Spotlight: Today’s Demand for Senior Finance Leaders

August 22, 2022 – Craig Lapham has served as CEO of The Lapham Group since 1997. Under his leadership, the firm has conducted senior executive search engagements on a global basis for multiple Fortune 100 insurance clients and smaller emerging insurance/ financial services firms across both P&C and life insurance. The Lapham Group is a boutique executive search firm headquartered in New York City. For over two decades the firm has conducted senior-level search engagements in insurance and diversified financial services, including private equity, venture capital, and asset management. Searches include board directorships, president/CEO/general management, risk management, finance and investment, marketing/sales, and information technology engagements conducted across North America and South America, Europe, Asia, and the Far East.

Mr. Lapham recently sat down with Hunt Scanlon Media to discuss the currently supply and demand for senior executives within the global insurance sector of the financial services industry.

Craig, discuss the current climate for recruiting senior executives for the financial services sector. What areas and types of execs are most in demand?
Our firm’s focus is primarily the global insurance sector of the financial services industry. The current climate for recruiting senior executives for the insurance sector is very strong. This includes executives at the corporate and divisional CEO/general management levels and across most functional areas with an emphasis on technology (including digital and data/analytics), distribution and finance. This also includes virtually all subsectors of the insurance industry to include insurance brokerage, P&C, and life insurance, and from the largest multinational insurance carriers down to start-up/early stage insurtech companies.

What challenges does the financial services sector face and what do you see moving forward?
The well discussed challenges facing the insurance industry continue to involve such issues as cyber risk, expanding catastrophic events, and a volatile investment environment that proves challenging to the investment side of an insurer’s balance sheet. However, the broader and more far reaching challenges facing the traditional insurance sector are from a competitive standpoint as the explosive growth in the insurtech sector has created entirely new digital based business models and MGAs across all sectors of the industry that are aiming to transform all aspects of the insurance process from front to back end. From an additional competitive perspective, more established companies beyond the traditional insurance carriers are establishing insurance offerings from such tech leaders as Google and Amazon, to the automotive carriers such as Tesla and General Motors.

Have CFOs been asked to do more in recent times, how has this role changed in recent years?
Yes, the scope of the modern day CFO has definitely expanded in recent years well beyond the traditional accounting and finance. The modern day CFO is essentially a partner to the CEO and, to that point, is often given expanded functional responsibilities to include strategy, corporate development, human resources, and even technology. This is true for publicly traded corporations and well as private equity backed companies where CEOs and boards are seeking CFOs who “can get behind the numbers” and be proactive drivers of profitable business growth rather than green eyeshade accountants.

Can you discuss the path do the CFO role, and how many of these CFOs typically make it to the CEO ranks?
A CFO becoming CEO is still the exception rather than the rule. Oftentimes CFOs get battlefield promotions to the CEO role during times of turbulence re a CEO abruptly leaving or being forced out by a board or during a significant restructuring. With that said financial services firms and insurers are balance sheet businesses. There is no manufacturing of anything. As such, a strategic CFO who can align him/herself with the business as a value added partner in driving profitable growth has the opportunity to assume future P&L leadership roles that can incrementally lead to a CEO opportunity.

How has the role for senior finance leaders changed over the past couple of years?
The role of senior finance leader/CFO has definitely evolved and expanded over the past decade. Historically, a main focus of the CFO was more accounting and finance oriented to include budgeting, reporting, treasury and FP&A. In addition to these responsibilities, the modern CFO has become more operations oriented working with profit centers to develop revenue, earnings, and capital allocation objectives, as well as serving as the CEO’s sounding board and advisor on significant operational matters including partnerships, material hiring plans, modifications of internal organizations, capital allocation to businesses and material relationships with outside vendors and partners. Furthermore, the modern CFO is now being asked to play a strategic role to include identifying and profiling emerging trends which may impact the competitive positioning of the business, assisting profit center managers in developing market based strategies to facilitate business expansion, and identifying and driving opportunities for strategic partnerships, joint ventures, and alliances.

How has your firm performed during and coming out of the pandemic?
During the brunt of the pandemic in 2020 our firm’s search activity was down from normal levels but we still outperformed relative to the worldwide disruption and shutdowns. Our firm had the most successful year in our 25-year history last year, and the strong pace has continued through 2022.

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