Understand the approach of rating agencies to support Swiss Re’s rating
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
Using your knowledge from analyzing Swiss Re’s balance sheet, determine the requirements to achieve and maintain the current rating. Present your findings to your line manager and/or team.
Suggested application tasks in order to meet the above-mentioned goal
With this new knowledge develop two tangible suggestions to present to your line manager and/or team, which could include:
- What actions might raise or lower Swiss Re’s rating, and
- Assess the impact of that action on the rating and present a case for or against taking these steps.
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 170%
The sections below reveal our calculation.
Select each thought (+) to learn more about it.
Quantifiable value: Assume that the time saving impact after this training intervention can be translated into the following, each year:
- Time savings for employee – 24 hours for the year (US$170 per hour).
- This equates to a total estimated 24 hours saved for every participant who attends the one-day workshop. This can be translated into a quantifiable yearly saving for each participant of approximately US$4,080 (24 hours x US$170).
Assume the cost of participating in the half-day training is US$300 which is the Swiss Re average cost.
Also assume the opportunity cost for being away from the desk for half a day is US$700. Further assume one day of work is required to apply the findings and to achieve the above-mentioned performance goal, which adds an additional US$1,400 opportunity cost for not being productive.
The ROI in this case equates to a high 170% (US$4,080/US$2,400).
Don’t forget this ROI calculation is not considering the above-mentioned non-quantifiable value.
Select each light blue number to discover more.
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 the person in your area who is able to explain the ways in which rating agencies make decisions, the way ratings impact Swiss Re, and the steps the company can and should take to manage its ratings"
Avoid: Attend workshop xyz
Finance background is not required
Learning from others. Exchange. Discuss.
Recommended social learning activities
- Articulate the nature of the impact of ratings on an insurance company and discuss your findings with a knowledgeable peer to deepen your understanding
- Articulate the specific things a company can do to maintain or raise its rating and explain that to a junior employee on your team. (Learning by teaching)
- Schedule several lunches with someone from the rating agency team and use these lunches as an opportunity to discuss selected ratings topics
- Assess the relevance of qualitative (soft) factors such as management skills in shaping the company’s rating. Discuss this with a knowledgeable peer and ask for their point of view
Practical assignments. Apply. Create value.
Recommended on-the-job assignments
- Research and write a one-page summary of who’s who among rating agencies, describing who the players are, what is the hierarchy in the industry, and what are the specialties of the various rating agencies. Share this summary with a member of the rating agency team and get their feedback
- Refine your approach and prepare and deliver an analysis of rating agencies to your manager, explaining who the agency players are, what they do, and how they do it, etc.
- Read several rating agency documents to learn precisely how they arrive at their ratings and present your findings to your manager or mentor
- Analyse the balance sheet requirements of achieving and maintaining particular ratings, determine what actions might raise or lower a company’s rating and share your thoughts in your next team meeting
- Develop an analysis of a specific action at the company that would have a direct impact on ratings. Then assess the impact of that action on a rating and present a case for or against taking these steps. Present your findings to a XFT Leader
