CFOs Must View Their Companies ‘Holistically’: Hamilton’s CFO Reiss
A successful chief financial officer needs to be collegial, cooperative, highly visible and a strategic thinker who has the ability to view corporate risks holistically, according to Jonathan Reiss, CFO of Bermuda-based Hamilton Insurance Group.
In addition to assessing underwriting portfolio and investment risks, Reiss said the job of the CFO should be a lot broader, examining the effects on the company of cyber attacks or changes in laws, regulations or taxes.
The CFO needs to examine any changes that could affect the company’s external environment and cause a rethink of its global footprint and in what jurisdictions it operates, he said in a recent interview, when he discussed his profession and career.
“There’s a lot more stress in the regulatory climate, and I think the CFO has to be on top of that,” even if the company has a chief compliance officer or a whole compliance department, he added.
“I personally view a CFO’s role as being very aligned with the chief risk officer role,” he said, noting that, as a result, he works very closely with Hamilton Group’s CRO Peter Skerlj on Hamilton’s capital management, including internal and external reinsurance arrangements.
“Reinsurance buying has a big impact on capital management, and a critical role of the CFO is capital management. As a result, that’s something I am very attuned with, as is Peter.”
Reiss has worked as a CFO since 2012, when he left a 19-year career at Ernst &Young (now called EY), where he ultimately became leader of EY’s Bermuda insurance and reinsurance practice.
He enjoyed his EY experience, particularly facilitating a group of Bermuda startups, which he said prepared him well for his current role. Not only did he work closely with many CFOs during his EY career, but he also was involved with three initial public offerings on the New York Stock Exchange and the London Stock Exchange.
“There were big companies that formed after 9/11 and again after Katrina, and I was a close adviser for many of those companies,” Reiss said.
As a result of these experiences, by 2012, Reiss said he “had a very clear vision of how I would go about setting up a finance function and creating best practices.” This is why he decided to join a startup reinsurance company—SAC Re—in 2012.
SAC Re was purchased in 2013 by a consortium led by Brian Duperreault, Hamilton Group’s chairman and CEO, and the founders of Two Sigma Investments. Renamed Hamilton Re, it is now part of Hamilton Insurance Group.
“I’ve really enjoyed bringing all of my experience to bear and helping to shape Hamilton; it’s been a real pleasure.”
- 1993-2012: EY Bermuda and New York City, leader of insurance and reinsurance practice in Bermuda (2006-2012); named partner in 2000.
- 2012-Present: CFO Hamilton Insurance Group (and predecessor company, SAC Re).
Hamilton Group has three financial platforms: in Bermuda (where Hamilton Re is located), at Lloyd’s and its Princeton, N.J.-based insurance business. Each platform has its own finance leader who reports into the platform’s chief executive officer, but they also have dotted-line reporting into Reiss.
“Our team—and the broader team too—are responsible for making sure that Hamilton achieves its mission. That to me is core,” he said.
“If I see areas where we need to improve that are outside what you might think of as a CFO’s domain, they’re still of concern to me,” he said. “I consider myself first and foremost as a member of a team that manages the whole business. I don’t consider myself stuck in a silo.”
At the group level, Hamilton has an executive team of eight members, including Duperreault.
Because the company is smaller and relatively new, he said it does not have a treasurer or a chief investment officer, and it significantly outsources its investment function. This is mostly handled by Two Sigma, the New York-based technology and asset management firm. “This arrangement works very well for us, and we’ve had good results so far.”
Reiss likes the fact that the Hamilton team is collegial and cooperative. “We really work closely together. I don’t feel like I have to solve problems by myself,” Reiss said, noting that he feels very supported, which provides a great deal of comfort.
“I have colleagues around me who are so good at what they do and understand the importance of the things a CFO needs to be a success. Having a cohesive team is a luxury that I have at Hamilton,” he said.
Reiss said one of his most important roles is to build relationships between Hamilton and its various key external stakeholders, such as shareholders, clients, intermediaries, rating agencies, regulators and bankers, “which are critical to our success.”
“If I’m doing a good job, then the trust between Hamilton and all those parties will be very, very strong,” he said.
Trust is earned by being very transparent and being proactive in managing relationships and understanding the information that people need to know about Hamilton, Reiss emphasized. “We as an organization could have needs from these other parties, and if the trust is high, as it should be, we’ll be able to accomplish more things.”
A successful CFO must be a good leader, and good leaders have “a lot of self-awareness and have good people skills,” he affirmed.
“I like to think I’m calm,” Reiss said. “It’s very important when things don’t go right that the leader remains calm.” In addition, he said, a good leader needs to be collaborative and a good delegator. These softer skills are even “more important than many of the other skills you could imagine a CFO needs.”
When asked about what he likes about being a CFO, Reiss said, first, the job always changes and no day is a “typical day,” which makes it interesting. He travels a lot between Bermuda and Princeton, London and New York. In fact, he would rather travel just a little less frequently.
Reiss also loves the fact that being a CFO is “a people job.”
