Chief risk officer of the year, Tom Wilson, Allianz Group
Chief risk officer of the year goes to Tom Wilson for being a highly respected thought leader in the world of risk management, with his contribution extending far beyond his organisation.
Wilson is chief risk officer for the Allianz Group, which includes global life, property and casualty (P&C) and asset management businesses. He manages 90 people in Allianz's corporate centre and oversees many more chief risk officers across the network.
He has made crucial contributions to Allianz, where he has served in the role for 12 years, including steering the insurer during the global financial crisis, the 2011-12 crisis and the implementation of Solvency II.
Wilson says his risk management role has become broader in recent years with a greater focus on qualitative risk and operational risk, as well as conduct risks, reputational risk and IT risk management.
Asked how he has influenced Allianz's risk management strategy and the role of the risk management team, Wilson says the first objective is to clearly understand how Allianz Group's risk profile is reflected in actual economics, as well as Solvency II.
He says: "This means being transparent about what could impact us, why and how. That involves a variety of tools, such as the internal model or ad-hoc scenario analysis, which we do quite frequently.
"The second aspect of my role is supporting the board in defining the risk management framework for which business gets done. So I make recommendations, for example, in regards to limits, how to measure profitability relative to the capital deployed and recommendations for managing exposures."
Since "there is no enterprise risk management system that is going to be suitable to meet the next crisis", Wilson says he needs to be close to the business and have a view on all aspects of its development, particularly when the existing risk management frameworks are not relevant.
He cites the introduction of affirmative cyber insurance to deal with the issues around "silent cyber" as an example.
Wilson highlights the low interest rate environment as a major challenge for insurers.
He comments: "Relative to Q4 2018, we are about 125 basis points under on the 20-year euro swap rate. The low interest rate environment puts us closer to guarantees and reduces policyholder surpluses, which might be used for risk taking.
"It raises a couple of different issues, for example the potential fragility of balance sheets. Rates are down, but we have not seen a perfect storm, which would also be equities down and bond markets down to the extent that credit spreads blow out."
The low rate environment also challenges the very business models of life insurers.
"At a 0% 20-year swap rate, in August 2019, it is very difficult to imagine the financing of guarantees let alone the financing of risk capital buffers to support risk taking in an asset portfolio."
From a P&C perspective, Wilson says: "We are seeing an adverse development globally of commercial lines, so an area of focus is how do we maintain and reinforce our underwriting excellence and technical excellence."
Another area of focus is qualitative risk. "That includes conduct risk, especially driven by regulatory developments on IT security and data privacy, and operational stability with regards IT platforms."
In addition to his role shaping Allianz Group's risk management strategy for more than a decade, Wilson has influenced practices across the insurance sector.
He has also found time to write a landmark book about the role of finance and risk in financial institutions, Value and Capital Management, published in August 2018. The book presents a framework for measuring and, more importantly, influencing the value of the firm from the position of the chief financial officer and CRO.
Last year saw Wilson being appointed chair of the Institute of International Finance's (IIF) insurance regulatory committee.
He will also take over from Frieder Knüpling, group CRO of French reinsurer Scor, as vice-chair of the CRO Forum in 2020.