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Interview: Insurance Finance, Leadership, Transformation & The Future

Interview: Insurance Finance, Leadership, Transformation & The Future

July 2020 by Damian Rhodes

Insurance Finance, Leadership, Transformation & the Future: An Interview by Damian Rhodes with Jaspal Kainth, Insurance Finance Leader.

I caught up with insurance finance leader, Jaspal Kainth, recently to talk about insurance finance leadership and the future.

What does it take to be a successful finance leader in the insurance industry?

Focus on your people – Bring them together, understand them in order to strategically build objectives with them to align with the business. Listening to your people (and the business) you should form a deep desire to create pockets of focused curiosity which further understanding and kick start innovation where solutions aren’t obvious – these can often be the subject matter when exploring objectives at many levels (business, department or people).

Sense of urgency – A business doesn’t always understand how vital the finance function is until it is broken. Finance functions are often too silent to communicate and educate the business as to their value. The concept of urgency can imply noise and chaos, but when combined with a requirement to “think together”, it should combine into a finance function where the team “can”, “will do” and “does”, this in itself reveals the value of the finance function in being more than just gatherers of history. A display of urgency by a finance leader can filter down to stimulate characteristics which enable development, learning and success.

Constructive paranoia – Finance leaders can never rest in ivory towers based on their historical success. Change is the only constant within finance and the insurance business. Constantly review the internal and external environment while taking every challenge as an opportunity to demonstrate capability. The FCA states that CFOs are responsible for management of financial resources of a firm and reporting directly to the governing body in relation to its financial affairs. With more actuaries being appointed CFOs than ever before senior finance leaders must use constructive paranoia to mitigate the risk of this definition not being fulfilled adequately adding value and support proactively as and where required. While actuaries are vital to the regulatory valuations and capital appraisal, their training doesn’t cover in enough detail areas such as changing accounting frameworks, design & management of processes and controls, management of ledgers or financial resources. So it’s important to stay tuned, and understand it could all go wrong if you don’t pay attention.

Think together – In order to initiate effective change we have to ensure everyone on the team/function understands and thinks together. This needs to be clearly communicated by the finance leader and acceptance by the team will take time.

What has been the challenge you have enjoyed most?

Within a number of roles in my career I have been presented with ledgers and financials which are not fully understood or controlled. I have enjoyed enabling people to scrap, rebuild and transform both reporting and governance structures. It’s an audit approach of simply asking probing questions as there are always people who know the answers but haven’t communicated or documented sufficiently. Upon entering a new role I have used two methods to understand the business:

  1. Quiz my peers and my team on their views of the business and separately the finance function

  2. Review statutory and regulatory documents through to GL reconciliations to learn about the business, processes, controls & key people

There has always been a need to rebuild effective reconciliations which tie into other business functions in order to “boot strap” the numbers and know who is to be held accountable via which process and which controls. The main driver of my enjoyment is seeing other business functions (underwriting, claims, reinsurance, investments, actuaries) come together and understand the role of finance as a support function and improve their own understanding of which part of the financials they affect.

What role have you been most proud of?

 I moved from the “live” insurance market to a company which manages run off (ie Legacy). The legacy market has since evolved and is now on every private equity/investment managers radar. I had to very quickly “roll up my sleeves” and dive into the detail; this related not just to finance, but actuarial, claims & commutations, RI, LPT’s, Part VII etc. It was a challenge because “business as usual” was forever subject to change due to M&A and growth. The business leaders at Group level were excellent and being part of the growth they enabled meant staying up to speed with a variety of constant changes internally and externally.

What is biggest challenge in the insurance industry in the coming six to 12 months?

IFRS 17 is quite a complicated challenge as it seeks to standardise insurance accounting globally. With the delay to Jan 2023 it remains a piece of work which will be undertaken with the help of external advisers and rolled out into the business; no one is reinventing the wheel. I don’t see it as anything more than hard work, and following the implementation of Solvency II, the implementation of IFRS17 should follow in the same vein. The noise around IFRS17 is just noise, unnecessary, as we have undertaken a similar implementation journey to embed Solvency II – “block out the noise”!

Covid19 is the biggest challenge to the business in the next 12 months. Working practices have been forced to change and the use of technology has proved to be necessary but more importantly effective. People’s attitude to working from home has changed too. What remains to be seen is whether the lockdown and limited choices of places to visit were responsible for peoples focus on their work. We must reflect in the coming months and manage teams fluidly enough to make the switch to move into and out of lockdown part of the “disaster recovery process” and seamless ….be prepared for Covid20 ! 

What do you look for most when recruiting for your own teams?

When recruiting I look for people who are genuinely interested in their own development or people who can clearly outline how their experiences have helped them to evolve within their careers. Without doubt you need the right experiences and ability to fulfil the JD for the role, but I like to identify how much the candidate does not know and therefore wants to use the role to develop. In my view 30% of the role needs to be new to the candidate and they have to show an inclination to develop via the role. This creates a value proposition between the business and the candidate.  

How do you like to spend your time when you are not working?

Spending time with my family and watching football with my sons. On the 22nd Dec 2019 I gave up alcohol and since October 2018 I have spent each day completing the activity goals on my Apple Watch – this has involved a lot of swimming, walking, cycling and the cross trainer. As grim as it may sound I have discovered IFRS17 & other insurance related podcasts, which have proved to be excellent to stay up to date and take my mind off the calories that need to be burned!