The challenge of the CROs role
CROs are under renewed pressure in the boardroom owing to a difficult operating environment, participants at an IGI-sponsored roundtable agreed.
Senior figures across the re/insurance market have agreed that chief risk officer (CRO) are facing new pressure to make themselves more relevant in boardroom decisions..
Discussing the role and the effectiveness of the CRO at a roundtable hosted by Insurance Day and international insurance group IGI, experts from across the market voiced their concern that the ability of the CRO to make a difference to bottom line is being eroded.
With many boards still challenged to fully understand the CRO role and its place within the organisation, CROs are being saddled with more responsibilities. This in turn threatens to impair their ability to carry out the core tasks for which they were employed.
Michael Hoskings, CRO, Faraday said: “I would say you’re justifying your existence perhaps a little bit more than you used to because that expense ratio or expense line in the balance sheet is under more scrutiny.”
The impact of regulation has had an effect as CROs have been given the responsibility to guarantee compliance alongside their role of ensuring the company is assuming the appropriate level and types of risk.
The effects of compliance with Solvency II, coupled with the imminent arrival of the General Data Protection Regulation (GDPR) and IFRS 17, are being felt.
“One of the issues is the hidden risk, I call it the big project fatigue, at present in the business,” said HCC CRO Graham White. “We went through Solvency II, that took management time away, we are going through Brexit, GDPR, and IFRS are on the horizon. I have concerns about the business not focusing on the risks they are writing rather than these big, big projects and that’s an issue.”
Simon Spurr, group head of risk management at IGI, added: “I think there’s been a polarisation towards how you comply with the measures contained in Solvency II, and with it we have actually lost sight of common sense.”