“Deep down there is the accounting nerd in me, and I do like rolling up my sleeves and solving a problem with a spreadsheet, but that’s not where I spend most of my time,” he confirmed. “I spend most of my time talking to people—to my colleagues and with various external [stakeholders]. I’m on the phone a lot, in meetings a lot, and I help colleagues with their daily challenges,” he said. “I enjoy the diversity of that and the fact that this really is a people job.”
What accomplishment is Reiss most proud of during his career? In addition to working with the startups that he helped launch during his EY career, he said he is “proud of the [finance] team we’ve assembled at Hamilton.”
“I think one of my strengths is I’m pretty good at identifying the right people who are a good fit for the job,” he said. “I’m most proud of the finance people Hamilton has, many of whom I personally hired. They’re all doing extremely well.”
But he wouldn’t have gotten where he is—at Hamilton—without taking a few risks. “If you work hard, opportunities are going to come along, and you have to be brave and take a chance,” Reiss said.
He pointed to two such times in his own career where he grabbed opportunities that required “some bravery,” noting that “both have panned out really well.”
The first was back in 1996 when he was a manager at EY. “I took the opportunity to transfer from Bermuda to EY’s New York insurance practice—a move that really catapulted my career.”
Reiss said his stint in New York really broadened his horizons. This included experience with mergers and acquisitions, the nuances of the U.S. insurance regulatory framework, as well as U.S. insurance statutory accounting.
Very shortly after returning to Bermuda, Reiss became an EY partner, he reported.
The second career-defining move was when he decided to leave EY in 2012. “That was a brave decision really. I remember my wife was very concerned. I left a very secure, great job and a great career where I was an insurance industry leader.”
But thanks to that move (to PAC Re and later Hamilton), “I became part of the founding management team of Hamilton. I’ve never looked back, and I’m really enjoying the job. It was a fantastic decision.”
Indeed, Reiss said it has been a “real privilege to work directly for Brian Duperreault.” (Duperreault, a member of the Insurance Hall of Fame, has held executive positions at Marsh & McLennan Cos., ACE Limited and American Insurance Group.)
Reiss likes to quote Duperreault, who often says “‘don’t be afraid to make a mistake’ and ‘the worst decision is no decision.'”
“This is such a great leadership lesson from Brian, who in essence is saying, ‘You need to empower your people. You need to make sure they’re not afraid to make mistakes,'” Reiss noted.
“He is such an icon of the industry, it would be easy to make the mistake of wanting to check with him [about decisions you’re about to make],” Reiss commented.
“But he has empowered us to get on with our jobs—and that’s a lesson for me about how I treat people who report to me. It’s important to tell your people not to be afraid to make a mistake,” he said.
“You also don’t want people to be afraid to tell you they’ve made a mistake. As a leader, you’ve got to break down those barriers.”
But Reiss recalled that Duperreault also goes on to say: “If you’ve made a mistake, tell me how you’re going to fix it.”
“Once you’ve made a mistake, let people know and let them know how you plan to fix it. Be proactive. This is Brian Duperreault’s style of leadership. It’s very effective, and it’s a great lesson that he has passed on.”
Reiss not only has a great deal of enthusiasm about working at Hamilton, he also thinks the industry provides a great career for younger people today.
His career choice was almost a “fait accompli”—his father was in the insurance business and, of course, financial services is the business of Bermuda where he grew up.
After an internship with Texaco’s captive insurance company, he decided to become a certified public accountant, which he accomplished in 1993 after he started his job at Ernst & Young.
Moving from strength to strength at the accounting firm, he became a partner in 2000 and leader of the insurance practice in Bermuda in 2006.
One of the worst times he has faced during his career was related to the economic downturn, which affected the whole world and, of course, Bermuda.
“For me that was the time in my career that I didn’t enjoy. For my whole career I was working at EY in a booming environment, and then we had this downturn, which affected all the Big Four accounting firms in Bermuda.”
At EY we had to “let some very good, hardworking people go. While I am happy that that only happened once in my career, I’ll work very hard to make sure I’m not in that position again.”
In a post-financial-crisis world, Reiss admitted that younger people in Bermuda are having a harder time finding entry-level roles. But getting a professional qualification—such as becoming a CPA, a lawyer or an actuary—will give them an edge.
“When any young Bermudian asks me for career advice, I always recommend they get into the industry as fast as possible and try to secure a professional qualification. You want to be able to join a company that allows you to get work experience and at the same time gives you the time and credit for furthering your qualifications with a professional designation.”
Reiss emphasized the power and importance of networking to a young person’s career, which is something he wishes he had learned a little earlier. “I’m not talking about having an extra few hundred followers on LinkedIn. I’m talking about real interpersonal networking,” he said.
“It’s a big world, but the industry is not that big. You meet people over and over again. The power of networking is vital,” he continued.
“If I was giving advice to young professionals, I’d tell them don’t be afraid to reach out to more senior figures in the industry and get to know them. Try to make a positive impression and then follow up with them. It will really benefit you in the long run.”
A version of this article first appeared in Insurance Journal’s sister publication, Carrier Management, which recently published a group of articles on CFOs in the re/insurance industry, with links listed below.
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