Managing Treasury for Insurance Companies with Dan Ferguson

Foreign.

Welcome to this week's Treasury Career Corner podcast. We interview treasurers about their treasure careers. I am welcoming back the amazing Dan Ferguson. Very good friend. Known Dan for many, many years. Originally placed him actually as a Treasury analyst manager back in the day at Royal Sun Alliance. Back last century I think it was. Oh my God, good old Dan. He was with rsa. He's now with Resolution Live. You're going to get the original show we did a few years ago and then we bring it up to date. So I have a nice 50, 10, 15 minute check. Catch up with him at the end. He's such a great guest. Really great value bonds for you. If you're listening to this, put in the old podcast which was great and very well received before but this new one is even better. I know both he and I have got a little bit better in our old range but anyway, enjoy the podcast.

This week's show. I'm delighted to be joined by Dan Ferguson, group treasurer at Royal Sun Alliance. Royal Sun Alliance Group, or RSA as it's more known, is a British international general insurance company headquartered in London in the UK. Got major operations across the UK and Ireland, Scandinavia, Canada and provides insurance products over 140 countries. So right the way across 9 million customers and listed on the FTSE 100 stock exchange. There was a quick overview into Dan. Dan's the group treasurer at Royal Sun alliance or RSA. He started in Treasury 22 years ago, back way back in 97, so talked through his first start in treasury. But then in 2002 we got to know each other and I placed Dan way back when as a Treasury analyst at Raw Seller Alliance. Now he's been there so since 2002. We spoke about this before. He's been there a number of years and gone from treasury analyst to group treasurer. And I know that a lot of people listening will go hang on, I want to do that. How does he do it? Or dig into why he's managed to spend that long at one company. But the progression is gone and everything else. So Dan, as always enough for me.

Let's go through your career today, if.

You would and maybe perhaps your early start in Treasury.

My original start partly I wasn't sure exactly what I wanted to do when I completed A levels and my father worked in treasury for BP at the time, so no particular insight other than I thought, well he's got a reasonable job and seems to enjoy it, so I should have a look in a little more detail at that. And now I got my first job I guess this is going to really show my age and sound remarkably old school. My dad got me a swift code directory of all of the banks in London and I wrote a letter to maybe a couple of hundred of them asking for a job. And, and one of them responded and that was bank of New York to work in their Treasury Department.

You obviously had a bit of an insight then. I didn't realise your job was in treasury. So you had a bit of insight to Treasury. What was he doing at bp? What was his role?

He was the treasury manager looking after cash management. So he spent a lot of time sort of traveling around BP's operation conducting RFIs and RFPs for banking services. So to some extent, I guess I saw him traveling around a little bit. He'd go to Australia fairly regularly, across Europe, North America and thought, well, you know, that sounds, that sounds interesting. It looks pretty interesting.

I've never heard of treasury being a family business till now. And that was.

No, that was a new one to me.

That's fantastic.

So you've got the role banking, the evil that is banking. Sorry, guys, listening, but good start. So you started there. Talk us through what happened then.

I mean, in all honesty, I was 18 years old. I didn't have a clue what I was doing. Yeah, my role was to run in and out of the front office periodically and check what trade the treasury dealers had executed. Pick up the sort of three bits of paper, run back to the back office and input it into a confirmation system and a swift system. I kind of thought that was quite exciting, really. I was kind of scared of the, of the front office at that time. It was a good introduction to what I was doing.

Okay, and then you made some moves before you actually really got into the treasury roles. You know, you then went to Lloyds and then. Ey. So just give us a quick run through those.

As is quite typical for that stage in, in your career, every sort of 18 months to two years, just you're sort of thinking, well, what's the next move? How can, how can I get some advancement? How can I gain some more skills, gain some more experience? Really nothing more to it than that. In terms of those additional roles I took on at the time, I guess the real catalyst for me was joining Thomas Cook in their treasury team there. So we had a sort of small central team of five people in London. Essentially I was the treasury dealer, so I got a lot more involved in foreign exchange and hedging programs, a lot more sort of active cash management because there would be, you know, Real sort of seasonality to the cash flow and peaks and trough there to get the grips with, you know. Really, really enjoyed my time there. Really interesting company to work for and like I say, it was a bit of a springboard on better things really.

You were working for a holiday travel company and everything else. A natural move into insurance, you know. Why the move?

Long time ago. Yeah. Let's be honest to the outside looking in, insurance isn't necessarily the most interesting industry. Certainly compared to, you know, a company that runs a fleet of airplanes and sells holiday. The attraction was really, it was a bigger company, it was a regulated entity, so you sort of learned more around that side of things. There was a greater scope in the role and a bigger team. And I think the one of the key differences I guess coming to an insurance company is you've got a, you've got a big asset portfolio to look at and look after and sort of understand the interactions with the asset portfolio as well. So there were, you know, there were a number of reasons for wanting to make that switch, but in practical terms Thomas Cook actually got taken over. At the time, it was just after 911 and the UK travel industry was doing pretty badly though I actually got made redundant.

You took that redundancy and we got you the role. I mean, Thomas Fruits, you started as a Treasury analyst. What were you doing then back, you know, back in the day? Sort of.

