In the first Phinsys Perspectives, we sat down with Katie Wade, CFO of Aegis and Finance Transformation Consultant Iain Sanderson, to talk about the company’s priorities, challenges and transformation journey. From discussing Aegis' focus for 2023 to exploring the company’s four strategic pillars of profit, culture, digital, and data, we gained valuable insights into their roadmap for the future. Moreover, we explored the pivotal role of Phinsys in their finance transformation journey and how they successfully drove change and embraced new ways of doing things. Read more below as we uncover the projects on their radar, and gain perspective on the industry's evolving landscape. Plus, don't miss the advice they have for aspiring professionals eyeing a career in the insurance industry....
Q. What are the priorities for Aegis in 2023?
Katie Wade: As an organisation, Aegis has four pillars that guide our priorities for 2023. The first pillar is performance, where our focus is to remain a top quartile performer within Lloyd’s by keeping our bottom-line performance strong. The second pillar is culture, where we aim to foster inclusivity, collaboration, and enablement in our workforce, as it is a key component of the Aegis culture that makes us who we are. Our third pillar is digitalisation, where we are expanding our digital products and their distribution, building on the success of our current platform, Opal. Finally, our fourth pillar is data, which encompasses automation and data science.
Iain Sanderson: Finance transformation sits under the automation component of the fourth pillar, while our new enterprise data programme is driving our focus on end-to-end data management. The data programme is focused on putting the structure in place, building the EDP, and taking it that step further in terms of additional sources of data and how we use them to drive underwriting decisions. We are really building out far more on the data science side, taking it to the next level from what we already do. This EDP is a significant part of our data strategy, and we are confident it will enable us to make better data-driven decisions and enhance our operational efficiencies.
Q: What is the biggest challenge across all four pillars?
Katie Wade: At Aegis, the biggest challenge has been digitalisation, our product offering is significant in the market and has been really successful, however, having completed a platform change we are keen to take this to the next level. This is a core area of focus for the executive and the Board as we want to maintain our position and stay competitive in the market.
Iain Sanderson: Digitalisation is definitely a challenge, and we need to focus on bringing in additional skill sets to help us develop what we need. The data strand is also crucial. We've got so many projects landing this year, and data is the one component that underpins everything.
Q: How does Phinsys fit into Aegis' finance transformation journey?
Katie Wade: Before we started any of the finance transformation programme, we took the time to define our Target Operating Model for finance, which aimed for end-to-end automation. We knew we wanted to use Workday, which our US parents were already using, but we wanted a complete end-to-end solution. After evaluating several solutions, we felt that Phinsys was the right fit for us to achieve our goals. Our transformation journey started alongside this, and Phinsys was an integral part of this and part of the alignment with our data project which commenced at a similar time.
Iain Sanderson: Aegis has experienced rapid growth over the past five years, which led us to recognise the need to upgrade our systems to handle the increase in data flow. The move to Phinsys was a strategic effort to position ourselves for future growth and to maintain control over data and have more structure around data flow as we move forward.
Q: How did you drive change in the organisation and move people away from old ways of doing things?
Iain Sanderson: In a business like Aegis where the current process works, it can be difficult to convince people of the need for change. Early in the process, people want to see tangible output, such as a dashboard that shows the value being generated. This is where the Phinsys proof of concept came into play. We spent the first 10 weeks of the project showing people how the system works in practice. This helped them to see the benefits of the system and create a sense of ownership and investment in the project, where everyone felt like they were part of the solution.
Katie Wade: As Iain mentioned, the proof of concept was the turning point. Seeing the output from the Phinsys platform and how it could improve our processes helped win over hearts and minds. Additionally, we took a unique approach to staffing the project. We brought in a pool of contract staff who took on the business as usual (BAU) roles, allowing our BAU staff to work on the project. This approach helped create a team that was committed to the success of the transformation.
Q: Can you tell us about some of the other projects that you're currently working on?
Iain Sanderson: We have been transforming the finance function for almost two years now. We have made significant progress in enhancing our wider finance architecture by implementing a new general ledger, procurement and expenses solution, in addition to Phinsys, as well as refining our processes. Moving forward, we will be focusing on building out reporting and FP&A capabilities, leveraging the systems we have implemented. Our goal is to transition our finance team to being proactive and value adding and to automate and streamline reporting.
Katie Wade: We have another project that we will be working on this year, which is changing our investment accounting solution. This will involve fully bringing it back in-house, re-platforming it and integrating it into Workday. This is the final piece and once complete, it will bring us one step closer to achieving our goal. We will also be looking at the team structure and how we can embed automation into people's day-to-day roles.
Q. Looking ahead what’s the strategy for the next 3-5 years?
Katie Wade: We don’t have an appetite for sudden acquisitions or changing the fundamental parts of our business, being privately owned by a Mutual, consistent steady profitability is our priority. Instead, our aim is to make digital distribution as much of a core as traditional underwriting to enhance our offering to the market and to take advantage of the new distribution opportunities. To achieve this, we plan to increase our digital product offerings and embed our new data structure, moving towards data-driven underwriting.
