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The Actuary The magazine of the Institute & Faculty of Actuaries
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Q&A: Craig Thornton, Aviva CRO

How did you come to enter the actuarial profession?
Throughout school I had always found maths to be a subject that held my interest. I first heard of the actuarial profession during my A-levels, when an actuary from a local firm presented at a careers day at my school. While studying maths at university I applied for holiday work at the same firm and was lucky enough to get several months of experience working alongside actuaries and statisticians. The experience I gained led me to apply for full-time actuarial work on leaving university.

What has been the most significant change in your mindset/approach since moving from managing life and health reinsurance operations to insurance risk management?
My current role represents my first experience of risk management in primary insurance business. I have already found that there are significant differences in being responsible for risk management as someone managing an operation and risk management from the perspective of formal oversight responsibilities.

However, I feel that the experience gained from spending a number of years working in areas directly responsible for owning and managing risk within a commercial environment has been invaluable in helping me start my new role in the risk world. A good balance of technical and commercial skills is tremendously useful in being able to perform a role such as this effectively.

The actuarially trained CRO is becoming less of a rare breed. What’s your take on the trend?
The skills acquired through training to become a qualified actuary provide an extremely useful background for becoming a successful CRO, particularly in fields such as life and general insurance. I think this is a very positive thing. I have always been of the view that the actuarial profession should produce extremely good candidates for senior leadership positions within organisations but that the technical skills for which the profession is generally recognised do not always give enough opportunities for actuaries to take on broad management roles to demonstrate the capabilities necessary to succeed at that level.

The CRO role is becoming an increasingly important contributor at the executive level of organisations and it represents an excellent opportunity to take responsibility across a wide range of areas of the business. This gives individuals fulfilling the role a great opportunity to demonstrate the full breadth of capability that can be gained from joining together technical skills attained from actuarial training to the more commercial and leadership skills that are gained from experience working across a variety of areas.

How do you balance your time between implementing risk programmes in the field and engaging in strategic discussions at board level?
This is one of the key challenges for all individuals operating at this level and not just those in the risk management field. The challenge of delivering the requirements of the area of business for which you are directly responsible balanced against the general requirements of operating at a senior executive level is not straightforward. It is made even more difficult by the need to create space to really reflect on the longer-term challenges facing the broader economy as well as the industry in general when there is still a packed short-term agenda to deliver.

The only way in which I think this can be achieved is by being disciplined on where you spend your time and by having the right people around to support you. It is important to build a team that you can trust and empower to help you deliver what has to be done but, more importantly, that this team is given the space, flexibility and support to do that. In addition, having the right culture within the team and across the organisation that encourages challenge, candour and feedback is a good way to genuinely ensure that the business keeps the right level of focus on all aspects of its operations, both short and long-term, tactical and strategic.

What do you believe the Chartered Enterprise Risk Actuary (CERA) qualification will do for actuaries?
The CERA risk management accreditation is the most comprehensive and rigorous globally recognised enterprise risk management (ERM) designation offering actuaries the opportunity to further tailor their training to risk management roles. The forward-looking curriculum helps support students and qualified actuaries to develop cutting-edge risk management skills and should lead to recognition of the actuarial profession as the premier profession offering certified risk professionals.

Some believe that the insurance industry needed Solvency II to take a sufficiently risk-focused view of running their businesses. What is your view?
Solvency II is likely to have a very significant impact on the way the insurance industry is run, regulated and viewed. Having a regulatory regime that requires organisations to be run in a very risk-informed way but that gives credit to organisations that do that very well can only be a good thing. However, in my view, it is important that management teams take their own view and responsibility for how they would like to run their organisations. While the regulations and regulators will clearly have a significant influence on how individuals view their business, neither is responsible for the decisions made and so the key requirement for all management teams is to support and drive the organisation forward in a way in which they are comfortable.

Given the calibre and experience of senior management teams within the industry, it is likely that satisfying the requirements of Solvency II and local regulators is less of a fundamental shift than is often perceived. The more significant challenge is likely to be industrialising and evidencing a number of practices that are used within organisations already, albeit with some changes to reflect the needs of a more modern portfolio theory approach.

A further thing to have in mind is that the complex models being developed and implemented to support the requirements of Solvency II also do not run the business — they merely provide input and information to management teams to help inform their decision-making.

You have held senior roles in the insurance industry, so what words of advice would you impart to actuaries aspiring to similar heights?
Don’t rely purely on technical skills as a licence to be successful. Being an actuary is tremendously useful as a professional background for working at senior levels within a variety of industries. However, the more challenging and senior the roles become, the more important broader skills become in equipping you to be successful. In particular, the ability to communicate complex and technical matters in easily understandable terms and becoming a good leader are increasingly important.

What are you looking for in a candidate when you recruit for your team?
There are a number of key attributes I look for when interviewing for senior roles. First, I always look to recruit people who are smarter than me, particularly in areas where I know my knowledge is not as strong. Second, pure technical skills are not enough — I look for strong commercial acumen, communication and relationship-building skills and, in particular, for individuals who have leadership potential as succession planning for leadership roles both within the team and across the business is fundamentally important.

If you could choose an alternative vocation, what would fulfil you?
The other two careers that attracted me when I was at school were medicine and becoming a pilot. I think both would have been as equally interesting and challenging as the route I eventually chose.

How would your team describe you?
I could venture an answer to this but I thought it best to ask some of my team directly.

“It is great to have Craig as UK CRO to lead the Risk team. I am particularly impressed by his commercial awareness and focus on people. With commercial awareness, Craig always looks for both downside and upside risks and encourages risk managers to add value to the business and be ‘critical friends’ to the first line. Focus on people means in this organisation risks are managed by people, not by mathematic tools or ‘internal models’.”

“Craig has brought a wealth of expertise and insight to Aviva and also the risk function. It is refreshing to have both the technical and commercial support from the risk profession at an executive level.”

“As a manager, Craig encourages a candid and energetic working environment and is always challenging his team. He has high expectations of his team but remains an approachable leader.”

How do you measure your success?
For me, feedback from others is the most important consideration when measuring success. This is not just from the person you work for — it is also from your peers, from the people within your team and from whoever is happy to give it. Most useful are honest pointers as to where I can improve.

What do you do to relax?
I spend time with my wife and two children and, when I can, I like to play golf. I also enjoy live music and have a keen interest in wine.

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Craig Thornton is Aviva UK’s chief risk officer and a fellow of the Institute of Actuaries. Prior to his current role, Craig worked for Swiss Re where he started in 1998 as financial solutions actuary and performed several roles until in 2007 he became managing director for Swiss Re’s Life & Health operations in the UK and branch manager for Swiss Re Europe.

Craig was also a member of the ABI Board from late 2007 until leaving Swiss Re at the end of 2009. He is currently a member of the ABI Audit Committee and continues to be involved in various working groups within the industry.