Justin Elks, partner, head of risk consulting at Crowe, explains how the risk consultancy is helping insurers to build sustainable businesses that deliver practical value - and benefit from change and uncertainty
Congratulations for winning risk consultancy of the year for the third successive year. Why do you think Crowe's service and approach is seen as innovative and valuable for insurers?
We are delighted to win this award three years in a row. It means a lot as it's voted for by CROs – one of our main customer groups.
At Crowe, our focus is on helping organisations build sustainable businesses that deliver value, and can respond to and benefit from change and uncertainty.
Some consultancies focus on ensuring businesses simply meet regulatory requirements tactically, and can use fear of the regulator to drive their businesses. We take a different, more strategic approach.
We focus on what insurers need to make their businesses better – whether that's integrating climate and sustainability into their strategies; mastering data to deliver value; enhancing risk and governance to optimise decision making; building resilience to enable them to react and respond to uncertainty; or delivering transformation successfully.
How does Crowe plan to attract more insurance clients in 2022?
We will continue to follow the same philosophy: to focus on being practical, pragmatic and proportionate in our recommendations, progressive in our thinking, and empowering and collaborative in the way we work with clients.
We take time to understand each client's individual needs and ultimate goals, beyond just clearing the next hurdle in their path, so they trust us to develop solutions that are right for them. We bring a unique blend of skills and expertise that helps us to work with clients flexibly throughout their journey.
What regulatory and compliance areas are most concerning UK insurers?
Regulators are focused on the long-term sustainability of businesses in its widest sense - encompassing not only ESG issues, but also operational and financial resilience. Insurers generally dealt well with the pandemic, and we are moving into a new phase of development where organisations increasingly adapt their businesses to a different world.
Regulators expect companies to continue evolving their ERM approaches to meet their needs. With changes in risk profile, business model, structure, products and acquisitions for example, risk and governance won't naturally keep pace unless refinements are made.
Too many companies see ERM implementation as a one-off investment. It's much more cost effective to approach ERM as a continuous improvement exercise.
Operational resilience, for example, can be seen simply as a set of rules to check off, or as a way of enhancing your business. Our contention is that operational resilience, done in a practical way, adds significant value by helping to get the balance right between identifying and assessing risks, and reacting and responding effectively to events.
What value does Crowe offer insurance clients in terms of climate risk and sustainability?
We see companies moving from setting ambitions to making commitments, and taking actions and accountability for change. We have worked on a number of climate risk and sustainability projects, and seen real value emerge where companies are able to link their ESG and climate goals clearly to their business strategies.
There are a lot of complex challenges for firms to address, but doing so pragmatically will help to ensure they can make a real difference to the world. It's fulfilling to be able to help companies on their journey to net zero and becoming increasingly sustainable businesses. This includes internally, where our team have been supporting Crowe UK in making a commitment to set near-term company-wide emission reductions in line with climate science and the Science Based Targets initiative.
In 2021, we helped clients to complete the Bank of England's climate biennial exploratory scenario exercise, in a way that prepared them for later reporting, such as TCFD, and ultimately to integrate climate risk into their decision-making. Our clients are now able to see beyond what impact the climate could have on them, and start to think about how they can minimise their impact on the climate and be innovative in meeting customer needs.
