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Analyse an investment portfolio with the intention to achieve higher yields

The program “Investment management in modern insurance business” 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

As a direct result of your increased investment expertise, prepare and deliver a presentation for your line manager and/or your team on the differing yields from various asset classes.

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

After reviewing the Swiss Re investments reports and financial statements determine the overall performance of Swiss Re’s investment portfolio. Once you have understood the components of the overall performance, present your findings for each investment class and why a particular asset class is yielding an above average return or why an asset class is returning below average. Recommend a possible re-allocation of the investment portfolio that could increase the investment income without unnecessarily sacrificing liquidity or safety.

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 148%

The sections below reveal our calculation.

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

Quantifiable value: Assume the possible reallocation of the investment portfolio would add additional investment income. If the annual Swiss Re investment income is approximately US$4,000,000, a two-tenth of one percent (0.002) increase in investment income would bring an additional $8,000 to the company.

Non-quantifiable value: Besides these measurable values, there are also non-quantitative benefits of this training. For example, reduced auditing risk exposure (this area of the business is prone to auditing risk due to the complexities and having sufficient knowledge ensures employees get it right at the beginning). Also remember the value of enhancing finance and business acumen/competencies of the employee, plus the enhancement of work quality, which often materialize over time.

Assume the cost of participating in the two-day training is US$1,200 which is the Swiss Re average cost.

Also assume the opportunity cost for being away from the desk for two days is US$2,800. Further assume one day of work is required to achieve the above-mentioned performance goal, which adds an additional US$1,400 opportunity cost for not being productive.

Therefore, the total cost of this learning investment is assumed to be US$5,400 (US$1,200 + US$2,800 + US$1,400).

The ROI in this case equates to a high 148% (US$8,000/US$5,400).

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
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