"Challenging but rewarding" is how David Otudeko, head of prudential risk and regulation at the Association of British Insurers (ABI), describes his 2022.
He wins the Judges' Award in a year when he led the UK insurance industry's response to some crucial and high-profile agendas, notably Solvency II reform and the endorsement of the accounting standard IFRS 17. He is also a passionate diversity, equity and inclusion (DE&I) advocate, regularly writing blogs and speaking at various events on the topic.
His role has two main elements: corralling the industry's thoughts, and getting those messages across to policymakers and standard-setters.
"I enjoy blank pieces of paper," he tells InsuranceERM. "If you tell me we have a problem, leave me in a room and I'll map out a solution, road test it with the right people and make sure it's fit for purpose. I also like communicating – it's a matter of pride to be able to showcase what the team and I have done."
The ABI also scooped the InsuranceERM award for Risk team of the year because of its work on Solvency II, and Otudeko is naturally proud of his leadership on this topic.
Brexit gave the UK an opportunity to reshape Solvency II to better suit its national characteristics, and it was not a chance the industry wanted to waste.
On some items – the risk margin, for example – the Prudential Regulation Authority (PRA) was on the same page as the industry. However, the analysis from WTW and KPMG commissioned by the ABI demonstrated the PRA's proposals for the matching adjustment would have curtailed the release of substantial amounts of capital, which the government was eyeing for investment in infrastructure and the real economy.
Otudeko and his team engaged with the highest levels of government and successfully lobbied for a "Solvency UK" treatment that, if implemented meaningfully, would allow insurers to fulfil the government's desires.
All these negotiations were taking place under an unusual media spotlight. Solvency II was repeatedly mentioned by senior politicians wanting to demonstrate the benefits of Brexit, turning what was a relatively obscure piece of financial regulation into a political football.
Otudeko says the attention "focused minds a bit more, in terms of how important it was. We talk technical about Solvency UK, but at its foundation is a social purpose we take very seriously and challenges we're trying to address, like levelling up our communities and the transition to net zero. That's what all this reform will enable the industry to do."
PRA chief executive Sam Woods described "a very public disagreement between us and the annuity sector". Otudeko acknowledges the strain on some relationships, which he - like Woods - is keen to repair and move on.
The Solvency II work was going on in tandem with another major reform: the UK's endorsement of IFRS 17. Otudeko picked up the agenda from the ABI's retiring expert, Andrew Carpenter, and with input from ABI members he wrote the response to the draft endorsement criteria assessment, as well as coordinating the reaction to the CSM amortisation issue for annuity providers.
"The team worked tirelessly on this one," Otudeko says. But on the whole, "I think we've ended up in a sensible place," he says.
With the standard coming into effect at the start of this year, insurers are now beginning to explain how their IFRS 17 balance sheets will compare to the previous IFRS 4 rules.
"It will be interesting to see how it all plays out. The industry has done about all it can in terms of trying to get the analyst community ready," Otudeko says. As with any new standard, issues are likely to pop up, and he urges analysts "to temper their excitement" when drawing conclusions from the initial results.
Another of Otudeko's major contributions has been on the DE&I agenda. "I don't have an official DE&I role at the ABI, but I just happen to do a lot of talking about it," he says.
"The topic is close to my heart and I think I say some sensible things, and talk about it through my own lived experience, which is good insight for the ABI and others," he says.
His blogs on the topic helped inform parts of the ABI's DE&I blueprint for the industry, published in November. He adds: "It is always pleasing to hear when you are told that your blogs were a useful input into the work."
One of his achievements has been highlighting the need to reframe the industry's diversity and inclusion debate to include the "E" of equity, i.e. creating an environment where everyone has equal access to opportunities for advancement, which enables a diverse workforce to become an inclusive one.
"Not everyone used to call it DE&I, but now more do," he says.
Practising what he preaches, his team now includes three women, one black woman and himself. "These people haven't been chosen out of tokenism. They have the skills to do the job. The team is diverse in terms of what they look like, how they think and their backgrounds," he says.
Asked to describe his leadership style, Otudeko responds with little hesitation: "Treat people how you like to be treated. There is no monopoly of wisdom, so listen to what people have to say. It's safe to fail in a controlled way: there's no such thing as failure; there's learning and there's doing different next time."
But there is one additional trait that Otudeko exemplifies, which isn't always present in the working environment: having fun. "The work might be serious and really high profile, but you don't have to frown and look like you're carrying the weight of the world on your shoulders. You could deliver it with a smile."
Looking into 2023, his priorities continue to include Solvency II, with the focus now on the detail of what goes into legislation and the PRA rulebook.
"The rubber is going to hit the road when [we] have to invest the £100bn ($120bn) that we said we were going to. It's making sure there's the right infrastructure, the right supply of assets and there's the right knowledge around the investment types and any non-regulatory barriers," he says.
Conversations about DE&I will also continue, along with climate change and the planned recovery and resolution regime.
His ultimate goal is creating fit-for-purpose regulation for UK insurers that enables them to meet the real-world challenges ahead.
"If I see the UK has Solvency UK that's working perfectly, tailor-made for the UK industry and able to reflect UK specifics in everything we're doing around sustainability, green infrastructure, etc, that's what I want the insurance industry to evolve into."
