People Are Key to a CFO’s Success: QBE’s Group CFO Regan

When discussing his career as a chief financial officer, Patrick Regan, group chief financial officer for QBE, emphasizes the importance of people and the team the CFO builds.

“You’re only as successful as the team of people you build around you, how well you mobilize them and the vision you set of what you’re trying to achieve,” he said in a recent interview.

Rather than micromanaging, he lets his team of professionals around the globe do what they do best because they “know how to do their jobs 100 times better than I could.” While he makes sure they’re on track and have the help they need, he lets them fulfill their goals without hand holding.

Regan, born and raised in Norfolk, a county on the eastern side of England, has leadership experience in finance roles on three continents: the U.K. (Aviva, Willis Group, RSA Insurance and AXA), the U.S. (GE Capital and Grant Thornton) and now in Australia with QBE. In three of those roles—at QBE, Aviva and RSA—he has been involved with major transformation projects.

He said there are loads of smart people in the industry who are great individual contributors but who will find it difficult to be good leaders unless they know how to build great teams and work cooperatively with people across the organization.

Indeed, he listed team building as one of the top skills a CFO needs, along with decisiveness, being analytical, strategic thinking, and being comfortable with presenting to internal and external stakeholders. “You need to be a good communicator because that’s such a big part of what we do,” he said.

“You need to understand the complex industry dynamics and how to help position the company within that environment.”

As strategy is a big part of his job, he likes to allocate some thinking time—if possible on a daily basis—when he blocks off time on his calendar. It’s easy for a CFO to get caught up with the rather “unglamorous” projects required of finance, such as reporting, but time needs to be taken for more strategic thinking—on behalf of the company and of finance, he emphasized.

“You might have gotten to the end of your day and plowed through your to-do list and delivered some of your deliverables,” but the question he likes to ask himself is whether he has “made the company any better at the end of today, or the week, or the month?”

Regan said he took the job at QBE in 2014 because “it felt like there was something we could create that was different and distinctive.” He previously had been CFO at U.K.-based Aviva, where he also was involved in a major transformation project.

QBE began its transformation in 2012 with the appointment of John Neal as CEO. He initially made changes to the management team and improved underwriting standards. Since Regan has been on board, the company has been involved with selling businesses to get back to its core skills, raising capital and getting on top of its reserving.

“Now that those resets are largely completed, we are focusing on how we run the business better in a thousand smaller ways and mobilizing the organization to carry that forward with enthusiasm,” he said, noting that QBE has an interesting franchise because it is “one of the few global insurers that just do P/C, and in our case primarily just writes commercial lines.”

QBE Finance

Even QBE’s finance department has kicked off its own transformation initiative, which aims to modernize and automate processes across the 40 countries where the company operates—using Oracle technology to replace legacy systems and manual processes. The intent of the project is to do “what we do in finance better, more efficiently” in order to add value and help the business effectively deliver its strategy, Regan said.

Indeed, he said that the use of data—how information is collected and analyzed—is one of the biggest challenges facing CFOs and the companies they work for. “There is an expectation from business leaders for faster, better information, and finance teams therefore have to step up to the plate to deliver faster and better information.”

Previous Experience:

• 1988-1998: Grant Thornton, various roles from investigations senior manager to partner designate.
• 1998-2001: General Electric Co., various roles including controller, global consumer finance (Stamford, Conn.) and U.K. controller, GE Capital Bank.
• 2001-2004: AXA SA, Finance & Claims director, U.K. General Insurance.
• 2004-2006: Royal & Sun Alliance plc, group financial controller.
• 2006-2010: Willis Group Holdings, group COO and CFO.
• 2010 to 2014: Aviva plc, CFO.
• 2014-present: QBE, group CFO.

World economic volatility post-2007 is profoundly different, he affirmed, which means that boards are much more active than they were 10 years ago with the information they’re seeking and “what they need to help them be stewards of the company,” Regan went on to say.

“Our job as CFOs is to provide information to our colleagues, to our teams, to our external stakeholders—and the bar is being raised continuously,” he said. “We have to make sure we can keep pace with that as finance teams and genuinely add value and provide information as quickly as possible.”

“Every CFO has to have strong partnership with the CEO; you’re their wingman. You’re trying to help them fulfill their strategic goals. I’ve always thought that,” he said.

“Similarly, there is a natural partnership with the chief risk officer. In many ways, you want the CRO to be provoking you with thoughts, challenges. COOs typically have a big cost agenda or efficiency agenda, which can be quite complementary to what the CFO is trying to do. They generally are natural bedfellows.”

While being collaborative and collegiate should be “the default style” for a CFO, he or she also has “to be brave enough to disagree with people and to push things a bit as well.”

Do you need to work in property and casualty to be a CFO? “No,” he said, “but it certainly helps because the expectations of the role expand over time. I have a very leading hand in the strategy function. A hugely important part of my job is to spend time communicating what we’re doing to the board, to the regulator, to the ratings agencies and particularly to the investors. If you don’t really understand how the business works, it’s harder to do that.”

Co-Locating Processes

Another big job for QBE Finance over the next year is to co-locate more processes, which means streamlining processes to be handled in the Philippines.

“We have a QBE-run facility there called the Group Shared Service Centre, which has been hugely successful since it was created in 2013.” Finance would like to co-locate to the Philippines different accounts payable processes—as an example—from different areas around the world to make these processes more efficient and provide a better service for the global teams.

QBE’s global finance function is about 1,200 people, with 200 of those working in Sydney. The functions that report to Regan are finance, internal audit, actuarial, tax, treasury and investor relations. “We have a separate team doing financial planning and analysis. I’m a great believer that you really need a dedicated group doing financial planning to get high-quality, dedicated thought processes.”

