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Incoming Hiscox CEO Hussain: A straight-talking analyst who cuts to the chase

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Analysts and market participants praised the “straight-talking” manner and analytical skills of Hiscox’s CEO-in-waiting Aki Hussain, who is still a somewhat unknown quantity within the London underwriting community.

But a minority of sources speaking to this publication also suggested that while his promotion from the ranks of CFO can be seen as an easy or safe choice for the firm, the challenges facing the carrier called for a fresh approach and an external hire, rather than continuity.

Hussain is a familiar face to the investment analyst community and many praised his intelligence and analytical skills, saying he came across as “inherently very sensible”, “down to earth and composed”.

The executive is seen as a driven “straight talker” who “cuts to the chase”, cut along similar lines to exiting leader Bronek Masojada’s analytical cloth.

The executive was highly regarded in his former role at Prudential and as this publication reported, was one of two internal candidates known to be in the running to replace Masojada, the other being global retail CEO Ben Walter.

A KPMG-trained accountant, Hussain had spent seven years at the Pru, also as CFO, after various other finance roles in his 20-year career prior to joining the insurer. From the time he arrived at Hiscox in 2016, he was seen as a future potential CEO, and it is thought his background in large corporates swayed Hiscox’s decision in his favour as it looks to step up to a new phase of growth.

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The carrier has previously said that it is looking to reinvest profits from its big-ticket London market and reinsurance business into US retail growth, as this publication wrote in looking at the succession planning challenges facing the firm.

Some saw Hussain’s appointment over Walter as one that would more easily enable Hiscox to bridge the cultural gap between its retail and London/reinsurance market divisions, since the CFO has no underwriting affiliation to one side of the business.

However, several sources noted that in elevating a finance expert to the leadership role, it will be important for Hiscox to strengthen its underwriting bench, as it has grappled with a number of senior departures in recent years.

It is understood that relatively new group CUO Joanne Musselle is likely to play a key lieutenant role in providing this underwriting support and direction to Hussain, partly to reflect that Hiscox was keen to ensure there would be a sense of a leadership partnership at the top.

Meanwhile, Hussain was described as someone with the strategic vision to complete his finance skills, rather than a narrowly focussed CFO. “He has been spreading his wings and being more involved with other areas of the group from the get-go,” one source noted in what may have partly been a reference to his role as chairman of reinsurance and ILS.

One of the areas that Hussain has been involved in as CFO is a finance transformation project at Hiscox, and analysts were expecting to see more focus on “industrialisation” of the company’s operations from him in the new tenure.

In a note, RBC analyst Kamran Hossain focussed on this issue as he praised the choice of the “well-rounded” executive.

“Hussain in his role as CFO has recently delivered a multi-year finance transformation programme updating legacy systems, improving insights and reporting across the group which shows his undoubted strength in building the infrastructure that the business needs to succeed going forward,” he wrote.

Peel Hunt analyst Andreas van Embden wrote that the CFO was “instrumental in strengthening Hiscox’s solvency capital over the past year, which has enabled the group to withstand the impact of the pandemic and build a layer of excess capital.”

However, some sources said they would have preferred to see an external hire for the role, given recent challenges for Hiscox, which has “lost its halo” after struggles with outsized losses, turning around its retail underwriting performance, controlling expenses and talent attrition.

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Hiscox’s share price had risen 0.5% by mid-afternoon the day of the announcement, suggesting a neutral or wait-and-see reaction from investors, rather than a decided reaction one way or another.

While Hossain’s note argued that the CFO had “dealt well with some of the more challenging experiences that the company has been through in the last 18 months”, others questioned whether the hire would mean that a “more of the same” approach would prevail, when bigger changes might be welcomed.

There have been suggestions that some investors see the firm as somewhat complacent, after a pattern in past years for reassurances from leadership to be followed by fresh problems – moving from outsized cat losses in 2018 to Covid BI wordings issues to retail underwriting challenges.

Ultimately, that is something that will only be seen when Hussain gets into his tenure.

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