There were a couple of things that were top of my responsibilities. I was essentially a Treasury dealer again. So I was bringing that experience I'd got from Thomas Cook into a slightly more in depth environment, if you like. The sort of range of products and strategies that we're employing were much broader at RSA than they were at Thomas Cook. RSA itself was going through a bit of a change at the time. They used to have an in house asset manager to run all of their sort of treasury and fixed income and derivatives etc. They just sold that asset manager and we're looking to bring treasury in now. So my boss at the time, the treasurer, was looking for someone to come in and sort of run the treasury dealing desk if you like, at that time. So it was a good opportunity to do all sorts of things really. We implemented a system, we took on board a load of processes and sort of set it up from scratch and looked after the blitz from the investment company if you like.

You know, in those days, what was technology like? You know, we'll come on to technology, you know, was it still very manual or what was it like?

Yeah, it was Pretty manual. I mean we weren't quite at the sort of green screen level which we were at bank of New York a few years before. But I mean to call the system we had a Treasury management management system was kind of insulting to treasury management system fees. That is to be honest, it was very rudimentary, very basic. In essence it did the important bit, which was maintain degradation of duty and sort of keep the key controls there. But in terms of integration through other processes, there wasn't any, you know, there was an awful lot of manual workarounds and a huge amount of work done on spreadsheet.

You've stayed with the group for 17 years. Talk us through gradually your progression, how it came about and things like that. Because then you stepped up to treasury manager role, deputy treasurer, group treasurer. You know, again a lot of guys will go, oh, three years in a row, I've got to move companies. But you've been with one company all the way through. How's gone from there?

There's been a number of factors to that, I guess. I mean one, the company's changed an awful lot around the intelligence. Always been some really interesting project to get involved with. Whether that's been debt, capital raising, IPOs, rights issues, various mergers and acquisitions and restructures through the years. So there's always something sort of meaty to get stuck into. I guess throughout that time as well I managed to qualify through AMCT and mct. So that takes a reasonable amount of time and you know, to some extent it's nice to have a bit of stability in your job whilst you're undertaking those studies. That was another factor.

What did they give you? And this is not, you know, just a flag raising for the exams per se, but it's more, why bother? You know, it's a lot of hassle, you know, you're not going to walk into your, oh, I've got these exams, can I have a pay rise?

Which a lot of people do actually.

Ask and a lot of them when they're, they're disappointed, they suddenly reach out to us, oh, I've just made all this effort. But you know, so why did you bother?

The experience and the breadth that you get from the exam, the self sort of achievement, the ability to sort of benchmark yourself with others as well is quite important and I appreciate that on a sort of personal level rather than on a, on a company level. I think like anything evidencing that you've attained a certain level of skill within the profession that you operate within that you know, that's kind of important over my career. I guess that's really changed to the extent that when I started, sort of 97, not many people had treasury qualifications. You know, everyone was kind of qualified by experience, if you like. But now if I was recruiting, I'd insist on a Treasury qualification because you, you want to categorically know someone attained a certain level of experience and understanding. In terms of the exams themselves, probably the MCT I found the most beneficial because it's really not so much around learning stuff quite hard, which there's always an element of in some exams. It's the practical application, it's the case studies, it's the, you know, okay, you've learned all of these skills, here's a scenario. What would you do or how would you do it? There's much, much more sort of practical, relevant for that, I guess, from our day jobs because of, you know, the, the great thing about being in treasury is you never really know what's going to come up from day to day. And you have to be agile, you have to respond to that, you have to respond to it in the right way. So, you know, getting the skills to do that is. Is hugely important and talk us through the progression.

So you started Treasury Analyst. What then, you know, gave you the opportunity to be, you know, maybe someone moved on or various other. But then you became Treasury Manager. You know, what, you know, were the competitive processes around that or was it just, hang on, you're the, you're the select, you're the guy that. Well, actually, here you go. Is the job, you know, I'm sure it's not like that, but talk us through.

Yeah, wish it was. Wish it was that easy.

Yeah, exactly.

You know yourself, Mike, right? A lot of treasury teams are pretty small, so there's an element of biding your time and waiting for the opportunity and a little bit of luck involved in all of the moves. To be honest, the qualifications helped, I think. I jumped up to Treasury Manager after I achieved the amct, and the role had changed a little bit by then as well. So. So there was a catalyst of qualifications, plus the role changing and the opportunity being available. As you'd expect, really, the biggest jump was from. To Group treasurer and again, I've been lucky there because my boss at the time was planning on retiring, so I had three or four years to take that on board and make sure I was positioned in the right way to take advantage of that when it came. So there's an element of luck, but there's also an element of taking the opportunities when they come, and actually going out and getting those opportunities yourself rather than, you know, rather than waiting for them to come to you.

And whilst you were preparing yourself for that promotion or that move, what did you do? Bar just sitting there and learning from Steve. Steve Fen here was great and, you know, then retired and things. But, you know, what did you do in your job that was preparing you for that? Was that about going and meeting the businesses or was it about trying to get systems right or, you know, what was the ethos?

