Q. CP4/19 sounds like a character from Star Wars. But it’s an important risk management challenge for insurers isn’t it?
A. You’re referring to the PRA’s consultation on Liquidity Risk Management which is a really important area for the insurance market and certainly for Asta and its syndicates. It’s all about managing liquidity risk correctly, something which our risk and finance teams already work on together to provide the reporting and analysis needed. This analysis helps us to not only determine cashflow liquidity but also to stress test the ability to continuously meet financial obligations. If you’re a Cat-exposed syndicate for example, with a relatively short claims development period, you have to be on top of how you use cash to meet your commitments. How they can use bank facilities and structure their reinsurance will be just two of the key factors and it’s our job to help them manage that.
Q. Your role is all about managing risk in an ever-changing world – what do you think an insurer’s risk function will look like in 10 years’ time?
A. It’s already quite different as a result of going into lockdown earlier this year! Working remotely has had its challenges but we – and this is true for the whole of Asta – have been able to maintain the same high quality of service and advice to our clients. It’s been very much business as usual. Looking ahead, any risk function will reflect the industry it serves. COVID-19 has reinforced the need for automation in the insurance market, and Lloyd’s in particular. This extends to the risk function where more advanced and integrated systems will improve the quality of management information and enable us to assess our risk appetite and manage our response in real time. We’ll be able to respond faster and see what the data means for our capital and our liquidity. That’s a real competitive advantage and data analysis skills – already an important resource for the risk function – will become embedded in the risk function of the future.
Q. What distracts you?
A. We have a boy of six and a daughter who’s ten and they were certainly a distraction during lockdown! With both of us working at home it’s been quite tricky managing those commitments whilst helping with schoolwork. On the flipside though, the last few months has meant more time together as a family and that has certainly been a welcome distraction.Outside of COVID, I’m someone who has a very strong tendency towards hobbies and interests. Some would say (my wife) to the point of obsession. Fish keeping is a big one – I have a large koi pond and a 500 litre tropical fish tank. I’m also quite a keen cyclist, with three road bikes, a mountain bike and a gravel bike which is halfway between the two, and great fun if a little dangerous at times.
Q. What film has made the greatest impression on you, and why?
A. There are several I could choose from, but the most recent one I’ve seen is ‘Just Mercy’ which is based on a true story about a lawyer in the US who represented poor prisoners on death row. It was quite striking to see how a a group of very committed and passionate lawyers in a small legal practice could make such a big difference to people’s lives. I thought it was a pretty powerful film made more so by the murder of George Floyd – Warner Bros made the film free during June 2020 to educate the public about systemic racism.
Q. What are the three most overused words or phrases in the risk management world?
A. There are an awful lot so this could be a long answer. “Risk” is an obvious, but important one I always encourage people to think about. “Solvency II” is another and of course “Regulator” – two words not often uttered with friends over dinner, but that are incredibly important. People sometimes think that risk management is about ticking boxes and assuring company boards and the regulators that we’re doing the right things, but in the end it’s actually about protecting the customer and improving the ways in which we do business. “Operational Risk” is another which is obviously topical right now. I could go on – is that a “satisfactory or acceptable” answer 🙂?
Q. If you could learn to do anything what would it be?
A. I already have. I can’t help myself. Another lockdown hobby is remote control cars which has obviously gone down well with the kids. I had one when I was a boy but the tech has come on in leaps and bounds since then and learning how to use them has been interesting. Fixing them after one of us has crashed is also a challenge but another thing I’ve embraced – I find myself ordering spare parts quite frequently!