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Paul Lucas: [00:00:12] Hello, everyone, and welcome to the latest edition of Insurance Business TV. I'm Paul Lucas, IB's Global Editor And today I'm delighted because we're spotlighting one of the New Zealand insurance industry's elite women. Yes, every year here at insurance business, we shine the spotlight on those women who are thriving in their insurance careers, breaking through that glass ceiling in what was once seen as a male dominated environment. And not only that, but this successful woman is also leading the change at one of New Zealand's top insurers, assisting with a digital transformation and tackling challenges such as climate change. In her role as managing director, Pacific and chief risk officer with more than 20 years experience under her belt. She is tower insurances Paula to break Paula. Welcome to ITV! Tell us a little bit about your career path to date, and how have you worked your way into the role that you hold now at tower insurance?

Paula ter Brake: [00:01:11] Oh, thanks, Paul, and thank you for talking to me today. Look, it certainly hasn't been a straight line, that's for sure. I've had a long career and I've been self-employed twice, so not a straight line through the insurance industry. I started off as a school leaver in the retail banking industry and was made a branch manager at quite a young age and didn't go to university, but also suffered from a redundancy when I was 20, so took the opportunity to travel abroad and found myself very fortunately right at the beginning of the Celtic, Tiger and Ireland, which presented an awful lot of opportunities for growth in my career. I had a stint in the insurance industry then at Canada life as a self-employed insurance adviser, but moved quite quickly on into what was a very booming industry, the mortgage industry where I stayed for the majority of my time. Of my 20 years in Ireland, so worked through retail banking again, mortgage intermediation businesses working in sales, working in operations, working and transformation customer retention. I really did have a great opportunity to stand right across a number of different roles in a number of different leading organisations. Probably a pivotal, pivotal point for me was getting involved in some mergers and acquisitions opportunities for GE quite early in my career.

Speaker2: [00:02:43] I had the great pleasure of being able to work through a JV that hadn't hadn't worked out so well. We managed to do a fantastic turnaround on that, and it gave me an opportunity to get into a global role with with GE, and that was a real turning point for me and my career. And then it took a change of path, went down the motherhood path for for a period of time before starting my own business and then had 10 years running my own business, which was an incredibly exciting and very challenging and sometimes scary existence as well. There's nothing like being responsible for other people's pay and financial wellbeing. But I learnt an awful lot through the experience ultimately sold. That business returned to New Zealand, bringing my family with me, where I focused on my governance career for a while and then found an opportunity to work on a strategy project for tower insurance. And at the time, they told me it was it was going to be challenging and it certainly was. And that project turned into a permanent role as general manager for their Pacific business, which ultimately led me to my role today as managing director for the Pacific and chief risk officer for the for the Tower Group.

Paul: [00:04:04] And super stuff, and it's amazing the amount of variety that you've had in your career, of course, nothing more important than motherhood, but as you said, you've spent time across sectors like banking, pensions, other financial services. Do you see similarities between those sectors and insurance?

Paula: [00:04:21] Oh, absolutely. I mean, at the end of the day, the core business fundamentals are absolutely the same, and I think particularly the time I had in the mortgage industry, because essentially what you're doing is underwriting risk and you have to get those fundamentals right. I think the you know, one of the key things is is making sure that you're picking up on those transferable skills and applying the knowledge that you've learned and those really challenging situations. And certainly, you know, there were many of those after the Irish market collapsed. And at that time I was I was running a business which was a consultancy and working with many regulated institutions who are facing the prospects of huge regulatory change. We tend to see those come about in cycles, and so I'm actually redeploying a lot of those skills and learnings that I had from that time and to my current role in New Zealand, where we're starting to see again another round of sweeping regulatory change. But I do think it comes back to core business fundamentals. You're you're focusing on the needs of your customers, you know what, what they need. And if you have that at your heart and the foundation of your strategy, I think that applies across multiple industries.

Paul: [00:05:39] Let's zoom in then on your current role, you are, of course, chief risk officer at Tower Insurance. Give us some insight into your day to day duties. What do they look like?

