The Insurance CFO

David Junius: well, maybe I’ll start in reverse order. So today I’m at CFO at Cowbell Cyber. So an exciting cyber-focused, cyber-insurance-focused MGA, so that’s a managing general agency, writing cyber insurance for small medium enterprises. Sub $1 billion in revenue is our target base in the US, and we recently launched in the UK as well. So it’s been a great, I’ve been here 11 months, very excited, I have a great team, both on the management side as well as on the finance team. great technology stack and we’re excited about moving forward. We’re about three and a half years old.

Rohit Agarwal: Very cool. Can we go back to kind of your early innings in the professional career? How did it all start? What made you sort of join the very first company that you joined?

David Junius: well, maybe I’ll start. I was actually in Moscow, Russia in the mid 90s and was excited to be there. Kind of things were very different than they are today, but it was an exciting time. And I had switched jobs there from a consulting firm. I was writing an English language equity newsletter at the time. And, you know, I thought we were doing a good job, but we were kind of servicing London clients, equity market in London on Russian stocks. But I realized I knew very little. about finance at the end of the day, because I had started and I was focused on, I was a Russian studies major in graduate school and undergrad, which is why I ended up in Russia. And it was a great time, but really realizing that I was kind of out of my depth. So I left Russia, came back home. One of the things I did, and I applied to graduate school and I started an MBA program at University of Chicago, great training ground, and it was a great foundation to build in my finance career from there. From there, I joined also at the same time. I started at AIG, so American International Group, a large multinational insurer. Exciting times in their Chicago office. Started as a political risk underwriter, so I was underwriting a lot of investments overseas for US multinationals or banks that were going abroad and wanted to insure their businesses by being seized by foreign governments or government contracts that were voided by a national government. So it was an exciting first job. When I finished my MBA, came an opportunity to actually move to New York with AIG. And there I really jumped into finance and started in M&A for AIG and did that for a little bit shy of nine years. And then, you know, that was great time. Lots of going, lots of going on both on the mergers and acquisition front. Had a chance to do a lot of modeling. But then also at the end of that, when we, AIG had some turmoil in the 2000s, as people may recall. Seems like a long ago now, but some days feels, to me it feels like yesterday. So, but then also had a chance to go overseas, back overseas out of the US, and I had a chance to go to Japan and become a CFO for AIG’s Japan and Korea, and ultimately all of their Asian businesses. I was a little bit nervous about that because I hadn’t been in, really in the finance function before, but the gentleman who was interviewing me at the time, who knew me, I’m like, you know I’m not an accountant. And he’s like, Yes, but I know you and I know my accountants and I’m like, and he said, he told me, you know, more accounting than some of my accountants. So that gave me enough, enough confidence to pick up the family, move, move abroad and, and run a very large finance organization for a multi-billion dollar business within, within the firm. So that was great. And then came back to the U S after that, worked on capital management within treasury. I actually became treasurer in time at AIG. And my last role at AIG, I was CFO for the International General Insurance business, working with some great partners responsible for all the businesses for AIG outside the U S Canada and Bermuda. So I spent a lot of time on a plane, but it was a lot of fun and I really enjoyed my team there. Left AIG and became CFO for a Bermuda domiciled insurer reinsurer now called SiriusPoint at the time it was a third point rate and got them kind of merged two companies together and got them on a strong footing and they’re trading today. So that’s a little bit of background on me. So good experience both not only in sort of corporate functions, but also called inline jobs and responsible for P&Ls for divisions and then ultimately for two companies now.

Rohit Agarwal: As you think about your experience, how important were each of those roles from being an underwriter to being an M&A professional to being a CFO of First Asia and then of course coming back and running the broad international general insurance, similarly being a treasurer. So you have worn multiple hats. As you look back at that experience today. how important were each one of those.

David Junius: I think they were all additive to my experience. So I’ve taken something material out of each of those roles. I mean, so kind of going back, you know, it was interesting. I never thought of myself as a strong writer, you know, because I was more on the numbers side. But then I was in a situation where I was writing, you know, again, as I started, I was writing an English language newsletter, and I was like, hey, I’m actually a pretty decent writer. And then, you know, when I came back and did finance, you know, actually my first boss at AIG on the M&A side, you know, he was like, well, you’ve never been in investment banking. You don’t have that experience. And I’m like, yes, but in graduate school, I, you know, at university Chicago, I did a lot of modeling and I’m like, I, you know, I’m pretty confident I can do it. And then you got a chance to do it. So all of the, all of the experiences in turn have added up, I think to this, you know, the CFO role within the finance function is really, you can, people come at it from different ways. They may come at it from. the accounting side, they might come at it from the treasury side. They may come at it from the business side and each, I was able to blend each of those experiences and really bring those together. And I think that’s gives me a bit of a different perspective than other CFOs that might’ve only come up through one function. I’ll give you an example. I think, you know, it’s one point I was, you know, a more junior role, uh, within M and A, but I, you know, we had, we had a controller was like, well, we’ll just, you know, write off all this intangibles. And, you know, it was a big hit to the bottom line for AIG at the point in time. And I’m like, do you know how, like, do you know how hard it is to generate the profits that you’re now magically writing off with your pen? It was the right answer and the right thing to do. But I really felt for the people out in the field who had to go out and, you know, write an individual insurance policy, which then turns into the profit and feeds into the bottom line. For me, it was much more personal. It wasn’t just a number on a page because I knew all the work and effort that went in to to build that up and it goes through each of the roles. Treasury is a great place to learn a business because when you understand how the cash flows in an organization, you really understand what the levers are because you don’t get caught up in the intangible or just the accounting items, you really see the cash flows. To understand capital management in our industry and insurance, capital management is key. So delivering on those return on equities is super important, but also, You can’t have an insurance business where you’re running balance sheet without consuming capital. So having a sense of how much capital you’re consuming is super important to understanding the way the business works. So I really feel that each of those roles contributed to me being ultimately a CFO for public company and now a private.