The people side of things is hugely important. So there's an element of building your network at the right level and making sure people understand who you are, what you're about, what's important to you, why you can sort of drive treasury forward and why treasury is important. So there's an element of sort of managing upwards and across your connections, really, to make sure people are aware of who you are. There's an element of shadowing as well. Clearly, make sure you understand every minutiae of the day job to make sure you're sort of got enough experience and there's no sort of practical gap, silly things, if you like, that can fall between the crack. There's an element of sort of personal development as well, in terms of leading people and being more of a figurehead for the business, for Treasuries. So that was important to me as well. We probably spent up the years running through various sort of HR course to sort of make sure I was as prepared as I could be.

But I'm going to list before today's interview of some of your achievements, things like that. And one of the things that stood out to me, you got 800 bank accounts. Oh, hang on. You know, almost says, hang on, you don't need 800. Quick, close, make it six.

You know, I'm embarrassed about that, Mike.

Well, you know, but there's reasons behind it and that's what I was going to dig into, that you got all these banking partners and, yeah, you do slim things down, but explain maybe to the audience why, why you need that sort of thing and why it's not just, oh, we've got one global partner, that's it, and one, you know, one major bank, that's it. But it's because I know that you and I have talked about this, you know, talk about how you've got that sort of cash visibility and what you've done to achieve that sort of thing in the process you've gone through.

I guess I'll start with a bit of context as to why we've got so many. And then. And then talk about. Whilst I'm disappointed that there's so many, it's perhaps not as big problem as it. As it might sound.

Yeah.

If you think those 800 bank accounts would be split across maybe 40 or 50 different legal entities, probably 30 or 40 different currencies as well. There's a practical component that if we're receiving premiums and paying claims in a certain currency, we'll maintain liquidity pools and bank accounts in those currencies as well, just to maintain the float, if you like. That's kind of on the normal side of things, I guess. The disappointing side of things is to do with the line of business systems and the legacy platforms that sit underneath the sort of things that make our company tick, if you like. And quite simply, there's too many old systems within the company and some systems can only connect to certain bank accounts in certain ways. When we look across the group, there's quite a lot of examples of that issue, I guess. So whilst the business itself is always trying to drive forward and rationalize systems and streamline processes, there's always a bit of a lag, if you like, while some of the old systems are decommissioned and therefore there's bank accounts that are connected to that.

You still need to have them and things. And then you talk about this sort of global treasury management system without being a big advertising blitz, you know, for them, but, you know, talk us through that and what they are and stuff.

So we use a platform called Citi Financials, which is part of the Ion group. The two key components of what we do, really, there's Citi Financials, which is deal booking system, front end, if you like, the dashboard. The way we keep track of everything. Probably the more important bit, the less sexy bit, if you like, is the Swift Bureau that sits underneath and that allows us to scoop up all of that balance and transaction data every day and present it into Citi Financials. So it's the Swift Bureau that gives us the daily visibility of everything that we need to be sort of comfortable. To be honest, If I had 800 bank accounts and I couldn't see any of them, I'd be much more concerned as to what was going on there.

You got that visibility, why bother? I think it's an obvious question, but people have sort of said, oh, well, what does it give you? What power does it give you as a treasurer, would you say?

There's a credit exposure angle, so we need to know on a daily basis how much money We've got with every counterparty, I think, sort of scrabbling around. During the financial crisis, there were various rumors about various banks and the CFO would say, what's our exposure to X Bank? And you'd have to say, give me some time and five days later you may come up with a number. You know, I think that's just unacceptable these days, to be honest. So there's a, there's a risk management angle to that, there's a liquidity management angle to that. There's a frictional cost for us for holding cash. We'd much rather get it invested into the investment portfolio and earning a higher yield. But we don't want to send everything to the investment portfolio without understanding what we've got, where it's at, when we need it, you know, why we need it, et cetera. You can't make those kind of decisions without having visibility. That liquidity point is kind of linked to the cashflow point as well as in how much have I got, what's coming in, what's going out, how do we keep track of that? In a sort of ideal world really.

In terms of management of the team, you know, what's the size of the team and how do you put it out? Now, you know, this is. Again, some of the people out there will be in teams of three, some will be in teams of 33. You know, how do you split it out and manage those people on a daily basis?

We're a team of three, so I think we're pretty lean for, for what we do. That does mean we've got some pretty good systems that are pretty well integrated which kind of take some of the legwork out of the process, if you like. We have a separate cash management team that operates as our back office and does the sort of daily position keeping and settlements activity. So there's another three people in that team keep the processes segregated and controlled. But yeah, it's pretty lean and it means we, we tend to do a bit of everything across the entire team. The team's structured as one analyst, deputy and myself. That's really so that I've got someone who can cover me for all the various fund committees and stuff that we have to attend as a matter of course and as a regulated entity. But quite honestly, there's so many projects and activities going through any one time, we have to split that up amongst us and almost try and choose the best person for the job.

You're managing a really small team and a lot of pressure, as it were. How do you do that. What's your management style or something?

