InsTech London’s Ali Smedley speaks to Kenneth Underhill, ICSR’s founding director, about the services the company provides and the biggest regulatory challenges insurers are currently facing.
Ali: Can you talk a bit about the genesis of ICSR and your development to date?
Kenneth: I founded ICSR as an alternative to traditional consulting firms using experienced insurance industry individuals including former CEOs, CROs, Heads of Compliance, CIOs and Project Managers. The company started in early 2017, from a single proposal and two employees. We have doubled our turnover every year for the past four years.
In 2021 we were awarded Service Provider of the Year from the Managing General Agents Association (MGAA). The award was judged by a panel of senior independent members of the insurance community and we were both surprised and very pleased to have been successful.
Ali: What insurance-focused services does ICSR provide?
Kenneth: We’re not just a compliance company. We offer a range of services mainly focused on the control environment. ICSR helps clients with risk and corporate governance matters as well as operational issues. As a result, we have been involved in a range of change management issues driven by legal and regulatory change such as Brexit, Operational Resilience, Insurance Distribution Directive or General Insurance Pricing Practices, through to mergers and acquisitions which are dominating the market now. ICSR works with insurers, brokers and MGAs of a range of sizes from small startups to large companies like AXA. Other clients of ours include Munich Re, Markel and Nexus.
Ali: How do clients use your services?
Kenneth: We can offer advisory services or resources, or a mixture of the two. In one recent engagement we created a team using a mixture to deliver a piece of work to a client which required experience in risk, run-off, project management and compliance. Another engagement involved helping a firm prepare for Brexit. We provided advice on the approach they should adopt, helped them apply to the Temporary Permissions Regime and are now assisting them with the application to the PRA and FCA to obtain UK authorisation, the latter part requiring advice on compliance, risk, actuarial and a number of other aspects.
Ali: What are the biggest regulatory challenges at the moment?
Kenneth: The biggest issue for insurance firms is internal resourcing and having the ability to deal with all the changing requirements. It is a particular issue for medium to small size companies but can also affect larger organisations. There are increasing regulatory changes that firms must respond to, but finding the resources can be challenging. For example, the FCA is undertaking a review of Appointed Representatives, which is likely to affect a lot of businesses. At the same time the PRA has announced a review of Solvency II for next year which will affect all insurers. In the meantime, there are a plethora of issues already challenging firms such as ESG and climate change, operational resilience, fraud and diversity and inclusion and new General Insurance Pricing Practices. We are able to support clients on all these issues.
Ali: What services does ICSR provide around climate change and the PRA requirements?
Kenneth: Firms are just starting to get to grips with the rapidly evolving regulatory landscape on climatechange and ESG. The PRA are currently undertaking the Climate Biennial Exploratory Scenario (CBES) to explore the financial risks posed by climate change for the largest UK insurers. We expect to see the outcomes of this work inform the next phase of requirements as they are rolled out to a wider range of companies. ICSR is already providing advisory services to a number of medium-sized insurers on their climate change and ESG risks. We have advised firms on how to set up their governance arrangements, how they should deal with the risk management aspect of climate change, and what disclosures are needed.
Ali: Is ICSR looking to expand into any other areas?
Kenneth: Our core strengths in compliance, risk and governance are leading us to move more into the internal audit, actuarial and operational areas, as well as continuing to build our risk offering.
Ali: Why did ICSR join InsTech London as a corporate member?
Kenneth: Early on I was a mentor at Startupbootcamp, which fueled my interest in start-ups. InsTech London allows me to align that interest with the insurance sector and add real value to member firms in the areas of risk, compliance and governance.
Ali: What companies is ICSR looking to connect with?
Kenneth: We want to connect with companies looking for services focused around compliance, risk, corporate governance and operations. There are many examples of well-established firms that have faced significant negative press due to failure in their control environments. We help firms mitigate those risks.
For more information on ICSR, go to icsr.co.uk