One of the Aspectus PR Financial Services team went along to Severn Consultancy’s recent breakfast discussion exploring the impact of the upcoming split of the FSA into the FCA and PRA. Severn Consultancy is a financial services-focused firm that specialises in the implementation of major change programmes, so this topic is an area of particular strength for them.
Following a short speech by Alastair Goddin, Group Head of Risk Management at Hiscox Insurance Ltd, the group broke into broader discussion, with attendees sharing stories of successes and challenges alike. While there are some things we can be reliably confident of under the new regulatory regime – not least that a low risk appetite is widely anticipated from both the FCA and PRA – the areas that remain unknown or at least unclear are significantly greater in number.
As Alastair Goddin highlighted in his opening address, new regulatory bodies present an unknown risk, and may be keen to assert their authority early on. The degree to which this will characterise the newly-formed bodies will not become clear until they begin life in April next year, he said. There are also questions lingering over exactly how the FCA and PRA will coexist and complement – or duplicate – each other, and how the new categorisation system will play out.
What did come across particularly strongly during the breakfast discussion was the importance of having a strong communications strategy to ensure that regulatory demands are managed as effectively as possible. This is just as true internally as externally, as attendees discussed the inevitable challenges of engaging senior stakeholders with frequently moving timelines and the almost inevitable lengthy delays in eliciting responses from those faced with particularly difficult questions regarding regulatory matters.
At the same time, the importance of nurturing a strong relationship between all regulatory bodies is critical, but again there were as many areas of diverging opinion as consensus expressed during the breakfast discussion. With the restructuring of the FSA into the FCA and PRA set to come into effect in April 2013, the impact it will have on the insurance industry clearly remains a source of contention and, with the breakfast discussion expertly steered by Severn’s own Patrick Oldoni, we enjoyed a lively debate that left us with plenty of food for thought. It was clear that everyone from Severn has put a great deal of thought into pragmatic responses to these upcoming developments, and that thinking was well-received by all attendees – senior managers from the risk and compliance departments of a broad spectrum of UK insurance organisations.
Thanks again to the guys at Severn for inviting us along to such a thought-provoking and well-run event.