I'm naturally pretty informal, to be honest. I might prefer to operate close and continuous communications if you like, rather than having these sort of big set piece meetings and one to one on a monthly basis. So we try and catch up multiple times every day. We have a few slightly more formal processes in place as part of the sort of performance review and appraisal. But yeah, I just like to keep in touch with everything and that extends across the other team that we work with here at Head Office as well. I much rather have short, quick catch ups with multiple teams than have these sort of big set p committed. Really. Anything more than half an hour unless you're doing something really big tends to be overkill, to be honest. There's something in there that's wasting time somewhere along the way.

And the aim for your role, you.

Know, you've been in there, you've been, you know, a trusted treasurer for a number of years, looking after it and stuff like that, you know, does that extend, you know, is your CFO a bit like this as well? What's the sort of the driving mission for treasury going forward?

We're always sort of seeking perfection, I guess, and we're never quite there due to the nature of the role and of the environment we operate in. Whether it's new regulations or new products or new technology means it's always changing as well. So I think as a starting position, I only ever wanted to be a group treasurer. So I'm quite happy with where I'm at from a role perspective. But from what's next for Treasury, I mean, yeah, we've got loads of little bits of optimization that we could continue doing. And what I really want to focus on the next couple of years is just how we best use the new technology that's coming out, whether that, you know, virtual accounts, new payment channels, things like that. Trying to support our business in their drive to be more digital.

Tell us about the business a bit more. I mean, we talked, you know, you're an insurance group, people sort of say, oh, you know, and there are different kinds of insurance. You know, we've got, you know, our friends, Life, we've got rsa, we've got jlt, just recently bought by Marsh. What sort of sectors of insurance do you guys particularly focus on? And what does that then? How does that then impact into Treasury?

We're a general insurer rather than a life insurer or a composite, if you like. And all that really means is we don't insure people we insure things, yes. So we'll insure cars, houses, boat cargo, wind farms, you know, that sort of stuff. The business is split pretty much 50, 50 personal and commercial. So personal would be you insuring your house or your car. Commercial would be marine cargo, things like that. And the commercial side can be sort of pretty lumpy cash flows multi currency across jurisdictions. You know, we might have a insurer client who wants to insure all of his factories across Europe for example. So you know, they've got an international component to that. The personal line stuff tends to be very domestic and to a large extent you could think of it a bit like a utility or a telecoms company in terms of high volume, low value cash management. So lots of backed payments and direct debits, etc. There's sort of a retail side to it as well as a large corporate side to the business, which makes things.

Interesting and challenges to the business. You know, what do you see within the insurance market? What's the biggest thing facing the business? Is it competition from other groups or is it events happening outside or what are the things that you think about? I think right, this is what we've got to plan for guys.

There's a lot of complexity and there's a lot of regulation that fits over the top as well. So I guess it trying to get that balance right between optimization but staying within the rules as well. There's a lot of stuff that we just can't do, whether it's for practical constraints or for regulatory constraints. If you like insurance industry, something's no different to banking that there's a lot of talk about sort of digital disruption and fintech and other players, whether Amazon or Google will come in and start an insurance company. But similar to banks as well, there's a lot of embedded expertise within insurance companies in terms of how you manage and model those risks. And insurance companies, again, like a bank, have a balance sheet that they need to support the risks that they're writing, which is, you know, maybe different, maybe not different to Google and Amazon, but certainly different to some sort of smaller disruptors that there may be out there. So I think the industry again is trying to work out how best to sort of integrate and play with, you know, other potential partners or competitors or vendors.

And in terms of coming back to the human element, which is, and obviously you're on a podcast hosted by the treasury recruitment company and you know, looking back at your career, what would you say has been GT success? We've got some study in there, we've got Taking your time, biding your time, what other things, you know, what do you, your treasury analyst, your deputy treasurer, they come to you and say, what should I be doing next? Or what advice are you giving them? And what advice, looking back, would you give yourself 10 years ago? Or stuff.

You've got to get involved in as wide a breadth of experience as you can, I think, and I appreciate that difficult when you're during your first one or two roles, but it's still possible to sort of volunteer or to, to get involved in some of the broader projects, really. I think the breadth of experience in treasury is hugely important because of the, the huge range of issues that you come up again on a daily basis. If I was going to say anything, I think it. That. And the important thing is translating that breadth of experience into, okay, so how did you make something better? What did you achieve? What did that. What did that save in money? What did that. Earning money, you know, sort of translating something from just. Well, I'd sat in on a meeting a few times to actually some practical implementation that made things better, improve things.

Now, we were going to talk recently, Dan and I, and we, we rescheduled because suddenly got pulled into the dreaded. Yeah, Brexit. And we, we're trying to avoid it a bit on, you know, such an overused.

But, you know, I'm gonna have to hang up now, Mike, before you do.

Hang up, you know, thinking, thinking about stuff like that. One of the things that I've talked to people, people said, oh, do you think it's going to affect us? And I said, look, treasurers for, you know, in particular, for their profession, you sort of enlist above it, if you like. It's, you know, I've talked to a couple of guys, maybe off the air, you know, in general, conversations at. Mike, it's nothing. So, hang on.

It's quite a big thing.

No, no, like it's a manageable risk. It's, you know, something we can predict. It's going to maybe be pushed back a year and then there's this and stuff, and it's, it's an orderly thing. I was like, all right. And they said, the thing that we can't cope with is the other stuff. What do you mean? Well, disorderly stuff, you know, disaster happens there or something like that. That's the stuff that we have to plan for as treasurers. So for you, number one, how do you manage Brexit? You know, how's that? What's your planning cycle for that? Is it the other stuff for you or what's the, what's the situation?

