Profile: Paul Muir, head of portfolio and risk management, Vero
When your business is managing other people’s risk, you need to be on top of your own risk management. Stuart Fagg spoke to Paul Muir, head of portfolio and risk management about his team’s work at Vero Insurance
The insurance industry has undergone huge changes since the collapse of HIH Insurance in 2001 and the regulatory reforms companies are now subjected to have changed the insurance landscape forever.
While that has – and will likely continue to - created huge workloads for insurers, the benefits of enhanced risk management are being felt and external stakeholders are increasingly taking in interest in internal risk issues.
For its pro-active approach to risk and embedding risk culture, Vero collected the Protiviti Award for Best Implementation of a Risk or Compliance Focused Strategy at the 2006 Australian Risk Management Awards.
Describe your role
I manage a dedicated and diverse team including pricing actuaries, lawyers, data specialists, insurance and audit experts, a scientist and of course risk managers.
Vero’s risk management team advises the business and fulfils obligations to shareholders, regulators, customers and employees.
We deliver insurance pricing, data frameworks and analysis, in addition to risk management and legal advice. We also advise the Promina Group on emerging risks (such as pandemics and climate change) and the manage the internal business licensing system.
It’s my responsibility to create an environment in which my team can freely provide their skills and expertise.
How does it fit into the overall risk management structure of Vero?
Vero operates a number of specialist strategic business units that offer insurance products and services to specific markets. It follows that each business is in the best position to understand and appreciate the risk and opportunity arising from their market segment. Therefore, while risk management sits within my team, in practice we embed risk management in each business unit.
My role is to ensure that risk management is seen as business as usual, that is, as part of our culture and a part of what we do. We are well on the way to achieving this based upon feedback from regulators, internal and external auditors and of course from the judging panel who awarded Vero ‘The Protiviti Award for Best Implementation of a Risk or Compliance Focused Strategy’.
What element of your role do you find challenging?
I find it exciting rather than challenging. What excites me is looking at both sides of the risk coin and providing solutions to the business that helps them grasp opportunities.
Risk management and risk managers are often seen as an obstacle to opportunity. At Vero, one of our strategic themes is ‘new ways to create value’. This includes innovation, idea generation, efficiencies, mergers and acquisitions and new product development.
That means I need to find a balance between adequate controls and growth opportunities. I think true essence of risk management means providing competitive advantage within a highly regulated environment.
How did you begin your career in risk management?
After 18 years in the insurance industry you could say that I have known nothing else.
In 2001, I took responsibility for Vero’s Corporate Liability portfolio. We targeted the manufacturing sector and to gain a deeper understanding of our clients’ risks I hired quality assurance specialists from the food industry. By 2004 the strategy was fully deployed and the team were providing great value add services to customers.
I wanted a new challenge so I started a part-time Law degree through Deakin University. This was to be the defining moment in my risk management career, with an opportunity to move from a business role into corporate services.
I haven’t looked back since.
What have been the biggest developments in risk management in recent years?
Within insurance we’ve seen significant regulatory change relatively swiftly, such as the APRA stage 2 reforms, Financial Services Reform and the recent introduction of the General Insurance Code of Practice.
Vero has worked hard to ensure that our risk management framework is robust and fluid to cope with regulatory change. It comes back to our people and culture. Historically, too much work has been devoted to defining risk management as a distinct discipline. But it’s simply one component of a successful business operation. It’s business as usual.
What would your advice be to someone starting out in risk management?
From a technical perspective, read widely and stay informed. It’s important to take the theory and apply it to the business in an ever-changing environment.
In respect of personal development, it’s vital to align yourself to a respected senior leader who can guide, coach and mentor. I am fortunate at Vero to have direct access to our senior executives and participate in tailored leadership courses.
What do you see as the key future trends in risk management in Australia?
The ability to have a deep understanding of emerging risks and react to them for the benefit of all stakeholders. Issues such as global warming, pandemics and nanotechnology present unique risks that require innovation. For example I have a PhD scientist (ex CSIRO) within my team at Vero. He looks at all emerging risks and the potential impact on our customers from an insurance perspective.
The work at the heart of risk management is leading edge rather than a handbrake to innovation. I think that a deeper understanding of risk enables a greater appreciation of the opportunities that risk can present.
Is there a risk, audit or compliance professional you’d like to see profiled? Ideas to stuart.fagg@lexisnexis.com.au
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