you didn’t have those losses. After three years, you’re going to start seeing that dividend come back off of what’s left of your money, plus all the investment income you earned on it. So that’s all your cash.

Anthony Codispoti (46:35)
So that long tail that you’re talking about, that happens potentially because I broke my toe and I’m trying to get payment for that, but there’s a discussion that’s going on. There’s verification processes.

Larissa Akrawi (46:50)
It could be so many things. You could end up with a back injury that two years later requires spinal fusion surgery. You can end up with a laceration that wasn’t taken care of that now becomes an amputation. know, some states, and it depends on where the injury occurred, some states have lifetime medical benefits where you’re paying that employee for the rest of their life if they’ve had a serious injury.

If they have children and that employee cannot work anymore, you’re paying for that, right? So it does change. Claims can reopen. Claims can develop over a period of time because the injury has gotten worse or requires more therapy or another surgery. So these are all the things that happen within the workers comp world that I think people, when they’re on a guaranteed cost policy, that means that

When they’re done with the policy, they’re done with the claims. In the captive, when you’re done with the policy, you’re not done with the claims because you are an invested owner in the insurance. You’re taking that risk for as an owner. So you get the profit and loss, not the insurance.

Anthony Codispoti (48:08)
Larissa, how is the captive that you offer, the workers comp to the staffing industry through captive resources, better than what else is out there, better than competing products?

Larissa Akrawi (48:22)
ownership. I mean, that’s the only thing it really is. ⁓ There’s no other market. There’s no other market in staffing, especially that A has been around for 30 years and B is run by staffing companies. Right. So I think that’s the biggest competitive advantage that the captive has is it’s a staff. It’s a staffing captive run by staffing owners. They’re not going to.

create an environment that’s going to make it difficult for them to be profitable. I mean, who would do that, right? So it’s a lot of these other insurance carriers, not only do they not understand staffing, but they like to jump in and out. Like they’re like fair weather friends, right? Where they one day they love staffing and then the next day they hate staffing. So they’re just really fickle when it comes to staffing. Whereas the captive, it’s not going anywhere.

It’s been around since 1993 It’s run by staffing companies. ⁓ So it is, in my opinion, and again, I grew up on the Kool-Aid, right? The captive Kool-Aid. ⁓ It’s the best place for good quality staffing companies to be.

Anthony Codispoti (49:33)
The tagline I sort of see in my head is for staffing by staffing, right?

Larissa Akrawi (49:37)
Yeah, yeah,

that’s exactly what it is. It’s forced. And again, know, staffing is so dynamic. takes, it takes a big personality to start and run a staffing company. So you’re really talking about A-type personalities that grind, that hustle. They are not going to have patience for a program that doesn’t do what it needs them to do. They just won’t. ⁓ So I think that’s the biggest.

draw to this. And of course, the whole concept of you have to qualify. People want things that they have to qualify for. It’s more it is elites. ⁓ We do have I’ve been working with some staffing companies that it took like two years, almost three years for them to get into the captive because I worked with them and said, OK, if this is your goal is to get into this program.

Anthony Codispoti (50:18)
It’s elite. It’s prestigious.

Larissa Akrawi (50:35)
These are the things you’re going to need to do. so, you know, it takes them a while, but they end up coming in. They put in the work because it’s merit based. At the end of the day, you’re betting on yourself. And if that concerns you, then you may need to take a look at what you’re doing and how you’re doing it.

Anthony Codispoti (50:43)
They put the word can.

Larissa, in my experience, most success stories have a chapter that almost broke them. Can you share a particular challenge you’ve gone through, personal or professional, how you got through that and what you learned in the process?

Larissa Akrawi (51:11)
my goodness, I was thinking about this one. most people don’t really know this. I don’t promote like my background. But I grew up in Chicago in the inner city, a very toxic, volatile environment. ⁓ And I learned very early, the only way I was going to get out of it was by working. That was, that’s the only way out. So at 12,

I became like the babysitter, right? Like any kid, babysit. Started waitressing early at 16. I was out on my own at 17, taking the bus from job to job. So.