Rohit Agarwal: Did you… Excuse me. Did you opt into these roles or these roles sort of showed up at your desk? How did that happen?

David Junius: I think the best scenario is when it’s a little bit of both. So I think I always wanted when I was in New York and we had been in New York for a while and I always had the intention of going back and working abroad. But I spoke Russian, my wife spoke French, I always had, oh, we’ll go to Paris, we’ll go to London, it’ll be great. And then the opportunity came up. hey, how about Tokyo? And I didn’t speak any Japanese and I was like, ah, okay, you know, because that was the opportunity that was available, very different environment than what I was expecting, but it ended up being a great fit. So sometimes you have to, you know, have your eyes open, open to possibilities, but you also have to trust that maybe some of the people that you work for know you and know how you could fit and roll. And also it’s always a combination of… the organization needs something and you want something and in the best case scenario, those two needs and wants overlap and you create an opportunity that maybe you haven’t, maybe it wasn’t your dream job, but it ended up being a dream job that you never thought about being available to you in advance. So I think that’s really kind of the best way. And each of the roles I think have come up over time. It’s just an interesting opportunity every time something else comes up new. to go, is that an opportunity for growth? Is that a chance to do something different and what can I learn from that?

Rohit Agarwal: Very cool, makes a ton of sense. Tell us when you move from one office of a multinational company to another office. I’m sure there are some cultural nuances that are common, but there are lots that are just completely different. How much of a difference did you see in AIG’s various offices, various functions that you got exposed to? And maybe what was one common thread that ran across? AIG globally.

David Junius: I think one of the things is knowing the, how the different businesses approach it. And that some of this is cultural and some of this is sort of business specific. So, you know, we got in the international CFO, the international general insurance CFO role, knowing that the Japanese love to hit their numbers. So they’re always going to kind of sandbag you because they, you know, a hundred percent, they’re very, they’re very much, you know, very much dedicated to hitting the numbers. So they’re going to give you a number that they can hit. So you always want to kind of push them. a little bit harder to say, okay, you know, how about stretching a little bit more? And can you do a little bit more? Where on the flip side, for me, at least, you know, our UK operations, they were always very enthusiastic and sort of willing to put up a big number. And then I would always have to temper and say, Hey, you know, okay guys, but, you know, what are you going to guarantee me that you’re going to hit? So I think those kinds of cultural nuances, um, to kind of know how people are fitting in, are they, you know, are they, are they just of their cultural or by nature, are they likely to sandbag you, or are they likely to be over-exuberant? And then to be able to kind of adjust in your own mind, okay, in order to kind of make numbers, what adjustments do I need? And also has to do with the businesses. So the businesses that AIG in the various markets are very different. Some are more consumer or small business focused. Some are very large enterprise, big deal, big businesses. So things can be a miss or not by a bigger amount. because if they miss one or two big deals, it can make a big difference in the numbers, where other businesses are more steady state and are more dependent on long-term trends versus short-term quarter to quarter different deal, driven by the dealer driven by an individual transaction.

AIG to SiriusPoint to Cowbell#

Rohit Agarwal: Makes sense. If I look at your trajectory, you started out kind of post-UR MBA with AIG, a really large multinational company, then went to SiriusPoint, right? Relatively smaller in size, but still a public company, kind of a conglomeration of two different businesses. And now kind of, you know, I would say maybe growth stage startup, right? Is perhaps the right way to define, but certainly smaller than SiriusPoint. So trying to understand, usually people try to go the other way out, right? They start with smaller companies and then tend to go to larger businesses. But then from your perspective, you seem to be going from more like scale the businesses to kind of really use that experience to pull the early stage or growing stage businesses to that kind of scale. Tell us a little bit more about that mindset in terms of, you know, how are you choosing? kind of your career path in some ways when you are moving different companies, as well as what are you bringing from your past experience to each of these new roles that you have taken.

David Junius: So it’s actually, it was a good observation by the, or former CEO at SiriusPoint, Siddhartha Sankaran, who was really good at sort of observing people and giving good feedback because I actually, you know, I started, uh, the AIG on, under the Hank Greenberg year years where it was really, you know, there was a lot of focus on growth and double digit growth at that, um, which was difficult, you know, the law of large numbers, it gets, it gets harder and harder as you get, it gets to be a larger and larger company. And so it was, Sid and I were talking about the time and he was, and he can’t, you know, Sid joined AIG after, uh, after the Hank day. So he didn’t have a really good feel for the culture during the Hank days. And he, you know, he kind of reflected on me. He’s like, you know, to me, and he’s like, you know, all the, you know, you, you old time AIG-ers he’s like, he’s, he, he could run and reflect to me. He’s like, you guys are all, we’re all growth people. And at the end of the day, you know, so insurance can be a little bit tough at times to grow, particularly after they have discipline. when the market’s tough, but it’s like the old culture of AIG was, you know, we liked growth. And so he, he was really interesting as we were kind of, you know, we were kind of reflecting on me taking this job when I was talking to him about it. And he’s like, no, this makes perfect sense because he’s like the AIG fights, they like growth, right? Yeah. It’s not a lot of fun to kind of just maintain a franchise and not have growth and kind of your, you, maybe you’re trimming a little bit around the edges to try to do efficiency, but it’s, it’s a lot more fun to be in a growing environment. And being in cyber, which is a great market in terms of excitement, you know, we get free advertising every day with all the ransomware attacks that happen around the world in terms of pushing our product that make businesses aware of that, that they, that they need our product. And then, so it’s, it’s an exciting growth market. And I think that’s what ultimately brought me to cowbell. And it’s the opportunity also to build something, you know, not quite from scratch, cause we, when I joined, we were about three years old, but. in on the ground floor, definitely, and sort of build a company and sort of do things the way I, the way I’ve wanted to do in terms of both the financial infrastructure, the team, and then also the development of the company. So it’s really an opportunity to put my stamp on things from a finance perspective and then with the broader business as well.

