News27 May 2016

The insurer's CFO:No mere number cruncher but a corporate strategist

27 May 2016

The role of the CFO in an insurance company has become and will be increasingly complex, such that he is "no longer the numbers guy who does not have an opinion" and has to transform himself into a corporate strategist whose advice is sought eagerly by the CEO and the board of directors.

This was the main thread of speeches delivered by several eminent insurance leaders on the opening day yesterday of the 10th Asian Insurance CFO Summit 2016. With the theme, “A Decade On: The Shifting Landscape in the Mind of the CFO”, the conference is held in Bangkok and is chaired by Mr Bill Bartlett, Director of Reinsurance Group of America (RGA).

Mr Steve Roder, Senior Executive Vice President & CFO of Manulife, who delivered a riveting keynote speech, gave tips on what a CFO has to do to succeed in the changing environment.

He said that CFOs face several challenges including: more demand for information, increased power of investors, competition and cost factors, regulation and compliance, the war for talent and the global functional matrix.

Qualities required of a CFO

CFOs need to have people leadership skills, a global perspective, and a strong voice and collaborative peers in the C-suite. They also need to be strategic thinkers who focus on solutions and stand up for regulatory productivity, among other qualities, he said. “We have to be ready to disrupt our own finance function,”  said Mr Roder.

“The CFO must embrace increasing complexity and ambiguity to be a leader way beyond the finance function,” he added.

In an earlier address welcoming participants to the conference, Mr Jonathan Zhao, Managing Partner & Asia Pacific Insurance Practice Leader at the international professional and advisory services firm, EY, provided a broad sweep of developments affecting insurance including fintech, blockchain technology and cyber issues as well as accounting and regulatory requirements, all of which have an impact on the work of the CFO.

Another speaker, Mr Nopadol Santipakorn, Secretary General of the Thai General Insurance Association, said: “The CFO used to look at numbers, costs, book keeping and performance management; now, he is looking at strategy.”  The CFO has to help identify where the value of the company is and seize opportunities which arise, he added.

Taking a leaf from Charles Darwin, Mr Nopadol said: “It is not the strongest of the CFOs, nor the most intelligent, who survives but the one who is most responsive to change.”

Mr Chai Sophonpanich, Chairman of the Bangkok Insurance Public Company, said that CFOs will have to be prepared for future increases in interest rates. “Since last year, the Federal Reserve has been trying to normalise interest rates,” he said, adding that quantitative easing in recent years by the Federal Reserve was an unorthodox way, never before attempted, of trying to stabilise the economy and to get businesses to expand. It led to low and even negative interest rates but little spending.

Other conference speakers talked about digitisation trends and implications for the CFO; how CFOs can support growth in the disruption era; cyber security, solutions to manage risk and the CFO’s role vis-à-vis that of the Chief Risk Officer.

Summing up, Mr Bartlett said succinctly: “The role of the CFO will have to change completely.”

The conference, sponsored by EY and RGA, ends today. It has attracted around 120 participants from about 20 countries.

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