Planning for the soft cycle is also a key part of our strategic outlook. We have already started building out scenarios around what our expense base will look like in a shrinking market and where we need to focus our resources. We anticipate that in the short term the business might need to shrink as market conditions decline. However, we want our people, systems and processes to be appropriate to enable us to push ahead and grow again as the market allows.
Iain Sanderson: To achieve this, we need automation systems in place to ensure we are efficient and not just adding more bodies as we add more volume. By focusing on digitalisation, we hope to position ourselves for long-term success and growth, regardless of the market cycle.
Q. Have you always wanted to work in insurance?
Iain Sanderson: I always wanted to work in financial services, but insurance was not on my radar. I joined an accountancy firm specifically to work on a nine-month project related to the mis-selling of split capital trusts. Upon completion of the project, I was reassigned into their pool of insurance people and really enjoyed the challenges of working in the Lloyd's market.
Katie Wade: Initially, I had no intentions of pursuing a career in insurance. I worked for a medium-sized practice firm and after completing my qualifications I joined PwC. From there, I had the opportunity to travel, and I chose Bermuda because it sounded exciting. The decision was between banking and reinsurance, and I opted for the latter. I fell in love with it immediately and have never looked back. I enjoy the challenge that the insurance industry provides, especially because it is a highly technical field.
Q. How has your role changed in the last 5 years?
Katie Wade: Over the years, the role of CFO has become more multifaceted. It's no longer just about financial reporting and compliance. As I mentioned, data and automation are now fundamental to the role of a CFO, but CFOs also need to be able to use them effectively to drive decision-making and embed them into our day-to-day operations. It's a constant learning process, and we need to stay up to date with the latest developments in AI and other technologies. Another challenge is the rapidly changing economic and political landscape. For example, the rise of social media has had a huge impact on how customers and the press respond to companies, and we need to be able to adapt to these changes quickly.
Iain Sanderson: My background is a bit unusual in that I started in audit before moving into commercial finance first and then into regulatory reporting. I was fortunate to have the opportunities to make these transitions. Having a broad experience in both areas has been really beneficial because it's given me a more well-rounded perspective. Experience in commercial finance is critical because it allows you to understand the business and make strategic decisions that drive growth.
Q. How do you see the industry and your role changing in the future?
Katie Wade: Technology, data, and automation will continue to play a significant role in our industry's transformation. The pace of change is only going to accelerate, and we'll have to keep evolving with it. I see technologies like Chat GPT as game-changers in the way we work. In the insurance space, we'll have to bridge gaps between actuarial, underwriting, claims, reinsurance, and finance. All these areas are interconnected, and a change in one can have a ripple effect across the system. It's both challenging and exciting.
Iain Sanderson: Following the 2007-8 credit crisis, an influx in capital and deterioration in the rating environment, resulted in the withdrawal of investment into systems across the market. However, we're now seeing investment in systems returning across the industry, I think we're all trying to catch up and respond to the changes in the industry's regulatory environment.
Q. What's your take on changing work environments? Do you prefer remote work or a hybrid model?
Katie Wade: At Aegis, we started off with a minimum of two days a week of remote work and had a review after about a year. We realised that being together is important, so we said at least half of people's time should in the office, but we recognise that having some freedom to flex your life and work is valuable and can be more productive for certain aspects. During COVID, it worked because there was no choice, but I don't think it would work if we were totally remote. You start to lose the connection, culture, and collaboration over time.
Iain Sanderson: Most people prefer the hybrid working model, but I like to do more days in the office than at home, and I think that works best for me. My concern is for people starting out in their careers now, and who are perhaps more inclined to prefer more days out of the office. They might not fully appreciate the loss of intrinsic knowledge caused by not being active in the team day to day, and it worries me how that may develop over the next few years.
Q. What advice would you give to someone looking to enter the insurance industry?
Iain Sanderson: I think it's important to have structure in your learning, especially in the early years of your career. While some may prefer a more flexible approach, having a clear path and pursuing professional qualifications – whether they’re in insurance or accountancy - can make a big difference in your development. In the insurance industry, we haven't always been the best at developing young talent, but pursuing industry qualifications can help set you up for success.
Katie Wade: The insurance industry is complex and offers many different areas of focus. My advice would be to explore as many areas as possible and be clear about your career aspirations. Don't limit yourself to one aspect of the industry, but instead be curious and seek out opportunities to learn and grow. Most organisations are willing to help you move around within the company, so take advantage of that and get a broad perspective. The more exposure you have, the faster you'll learn and the better you can shape your career.
About Phinsys Perspectives
Phinsys Perspectives is a series of exclusive interviews with Insurance, Finance and Tech leaders in the global insurance industry, offering valuable insights into the pivotal role of digital transformation in revolutionising finance and accounting processes. Each perspective aims to shed light on the dynamic nature of the insurance landscape, highlighting the need for adaptation to ever-evolving regulatory demands and market trends, and offering opinions on the industry's current state and the future trajectory of insurance finance in the digital age.