What makes an insurance CFO different#

Rohit Agarwal: Very cool. Tell us, you’ve been around the insurance industry almost throughout your professional journey. What makes an insurance company CFO different than any other industry CFO?

David Junius: So I think it’s two things. I would say one, I’ll broaden it out a little bit and say financial services. And so financial services, it’s a little bit of one balance sheet is important. So bank and I’ll include banks and others. So that’s super important. You know, for those of us who live through the financial crisis, the importance of understanding balance sheet and that interplay is super important that you’re taking risk. And a lot of times it’s magnified and that’s really important. And then I think also specific to insurance, which is even the bankers look at insurance and goes, you guys are a little bit crazy from a regulatory perspective, because at least in the US, the regulation is state by state and the banks are fairly happy to get regulation on the national level. But we’re trying to manage, and it’s kind of hits, whether it’s licensing and whether you have to run your licensing, but also pricing is done in the US on a state by state level. A little bit easier in some other countries where you have national regulation instead of state regulation, but obviously like our home state, I’m based in New York, but our company is based in California. California obviously a huge market for us. And so, you know, with over 50 million people. So it’s a, it’s a huge market in and of itself and larger than a lot of countries. And so that’s important. It makes sense for the U S I always thought the model of being able to have different regulatory regimes and we’re not concentrated that everybody’s doing the same thing, uh, cause if you get, if you get it right, awesome. But if you get it wrong, you don’t want to have, have the same problems everywhere. So that, that federated model in the U S makes a lot of sense. But then it presents a lot of challenges as well, because you have to manage it on a state-by-state licensing. Maybe your products have to be a little bit different state-by-state. Your pricing may have to be a little bit different state-by-state. And so that presents unique challenges and opportunities for us within the insurance space.

Rohit Agarwal: Got it, makes sense. Do you wanna introduce your company in 30 seconds to all of our listeners?

David Junius: so Cowbell Cyber, we focus on small medium enterprises, selling them cyber insurance. And we want to do a great customer experience, so a quick sale. For SME businesses, you don’t have a lot of time to spend weeks on an application, so our sale process has to be quick. But we’re also providing risk mitigation services. So the best outcome for someone is to not have a cyber attack. And so we work with our clients to mitigate and hopefully avoid cyber attacks. But we also provide a great claims experience on the backend, which is unfortunately, if that day comes and you do have a cyber attack, what do you do? We have a great claims team that’s prepared to jump in and help people through. And a lot of those people are CFOs of the small businesses, help them on some really dark days if they show up and their computer systems have been hacked or they have a ransomware demand. And we have an experienced team that helped them walk through that process and really get through some targets. really can get through some tough times and get them back up and running as quickly as possible. And that’s what we’re here to do is, you know, hopefully you don’t, you don’t have to use the insurance. It’s good outcome for us. It’s all good outcome for our clients, but you buy the insurance for that, for that dark day. And when, and when that dark day, uh, if it comes, you know, having someone there to support you, walk you through the process and get you back up and running as, as quickly as possible is very important.

Rohit Agarwal: Typically, the preconceived notion around the bad guys is they follow the money. And as you focus more on the SMEs, I would argue they have less money than the bigger guys. And so maybe can you debunk that kind of hypothesis as to why even the SMEs should go and get cyber insurance?

David Junius: So for cyber, it’s a lot of, instead of, typically they’re not specifically targeted. So they’re not looking at mom and pop, shop on the corner going, I’m gonna go out and spend all this time and effort like hacking their systems individually. They’re looking for, we like to call it the slow gazelle. So it’s the company that doesn’t upgrade their systems, hasn’t put in a multifactor authentication, hasn’t taken other security systems, security steps to protect their systems. We kind of think about it and, you know, put it in a property, a homeowner’s context, they’re going to make it real for people. If, if, uh, if a bad actor is walking down the street, right. They’re looking, you know, you walk down the street. Okay. Who’s got the alarm system up versus who’s left their windows open, mate, who doesn’t lock their door when they, when they, when they leave for the leave to go out, right. Who leaves their keys in the car, which amazingly is still a problem in the U S with, uh, with the rational car thefts the last few years. Um, so they’re looking for, you know, at the end of the day, you know, I don’t know a lot of criminals, but I’ve looked at a lot of criminal activity through the years, right? And, you know, you don’t go and you don’t usually, you know, it’s, it’s not like the movies where people are going after, you know, this is not mission as possible where they’re going after the hardest target that, you know, to get the highest, right? Right. They’re going to go after the easiest path forward, uh, the open door, the, the unmitigated, uh, systems vulnerability, and then they’re going to do that. So if we can help our, if we can highlight to our customers. the need to do software upgrades, software patches, encourage them to do multi-factor authentication. One of the things that we offer in partnership is also training for employees. So a monthly video, short little one minute videos that remind employees about phishing attacks, about wire transfer, fraud attempts and things like this, and get people aware, then we help them avoid. losses from cyber. And I think that’s, it’s a lot, uh, the, the threat actors are going to go to the easiest path for particular in the SME space.

