- 1. Stakeholder management as a driver of corporate performance
in the insurance industry International Insurance Society, 41st
Annual Seminar, Hong Kong, July 10-13, 2005
2.
- Defining stakeholder management
- Stakeholder management in insurance
- Stakeholder management as a driver of corporate
performance
- Conclusions from a practitioners point of view
Agenda 3.
- Managing the relationships of a corporation with relevant
constituencies in its industry, political, social, economic and
legal environment
- Roots of the concept go back to the 1950s:
- Customers, employees, the community, and stockholders are the
four parties to any business. () If the other three parties are
properly taken care of, the stockholder will benefit in the long
pull
- General Robert E. Wood, 1950, then CEO of Sears
- Stakeholders contribute to the wealth-creating capacity of a
corporation and are, therefore, its potential beneficiaries and/or
risk bearers
Defining stakeholder management 4.
- Defining stakeholder management
- Stakeholder management in insurance
- Stakeholder management as a driver of corporate
performance
- Conclusions from a practitioners point of view
Agenda 5.
- As from the 1990s: Increasing relevance of the concept in
insurance
- Deregulation of terms and conditions
- Liberalization of market access
- Privatization of state-owned insurers
Stakeholder management in insurance 6. The insurance industry s
key stakeholders Insurance Company PolicyholdersInvestors
Source:Schanz Brokers Investors Employees Governments Alliance
Partners Rating Agencies Supervisory Authorities 7.
- More recent drivers of stakeholder management in
insurance:
- Surging insured catastrophe losses
- Liability claims inflation
- Regulatory reforms and investigative pressures
Stakeholder management in insurance (contd) 8.
- Defining stakeholder management
- Stakeholder management in insurance
- Stakeholder management as a driver of corporate
performance
- Conclusions from a practitioners point of view
Agenda 9.
- A corporations ability to establish favourable interactions
with a multitude of stakeholders enhances corporate value drivers
and is a necessary condition for maximizing shareholder value.
Stakeholder management as a driver of corporate performance 10.
Main corporate value drivers BusinessEnvironment Corporate Value
Corporate Strategic Positioning Reputation Reputation Reputation
Reputation 11. Shaping the business environment
- Changing role of governments
- Shifting attitudes towards
- GDP, inflation, interest rates,
- Growing complexity/inter-dependence of economic
- Technological Environment
- communication/information
Industry Environment
- New distribution channels
- New entrants (banks, capital markets)
- Internationalization/Globalization
Insurance Corporation 12.
- The Balanced Scorecard offers an attractive approach for
measuring the
- effectiveness of stakeholder management:
Enhancing the firms strategic positioning 13. A typical Insurers
Balanced Scorecard Strategy Map Shareholder Value Customer Value
Internal ProcessesHuman Resources Premium Growth Underwriting
Profitability Cost EfficiencyPriceCapital Efficiency Investment
Returns Terms & Conditions Services Quality of Relationships
Brand Reputation Client Relationship Management Process Innovation
Capability Underwriting Process Business Process Underwriting
Skills Marketing Skills Financial Skills Claims Manage- ment Skills
Financial Perspective Customer Perspective Internal Perspective
Learning & Growth PerspectiveSource: Kaplan/Norton (2001),
amended by Schanz 14.
- The capability of a firm to create and sustain competitive
advantage depends on the competitive effectiveness of its value
chain
- The competitiveness of the value chain, in turn, is heavily
influenced by the firms relationships with clients, shareholders,
employees and other stakeholders
Stakeholder management helps create and sustain competitive
advantage 15. Competitive advantage is determined by the corporate
value chain Claims & Liability Manage- ment Product Design
& Develop- ment Marketing Under- writing Distri- bution Policy
Admini- stration Asset & Liability Manage- ment Source: Schanz
16.
- Main sources of competitive advantage (according to Michael
Porter)
- Reconfiguring the value chain
Two fundamental strategies for competitive advantage or
17.
- Stakeholder management can support both competitive
strategies(cost leadership and differentiation)by lubricating the
value chain!
Stakeholder management as a source of competitive advantage
(contd) 18.
- Defining stakeholder management
- Stakeholder management in insurance
- Stakeholder management as a driver of corporate
performance
- Conclusions from a practitioners point of view
Agenda 19.
- In order to maximize the benefits from stakeholder management
anintegrated stakeholder communication approachshould be adopted by
the insurance industry
- Stakeholder management activities should befully aligned with
strategic corporate goals
Conclusions 20. Integrated messaging for an insurance
company
- Combined ratio/operating margin
Source: Schanz 21.
- Benefits from aligning strategy development and stakeholder
management
- Effectively influencing key parameters of corporate
strategizing
-
- Socio-political environment
- Enhancing strategy development by stakeholder feedback
(outside-inperspective)
Aligning corporate strategy and stakeholder management 22.
- Stakeholder management in insurance has rapidly gained in
importance due to seismic changes to the sectors business
environment
- Effective stakeholder management can enhance corporate value
drivers
- Stakeholder management and the corporate strategy should be
fully aligned
Summary 23. Dr. Kai-Uwe Schanz Chief Communication
&Corporate Development Officer [email_address] Phone: +41 (0)
44 639 90 35 Fax: +41 (0) 44 639 70 35