As an insurance company, we're kind of, we're sort of purpose built to deal with disasters and it's kind of in the, in the blood, if you like, in terms of how we, how we assess the impact and how we go about sort of fixing it, really. And to some extent, Brexit has been no different. You look at the range of potential outcomes, you look at what the worst outcome is or what the, or what would impact the business the greatest. And then you, you sort of plan for that and put your mitigation around what the worst outcomes. And for us as a business, we've actually set up a new subsidiary in Luxembourg and transferred all of our European business into that subsidiary so that we would be insulated in the event of a hard Brexit. So it has had a big impact on us and we have had to take proactive action, as you'd expect from a company like our.

Yeah, when you say you've got, you.

Know, proactive action, as you'd expect from a company like our.

Yeah, when you say you've got those other risks. Brexit is one thing, but is it the other stuff that's spending more? You know, where's the percentage of your time being spent?

Brexit's been a heavy resource drain for the last sort of 18 months, for two years, to be honest. It's been a big project and a lot of effort to get that set up, authorized by the regulator and the rating agencies, et cetera. We're just kind of coming out the other side of that to some extent now. It's got a bed down. So I think, am I worried about Brexit from a business perspective anymore? Not so much. Am I worried about the impact on financial markets and liquidity? Again, we sort of, we try and predict what might happen there and look to manage any downside. I'm probably less concerned about that. We spend a lot of time with our capital management colleagues who'll be modeling our capital position. Our risk management colleagues will be looking at the sort of impacts and probability of various things. And so there's not really a sort of. This is going to sound like I'm being complacent and I'm not at all. There's not really a killer risk for rsa. We spend a lot of time trying to keep in the middle of the range, if you like, across everything we do, whether that's the investment strategy, the liquidity strategy, whatever it happens to be, and sort of tweaking things as we go through. So I wouldn't say there's one thing that's taken up a lot of my time at the moment.

No, fair enough.

Okay, so let's wrap up today's show.

With the usual question. As we said before, we'll put a link to Dan's LinkedIn profile on the show notes so he can connect with you if he wants to and if it's useful to you and your career, and his career as well. Looking back over your career, you've got this great blue chip background. The guys that are looking at it today, they go, right, I want to do that. What's your sort of summary advice to someone sitting there now going, I want to do the same. What would you say?

There's a few things I think that the qualifications are really important for. Just sort of get it done, really, and get it out of the way. Someone once said to me, which is absolutely true, that the qualifications only matter when you haven't got them. But as soon as you've got them, you kind of forget about them and move on. They provide that baseline of experience, if you like, which is really important. The ratio. There's a common theme, really. It's about talking to people, staying connected, throwing yourself into the opportunities. The people side of things should not be underestimated for treasury because most of what we do involves negotiating, communicating with other teams and internal parties like our bankers. So keep being bold, keep, keep talking, keep learning, keep, keep throwing yourself into the opportunities, as I say, and to some extent, if nothing's coming your way, you've got to make it yourself.

So welcome back to this week's show. I hope you've enjoyed that rerun of Dan Ferguson from before. Well, Dan's joining me again a few years later. Now, we've been through Covid, been through a few other things, welcoming him back. He's also made a move since then. So Dan has now become the group treasurer, Resolution Life. So we're going to talk about the transition to this new role. Now, the group treasurers say Resolution, Resolution Life are a global life insurance company focusing on the acquisition, management of portfolios within the four in force life insurance policies. Now, again, I'll get Dan to explain that a little bit more to the audience, exactly what that means because obviously different kind of, you know, although it still says insurance above the door, they're quite different. So, Dan, I'm gonna hand the show back to you. What's happened since we last spoke. Back to you, sir.

Hey, Mike. And look, thanks for having me on again. Really appreciate it.

So yeah, a few, a little bit more to the audience and exactly what that means because obviously different kind of, you know, although it still says insurance above the door, they're quite different. So Dan, I'm going to hand the show back to you. What's happened since we last spoke. Back to you, sir.

Hey, Mike. And look, thanks for having me on again. Really appreciate it. So yeah, a few, a few changes as you've alluded to there, right, not least the fact that I'm now at Resolution Life as group treasurer here and as you also alluded to, whilst it might may say still has insurance in the title, it's a very different organization compared to. To RSA where I was at previously. Not least the fact RRSA was perhaps 300 years old. Whereas this particular vehicle of a few changes as you've alluded to there, right, not least the fact that I'm now at Resolution Life as group treasurer here and as you also alluded to, whilst it might may say still has insurance in the title, it's a very different organization compared to RSA where I was at previously. Not least the fact RRSA was perhaps 300 years old. Whereas this particular vehicle of Resolution was only formed in 2018. So whilst we might ensure your life policies, so long term insurance, this particular vehicle is actually a very young vehicle and there's some really attractive elements to coming into a company like Resolution that's so young in terms of being able to build the function and with yourself.

As you say, your previous role, what.