Defining the modern CFO#

Rohit Agarwal: Got it. Makes sense. Why don’t we talk a little about kind of the evolution of the CFO and maybe as you have been a CFO for, you know, a bunch of years now, as well as must have seen other CFOs operating, how do you see that role evolving over the last 20, 25 years? And how do you maybe define the modern CFO today?

David Junius: Well, since I have talked to recruiters through the years, I mean, if you’re good, you’ll always get calls. And sometimes you’re not interested, but it’s always good to get some feedback on the market. So the recruiters I would talk, I think, and particularly in the last maybe five or 10 years, they’ve talked about their strategic CFO. We want a strategic CFO. And it’s in, you kind of, if you try to decode that a little bit and get past the consultant speak, what does that mean? They don’t want someone to just kind of process numbers and show up and say, here are the numbers. They want a strategic partner who can bring insights as to how the business is performing and get that feedback back to the business leaders. The way I’ve talked about it to my teams, and this is not just for Cowbell, but also consistently, is what is the goal of a modern finance organization and is it’s really to be a value added business partner. So you want to be, the finance people, it doesn’t be, okay, oh, the finance guys, they’re better than… They’re beating me up on invoice. They’re beating me up on expenses. Right. You want to be as the goal of, uh, of my finance organizations is you want to be the person that the business people are calling going, Hey, like help me understand the numbers, what are you seeing? Are there any insights that you can bring into our performance? Is there something that we can do doing better? And I think that if you can kind of turn the tables where finance isn’t chasing the organization, but the organization is reaching out to finance for strategic insights. I think that’s the hill that we want to climb as a finance organization. I think that is the definition to me of a modern CFO is someone who can lead that organization. Obviously at the top of the house, so partnership with the CEO, and it’s not somebody that the CEO is coming to and talking to on either monthly or quarterly finances, but someone that they’re leaning on to go, okay, what are you seeing in the business? I’m seeing this, which is a different, CEO has, they have a different job. They interact with different partners. But as a CFO, who’s maybe a little bit more internally focused within the organization, but also has a pulse on, hey, this is how investors look at things. How do investors view us? It’s a super important feedback for CFOs sitting at the top of the house. You get a different view. So in my role, talking to those investors and getting that feedback, hey, we think we’re doing this and we think we’re providing value in this way. But the investors are looking at it slightly differently. They think we’re delivering value along these lines. How do we close that gap? Do we have to change the messaging and educate our investors? Or are the investors onto something that we’ve missed and they’re looking at it in a different way, a little bit more detached from the emotion of running a business every day and are giving us honest feedback that we have to incorporate. And maybe we should be doing something different. And I think that’s one of the key elements of. being a good CFO is interacting with a different set of strategic partners, stakeholders, and giving the CEO feedback in a different way than what he’s hearing from customers, distribution partners, and also employees.

Rohit Agarwal: I love the concept of being a different voice to the CEO. Makes a ton of sense. Tell us how much time maybe do you spend around the whole balance sheet management and the regulatory aspects within the insurance industry on a day-to-day basis?

David Junius: Well, as an MGA, there’s less of it. So this is, I think as in when I was running an insurance company, it was more time because the ultimately, I think, let me start with the regulators. The regulator relationships are super important for every insurance company. MGA is a little bit less so because the risk ultimately resides with our front-end carriers or in our carrier partners who are out there and the risk sits on there. The regulators are keenly, I don’t wanna overly simplify it, but what are they there to do? They’re ultimately there to make sure you don’t blow up. And they’re also, you know, and as everyone wants to do, they don’t want to look bad either, because if you blow up, then they look bad that they weren’t doing their job. And ultimately their job is ultimately to protect the policyholders that the paper or the electronic file that you’re issuing to them is worth something at the end of the day and that you’re there to deliver on the promises that you’re out there to put in and I’ve had lots of regulatory conversations through the years. with both in the U S uh, and with, uh, and regulators overseas. And that’s, you gotta understand their points of view. They’re not there as, you know, I don’t think the regulators are there just to give you a hard time, right? They have a job to do. They have, they’re there for policyholder protection. They’re there for the stability of the financial system. And you know, and so they have bottom lines that you have to meet. Totally fair. Love our, we have a, we have an insurance carrier in Nebraska. Love, you know, I love that, love that relationship in Nebraska. I think they’re, they’re a great regulator. And it’s we’ve had a conversation with them and it’s all about, you know, it’s all about transparency You know, they want to know what you are up to so there are no surprises and we want to you know We want to let them know the same way we want to let them know what we’re up to So when we have an ask whether it be regulatory or in approval that they know what’s going on and they understand how it fits In with the business and I think that’s a that’s a key point

Rohit Agarwal: Makes sense. In the current business environment, interest rates environment, is it, has it become challenging for you to manage the balance sheet side of things as well as then kind of the return on that capital? Any comment on that side?