Paula: [00:05:49] Well, they're very wide and varied, particularly because of some of the unique nature of the geography that that tower operates. And the tower is a nine territory business. So we are in. Obviously, New Zealand is where we're headquartered, but we have eight countries across the small Pacific islands where we operate as well. But that is a vast geographical landscape. It's equal to 15 per cent of the Earth's surface, which makes it quite interesting. It's also the most perilous region in the world. And for that, for that reason, on any given day, I could be working with our chief financial officer and our chief underwriting officer working on business fundamentals like making sure that our our capital solvency is right. Our reinsurance programs are robust and that we're we're doing pricing fundamentals correctly as well. But on that same day, I could be working with our emergency management team, dealing with catastrophe events that impact the health and well-being of our team members and any one of the multiple locations where we operate. More recently, we've seen riots in the Solomon Islands. We've seen their very recent catastrophe in Tonga with the volcanic eruption and tsunami, and those are real live events where we've put our business continuity planning into play. On a normal day, though, when those things aren't happening, I have seven senior leaders who report to me who span the breadth of the organization. I do make it really a top priority to spend time with them each and every day, making sure I'm helping them to unlock any roadblocks that are preventing them from achieving their strategic objectives. And then most of the rest of my time is spent really on stakeholder management. So I manage the regulatory relationships that we have and the government relationships that we have across our eight Pacific islands and of course, our regulatory multiple regulatory relationships that we have here in New Zealand. So between that and governance. So both operational governance and corporate governance. And I look after the legal function and the company secretarial function at tower as well makes her a very diverse, busy but incredibly interesting day on average.

Paul: [00:08:07] I want to come back to you on on some of the talk around catastrophes and climate change and in a minute, because I'm sure you know, it plays a massive role. But if I can zoom in on one thing that perhaps you didn't focus on there, which was that tower, of course, launched the first digital insurance platform in the Pacific quite recently. Can you tell us a little bit about the impact that that has made?

Paula: [00:08:30] Yes. I mean, this is probably the biggest project that we have running at Tower right now, and Tower has undergone an enormous digital transformation over the last five years, and we are making cut. We're cutting through into areas which are completely transforming our business. The decision to digitize our Pacific Islands business was a very, very big decision. It hasn't been done before by any insurer in the Pacific. The countries that we operate in are developing. Markets, so the the baseline assumptions or the baseline technology that you would normally need in place before you embark on a massive digital platform upgrade like this, which also includes a full digital sales and service solution for customers, is is really unheard of. And, you know, we don't there are core things that there are no Pan Pacific payment solutions. You can't make online payments and many of the territories where we are, where we operate. So you can understand why it is. It's a a a project that many other insurers have have said that's too hard, just feels too hard and there's too technically challenged. We consider ourselves to be a really a bold organization. One of our values is to progress boldly. And so I think this is us really living our values. It is a key project for us because our strategy is to improve accessibility to insurance across the Pacific islands and to ultimately improve affordability for insurance.

Paula: [00:10:13] We know that or we estimate from from our own data that less than five per cent of homes and the territories that we operate in are protected against some of the major perils, like cyclones, for example. And that comes down to three things a lack of awareness around the benefits of insurance, a lack of accessibility to insurance, and a huge barrier around affordability for insurance. So our program is a long term program to resolve all three of those issues by bringing affordable insurance in a digitised manner to that vast geographical landscape and doing very simple things like enabling digital, digitally enabled WiFi enabled kiosks to be in community centers all across the Pacific and to partner wherever we can, possibly so whether it's on the forecourt of where people are buying a new car, whether it's in their local bank, whether it's in their local post office, whether it's in their local community hall, where we have a mobile advisor and a and a WiFi enabled data free kiosk for them to purchase or administer their insurance. It's just thinking practically about what customers need and how we can modify our approach to ensure that we're delivering it in a way that is right for them.

Paul: [00:11:37] It's amazing, isn't it? Even when you're talking there about digitization, you're still mentioning themes like cyclones and climate change, obviously playing a massive role in New Zealand. Do you think it's the biggest challenge facing risk managers today?

Paula: [00:11:53] Look, I actually do, and I think whilst we have the sort of the core risks that all insurers deal with globally, regardless of what they are, I think particularly in this region, climate change is the biggest challenge for us in the future, and it comes through in many different forms. You know, we have across the South Pacific, we have an increasing need for very robust reinsurance participation because of the increased frequency and severity of major weather events. We are seeing, on average two to three category five cyclones every cyclone season. That cyclone season is getting longer. Last year, we had a Category five event in April, which was nearly three months after what the traditional cyclone season is. So the patterns are there, they're absolutely emerging. And of course, what comes along then intermittently as those one in 1000 year events like the recent underwater volcanic eruption and subsequent tsunami and Tonga, it has only been 11 years since we had a past stated tsunami that was catastrophic in the Tonga trench, which impacted American Samoa, Tonga and some or and had quite significant loss of life. So these are very, very significant issues. We're also seeing that it being such a perilous and high risk location that there is a massive role of regulation in in conjunction with managing climate change. And we see that whilst some global insurers have retrenched out of the South Pacific and new local insurers have emerged. Regulation needs to keep up because those local insurers have got to be as robust in their capital management as a global insurer would be. And we've seen in the last 12 months that not even as a result of a large event, but that as a result of one large claim, local insurers.

