Partners Life chief risk officer on what keeps her up at night

“We’ve seen this accelerate in the last 12, 24 months around cyber,” the chief risk officer told Insurance Business. “If you ask me what I think about just before I go to bed each night, anything that is on my mind, that type of cyber incident is a real worry to me.

“We as a business and lots of financial services firms are in exactly the same situation. We hold a lot of really personal private information on our customers.”

In Australia, Medibank chief executive David Koczkar found himself apologising to customers in 2022 after the health company fell victim to cybercrime.

“We keep a very close eye on those types of things,” added McCleland. “I think we’re in a pretty good position, but as excellent as IT security guys are and how quickly they keep on top of things, they’re permanently having to fight against the speed at which other external actors are working, and it’s just incredible.

“I have learned a huge amount about IT security since I’ve been in this role, and that type of thing will become increasingly problematic. We’ve got a general election coming up in New Zealand this year – that puts us in the line of sight of those types of overseas people who may wish to be disruptive for various reasons. Whether that will hit businesses and banks and insurers as well, there’s a real possibility of that.”

More than anything, McCleland is worried on behalf of customers.

She said: “It’s not necessarily the lack of being able to get information from us because things have been closed down; it’s more about the loss or publication of their information that I really worry about.”

Economic woes

Another major concern for McCleland is that of everyone’s – the economic difficulties both here and abroad. According to the Global Risks Report 2023, the cost-of-living crisis is the number one risk over the short term.

“The economic pressures that we’ve got, I don’t just mean domestically – albeit that we have got potential recessions coming in New Zealand, but that’s a global problem as well,” noted McCleland when she sat down with Insurance Business.

“That means that that impacts on us as a business because it impacts on our customers. If our customers are struggling to afford to do things, one of the first things they’ll look to do is trim their expenses. Unfortunately, insurance is often one of the things that seems nice to have.”

The Partners Life executive stressed the importance of financial advisers under such circumstances.

She declared: “I can understand that when you’ve got food and petrol and school stuff for your kids and all of that type of thing, it does look like a nice-to-have, but it’s only a nice-to-have when life is good. That’s why we, as a business, are always very, very keen that if people are going to make decisions like that, that they talk to a financial adviser first. That’s critical.

“We’re definitely hearing [from advisers] that things are tough. It’s tough from a new business perspective; it’s tough for the end customer there who’s making decisions, sometimes primarily on pricing, which might in the long run not be the best thing to do…

“We’re very cognizant of the issues that small independent advisers face, particularly when they’ve got licensing and all these other things that they’re trying to juggle from a regulatory perspective, so we’re really keen to make it as easy for them to do the regulatory stuff so that they can focus on their customers as much as possible.”

Positive outlook

Despite the risks, however, McCleland’s outlook remains ‘glass half full’.

“Yes, we’ve got some challenges, but once you get older like I’m starting to become, [you know] things come in cycles and it will be OK in the end,” she asserted. “We might have some tough times and things might be difficult, but we’ll come through it.

“[It’s actually a very exciting time for the business] because we are now part of a much bigger group… All the good stuff about being part of a much larger and very well established life insurance company, I think, is going to be incredible for us. Me and my team, we’ve got lots on our wish list and lots to do; we’re not going to be sitting around twiddling our thumbs. I’m really looking forward to this year; I think it’s going to be very, very productive.”

Do you also see cyber and economic pressures as the biggest risks this year? Share your thoughts in the comments below.