Rotman and the Global Risk Institute in Financial Services (GRI) hosted Rahim Hirji, Chief Risk Officer (CRO) at Manulife, to share his insights on the insurance industry. The event, titled “Risk Management as an Enabler of Change,” is one of the over 100 public talks hosted by Rotman each year. Master of Financial Risk Management (MFRM) students can expect to learn the insights of top executives in the risk management industry on a regular basis through the program.
Sonia Baxendale – President and CEO of GRI – sat down with Rahim to learn more about his career path as well as the day-to-day challenges of his position in an age of technological disruption. When asked about what it takes to be the CRO of an organization as complex and advanced as Manulife, Rahim responded by sharing his three guiding principles of success –- principles which he has put into practice throughout his entire career.
Rahim’s three Principles of Success
1. Don’t be afraid to take risks
Rahim explained that he took on several important roles at Manulife before becoming CRO, including VP of Asset Liability Management and subsequently CFO of its Canadian division. This diversity of experience was possible because he was confident of overcoming the challenges of the roles through a strong work ethic and open-mindedness.
“If you look at my career path, I've jumped into a lot of different roles and a lot of different careers, and they are not necessarily sequential in any particular aspect. I always had confidence I would work hard and get up on the learning curve. So don’t be afraid to take chances and take leaps.”
2. Collaborate as much as you can
Rahim encouraged the audience to build a network with others within their organization. This would make it easier to ask for help in the future in the case of a challenging issue.
“Internally, it’s really helpful as you move up in your career that you have contacts that you can pick up the phone and say ‘hey, I’m having some difficulties, can you help me with that?’ And it’s important to say ‘can you help me?’ and not just ‘I need this’ to emphasize the favour aspect of it. A lot of people will call you up and ask the same; don’t be afraid to reciprocate. You learn a lot about people when you actually call and ask for help and see who is actually willing to respond.”
He highlighted the importance of cooperation in new fields, such as in cyber-insurance. For him, this meant collaborating with others outside of his company and even CROs of competitor organizations.
“If I have a problem and I don't know what the right solution is, I’ll pick up the phone and call a few individuals and ask, ‘are you guys dealing with something similar?’ [...] We’re in it together, the reputational aspect in the industry is big enough that really we all need to think about those solutions, so the importance of collaboration is key.”
3. Aim high
Rahim’s last piece of advice was about setting a high bar. For him, this led to better results in the long-term.
“I always thought that If you aim high and you fall short you are still probably going to be much further ahead than if you set a lower bar and if you achieved that lower bar. Aim high, maybe you won’t get there, but it’s important to know and celebrate how much you do actually achieve success when you do that.”
The Evolution of the Risk Management role
When asked about how the role of CRO has changed, Rahim responded that he currently focuses more on emerging sectors of the insurance industry such as IT risk. These areas became significantly more important after the recession of 2008, when he was mainly concerned with macroeconomic risk.
“I spend a lot of time these days thinking about IT risk and I think that if you ask any CRO they will tell you the same thing. It is such an important part if you think of technology, which is pervasive throughout our company and our personal lives.”
Rahim also spoke about the innovations in the industry, including his company’s product Manulife Vitality, which allows customers to receive potential discounts on the cost of their insurance for maintaining a healthy lifestyle.
“The whole aspect of insurance rates being flexible, tied to the individual’s health styles over time, is an innovation in the industry that would not have been possible without the use of analytics and big data and some other variable technologies that we have.”
Technological Disruption in the Insurance Industry
Rahim discussed the possibility of disruption in the financial industry with the rise of new technologies. He cited Netflix as an example of an innovator disrupting traditional business models.
“I think that if you look at various industries in the past, companies that existed 20 years ago don't exist today because of the impact of technology. A big example is Blockbuster. When Netflix was first born, Blockbuster was actually offered an opportunity to invest in Netflix. And Blockbuster at that point in time had revenues of 6 billion dollars or something like that. And Netflix was looking for 50 million.”
“Blockbuster looked at it and said ‘that’s a bad business model, who’s going to actually get DVDs in the mail? Nobody is going to do this.’ And a few years later, Blockbuster was out of business, just based on the success of Netflix. It’s just remarkable just how much technology has disrupted.”
Additionally, the event also centred on other topics such as private sector collaboration with the government, the growing importance of artificial intelligence, and the necessity of corporate responsibility with respect to personal information.
As a hub for risk management, events such as this gives MFRM students unparalleled exposure to some of today’s business leaders and their insights on the industry.
The Master of Financial Risk Management is a full time program designed to prepare ambitious young professionals for careers in risk management and finance.