The enthusiast: Compass Group’s Scott Feltham, discusses his passion for risk management, collaboration and innovating

Currently, Scott Feltham’s role as head of insurance for Compass Group sees him manage insurable risks across 33 countries and a workforce comprising more than 580,000 people worldwide.

Yet he has recently also brought employee benefits under his purview, to streamline expenses, enhance coverage, and promote equality in benefits across regions, with focus, to begin with, on Europe and the Middle East.

“I’m responsible for the placement of the global insurance programme and I manage our captive insurance companies,” he says. “I also have some responsibility for employee benefits across the group, from the perspective of how we consolidate and finance them.”

Feltham has been at Compass for around five and a half years, but he started his journey in the world of insurance underwriting more than 20 years ago, before moving in-house at Balfour Beatty, where his love affair with the world of risk management began.

“I think the experience in underwriting gave me that platform to really get under the skin of things internally within Balfour Beatty. What I really fell in love with and what has meant that I’ve never looked back is that, in this kind of role, you need to be all over and develop a detailed understanding of the operational risks that are inherent within the organisation.

“We apply a collaborative approach to risk management involving several functions within the organisation who assess, quantify and review the risks, and determine how they are best mitigated or transferred.”

“You’re given carte blanche to go in and absorb all that detail and generate knowledge around what those key risks are. When I go out to the insurance market and I’m representing our risk in the market, being absolutely clear and on the front foot is critical to performing my role to the fullest. And I think the level of responsibility you’re given in these roles from a very early stage is fantastic.”

He works closely with other internal support functions, as well as key groups such as internal audit and health and safety, to help ensure that risk is quantified and managed comprehensively. This includes assessing risks and determining whether risk transfer is the optimal strategy. A collaborative approach is crucial.

Feltham explains: “Cyber is a good example of this. We buy cyber insurance to a good level, but we take a more sophisticated approach in terms of how to deploy capital to minimise the chance of cyber events happening in the first place. We apply a collaborative approach to risk management involving several functions within the organisation who assess, quantify and review the risks, and determine how they are best mitigated or transferred.”

Feltham also sits on the Airmic board and chairs the organisation’s food and drink special interest group. His involvement with Airmic started early in his risk management career, where he joined as a member to take advantage of the guidance and information available, not to mention the opportunities to meet and learn from his peers.

Now, he’s actively participating in shaping the organisation’s future direction.

ADAPTING AND THRIVING AFTER COVID

Feltham joined Compass Group just a year before the COVID-19 pandemic hit, an event that he says has helped to shape his career. “The impact on Compass was seismic. At one point, in April of 2020, we had roughly 60% of our operations globally at a virtual standstill. If you bear in mind that we operate out of no less than 55,000 locations, the impact was profound.”

He adds that the Airmic food and drink special interest group really demonstrated its worth during this time, as the whole sector was hard hit by falling footfall, lockdowns and the need to rapidly evolve models to cope with the challenging environment.

He recalls: “It became a really tight community during COVID, invaluable for sharing strategies and experiences amidst massive operational disruption.”

“The strong recovery from COVID has given us a real platform for continued growth as we continue to see lots of opportunity in first-time outsourcing”

The challenges facing Compass Group at this time were not unique but rather symptomatic of an industry grappling with unprecedented disruptions. As revenue streams vanished overnight, companies were forced to reconsider their operational strategies and risk management approaches.

However, Compass Group’s journey through the pandemic was characterised by swi and strategic decision-making, which positioned the company for rapid recovery. This approach has been borne out by the company’s recent financial results. Feltham says: “If you look at our latest results, we’re doing tremendously well and, generally speaking when you consider the hospitality sector as a whole, the recovery from COVID has perhaps been more rapid than anyone expected circa three to four years ago.”

Ultimately, Compass’s success is down to its ability to innovate, flex and tap into new opportunities. For instance, the trend for first-time outsourcing became significant, as sectors previously handling catering in-house sought the assurance and expertise of established service providers.

“The strong recovery from COVID has given us a real platform for continued growth as we continue to see lots of opportunity in first-time outsourcing and, where the right opportunity presents itself, acquisition features heavily at part of our growth agenda at present,” he says.

INSURANCE HAS TO EVOLVE

As head of insurance at Compass Group, Feltham is at the forefront of identifying and managing risks in an ever-changing environment. He says that the corporate risk landscape has transformed over the past two decades, noting that intangible risks have now become far more prominent.

For instance, he points to cyber risk, reputational harm and non-damage business interruption as key areas that the hospitality sector must now actively consider, as they can have significant repercussions for the business’s bottom line and continuity. However, one of Feltham’s main concerns is the pace at which the insurance market is evolving in response to these emerging risks.

“The corporate risk landscape has changed significantly… I’m not sure the insurance market, in terms of conventional risk transfer, is evolving at the same pace,” he says.

“What we ended up doing in terms of non-damage business interruption was to create our own product, which sits as a bolt-on to our property damage insurance programme.”

“Given the prevalence of certain intangible risks, we need to see a shift away from some of the more traditional products which, for instance, rely on triggers that centre around property damage. We sit on an abundance of data and would be prepared to work with the insurance market to determine how the same might be modelled in support of developing better and more targeted solutions to certain risks.”

This mismatch has lead companies like Compass Group to seek out more innovative solutions, such as creating their own bespoke insurance products and using captive insurers to manage and incubate risks in a more tailored and flexible manner.

He explains: “What we ended up doing in terms of non-damage business interruption was to create our own product, which sits as a bolt-on to our property damage insurance programme. This is fronted by a well-known market, is ceded to Compass’s captive and operates as something of an incubator. We have put this to test a few times in terms of calling on the coverage that is a  orded –and we are confident that it adds value in support of some of Compass’s strategic and operational endeavours.”

THE FUTURE IS COMPLEX… BUT EXCITING

Feltham feels it’s critical that the risk and insurance industries develop a broader understanding of how various risks are interconnected and that a singular risk event can cascade into multiple areas, affecting reputation, operations and even legal standing.

This interconnectedness, he argues, requires a holistic approach, where risks are not just managed in isolation but with an understanding of their potential ripple effects. He adds that the role of technology, especially AI, will become central to the evolution of risk management practices by enabling us to leverage data more effectively.

“I think the beauty of risk management and insurance is you can genuinely learn something new every day”

Finally, a heightened focus on climate risk is on his horizon for risk management. With climate events becoming more frequent and severe, businesses will need to increasingly factor these into their risk strategies.

He concludes: “I think the beauty of risk management and insurance is you can genuinely learn something new every day. You never get to a situation where you’re sat pretty and twiddling your thumbs. If, as an individual, you’re naturally inquisitive, it really plays to that as a profession, and I think you can thrive.”