David Junius: it’s simpler for us. So because we’re smaller, our balance sheet is less complex. So we have a very high quality, short duration investment portfolio. Because if you think about insurance companies, we’re generating liabilities through the sale of insurance policies, and we’re managing the assets. We’re taking that cash that comes in the door, and we’re turning those investments to support the policyholder position. Since we’re small and we have a small balance sheet, My life’s been pretty easy. Watching rates go up, that’s been good. I’ve kept the investment portfolio short and sort of we’ve kind of ridden the wave up. I don’t have a lot of long-term liabilities to worry about. So that’s been easy from my perspective. We at Cowbell, because we’re an SME business, our duration of our liabilities is shorter than most companies actually, most insurance companies face. So that’s been really great. Unfortunately. If you have a lot of long-term liabilities and you can get mismatched on the investment portfolio vis-a-vis the liabilities, that’s more challenging, but we don’t have those issues. So it’s good from my perspective. I’ve been able to keep our cash deployed. I think the big thing for us is calling the turn is when is the Fed going to stop raising rates? When is the inverted yield curve kind of going to go, quote unquote, go back to normal where you’ll get paid for holding bonds for a longer duration versus short-term? But in the moment… you know, there’s no, there’s no advantage for me to going longer term. So it keeps my life pretty simple right now.

Technology and data in finance#

Rohit Agarwal: I’m going to jump back to the modern CFO. One of the things that we have heard constantly is technology impacting the role of the CFO and the broader finance function, making it much more productive, much more effective. How do you think about technology in the finance function broadly and anything specific that you have done in your organizations to really unlock the productivity of the organization?

David Junius: So I’ll just start, I think this is one of the greatest challenges, you know, for CFOs over the last 20 years. Everyone is in the technology business. It doesn’t matter what your business is. Now we are particular in the technology business because we have a proprietary built platform and we have a whole team of engineers building that. But from a CFO perspective, everybody’s in the data business and hence everybody’s in the technology business. The challenge is really around one speed. So again, to your earlier question about being small, it’s great being a small company because you can move at speed and the system complexity is just easier. So fewer legacy systems and we were able to move quick. Although we have some challenges and we’re making some changes to the organization as well, but I contrast to AIG, just to get a system diagram just for Japan and looking at some of the… It was interesting to bring the cultural element to it. In Japan, our oldest system at the time when I was there, which was not that long ago, was developed in 1969. And then I would, yes, Cobalt, we our biggest problem was having Cobalt programmers that were in their seventies and wanted to retire, but we needed them. So what do you do, right? And it was a long to get that system, mainframe systems to go. And then I would go visit my team in China and they would be like, Oh, our systems are so old, they’re like from 2006. And you’re like, Hey guys, you know, it’s, it’s all relative, right? So, uh, but it, you know, the technology piece is, is a real challenge. And so, you know, you know, today’s new, new technology is tomorrow’s legacy technology. So how do you stay on top of it? Obviously things getting easier, things in the cloud. Um, you know, I think that the movement away from on the sit on the, on the financial side. away from proprietary built financial systems. So you’re getting upgrades. It’s a lot of the financial systems, right? You’re getting upgrades across the board. It’s a web developed and you don’t have to maintain that. And that makes life a lot easier. The real challenge though is then getting systems to speak to each other, even at Cowbell. I don’t have a giant systems diagram, but we do have a data warehouse and getting things plugged in from the front end to the data warehouse, back to the financial systems, and then getting the various financial systems. to, I wouldn’t say speak to each other, but getting them to reconcile and all be using the same data. I think we’ve done an excellent job here and I’m much happier here than looking at some of the other old legacy platforms that I’ve had in the past. But it’s a real challenge because as we grow, our systems will get more complex and we’ll face some of the complexity issues that I’ve had at other firms over time. But that’s the real challenge today is how to use data. and hence the technology choices and then the speed because I think, you know, everything used to be, everything was sort of quarterly. Then we were trying to move to monthly, you know, at, at cowbell, I come, you know, contrast and cowbell, everything starts at monthly. Um, and we’re just, you know, we’re trying to shorten that cycle. Even that, you know, our closed process takes a couple of weeks today. I’d like to get that, you know, I’d like to get that shorter on a monthly basis. And so I can turn things around. Uh, and again, more of. less time we spend in close is more time that we can be a value added business partner.

Rohit Agarwal: Makes sense. How do you think about people in this technological deployment in finance functions? Do you choose for people who are more tech savvy? Do you choose the best brains? Maybe not. As tech savvy, what’s the balance? What do you look for when you’re bringing in people and building the right kind of team?

David Junius: I really want, I mean, at the end of the day, I think, I think, and it’s whether it’s tech or not, you want people that can grow and really you don’t want people to go, well, I’ve done it this way. And whether this way is, you know, I’ve done it for a year this way, or I’ve done it for 20 years this way, right? Because I’ve seen both. And you want people to be able to grow and adapt who are interested in learning. And you know, I’m always challenging my team. And if they listen to this, maybe they would understand this and a little more, because I’m always pushing them. What can we do better? What part of your day is not value added? The business doesn’t appreciate it. Maybe I appreciate it, because we’ve got to get out financial statements. The business, maybe at the end of the day, doesn’t really appreciate it. OK, we’ve got to get statutory financial statements out. The business is like, OK, fine, that’s a job for finance. OK, fine, but I appreciate that. But at the end of the day, like, All right, I’m doing, I’m doing bank recs. My is, you know, is that value add? It’s, it’s super important, but it’s not value add. And so how do we automate those kinds of things? And then we look, you know, what, and I, I’m always challenging the team, what takes the most amount of time, which is the least value add. And let’s look at a different way of doing business. And so my best team in terms of, again, to your question about looking to hire people, I’m looking at people that go just because I did it that way yesterday. doesn’t mean that’s the way I want to do it tomorrow. Now there’s a balance. You can’t change everything all at once, right? So you’ve got to, yeah, actually sometimes you have to say, okay, I get it, but not the most, you know, we’re going to prioritize and we’re going to work our way through the prioritization stack. But I really want people that can challenge the status quo and are interested in, yeah, moving on efficiency and buy into the view of being that value-added partner, which means finding time in your day to do that value-added work.

