Life, Leadership & Learning : An Interview by Damian Rhodes with Steve Hardman, Insurance FP&A leader.
I spoke to Steve Hardman, a tenured Insurance FP&A leader re his views on life, leadership and learning.
What does it take to be a successful in FP&A leader in the insurance industry?
They have to be knowledgeable about the insurance market and products, how they are priced, the margins, understanding of loss ratio drivers etc. They also have to be able to challenge the business when building plans and forecasts to ensure the plan is challenging enough to satisfy the Executive but are still achievable so that the business owns into the targets.
They also have to be able to challenge the business to get to the real variance drivers when expected results are not in line with expectations. The insurance market is also driven by data and so the ability to consolidate the results quickly and succinctly and be able to summarise the findings into key findings and be able to communicate these easily is a key attribute of a successful FP&A leader.
What does it take to be a successful in Finance Transformation?
First and foremost transformation needs to be driven by business needs – not by the new technology that’s available. The technology is the enabler and not the main reason for transformation.
For transformation projects to be successful all levels of the business have to buy in to the project from the clerk who will be inputting data at the beginning of a process to the CEO/CFO who will receive MI at the very end. Without this buy in the project will have difficulties as everyone in the process needs to understand the benefits that will be derived.
Also all levels of the users have to be involved in specifications/design, testing with numerous checkpoints so that they feel “ownership”. If they don’t own it they will have less drive to make it a success.
Delivery of some parts of the transformation has to be done quickly to keep momentum going. The traditional long project approach (2 years before a big bang delivery) often get stalled and struggle to keep momentum. It’s better to break these into smaller projects that can deliver something relatively quickly so that all levels of the business can see the incremental improvement and give more buy in for the longer term goals of the total project.
What has been the challenge/project you have enjoyed most?
Within one business there were products/markets that were regularly struggling to achieve their budget/ profitability plans. To fully understand what were the real drivers a huge data exercise had to be undertaken to really get to the bottom of everything involving Finance, business analysts and the actuarial teams. This involved coming up with theories and then using the data to test whether these were true. Once the findings were tested and shown to be true these then had to be summarised and options given so that senior management could agree on the next steps. This led to products being redesigned, repriced, commission renegotiated and changes to the claims process, demonstrating that FP&A can make a fundamental difference to the business to improve profitability.
What do you see as the biggest challenge in the insurance industry in the coming six to 12 months?
I see Covid -19 as the biggest challenge for the insurance industry in the near future.The way insurance is purchased was already moving with technological developments with online purchase platforms for consumers/SME’s but not as much for the technical larger products/clients; this has been forced to change due to the distancing restrictions and brokers are now embracing technology more to assist their clients to find the right insurance for them.
One are that can improve especially through the current crisis is the collection, analysis, distribution and quality commentary of Management Information. The traditional approach has been using excel for all of the data crunching and manipulation. Then having various meetings (or simply walking to someone’s desk) to speak to underwriters, claims, management etc. to get the underlying business drivers and then finally using PowerPoint/word to collate the commentary/numbers and then distributing these files to then have a regular management meeting. The current crisis should be giving the opportunity to companies to reengineer this and other manual FP&A processes and to bring in more on line/real time MI systems where first claims/underwriters can add commentary directly with support of the FP&A team and then senior management have the high level numbers and commentary at their fingertips and can drill down simply and easily to any areas that require further analysis.
What do you look for most when recruiting for your own teams?
As well as the normal check for qualifications and experience the biggest thing I would look for is their approach to solving problems. Being part successful FP&A team will bring regular challenges that have not been seen before and I like to understand how they would approach solving a problem. Another major check it to see if they will fit in within the team and also the wider business community to see if they will build business relationships and to see if they will have creditability with senior management across the business.
How do you like to spend your time when you are not working?
I am a keen cyclist and am normally found either in cycling gear or surfing bike websites. Pre Lockdown I used a Brompton bike to get to and from the office and then, at weekends, I was usually on one of my other bikes putting in the miles around the Hertfordshire countryside with friends. Since lockdown I’ve been doing a lot more indoor cycling and have just started getting out on the roads again (unfortunately mostly on my own without any coffee stops). I also have regular cycling holidays within Europe. These holidays have included cycling from London to Paris, From Venice to Rome, From Geneva to Nice and across the Pyrenees from Carcassonne in France to Barcelona. This year’s trip is planned to Mt Ventoux in France but we’ll have to wait and see how Covid restrictions develop over the next few months to see if that’s going ahead..