Happened with Resolution was only formed in 2018. So whilst we might insure life policies, so long term insurance, this particular vehicle is actually a very young vehicle and there's some really attractive elements to coming into a company like Resolution that's so young in terms of being able to build the function and with yourself, you.

As you say, your previous role, what happened with rsa, you know, because again for the audience because interesting process there for you to then rsa, you know, because again for the audience because interesting process there for you to then make a transition.

RSA was taken over by a Canadian insurer called Intact. That's a. That was announced a few years back and it probably took a year to. To sort of work its way through. So I knew I was going to be made redundant. My role was no longer required. So I had a year of transition of fulfilling a number of projects while still at RSA and some time to secure my next position.

And this role, Resolution Life, you touched on it there. How are the two still Insurance. But how are they different? You know, you talked to me about the three key differences, particularly between the firms, but also make a transition.

RSA was taken over by a Canadian.

Insurer called Industry, although it still says insurance. It's quite different.

It is, it is. There's three key differences I'd highlight, really, I suppose. One is the nature of the regulation. So at rsa we were solvency too. So that's the European and UK regulation for insurance companies. At Resolution, we're regulated by Australia, so apra, Bermuda and the us. So three different sets of regulations to come to grips with. And whilst the principles are clearly similar, there's a lot of subtleties in terms of the application. So that's one challenge to get to grips with. Secondly, life insurance versus PNC or general insurance. So just by the nature of life insurance, it's a much longer term product, so we have much longer term liabilities in terms of insuring people's lives. We also have much longer term assets to back those liabilities. So both sides of the balance sheet are a little bit different and a little bit longer than they would have been at a general insurance company. And finally, Resolution only buys closed book policies. What that means is we don't write new business, so we're not open for new customers. We buy blocks of business from other insurance companies that are looking to sell those blocks of business. That allows the selling company to free up capital to write new business and it allows us to specialise in what is essentially a runoff business.

And for treasury, is it exactly the same? You know, the. All the. You're talking about a longer term, you know, liquidity, flow and everything else, because obviously we're on the treasury career corner. We're talking to, you know, it's a captive audience of treasury folk. What's it like for you with that? A couple of things, you know, new setup there and say, what was that like for you, going in there? And then also, what were the treasury nuances? That again, someone listening today will go, oh, wow, these are the treasury things. If they're doing a similar move.

Yeah, there's a couple of observations I'd make there, I guess. I mean, the core treasury components, how much money have I got? Where is it? What financial risks do I face? How can I fund the company? You know, those key sort of functional areas don't really change, it's really the business that changes underneath and how that interacts with those functional areas.

So.

So just to take a few examples there, I guess from a funding perspective, we're A regulated entity. So we have to consider capital funding as well as just senior bank funding. And that's where the regulatory angle comes into play because we need regulatory eligible capital instruments. So there's a slightly different set of rules to deal with in terms of BERMUDA, Australia, the U.S. as we just mentioned, from a liquidity perspective, we're dealing with different underlying liquidity risks within the company compared to to a general insurance company. So general insurance is all about paying claims in short regulatory eligible capital instruments. So there's a slightly different set of rules to deal with in terms of BERMUDA, Australia, the U.S. as we just mentioned, from a liquidity perspective, we're dealing with different underlying liquidity risks within the company compared to a general insurance company. So general insurance is all about paying claims in the short term. Life insurance is all about paying claims over the longer term and the adjustments in estimates and actual burial assumptions that go into those claims. So things develop, I guess, or risks develop, tend to develop over the longer term at a life insurance company. So to some extent that's good because you have time to adjust your approach to those risks, but you still have to be mindful of the things that can catch you short in the. In the short term. And just to give an example of that, something that's a hot topic in life insurance industry at the moment is lapse risk. And what that really means is if people try and cash in their life insurance policies, that's a liquidity risk for us because we have to settle, we have to pay out the claims a lot sooner than we were expecting to settle those claims. So again, the term life insurance is all about paying claims over the longer term and the adjustments in estimates and actual burial assumptions that go into those claims. So things develop, I guess, or risks develop, tend to develop over the longer term at a life insurance company. So to some extent the nature of the risk is the same. It's a liquidity risk. But what causes or drives or triggers those risks is very different in a life insurance company compared to a general insurance or indeed a regular corporate entity.

And you and I have been mates for years.

But when I then that's good because you have time to adjust your approach to those risks, but you still have to be.

I talked to you obviously about you as a treasurer and a Treasury professional. You recently, you know, on a more personal level made a move, you know, the tail end of, of COVID if you like, you made the move. What's it, you've got into this new role. What's it been like, you know, Settling in, creating a new team which we, we've, we're thrilled to have been able to help you with. But you've come into new setup. So what are the things you're thinking? Right. We're out of COVID mindful of the.

Things that can catch you short in the, in the short term. And just to give an example of that, something that's a hot topic in life insurance industry at the moment is lapse risk. And what that really means is if people try and cash in their life insurance policies, that's a liquidity risk for us because we have to set now.

We'Re looking at the future treasury here. What's that been like for you?