The first 100 days#

Rohit Agarwal: Love the learning and adaptive mindset. Let’s switch gears a little bit. We’ll talk about hypothetical. Let’s assume I’m joining a company as a CFO and this is my day one. What would be your advice on my first 100 days plan at this company to really set up good foundation for long term career growth?

David Junius: Well, I think coming into any new role in the finance function, you kind of have two things. You have one, which is what are the levers you have to move the business? And so maybe you have to take part of that a hundred days to really understand that. You might’ve thought it was, okay, I had these three levers and you may come to learn that there’s another six that don’t get talked about, but are really the six movers that are levers they have to move. And you really have to understand those and what is your sensitivity there. both in terms of day to day, what kind of movement, but also in stress. And so are your levers in stress different than your levers in day to day? And how do you balance that? How do you think about that? Cause that’s super important because insurance by design is here to deal with things in stress. Cause that’s the business model that we’re in, on the policy holder, the only time they access the product is when they have something in stress most of the time, but also thinking to the business, right? What is gonna stress your business and are those levers different? And then the second big thing is the people. And we were just talking about it, but, um, do you have the right people in the right roles and are that, you know, whatever the agenda is that you have, you know, is you come in and go, you know, what’s the business priority? You obviously, hopefully you don’t take a job without having some discussion with the, whoever your business partner is, whether it’s CEO or someone else. But you have discussion over what the business priorities are. And is there, are there things, what is getting in the way of helping on the, on the, is it, is it, you know, you come in. Hey, everything’s hunky-dorty. You just have to kind of maintain and grow. And there’s a little tweaking around the edges. I have yet to have that job. So I’m interested if any of your listeners actually have the job, great for them. I’ve talked to some people who have, tell you, everything’s working fine. Usually what happens is it’s not all fine. So you come in and what the weather is it, is it legacy technology? Do you have to make some changes there? Do you have to run financial transformation or? you know, do you have to change the people over? Do you have to change the processes? Whether that, you know, maybe it’s not technology, maybe it’s a process, maybe it’s organizational design. The teams aren’t working well together. Maybe it’s personalities. So I think like, particularly within those first 100 days, it’s very important to make assessments. And if you need to, if you, and you have to come out of those 100 days with two things. One, do you need to make any people changes? And you should move on those and whether that means reorganization. or moving people around because some people sometimes people are just in the wrong they’re good people but in the wrong roles and So you have to do a little reshuffle or sometimes you got to swap people in and out because you don’t have the right skill Sets for where you’re going and then it’s also I think for me coming in I’ve always been trying to be very clear about setting the agenda. Okay, you know come into finance function. We’ve got some challenges Every finance organization gonna face some challenges How are you then designing? What are the priorities on those lists because typically? You’re not going to be able to snap your fingers and fix everything in 100 days. So what’s your priorities? Does your team understand your priority list? Have you been clear? What’s, you know, AIG, you know, we worked on finance transformation, I think for a decade, you know, so that was, you know, that was a much longer timeframe, um, and, you know, it was, you know, when you’re, I think I was, I was responsible for 56 countries, so, and a lot of them had their own underlying systems, things are going to take time. Now. It’s a big organization, things move slower, but it was also more complex. Went to SiriusPoint, kind of had to do the same kind of legacy finance transformation, but we got it done in about, you know, it got done in about two and a half years, so that’s good. Small organization, able to move quickly. But I think coming in with a plan to say, okay, for the next six months, we’re going to work on this, we’re going to finish this off, then we’re going to move on to the next thing, then we’re going to move on to the next thing. Coming into SiriusPoint, it was new. They were already in the midst of. putting in a new ledger because they had outgrown what they had. So that was well underway and nearly done. So that was nice. I didn’t have to do too much there. But then we moved on. So then we moved on. OK, FPNA platform, not working great. We’ve outgrown it. Let’s go through the process. What are we going to select? And hopefully, cross my fingers, and the team working hard, we’ll be done with that process in the next, I’m going to call it, four to six weeks. And super excited about that. Other thing I came in was we had, we didn’t have a, our card platform was outdated and there’s a lot of interesting, you know, card and expense platforms. Integrate those. So I switched the cards over, switched the travel platform, you know, these kinds of things, which are, you know, got to get some right of some of the things are internal to finance. Like the card experience, you know, impacts every single one of our employees. And that’s, so you kind of got a balance, right? You got to, you got to show, you got to show the rest of the organization that you’re making some progress on some things that are visible. as well as working on some of the fundamental infrastructure. But that’s how I would kind of think about the first 100 days is prioritization. What’s there? What are your levers? Um, and then also on the people side.

Rohit Agarwal: You mentioned the car program that you established. How important is it for you to, rather, how important is it in your view to have quick wins into a new role, versus sort of taking your time and kind of growing slowly into the role and kind of, you know, knowing everyone around and so on?