It really wasn’t one of those situations where I ever thought I’d have a career, right? When you grow up in that environment, it’s more survival. And I had jobs, but I didn’t really have a career path or anything. And it wasn’t really until I got to captive resources that I realized like, okay, I can do this, right? I can do this. ⁓ When I first put my hat in the ring to take over this captive,

back in 2013, 2014, I thought I, until this day, I really do kind of get it in the back of my head. Like, I don’t belong here. Like I didn’t go to university. I don’t have an MBA. Like I’m a kid from Chicago. Like, why is anybody listening to me? You know, when I got the promotion, I freaked out to my husband. I’m like, what was I thinking? I’m in over my head. I can’t do this.

So was really that self doubt, but I think it was more because I didn’t have the credentials, right? Like I didn’t, and I think that put me in a self doubting position. It took a lot to overcome that. And even still sometimes today it sneaks in. If I’m sitting at, I mean, I’m sitting in multimillion dollar meetings. This captive runs $430 million of assets through it.

And I’m in charge, know, the group, the board comes to me to solve their problems. And I still find it just mind blowing thinking of kind of where I came from and how I, how, where I am now. And really just the, the gratitude of the people that kind of took me under their wing, that taught me the stuff, that helped me grow.

That means a lot. it’s really, yeah, just kind of that, that self confidence. I had to really, really get over that hump of like, yeah, I do belong here. I do have value in this environment.

Anthony Codispoti (54:04)
As you look back to your time as, you know, just some kid from the inner city of Chicago, and the age of 12, you were like, my only way out of this really rough environment is just to work. You see some of the people who were around you at the time, did others kind of make the move up the ladder with you?

Larissa Akrawi (54:25)
⁓

That’s hard to say because I don’t really know. It was one of those why I really had to get out. because people that are not in those types of environments don’t really understand. It has to be all or nothing. It has to be because they pull you. They pull you back in.

Anthony Codispoti (54:32)
You got out. Yeah.

Larissa Akrawi (54:50)
who enjoy their misery want everybody to be part of that. They don’t want you to be successful. ⁓ So they try to pull you back in. So it had to be all or nothing. Yeah.

Anthony Codispoti (55:03)
Okay.

Do you think you’d be where you are now if you had a more traditional upbringing?

Larissa Akrawi (55:11)
I have no idea. I don’t even think about it really because I couldn’t even fathom what my life would be like if I was raised in a normal environment and got opportunities or went to college, four-year university or lived in a better neighborhood. I don’t even think about that. have idea.

Anthony Codispoti (55:31)
Don’t even go there.

So what did you do to help get you to be more comfortable in believing that you do belong?

Larissa Akrawi (55:43)
I think it was having having difficult conversations with smart people. So one of the things that I think helped me over that hump was again, I put I put our clients on pedestals, like again, they’re staffing companies, they I never built anything like they built this, right? They run it, they they deal with the daily stuff. ⁓ And they’re coming to me for solutions. So

when I can help them solve a problem, that’s where I get that confidence boost from. And the fact that they’re coming to me to help solve a problem for them, that’s almost like…

It fills that bucket for me where then I can be like, this super smart person that I respect needs me for something. So it’s just those little things, those little acts that I think really help solidify. Yeah, I do know what I’m doing, right? So that was kind of like how it worked.

Anthony Codispoti (56:47)
I like that.

What’s your superpower Larissa?

Larissa Akrawi (56:52)
my goodness. I think I’m a people person. ⁓ I do like people and I think that’s what drew me to stay with the staffing captive as long as I have. They really do care about people. They want people to work. They want people to provide for their family. They want people to go home safely. ⁓ I like to think I’m authentic. I don’t really have agendas. That’s not really how I operate. ⁓

You know, don’t, I take my work seriously, but I don’t take myself too seriously, right? I like to have fun. I think I’m pretty, I’m pretty chill. I don’t really let a lot of things fluster me. Even if there’s a problem, if a member’s having a problem or, you know, having a difficult conversation. ⁓ Yeah, I don’t let things fluster. So I don’t know, I think life’s too short to be so.

you know, stressed out all the time. So I just kind of take things for what they are, very calm and logical. I don’t get too worked up. And I think that’s because of the people thing, right? Like people react to your reaction. It’s contagious. So if I’m getting all crazy, then other people are getting all crazy. Whereas I try to really maintain like people are people. Let’s try to help everybody. Let’s be a good leader for our team.