A few observations I've made. So we have to pay out the claims a lot sooner than we were expecting to settle those claims. So again there I guess mark, I mean one I was at my previous employer for nearly 20 years, which was a very long time and in retrospect perhaps that was too long a time because it's a natural question for potential employers as to well, why did he stay at that company for so long? You know, is he perhaps lacking ambition or drive or, you know, perhaps there's other factors there. So that was in the back of my mind as to making the move and it was certainly a question I was asked a number of times when I was interviewing at certain places. So that is something to consider to make sure you have a strong story around that. What I would say though, and what I've always found actually is the best examples of good the nature of the risk is the same, it's a liquidity risk. But what causes or drives or triggers those risks is very different in a life insurance company compared to a general insurance or indeed a regular corporate entity.

And you and I have been mates for years, but when I practice this.

Within treasury can most often be found outside of your organization. So it's really important to maintain your external network and keep talking to people.

I talked to you obviously about you as a treasurer and a Treasury because.

That gives you a level of confidence and comfort that you're in tune with what's going on from a Treasury perspective more broadly, you're not just looking at what's going on within your own company and you haven't formed your sort of treasury viewpoints purely based on what's right in front of you at the that time. You need to be much more broad in terms of your outlook. Keep that external network sort of well connected and keep those discussions going because then you feel a Little more confident that you can assess new challenges and approach new challenges.

And with yourself, you've, as I say, you've taken this new role. You come into this new organization, you're sort of setting out, you're the leader of this, you know, this treasury area. What's it been like hybrid wise? Because you know, as you and I know when we, when I first placed down many, many years ago at RSA Professional, you know, recently, you know, on a more personal level made a move, you know, the tail end of, of COVID if you like, you made the move. What's it, you've got into this new role. What's it been like? You know, settling in, creating a new team. And that was. You are in the office five days a week. And I've talked about it just recently on a virtual team, which we, we've, we're thrilled to have been able to help you with. But you've come into forum that, you know, when people said, oh, flexible working five years ago, well, place we're working, off you go, go get a different job with someone else. Now hybrid is normalized and it should be. And I think, you know, giving flexibility within reason is the right thing to do. How does it work with you guys and how have you embraced that?

I mean, as someone with a young family, I've got to say I do really appreciate the ability to work flexibly and to spend a lot more time with, with my children than perhaps my parents have the opportunity to do. So I think there's. That permanent change has definitely been of benefit to many, many people. That being said, there are some circumstances where it's just more new setup.

So what are the things you're thinking? Right, we're out of COVID now. We're looking at the future Treasury. Yeah. What's that been like for you?

A few observations I'd make there, I guess, Mike. I mean one, I was at my previous employer for nearly 20 more efficient and effective to be in the office to workshop certain things or, you know, years, which was a very long time. And in retrospect, perhaps that was too long a time because a key part of my role and any treasurer's role is building and maintaining relationships with external stakeholders. And the reality is you just need to see people face to face occasionally to do that and to maximize that. That being said, it's a balance. Right. And so how we handle it at resolution from a Treasury perspective, we have one day a week when the whole team is in together and we hold our one to ones and our team meetings on that day. And then we have a series of regular checkpoints through the rest of the week and over the course of the month, including with our overseas subsidiaries, just to make sure we're in touch and in tune and feeling as connected as we can. It's a natural question for potential employers as to, well, why did he stay at that company for so long? You know, is he perhaps lacking ambition or drive or, you know, perhaps there's other fandom.

Amazing.

Great advice as well there for anyone listening today when, you know, actors there.

So. So that was in the back of my mind as to.

Dan and I have talked about this in the past where some of our clients in the US Are we making the move?

And it was certainly a question I was asked a number of times when I was interviewing at certain places, being.

Five days a week. But actually when I then talked to some of those treasurers, they're not in.

Five days a week.

You know, there's an ethos of, yeah, let's get everyone back in. But actually it turns out they're spending more time out of the office. But I think having that regularity, having it set down, I think really works great value bombs there, sir. Again, as we wrap up. You know, people have listened to you already, so they've got a lot of your great stories so far. Bring us up to date if you know, and what takeaways you can give to the audience today. Because I know that you're a busy treasurer, so I don't want to steal too much of your time. What are the. The final takeaways for this episode now we're a couple years later as well.

Yeah, I guess just one real reflection I think I've seen a lot of. So that is something to consider to make sure you have a strong story around that. What I would say, though, and what I've always found actually is the best examples of good practice within treasury can most often be found outside of your organization. Articles written over the course of the last three or four months about. So it's really important to maintain your external network and keep talking to people. Is now the time that the treasurer is a sort of more strategic player, more in tune with the cfo, more relied upon by the cfo. And let's be honest, we've been hearing those kind of lines since the financial crisis and even before that.

Oh, yeah, 20 years.

Yeah. I don't. Personally, I don't think anything's changed. Treasury is such an important function, but some of it is down to the treasurer and the treasury team of putting their best foot forward and making sure they can show value that's appropriate and relevant to the CFO and to the company. So, you know, I must admit I get a little bit annoyed at all of these column inches that somehow it's only now that treasury is a strategic function. I think treasury has always been a strategic function, but there's a responsibility on because that gives you a level of confidence and comfort that you're in tune with what's going on from a Treasury perspective more broadly, you're not just looking at what's going on within your own company and you haven't formed your sort of treasury viewpoints purely based on what the treasury team to show that value. And I think that that will always remain and I think you'll right in front of you at that time. You need to be much more broad in terms of your outlook. Keep that external.