David Junius: I think it kind of speaks to the complexity of the organization and kind of, you know, are there things that are on fire or not? So again, if you come into a more stable environment, quick wins may not be so important. And, you know, I think one of my favorite phrases is, you know, movement is not necessarily progress. So creating, you know, creating quick wins just for the sake that you show you’re moving, if you’re not really, if you’re just creating disruption, you know, I wouldn’t be a big fan of that. But the extent that you can make things better. So one of the things I did for putting the new card in, and I think there’s a lot of new, there are new technologies out there that kind of collapse the card to the expense reporting into the ledger and kind of takes out that middle step and you can go card and expense point platform are integrated, which is nice. But just to get visibility. So I didn’t feel like we had good visibility. We had grown really fast. And when you’re in a growth company, Again, you don’t have 50 page manuals on everything. So I’m definitely not being critical of where the company was, but we needed to kind of, we needed to progress the organization. We needed better visibility as to where we were spending our money, both on, you know, T and E, but also on with vendors as well. And this was a way to introduce a platform where I could sit at my desk, get a hundred percent, you know, a hundred percent visibility on every dollar that was going out the side of the organization on every single day so I can come in and. You know, look and pull up our platform and I can see everything from the, you know, the $8 Uber ride, you know, to the a hundred thousand dollar, you know, professional service fee payment that goes out the door and, you know, depending on how, how much time I have, I may peruse some of that just to kind of, just to get a feel, you know, I want to, I want to get a feel for the pulse of the organization. So I think that’s important. Um, again, look, being at a smaller organization, that’s a lot easier. That would never, you can never do that at AIG. One, the numbers were all bigger. but the systems weren’t integrated. So trying to get a feel for, you know, it would take us months at times to figure out like, where did all the money go? Like, and get our arms like, well, who’s doing, who’s responsible for that expense? Where now, you know, I’ve kind of worked through here and kind of put names against it. And, you know, and so, you know, it just makes it a lot easier because we have ownership, clear ownership of everything. We were able to do that in a very short period of time. We did the same at AIG, it just took, you know, it took years. And so again, the size and the scale of the companies are very different.

Career reflections#

Rohit Agarwal: Makes sense. If you were to change one thing in your career, what would that be?

David Junius: I think I probably would have maybe paid more attention to some of the, or going out and learn more about tech early in my career. Because I think I’ve probably done a good job of maybe, maybe I haven’t done a good job, but we’ll see over time, paying attention. So tech is usually important, but I think understanding some of the underlying technology and actually how it works. I don’t know, maybe if I would have learned it 20 years ago, it wouldn’t do me a lot good today anyway, because it has evolved so much. But I think… understanding on some of those underlying moving pieces actually interact because some of the interfaces in terms of the way the systems work, I think some of the challenges that I think companies face is it’s typically when there are handoffs, particularly between systems and what can fail. And if I think I would have had a better understanding of that, I look, I have a son who’s a senior in high school, whatever he wants to do, but it’s like he’ll have a fundamentally a different understanding of technology than I did at a similar, not only at a similar age, but starting off. And I think that’ll, that’ll advantage him as he goes forward. Because again, you know, tech is part of every single business today. And so having a good foundation there, it was good. Some of it’s generational. I mean, I think I’ve done a decent job of trying to pay attention over time, but you know, clearly I wasn’t doing coding when I started off and missed an opportunity there, I think to really understand how that works.

Rohit Agarwal: Makes sense. How do you define a successful career, David?

David Junius: So I always find this interesting because I think a lot of people are, and probably majority of people in the finance, think of successful careers being CFO. And however it’s defined, division, unit, company, public company, private company, but that’s sort of the be all and end all of every career path within finance. And I think like, you know, I would challenge people to that isn’t necessarily the answer it’s worked out for me. I love it. I love being a, I love being a business partner. I love, um, I love having an organization and kind of guiding them, but also giving them a chance to, you know, do their work without me meddling day to day. You know, sometimes they’ll deep dive and get in the weeds and maybe, maybe the team doesn’t appreciate it so much, but I want to, again, keep my pulse on the organization, but also like, you know, to me, a definition of success. is giving the organization enough room to grow and develop within some guard lails and then they do the work and then I represent the finance organization at the top of the house to the external stakeholders, whether they be internal management, equity holders, bond holders, regulators, etc. My job is really to present to really represent what everyone else is doing within the organization and go out. So I think people need to think about their careers as what’s really enjoyable. Do they like that? And there are There are a lot of introverts within finance, you know, and that’s, that’s perfect. So do they like that public role? You know, I have to say, you know, having been, you know, a public company and having been at a couple of companies that have at times faced challenges with the stock price, you know, investors are going to, if they don’t like the answer, you know, they’re not going to be shy about telling you that they’re unhappy. And so, you know, is that, are you going to be the kind of person that if an investor yells at you, or a regulator yells at you because they’re unhappy. Is that gonna cause your world to crumble or not? And there’s other things to do. You can, so I think you gotta be challenged. Other people have gone and I think they get to the point in finance where they’re like, I really wanna make a difference on the business side because I don’t wanna just report, but I wanna have more of a direct outcome on the business side. And so they make their jump over to the business side. And so I think people need to reflect what really gets them excited. I kind of came at it from the other way. It was having P&L responsibility and writing a book and came into finance. But I know a lot of either CFOs have gone on to be CEOs. But I think people have to kind of, you know, what drives them, what gets them excited about in the morning and then kind of plan around that. You know, for me, it was international. I love the international element to it. You know, and as much as I love customers. You know, I have a great respect for the sales guys. It’s tough to go out there and try to sell stuff every day. And that doesn’t get, that doesn’t get me excited. So I’m less excited on the business side to go out and meet customers when you’re going to close, you know, one sale in 10 or whatever your percentages are. Um, and it’s tough. And I have great, I have great respect for that, but I think I also know myself. I’d rather, you know, I’m very comfortable talking to bankers, talking to bond investors, talking to regulators, working with the CEO, and I like that role. Within the finance function is a little bit behind, you know I wouldn’t say it’s all behind the scenes but at least from a customer perspective a little bit a little bit more behind the scenes and I don’t I know I’m not dying for You know time on Squawk Box, you know trying to do that five-minute interview on TV But I know some people that really enjoy that so, you know I’m happy to make a big difference and have the company be successful and a little bit let other people take credit as long as you know, my key stakeholders know, you know, the good job that I’m doing and the contribution that I’m making.

