InsuranceERM's chief risk officer of the year in the 2024 UK & Europe Awards, Vishal Desai, talks to Christopher Cundy about his career and what CROs should be thinking about the future
InsuranceERM's CRO of the year is someone who is relatively new to the role, but one who has already made a significant impact on the business. He has quickly grown into an industry thought leader on risk management practices, as well as wider industry topics such as diversity, equity and inclusion.
Vishal Desai joined MS Amlin in May 2021 after having spent more than a decade overseeing general insurers at the UK regulator. It's quite rare for supervisors to become CROs, but Desai explains he missed the thrill and pace of the commercial dimension of roles he held previously, including at Hiscox, PwC and UBS.
"I enjoyed my time at the Bank of England. There were so many reasons to stay"
"I enjoyed my time at the Bank of England. There were so many reasons to stay: the constant variety and intellectual challenge, the genuine sense of purpose you feel, working with some of the most impressive minds I've ever encountered – not least, Mark Carney!," he says.
But he adds: "I always knew I wanted to help lead and contribute to the success of a commercial enterprise; taking the breadth and depth of experience I had gained across insurance and banking, both here and abroad, and to apply that in-house. I just needed to find the right firm and the right time; one where I knew there were issues I was uniquely placed to solve and where I could therefore make a tangible difference. And then MS Amlin came along, always the jewel in the London Market crown when I started out, but one which back then had lost its lustre with some performance issues to address."
InsuranceERM interviewed Desai last year about his work with MS Amlin and how, having successfully helped turn around the London-based business, his expertise was being tapped by parent company Mitsui Sumitomo in Japan.
His unconventional experience has brought an unusual skillset, but one that he's clearly able to leverage as a CRO.
Working at the Bank of England "provided access to every top table in the country and it's not a stretch to say, the world – not something any other role in the market can do, certainly not until much later in your career. Not only did that provide an unmatched environment to learn and develop, but over the years, it furnished me with a profile and network which supported the visibility and sponsorship needed to move into the board room."
"Supervision also teaches you about relationship and stakeholder management, and about how to influence through others"
He also had the opportunity to see how others had approached the CRO role. "I had developed a strong sense of what 'good' looked like, what 'poor' looked like, and importantly, in a commercial setting, what 'good enough' looked like," he explains.
Desai says there are many skills that can transfer from supervision. For example, the risk function exists to provide independent review and challenge to the business. "That is not dissimilar to the nature of supervision where you hone your skills in asking the right questions to elicit the answers you need, particularly from people who quite often want to give you as little information as legitimately possible!," he says.
The difference is that working for a company means having to work through the issues, as opposed to just pointing them out, and also seek out new opportunities.
"Supervision also teaches you about relationship and stakeholder management, and about how to influence through others. These are key skills if you want to be an effective CRO, when you do not have day-to-day direct control of any front lines of the business, yet you must retain responsibility for oversight of all of them," he adds.
Today's challenges
Among the challenges for modern CROs is dealing with change and disruption. Desai describes this situation as the "new normal", and thinks the pace of change and unpredictability is likely to increase.
"The time for ticking and bashing of risk registers is over"
He says companies that can continually evolve and adapt will differentiate themselves. This means the best risk functions "will need to be more integral in helping firms navigate strategy, business model evolution and the consequent transformation activity needed. The time for ticking and bashing of risk registers is over!"
In this context, he expects dynamic stress and scenario testing to become an increasingly important activity, including in arenas not traditionally expected to impact on business models: climate, technology, politics, societal shifts, technology and workforce demographics.
"Risk functions need to encourage the uncomfortable 'what if' questions and consideration of a longer time horizon despite the inevitable pushback from executives more invested in the 'here and now' of delivering the current year's business plan and more so, where current business models may be profitable. We have a role to play in helping executives and the board manage the potential cognitive dissonance between the two," he says.
"It is no longer a question of just 'if' but rather also 'when' the unexpected hits, how do you respond?"
Desai also expects risk functions will be spending more time supporting the business on operational resilience. Having an agile crisis management framework is key, he says. "The reality of our world now is that it is no longer a question of just 'if' but rather also 'when' the unexpected hits, how do you respond?"
CROs will also have to focus more on ensuring their companies have a risk-aware culture, as non-financial misconduct and poor behaviours increasingly become drivers of organisational risk. The most mature risk cultures do not rely on overly restrictive controls, or indeed the second and third lines as fail-safes, he adds.
Technology opportunities
The modern world has presented a host of technologies that have the potential to improve efficiency and understanding of the drivers of risk.
But Desai warns that leveraging these technologies requires data, systems and processes across the first line "supply chains" of the business to be agile. "Without first investing in that side, you are somewhat placing cart before horse," he says. That said, his firm is experimenting with where machine learning, data mining and AI can help second line activities.
"Sanctions screening, fraud detection, model validation, a move to more preventative versus detective controls and their automation are all examples where both risk and compliance can think about how new technologies can support our work," he says.
"Technology though is complementary in my view. Having the right people, in the right roles, doing the right things will always improve the impact of the risk function more than technology alone."
Outside work
Life outside work for Desai seems as busy as his job. First there is four-year-old cavapoochon, Freud, to take for walks. Then he is constantly planning his next trip to feed what he describes as an "insatiable wanderlust".
He also professes to love learning new things, especially creative and caring activities that stimulate the right-side of his brain. He is a trained massage therapist and is pursuing a qualification in reflexology, which he says has always fascinated him.
"And I'm starting to learn Japanese. A barista workshop is on the cards too – so I'll be able to make you the perfect latte soon!"
Vishal Desai embodies the definition of a modern, holistic CRO and is a deserving winner of InsuranceERM's award.
Vishal Desai's advice for budding CROs
- Be clear on what you are bringing to the table before you ask to sit at it. But equally, take the time to really understand your 'why' and your 'how'. Your 'what' will then be far more compelling.
- Your value does not diminish based on someone else's inability to see it. Find your tribe – the ones who see you, the ones who encourage you, the ones who will speak your name in a room full of opportunity. At the same time, actively seek critical feedback from a diverse cohort of people who you trust and respect. Then act on it.
- Get comfortable with rejection and setbacks – but equally, don't take "no" for an answer! The sooner you do that the more resilient you will become. Resilience and the perseverance it fuels is one of the most under-recognised skills needed to succeed. And remember it only takes one person to say "yes"!
- Never dull your shine to make someone else feel comfortable. Rather find ways to also bring them into the light. And if people think you are too much, let them go find less. Authenticity always wins in the end!
- Finally, progress is rarely vertical. Just make sure you're always adding to your experience in some way or another. Keep building an interesting narrative. What is the story you want to tell with your career? And remember the best stories always have plot twists.