Right. I think prove your value and earn your place at the table has always been a key thing and I know you've done that very effectively. Sir. Dan. Thank you, sir. Amazing second show. I could just do this all day, but you've got a job to do, allegedly. Thank you, Dan. You've been an absolute superstar and thanks very much for your time.

My pleasure. Thanks, Mike.

Hello, it's Mike here again. I hope you enjoyed this week's show. If you did, then maybe you want to follow the show or subscribe depending on where you listen, whether that's itunes, Spotify or another great place to listen.

To the show from.

It's totally free and means that you'll be the first to see each and every week when we release a new show and maybe whilst you're there you could even leave a quick review reviews.

And rating network sort of well connected and keep those discussions going because then you feel a little more confident that you can assess new challenges and approach new challenges.

And with yourself, you, as I say, you've taken this new role, you come into this new organization, you're sort of setting out your.

The links are among the most important metrics for a podcast to effectively rank.

And as you can leader of this, you know this treasury area. What's it been like hybrid wise?

Because probably appreciate the podcast is a lot of hard work to produce every week. It'd be amazing. Just take say 20 seconds, leave a quick review of my amazing guests and their great career stories. We'd really appreciate it. Thanks very much and I can't wait to see you soon.

You know, as you and I know, when we, when I, I First placed down many, many years ago at rsa and that was you are in the office five days a week. And I talked about it just recently on a virtual forum that, you know, when people said all flexible working five years ago, well, flexible working, off you go, go get a different job with someone else. Now, hybrid is, is normalized and it should be. And I think, you know, giving flexibility within reason is the right thing to do. How does it work with you guys and how have you embraced that?

I mean, as someone with a young family, I've got to say I do really appreciate the ability to work flexibly and to spend a lot more time with, with my children than perhaps my parents had the opportunity to do. So I think there's that permanent change has definitely been of benefit to many, many people. That being said, there are some circumstances where it's just more efficient and effective to be in the office to workshop certain things or, you know, a key part of my role and any treasurer's role is building and maintaining relationships with external stakeholders. And the reality is you just need to see people face to face occasionally to do that and to maximize that. That being said, it's a balance, right? And so how we handle it at resolution from a Treasury perspective, we have one day a week when the whole team is in together and we hold our one to ones and our team meetings on that. And then we have a series of regular checkpoints through the rest of the week and over the course of the month, including with our overseas subsidiaries, just to make sure we're in touch and in tune and feeling as connected as we can do.

Amazing.

Great advice as well there for anyone listening today when you know, again, Dan and I have talked about this in the past where some of our clients in the U.S. for instance, oh, we should be in five days a week. But actually when I then talk to some of those treasurers, they're not in.

Five days a week.

You know, there's an ethos of, yeah, let's get everyone back in. But actually it turns out they're spending more time out of the office, but I think having that regularity, having it set down, I think really works. Great value bombs there, sir. Again, as we wrap up. You know, people have listened to you already, so they've got a lot of your great stories so far. Bring us up to date if you know, and what takeaways you can give to the audience today. Because I know that you're a busy treasurer, so I don't want to still too much of your time. What are the final takeaways for this episode now we're a couple of years later as well.

Yeah.

I guess just one real reflection. I think I've seen a lot of articles written over the course of the last sort of three or four months about, you know, is. Is now the time that the treasurer is a sort of more strategic player, more in tune with the cfo, more relied upon by the cfo. And let's be honest, we've been hearing those kind of lines since the financial crisis and even before that.

Oh, yeah, 20 years.

Yeah. I don't. Personally, I don't think anything's changed. Treasury is such an important function, but some of it is down to the treasurer and the treasury team of putting their best foot forward and making sure they can show value that's appropriate and relevant to the CFO and to the company. So, you know, I must admit, I get a little bit annoyed at all of these column inches that somehow it's only now that treasury is a strategic function. I think treasury has always been a strategic function, but there's a responsibility on the treasury team to show that value, and I think that that will always remain.

And I think you're right. I think prove your value and earn your place at the table has always been a key thing, and I know you've done that very effectively. Sir. Dan. Thank you, sir. Amazing second show. I could just do this all day, but you've got a job to do, allegedly. Thank you, Dan. You've been an absolute superstar and thanks very much for your time.

My pleasure. Thanks, Mike.

Hello, it's Mike here again. I hope you enjoyed this week's show. If you did, then maybe you want to follow the show or subscribe, depending on where you listen, whether that's itunes, Spotify, or another great place to listen to the show from. It's totally free and means that you'll be the first to see each and every week when we release a new show. And maybe whilst you're there, you could even leave a quick review. Reviews and ratings are among the most important metrics for a podcast to effectively rank. And as you can probably appreciate, the podcast is a lot of hard work to produce every week. It'd be amazing. Just take, say, 20 seconds, leave a quick review of my amazing guests and their great career stories. We'd really appreciate it. Thanks very much and I can't wait to see you soon.

Sam.