Identify the financial impact of insurance transactions applying US GAAP
Moving from 'Learning' to solving a 'Real Business Issue'
Focus on solving a business issue
Learning returns the highest benefit when it is properly applied to solving real business problems. We recommend the line manager and the employee agree on measurable goals that will address known business issues.
The employee might then need to attend a development program such as this workshop. The objective is not just to attend a workshop, but rather to increase the employee’s business and financial acumen, and as a direct result of this development program, identify and help achieve specific, measurable, value-creating performance goals. To illustrate moving from learning-related goals to performance-related goals, we have prepared the following suggestions, which of course should be modified to meet the specific needs of the line manager and employee.
- Issue needs to be solved asap
- Employee is unclear how to do that
- Definition of KPIs to solve the issue
- Training will be recommended to help solve the issue
- Maybe a workshop
- Maybe on-line
- Employee addresses the issue with the newly acquainted knowledge
- Employee shares how it was possible to meet the KPIs
- Issue is solved
Value creating performance
Value-Creating Goal
After reviewing the financial statements Swiss Re you can now demonstrate this increased knowledge by preparing two short presentations for your line manager and/or team.
Suggested application tasks in order to meet the above-mentioned goal
- The first presentation, the simulation of a major risk event and the potential financial impact on the financial statements of Swiss Re.
- The second presentation, after comparing the financial statements of another insurance company and Swiss Re, highlight the major differences and reasons therefore, and any way these differences could be applied to Swiss Re.
Summary
Addressing business issues - in a context of learning - promises to produce impressive ROIs.
When we consider all the benefits and costs, this type of training/development investment creates significant value and provides impressive quantifiable returns, both for the employee and for Swiss Re. Therefore, this approach moves us far beyond "just learning something"; it focuses us on the positive business outcomes by quantifying the expected costs and resulting value creation.Our Thoughts – the Return on Investment (ROI) Calculation
This activity promises a strong ROI of 114%
The sections below reveal our calculation.
Select each thought (+) to learn more about it.
Quantifiable value: Assume the increased knowledge from the above presentations have time saving impacts which can be translated into the following each year:
- Time savings for the line manager - 4 hours for the year (US$250 per hour)
- Time savings for the team – 5 hours for the year (US$170 per hour)
- Time savings for employee – 12 hours for the year (US$170 per hour)
This equates to a total estimated 21 hours saved. This can be translated into a quantifiable yearly saving for each participant of approximately US$3,890 (4 hours x US$250 = US$1,000 + 5 hours x US$170 = US$850+ 12 hours x US$170 = US$2,040).
Assume the cost of participating in the one-day training is US$600 which is the Swiss Re average cost.
Also assume the opportunity cost for being away from the desk for one day is US$1,400. Further assume one day of work is required to apply the findings and to achieve the above-mentioned performance goals, which adds an additional US$1,400 opportunity cost for not being productive.
The ROI in this case equates to a high 114% (US$3,890/US$3,400).
Don’t forget this ROI calculation is not considering the above-mentioned non-quantifiable value.
Select each light blue number to discover more.
Talk with your manager - Agree on an outcome based goal.
Prepare online.
All job types and bands
Completing the training options will raise the competency level to "basic". Completing the "20%" and "70%" actions will raise the competency level from "basic" to approaching "proficient".
"To be regarded as a person in your area who has a broad understanding of the US-GAAP accounting principles utilized by Swiss Re."
Avoid: Attend workshop xyz
Understanding basic accounting concepts are a prerequisite to attend. Completed online programs "Accounting – introductory" and "Accounting basics for finance professionals"
Learning from others. Exchange. Discuss.
Recommended social learning activities
- Discuss with a member of the accounting department the ways in which the US-GAAP accounting principles shape choices and decisions at Swiss Re
- Schedule several lunches with a member of the accounting team and use these lunches as an opportunity to discuss selected accounting topics
- Join an accounting online newsletter, distribution list or discussion forum, get yourself on a distribution list of major accounting bodies to be informed about latest changes
- Attend Global Finance events which focus on accounting methods (for example, the Annual Accounting update from Group reporting) and learn from the experts
- Identify an organization where you are a member or volunteer (e.g. football club, religious institution, social groups) and meet with their financial officer to discuss their accounting practices to test your understanding and to appreciate the differences in accounting
Practical assignments. Apply. Create value.
Recommended on-the-job assignments
- Write two slides that describe the major US-GAAP accounting principles for re/insurance companies, present this and discuss that with a peer
- Explain to a junior team member how insurance related US-GAAP accounting principles affects Swiss Re
- Assume a major event (e.g. destruction of the most expensive building in New York, or a major tropical storm in Florida) occurs and calculate its assumed impact on Swiss Re's loss reserves, profit and loss statement and balance sheet from last year. Discuss findings with a member of the accounting team
- Compare and contrast the financial statements of several insurance companies and Swiss Re: Discuss the findings with a knowledgeable peer
- Research the meaning of each line items in a recent Swiss Re US-GAAP financial statement and explain these to a junior team member
- Identify the key financial ratios important to corporate managers, clients, rating agencies, outside investors, and other stakeholders and present your findings to your manager