Reinsurance Buying

Regan said the finance function is heavily involved with reinsurance buying decisions, which is hugely important for QBE because it spends a lot of money on reinsurance. “We spend more money on reinsurance than we do on our expense base. It’s a huge source and form of capital and a huge source and form of risk management and volatility of earnings management.”

In 2010, the company decided to parcel out its risk around the world into five main programs, including bundling multiperils and multiterritories into a single global catastrophe program.

In the past several years, Regan said the company has seized pricing opportunities to buy more comprehensive and unique reinsurance programs, which “have given us a lot of earnings stability at a time that is really quite valuable to us.”

Why are they unique? “We bought big aggregate treaties, which means all risk claims and all catastrophe claims of more than US$2.5 million fall into this treaty once they accumulate up to a bit over a billion dollars,” he said.

As a result, in 19 years out of 20, QBE knows that the cost of large risk claims and cat claims will be about 9 percent of net earned premiums “whether they’re in a light cat year or a heavy cat year.”

Career Advice

Regan got into finance and ultimately the insurance industry by becoming an accountant—and he admitted he first became an accountant because he wanted to work in London.

He laughed, saying, it wasn’t a particularly well-thought-through career plan, but “I’ve really enjoyed financial services. For me, it’s got such a nice mix of financial complexity and strategy, which I really enjoy.”

He recommended that a young person who wants to enter the industry and get into executive roles should take a foundation qualification (such as accountancy or an MBA), get as many career experiences as possible and stretch themselves as much as they can.

Regan chose the variety and benefit of working in three countries, when he often had the opportunity to step outside his comfort zone. “Working in different places, different cultures, different company styles, challenges you enormously.”

He recalled his role as group controller for GE Capital in Stamford, Conn., which he described as a great job. But in his first three months, he felt like he had been thrown into the deep end.

GE has real “people bravery” and puts people into roles that will stretch them, he affirmed.

GE Money, the successor to GE Capital, had been buying banks around the world. “We had to establish finance teams around the world for all these businesses we bought.”

There were results to deliver and “zero tolerance for anything going wrong, and stuff was going wrong all the while,” he said. In addition, he had to familiarize himself with some very technical U.S. GAAP rules.

“The first three months there were horrendous, and I was thinking, ‘Am I ever going to get through this?'” Regan continued. “But looking back on it, it was the best job I ever had because I learned so much about how do you work with a group of people who work for you who you can’t see down the corridor because they’re on the other side of the world.”

This experience taught him that “if you apply yourself well, you really can learn to do almost anything. I’m a huge believer in that.” But he emphasized, “You must ask lots of questions; you must ask for help. Put aside your pride and ask for as much help as you can. There’s always somebody who knows how to do what you’re trying to do.”

Career Accomplishments

Regan said his two major career highlights were at his most recent role at Aviva, where he was CFO between 2010 and 2014 and closely involved with its turnaround, and his current role at QBE.

There were a lot of people involved in Aviva’s turnaround, including current CEO Mark Wilson, he said. But as part of the team, Regan helped Aviva reset its strategic direction, which like many companies it had grown a lot in the late 1990s and early 2000s.

“I was responsible for helping set the strategy, getting back to the core businesses and selling business such as Aviva USA,” he said. And within the finance team, he helped to “build a world-class finance function. I was very proud of what the team did—all the team, not just me or my part in that.”

While QBE is only part way through its transformation story, Regan said he is really pleased with what the team has collectively accomplished.

“We’ve moved from a period of quite big instability, with the collection of businesses that John [Neal, group CEO] inherited, and have created a very stable and well-capitalized, much more predictable, interesting set of businesses with some really interesting market positions around the world.”

He says he has “really enjoyed being part of that. And we’re just getting started in other ways, so I’m excited about the next chapter as well.”

Biggest Influences

When asked who were the biggest influences in shaping his leadership style, Regan, without hesitation, points to Joe Plumeri and Andy Haste. Plumeri was the former chairman and CEO of Willis Group Holdings, and Andy Haste was the former chief executive of RSA Insurance. Regan worked with Haste at RSA (where he was part of another transformation project) as well as AXA and GE Capital.

Plumeri had vision, energy, passion and knew how to energize an organization, said Regan, chuckling when he recalled that Plumeri “would come in every day with a new idea.” He added: “I learned a ton working for Joe.”

Regan said Haste was also influential and imparted a way of measuring his days, weeks, months and job successes. Haste was not only great at focusing on the things that really mattered, Regan said, but he always asked: “What can we do to make us better next week than we are this week?” And now it is what Regan often asks himself.

Best Advice

Regan said the best piece of advice he has been given is “to show your heart.”

“It’s easy in this kind of job, or for me as an individual actually, to come across as all business focused, especially when you get in a senior role,” he said. If you give the impression of intensity and being aloof, there is a “danger that you don’t show your heart to people, that you care about them.”

Measuring Success

How does Regan measure his career successes? For most people, he said, it is the roles they achieve that become their measure of success. “But I think trying to make a difference in an organization is the best measure for me.”

He is pleased with his involvement in transformation projects at Aviva and now QBE because they’ve been challenging and interesting and, most of all, a lot of fun.

Regan no doubt will continue to stretch himself in his future career, wherever it may lead him. “I don’t really mind whatever way it comes. I could be working in a different country again, or a different culture. I could be doing a CEO role, rather than a CFO role; I don’t really mind. It would be interesting to challenge myself and see what I can do.”

A version of this article first appeared in Insurance Journal’s sister publication, Carrier Management, which recently published a group of articles on CFOs in the re/insurance industry.

Topics USA Claims Reinsurance Uk