Anthony Codispoti (58:06)
even keel.

Larissa Akrawi (58:19)
Let’s be a good example for the other people coming up in captive resources that are new or in their 20s that are learning this captive thing. ⁓ And then everything just kind of works out on its own.

Anthony Codispoti (58:31)
Larissa, I’ve just got one more question for you today. But before I ask, I want to do three quick things. First of all, anybody that wants to get in touch with Larissa, there’s three options. Her LinkedIn page, and we’re going to have a link to that in the show notes, but her name is Larissa Accraoui, A-K-R-A-W-I, Captive Resources. ⁓ Then there’s two websites I’m going to give you, captiveresources.com and tempsinsurance.com. temps with an S, insurance.com.

We will have links to all that in the show notes if you missed it. And speaking of the show, if you are enjoying it, please take a moment to subscribe wherever you’re listening. It sends a signal that helps others discover our show. So thank you for taking a quick moment to do that right now. And as a reminder, you can get your employees access to therapists, doctors, and prescription meds that, as paradoxical as it seems, actually increases your company’s net profits.

real gains that can change how a business is valued, contact us today at adbackbenefits.com. So last question for you, Larissa. A year from now, what is one specific thing that you hope to be celebrating?

Larissa Akrawi (59:39)
the rebound of the staffing industry.

It’s been a rough two and a half years for the members and I would really, really like to see a recovery. I would like to see them bounce back, bigger, better, stronger. The last two and a half years have just been really tough and it does, I’ve seen a couple of our folks that had to shut their doors over the last couple of years. So I really would love to see them just rally.

high tides raise all ships and and I think You know, it just makes them happier. I just want to see them happy I just I want them to see them. I want to see them just recover That would be that would be my hope

Anthony Codispoti (1:00:23)
What do you think has led to the decline over the last two and a half years? Or maybe a different way to ask it would be, what needs to change in order for the rebound to take

Larissa Akrawi (1:00:32)
Yeah, it’s interesting because it’s a decline compared to the recovery after COVID. So we’re really back to our 2019 numbers. So it’s been a hard five years where it’s just been up and down and up and down.

I think other staff, I think staffing companies could probably answer that better than I could. I mean, I have maybe some theories, but you know, when you’re dealing with stuff like medical inflation, legal inflation, you know, that really puts a lot of pressure. The cost of claims is getting higher. We’re seeing a lot more claims just become mega dollars. The auto industry is tough with distracted driving, auto claims are out of control. So, ⁓

I think that maybe what part of it too is that everybody thought by now the manufacturing facilities would be full of robots and they’re not. So now it’s really what’s going to happen with AI is AI going to remove some of the more.

white collar jobs versus now the blue collar jobs. So it’s going to be an interesting dynamic to watch over the next few years how the staffing industry responds to this. I have no doubt that they will find they’re so good at pivoting and they’re so good at finding the areas where they can bring value. I have no doubt that they’ll just crush it over the next couple years.

Anthony Codispoti (1:02:03)
I had the pleasure to interview dozens of folks in the staffing space on this show. And I’ll echo your comments about the entrepreneurial and resilient spirit that seems to exist as a common thread amongst almost all.

Larissa Akrawi (1:02:18)
Yeah, they’re great people. I’m so blessed to be able to have the opportunity not only to work here at Captive Resources, but to have gotten to know the staffing group and the staffing industry.

Anthony Codispoti (1:02:31)
Well, Larissa Accraoui from Captive Resources, I want to be the first to thank you for sharing both your time and your story with us today. I really appreciate you being here.

Larissa Akrawi (1:02:39)
Thank you so much. This was fun. My first podcast.

Anthony Codispoti (1:02:42)
⁓ you’re you seem like a seasoned veteran. That’s awesome, folks. That’s a wrap on another

episode of the inspired stories podcast. Thanks for learning with us. And if one thing stood out, put that into action today.