Build Your Financial Capabilities
Search results will be displayed here..
Your Development Journey
Introduction Your Roadmap to Success Swiss Re's Growth Philosophy Development Happens Everywhere Contact Us
Foundations of Finance
Introduction to Finance for Re/Insurance Economic Valuations / Accounting Overview of Finance @ Swiss Re
Client-Facing Finance
Introduction to Client-Related Finance How to Win Transactions & Solutions Special Interest Topics ATLAS & IETV
Advanced Finance
Expert Development Program Reinsurance Finance Leadership External Certificates & Degrees Finance Library

Understand Swiss Re’s economic framework to improve profitability

The program “EVM Advanced” will get you there

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.

A business issue is on the table
Manager asks employee to solve the business issue
Training takes place with the issue in mind
Employee focuses on solving the issue
Employee reports outcome

  • 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

Now that you understand how and why Swiss Re relies on EVM as an integrated economic valuation and accounting framework for planning, pricing, reserving and steering the business, recommend how EVM can be used to avoid non-profitable deals (saving time) and improving the profitability of a transaction.

Suggested application tasks in order to meet the above-mentioned goal

After reviewing the EVM reports, demonstrate your application within the Swiss Re environment by presenting three key ideas with XFT (Cross functional team).

  • Identify the key cost drivers and establish ways to reduce costs.
  • Illustrate how profitability is calculated across product lines and asset investments (on a risk adjusted basis – using post cost of capital).
  • Brainstorm how to improve profitability and achieve consistent performance.

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 147%

The sections below reveal our calculation.

Select each thought (+) to learn more about it.

Quantifiable value: Assume that each transaction size is US$500,000. We should be able to increase profitability of each transaction by 1%. The value added could therefore be calculated this way: US$500,000 x 1%, which equates to US$5,000 in benefit.

Non-quantifiable value: Besides this measurable value, there are also non-quantitative benefits of this workshop. These include for example, enhancing finance and business acumen/competencies of the employee, creating better relationships with key brokers, and the creation of customer value and company differentiation, all of which materialize over time.

Assume the cost of participating in the one-day workshop 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 that 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.

Therefore, the total related cost of this learning investment is assumed to be US$3,400 (US$600 + US$1,400 + US$1,400).

The ROI in this case equates to a high 147% (US$5,000/US$3,400).

Don’t forget this ROI calculation is not considering the above-mentioned non-quantifiable value.

Additional savings could result since the savings could reoccur in subsequent years and the learnings from the workshop could be applied to other situations. In your own individual case, the numbers may differ, our intention here is to offer an example for creating your own ROI calculations.
Agree on your goal
Structured learning
Social learning
On-the-job learning