08 MAY 2014 | Sarah Bennett and Richard Cohen
We are ushered into a meeting room at Bupa House in central London, having managed to secure some time in Evelyn Bourke’s busy schedule. Slight in stature, she stands out in many ways, speaking with passion, confidence and authority in a distinct Irish accent.
Pursuing an actuarial career straight from school, Bourke was one of the first two women to qualify as an actuary in Ireland. Since then, she has navigated her way through various actuarial and business roles to become chief financial officer of Bupa.
Actuarial training had largely equipped her with the necessary skills for a CFO’s role at a financial services company. But, she points out, this was not a passport in itself and she firmly believes that good people management and communication skills, and an ability to influence and shape agendas, are key to success in a senior role.
Bourke admits it was not easy to move to Bupa from a long-term insurance background. “Although the business is not as actuarially intense and is easier to navigate from a measurement perspective, the strategic challenges are multi-dimensional because of operating in provision of healthcare as well as in pure health insurance.”
She is well aware that healthcare is a political issue, with wider society being more present in what you do. “People’s health feels more immediate to them,” she says.
The changing face of the actuarial community, with more women moving into the profession, is a source of pride for Bourke. She acknowledges that this is also changing at more senior levels but is pragmatic in her expectations that “this is largely cohort-driven and an artefact of historic influences”. Her expectation is this will change in future.
Bourke also sits on the board of Opportunity Now, an initiative by Business in the Community to promote gender diversity in the workplace. The organisation is in the final stages of research into what gets in the way of career progression for women, and how to balance the juggling act of starting a family and pursuing a career.
The Opportunity Now Report, Project 28-40, has since been published (bit.ly/1jyKGV5).
“It is a matter for employers to consider what else they can do to facilitate women staying connected to the workplace and not dropping out completely,” says Bourke. “This is so that when they want to take on a higher level of participation they are able to do so, and their skills are current; they have the networks and are still connected to what the business is doing.”
Bourke says her advice to young actuaries would be: “Believe in yourself, have the confidence to go and try new stuff. Take chances, take risks, take on a role that you are not 100% qualified for just yet.” She believes she benefited hugely from the varied experiences over the course of her career and that these helped her “develop a high tolerance for uncertainty, ambiguity and unpredictability”.
In particular, her time spent working for Tillinghast (now part of Towers Watson) as a consultant gave her the skills to move on to new projects with ease, plus the ability to identify problems and to work toward solutions.
“Anyone who aspires to a senior executive career should understand what it takes to run the different functional parts within a business as this knowledge will prove invaluable,” she advises.
When Bourke starts talking about Bupa, her passion for the company is evident. She cites the little-known fact that Bupa was founded by an actuary, Andrew Rowell, who became the centenary president of the Institute of Actuaries and was eventually knighted. In the face of the formation of the National Health Service, Rowell championed a national association of all provident societies that would operate as a united scheme for the whole country. Bupa was formed to “prevent, relieve and cure sickness and ill-health of every kind” by the merger of 17 provident associations.
Bourke relishes the global reach of the business, believing that “despite the current economic and regulatory environment, health and care companies have a great future, particularly where they are uniquely positioned in both the funding and provisioning of healthcare services”.
She acknowledges that the role of CFO has changed over the past five years, largely by embracing the risk agenda. The role has progressed from one focused on financial performance to one that requires a CFO to identify risks with the aim of aligning their strategic consequences with consideration of economic capital.
It is her belief that managing risk is integral to the successful and sustainable performance of any company and that an organisation cannot manage the risks it faces unless senior management embraces this. It is no longer acceptable to focus on performance only and there are many examples where companies have made good profits which turn out to be unethical or unsustainable. For Bourke it is about “sustainable profitability underpinned by strong risk management based on durable customer relationships”.
The UK is one of the most regulated individual markets in which Bupa operates as a result of the dual regime of regulation with a solvency and prudential perspective, and a conduct perspective. Bourke recognises how easy it is to complain about the intrusiveness of the regulator, but is very clear that it is best to proactively demonstrate strong governance and the fair treatment of customers in order to prevent any requirement for the regulator to intrude.
Another key challenge for the private medical insurance industry in the UK is affordability and Bourke believes that the core indemnity product is becoming increasingly expensive. This is exacerbated by the fact that medical cost inflation can run at a level twice that of Retail Price Index inflation if left unchecked.
The success of companies in the industry relies on their ability to launch products that are more affordable. Only through continuous engagement with customers will these products become available. Without reaching more customers there is a risk the private medical insurance market will be unsustainable.
Bourke talks us through the various approaches to cost management available to a private medical insurer, including improved contracting with hospitals and provider groups, ensuring compliance with existing contracting and ensuring that the recommended treatment is appropriate. “It is not our job to second-guess clinicians but it is unquestionably the case that there is a lot of over-treatment. This is well-documented in the US. In the UK it is not at that level, but left unchecked there is scope for it to get to there,” she says.
She is also aware how important it is to manage all aspects of healthcare financing to ensure an affordable and appropriate level of care is provided for members. Bourke believes that the recommendations proposed by the recent Competition and Markets Authority report into the private healthcare market are promising, “They offer the potential for better outcomes for customers, clinicians and hospitals. The prize would be to make private healthcare more affordable.” (See final report: bit.ly/1iwmHmM.)
Another key but complex opportunity facing the health and care market in the UK is the growing population of older people and the ability of the government and families to provide care for them. Bourke is clear that the current system is not effective. “In our care homes business, about 70% of our residents are local-authority funded. We are experiencing an adverse pincer movement where on the one hand local authorities are driving fees down where they can, and on the other hand the system is delaying entry into care to the latest possible point. This means when frail and elderly people arrive in our care homes they need more intensive specialist nursing care, so the costs per patient day are driven up.” She admits it is a difficult balancing act to get right.
The Dilnot commission has raised the profile but more work needs to be done to find long-term solutions. “We need more radical solutions. But it’s a huge societal issue and the best thing you can do is stay healthy for as long as possible.” Bourke believes that companies are uniquely placed to learn from international markets. The UK might learn from the accommodation bond concept in Australia or care villages in New Zealand.
Asked about her own career development, Bourke readily admits to getting her ‘university fix’ while doing her MBA at London Business School at the age of 32. While not looking to change industry, she believes that LBS gave her access to a breadth of experience and significantly enhanced her confidence.
“Sometimes you wonder whether, because you are in the insurance industry all the time and are looking at the world from that perspective, it might be restrictive,” she says. “The diversity of topics, intensity of teaching, a university setting, and the people you meet from diverse backgrounds is unique.”
As our time ends, we catch a glimpse of how important it is to Bourke to maintain a work-life balance and of her future aspirations. She likes to travel with her partner of over 20 years, Seamus, also an actuary, making use of London’s proximity to continental Europe for weekend getaways.
In the future Bourke sees herself taking on non-executive directorships in different industries. “I value the contribution of a fresh perspective that can be made by a non-executive director, in particular the rich functional expertise they can bring.”