Country Credit Risk Guru
When Argentina’s economy sank into a severe depression in 1998 and stayed there until 2002, business leaders everywhere realized they needed a better way to understand global credit and country risk.
XL Insurance, now known as XL Catlin, started working on the challenge and is still at it. Simon Argent, the company’s senior vice president and head of credit risk management, heads a team that created a global credit and country risk aggregation framework.
The framework, created using a mixture of vendor models and proprietary platforms, gives insurance and reinsurance leaders in all of XL Catlin’s businesses a much better look at where they should consider growing their businesses. It also lets them know where they should be moving more conservatively.
“We realized that we needed to be as competent in this space as we were in dealing with natural catastrophes such as fires and earthquakes,” Argent said.
He describes the framework as a “living, breathing thing,” that stays vibrant due to transparent communication between XL Catlin’s various business leaders across the globe and those charged with understanding and managing the company’s enterprise risk.
“When it works, the sum is greater than its parts,” Argent said of the global team of XL Catlin employees that maintains and builds the framework.
“I think we have a very good cross-section of experience and expertise and it fits nicely into all of the aspects that we manage,” Argent said.
Fid Norton, XL Catlin’s deputy chief enterprise risk officer, said the creation of the country and credit risk management framework is an example of the kind of collaboration and shared vision that leaders of XL and Catlin envisioned when the two companies merged back in 2015.
“Fortunately, XL and Catlin had a lot in common, which is why we got together in the first place,” said Norton, who sees himself as occupying an advisory or mentoring role for those, including Argent, who are assigned responsibility for monitoring and reporting on corporate-wide credit and country risks.
“We’re proud of the way we brought teams and tools together to truly do a best of both combination,” Norton said.
“We realized that we needed to be as competent in this space as we were in dealing with natural catastrophes such as fires and earthquakes.” —Simon Argent, senior vice president and head of credit risk management, XL Catlin
Given substantial industry headwinds, i.e. declining rates for quarter on quarter now, the work Argent’s team is doing is credited with keeping XL Catlin profitable for 17 straight quarters. It’s given its various business leaders better insight into risk budgeting, portfolio optimization and whether they should get involved in new business.
For his part, Argent sounds thankful that he leads a diverse, talented team and that he gets to innovate while engaging global risks, the worries over North Korea’s missile capabilities being one of the more recent examples.
“Every year we have done something that I have looked back and been able to say, ‘Wow, that was really cool, we have done something really good there,’” Argent said. &