Compliance as catalyst for operational excellence!

Some business managers might fall from their chair by reading the title. Compliance is mostly seen as a cost-driver for business/process owners. Often without understanding exactly why certain legal requirements must be implemented in their processes. But they do because they have to! Turning it around and making it an opportunity of controllable and lean processes to stay ahead of competitors, is not the first thought. This interesting theme was the basis for a panel discussion on the Insurance Day in UK with 300 participants.

Luckily, the session sponsored by Software AG consists of a lot of experiences having two Compliance Officers and a Chief Risk Officer in the comfortable chairs.

Suneeta Padda started her carrier at the FSA, she worked in various roles over the five years which included. Internal risk Management, Case Management team that dealt with the authorisation of General Insurance and Mortgage Firms and Supervision of a portfolio of firms that included both Insurers and Insurerance intermediaries. From May this year she took the position as the Head of Compliance for Amlin UK. Amlin plc is a specialist insurance and reinsurance underwriting group listed on the London Stock Exchange

Sarah Dalgarno has two decades experience in the Insurance market including 6 years of experience at the Financial Services Authority, where her responsibility latterly included supervision of insurance brokers operating in the London market. Sarah joined Gallagher in 2006, one year later she was promoted to Chief Risk Officer, appointed to the Board. Based in London she plays a significant role in implementing the group’s international strategy and development plans. Arthur J. Gallagher, one of the world's largest insurance brokerage and risk management services firms

Ann Henstrand is Chief Compliance Officer at ACORD and responsible for their regulatory and industry association relationships.  Ann has worked for many insurance business areas including data standards, investment rules, market conduct, risk management, financial and actuarial reporting, and cross-border regulatory issues. Acord stands for Insurance Data standards

What was it all about: Compliance as a catalyst for achieving operational excellence. Operational Excellence is all about optimizing your business processes, taking effectiveness , efficiency and quality (such as compliant to standards) into consideration. Working on operational excellence, optimizing your processes, is continuously balancing between certain topics. Topics that are more and more converging.

Let´s start with Compliance Management.Compliance is traditionally seen as a cost-driver, proving to comply demonstrable to certain requirements, like legislation and standards.

Can compliance also help to achieve operational improvements and if yes, how?

Ann Henstrand, CCO Acord, answered this question by saying yes, as long as compliance is not positioned as a Cop, but as a Translator enabling the business. There should be no resistance but conversation where legislationis translated in business terminology in order to anticipate adequately. 

Business Performance management is traditionally seen as a revenue-driver, enabling continuous improvements. Are performance management and compliance considered incompatible in organisations?

Sarah Dalgarno, CCO Arthur J. Gallagher, explained that both need each other. She used Solvency II programs as an example that a continuous conversation between different roles is needed to get the right outcome. Compliance sets often conditions for the processes and the processes should be shape to perform optimal.

Enterprise Risk Management underlines the importance of deriving risks from the company objectives (performance) and distinguishes compliance risks as a risk category.

Can enterprise risks, allocated to processes be interpreted as the glue between business performance and compliancy? Can risk mitigation be considered as balancing between ‘stay in business’ and ‘stay in control’?

Suneeta Padda, Head of Compliance for Amlin, underlined the importance of a risk-based approach. Risks are derived from (business) objectives on the hand side and can give direction to the way the business processes must be designed on the other hand side. But also the corporate culture is very important in the way how to handle risk and compliance. Especially for those insurance companies that acquired multiple companies in several countries. Culture should not be underestimated in transformation programs, it can require to adapt your Governance.

In the panel discussion several other topics were touched and for a complete overview, we will be posting a link to a video of the whole Panel session.

If you would like to know more about the panel discussion or Risk & Compliance Management, feel free to respond to this blog.