Rohit Agarwal: Very cool. In crisis or you know those shit hits a fan kind of moments, how do you keep your calm?

David Junius: Well, for better or for worse, I’ve had a few of those moments in my career. Um, you know, maybe, you know, maybe two very defining moments for me. Uh, you know, one was the financial crisis, uh, in September, 2008. Um, and, you know, which was, which was a period of time. And one, I was in Japan for the earthquake in, in March, uh, 2011. Um, so to me, I kind of look at it, you know, this is my list of priorities around when the shit hits the fan, right? Um, Clearly when there’s a physical threat for people, and this is really felt at this in Japan, it’s easy to kind of make priorities. First thing, is your staff safe? Is your staff safe? Your staff is the company, are things intact? What can you do in that immediacy of an event to drive the organization forward? And we’re speaking in September. I didn’t really have a leadership role then, but I did live through 9-11. Those kind of things are life-transforming. And then I think it’s very easy to focus. I was interested, and just before I come back to the financial crisis, but I was very interested in some of my staff to see how staff responded in extreme stress. In Japan, it was not only the earthquake. but it was also the tsunami. And then it was, you know, we had the threat of nuclear meltdown the next week. So it was a very intense sort of 10 days and trying to kind of work those things. And also working for a property cashly firm. So not only are you trying to work through it, but then you’re trying to service clients and customers at the same time. And then there’s a lot of questions and ask like, you know, how was the firm doing? What are the losses going to be? And all those balance sheet considerations at the same time. But I think it’s, you know, getting to see the staff And I think it’s hard to pick in times of extreme stress how people are gonna respond. Some people just kind of panicked and were not productive. And other people who I might’ve thought were not great were rock solid and were super laser focused. And it’s kind of, you know, until you’re in the situation, you’re kind of in the crucible. You see people’s real character come out. I think that whether it be that or even in the financial crisis, which was a much longer drawn out thing, but maybe super stressful also, kind of like, so my number one thing are people safe? And then is the global financial system melting down? If you can answer yes to the first one and no to the second one, everything else is easy after that. But I think anytime in stress, it’s really about prioritization. Because I think where people get distracted, they can get caught up in the stress and the panic and then they kind of lose focus on their day-to-day work. I think particularly in the finance function, you can come in and say, okay, I know this is going on. What are our priorities? Is it balance sheet? Is it cash? We had SVB this earlier this year. Forget that since that was only a couple of days, it didn’t feel that stressful in retrospect. But I know it was particularly for companies on the West Coast. You know, they really had some, some dire moments until the government stepped on. So, you know, what do you, what are the most critical items? Get through those. And then just keep your way, you’re working your way down the list. You know, being able to be a voice of clarity around prioritization and getting people focused on the high priority items. So they just not running around like, well, should I do my day to day? Should I drop everything to go work on something else and be able to get the team rallied around. This is what we need to do today. And this is, you know, that, yes, that’s important, but right now that’s a tomorrow issue, you know, and in, in extreme crisis, you are literally living day to day and you’re trying to get through today and tomorrow can seem like a long way away. So I think that, again, and then you can stretch things out. I mean, I think any good, um, CFO, you have a longer term priority, uh, longer term horizon, um, and you’re charting the guide. So I think if you could get good at this, I don’t want to get too good at this because I don’t want to be through too many of these like existential crises. But you know, okay, I’m thinking about today and I got the team focused on today, you know, but I’m focused on tomorrow. I always, you know, maybe in retro, maybe with all my taking ways, you know, big picture, I think the CEO should always be focused on where do we need to be in three years? And I think a good CEO is thinking about three years down the road. then allowing his or her team to execute day to day. I think a CFO, you know, put things in perspective. I think the CFO is thinking about, you know, longer term for finance, but where do we need to be in a year? How do we get there in a year? I know where the CEO wants to be in three years. I’m going to break that down into chunks. I’m going to be responsible for executing on that next year. Make sure, are we, how do, how do we deliver on our numbers over the, you know, 12 months out? Are we doing the things, the right things today? And maybe your business a little bit different. You might have different timeframes. I guess if I was building aircraft, I might have a much longer term horizon. In insurance, it’s hard to predict what the market’s gonna be like a couple of years out. So you have to be able to be a little bit flexible. But are you building those foundational blocks to get yourself ready? And that’s, in stress, all your timeframes just condense down. So it’s today, tomorrow. next week, next month, and being able to break those down and making sure you’re marshaling your resources to address each of those horizons.