The pre-conference workshop at the 17th Annual Health Insurance Summit will focus on Risk Culture, and will be held on the 30th of May 2018 from 2:00-5:00PM.
We are delighted to have Natasha Hall, Managing Director at Hall Advisory and Elizabeth Sheedy, Associate Professor, Macquarie University Applied Finance Centre co-present this years workshop. Natasha Hall will be assessing Risk Culture in the PHI Sector and Elizabeth Sheedy will be discussing the Macquarie University Risk Culture Scale.
With this event fast approaching, we spoke to Natasha and Elizabeth to gain their insights on risk culture.
Natasha, you are going to focus on Assessing Risk Culture in the PHI Sector. Without giving too much away about the upcoming workshop, are you able to share your thoughts generally on better practice approaches to risk culture assessments for the PHI sector?
A wide range of approaches to the assessment of risk culture are currently adopted by entities operating across the financial services sector. The approach selected needs to be fit for purpose for each individual entity, and may necessarily change over time as the entity changes in terms of operational complexity and moves along the continuum of risk management maturity.
Better practice risk culture frameworks incorporate the triangulation of data across a number of information sources to piece together a more complete view of the complex internal business environment and current risk culture. Interviews of stakeholders at all levels of the business by an operationally independent party can add a lot of value here in joining the dots and interpreting the results from risk culture surveys. Other market leading approaches to risk culture assessments include the use of research backed risk culture scales in the survey process, and the application of artificial intelligence to: the analysis of business data; the identification of key influencers or ‘culture carriers’ within the business’; and the monitoring of company emails for the ‘risk tone’ of business communications.
Elizabeth, you are going to focus on the Macquarie University Risk Culture Scale. Are you able to provide some general information on the process of application of the Macquarie University Risk Culture scale to the private health insurance sector?
The Macquarie University Risk Culture Scale (MURCS) is, to the best of my knowledge, the only survey instrument with good evidence of validity and reliability. It can be applied to any kind of financial services business and we have also used it in non-finance contexts. We went through a very rigorous process of development for the scale, in collaboration with Associate Professor Barbara Griffin who is an organisational psychologist. Our research has demonstrated that a combination of a good risk management framework and a favourable risk culture is like to lead to the best employee behaviour i.e. compliance with policy, speaking up, having accountability for risk, lack of gaming/overconfidence etc.
If you could each offer one piece of advice to a Health Insurer with regards to their risk management framework, what would it be?
Elizabeth: Have a good look at performance measurement and remuneration systems for your staff. Make sure they are consistent with your risk management objectives and not creating a focus on short-term outcomes.
Natasha: Make sure you’ve got the right people on the bus in the risk and compliance function and embedded throughout the business as risk champions, who can role model the right behaviours to encourage collaboration on risk and compliance solutions, respectful challenge in decision making processes, and maximisation of the risk and return profile of the business.
Are there any presentations from the 2018 Health Insurance Summit that you are particularly looking forward to?
Elizabeth is unfortunately not attending but as a consumer is very interested in the issue of out-of-pocket costs. This is a major problem with our health system.
Natasha is very interested to hear Peter Kohlhagen’s annual address and get further insight into APRA’s pending consultation on its proposed governance standard for PHIs.
The 17th National Health Insurance Summit will be held on the 31 May – 1 June 2018 at Rydges World Square. This years conference will provide discussion on legislative reform, regulatory changes, and the future direction of the Private Health Insurance (PHI) industry.