Paula: [00:14:03] And in local Pacific Island, nations can go under as a result of one large claim, so there's a big role of regulation. And I think finally, one of the things that we haven't yet been able to grapple with to a satisfactory degree as an industry in markets like the South Pacific is that to tackle climate change, there needs to be a significant uplift in the quality of industrial and infrastructure insurance for things like renewable energy. And we haven't scratched the surface of that, possibly because they are developing markets so they are not as advanced, albeit there are some significant agendas being made by the Pacific island nation governments themselves, with support from international stakeholders like the UN and the World Bank. But it is a very complex and urgent matter, which of course has been a little bit put on the back foot because of the economic impact of COVID over the last two and a half years. So that has exacerbated the the issue. But we are taking, regardless of all of that, we are doing what we can as an insurer to play our role as a good corporate citizen by pushing forward with significant multi-million dollar investments and digitization, online payments to improve accessibility and what we will then come out with next as a suite of new non-traditional products like parametric micro insurance to specifically tackle head on that climate change in a way that we can control ourselves.

Paul: [00:15:46] So Paula, let's zoom in a little bit on that if we can. Tell us a little bit more about how Tower has actually been helping customers specifically to navigate those challenges surrounding climate change.

Paula: [00:15:58] Yeah, well, thank you. Yes, it's a really passionate topic for us at Tower at the moment because quite recently, we've just launched a very significant initiative in this regard and that is in relation to earthquake and flood modelling for New Zealand. So New Zealand has actually pretty good data. And part of our strategy is that we we leverage digital and data wherever we possibly can. So we've recently done a long standing project to bring a flood and earthquake risk rating to every single residential property in New Zealand. And what that enables home owners to understand is how their insurance premium is actually comprised, so it provides complete transparency around the risk that their own property represents. And of course, there has been a global trend towards more risk based pricing models, which you know at Tower, we believe is fundamentally the fairest way of approaching it. But in this regard, it also enables purchasers of properties to assess the risk associated with a property that they're considering buying. So it transparently shows them how high the the rate of risk is for flood and also for earthquake. And that's data that we've we have been able to work in partnership with, obviously the global providers like RMBS, who were our particular partner on this particular initiative. And what that's done is increased the transparency, but also the puts a little bit of control back in customers hands around how they live, where they live in the future, what we want to do more with that data. And we've we've already made the data available and have showcased it to every local council in New Zealand so that councils can understand and deploy that information and consideration of their own decisions around building codes. The Resource Management Act and New Zealand, which governs how we do land development, where we do it, how we do it. So really, what that leads to ultimately is sustainability in building and very careful consideration that we don't do developments where we shouldn't do and won't provide sustainability for the families who have to live there.

Paul: [00:18:19] And you know, I think we've talked about quite a variety of topics, but we haven't really focused yet on the fact that you've been named an elite woman for 2020, too. So let me ask you, do you think that women are starting to to break through the the glass ceiling, so to speak and insurance? And and have you ever encountered any issues related to your gender in terms of advancing in the industry?

Paula: [00:18:42] Look, I think it's a really exciting time to work in the insurance industry, and I think the future of insurance means that there's enormous opportunities, particularly in the area of science and technology, engineering and mathematics. Insurance won't look like the way that it did in the past. But of course, in that, you know, women are still wildly underrepresented in STEM, and that's something that we need to be really aware of at Tower. I mean, we're incredibly proud that we've got women represented at all levels across our organization and including we've got a fabulous female data scientist, including multiple roles. So I think the the the issue is really more a matter now for a conscious awareness of what organizations can do to be absolutely ensuring that women are given every opportunity to progress into any aspect of the organization that they they wish to, whether it's the the research field, the technology field. And I recently shared an amazing photo of our project team on the Pacific digital transformation. The whole squad was there on a on a quite a fundamental meeting that we were having. Every single one of them was women. Now there's an enormous team of men as well who are working on this project and they work excellently, collaboratively and bring every bit of skill and expertise that all of them have to the table to make it a success. So look, I think it's it's a it's a it's a key time for women to back themselves in this industry and to know that there is such a variety of unique and exciting roles that you can have in the insurance industry. And they should give it their all and organizations should back them to be successful.

Paul: [00:20:41] I think you may have just answered my final question for you, Paula, with the idea of backing yourself, but what advice would you give to women who are looking to emulate your success in the industry?

Paula: [00:20:53] Look, I think the key thing is to, you know, to seek feedback. That's something that that I've always done throughout my career, and I think it's a really important component of learning and and developing in your career. So seek feedback. Believe in yourself, back yourself, take some risks and don't wait for someone else to put an opportunity in front of you. You actually have to go out and hunt down those opportunities for yourself and put yourself in the frame for them.

Paul: [00:21:31] You've certainly had some fantastic achievements, Paula. Huge congratulations again on being named as one of insurance businesses, elite women. You have an inspiring story and we hope to bring you more inspiration soon. So join us next time here on insurance business TV.