 |
|
   
|
|
|
LOMA's new research report, Financial Management in the Life Insurance Industry, explores the challenges of senior financial officers who must possess human resources skills, as well as a wide range of technical skills, to operate effectively. Financial Management looks at important capital management activities such as the development of appropriate financial performance standards and effective reporting of the organization's financial position to the board of directors, investors, regulators, rating agencies, and the general public. The report emphasizes the financial officer's need for "people skills" -- to create a high comfort level regarding financial and risk management practices to outside constituencies and, at the same time, work effectively with the line and staff managers of business operations. Financial Management in the Life Insurance Industry notes that organization of the financial function among insurers varies considerably, depending on a variety of practical considerations such as the amount of information available to the decision maker, the level of trust in the financial officer's ability to make good decisions, and the CEO's personality and preferences. Sixty-seven of the top 100 U.S. companies (ranked by assets) have a chief financial officer (CFO), and many others have a senior financial officer who coordinates the effort across divisions in a committee structure. There is no "right" organizational design for conducting financial management and other business functions, the report says. However, the report recommends that companies develop centralized regulatory and investor financial reporting processes and use financial management systems that generate efficient, consistent and non-redundant information. It suggests that creating financial information as a product to be managed can contribute to the development of actionable information. The financial pressures facing the industry have resulted in a shift toward active business portfolio management which leads to the sale or liquidation of poorly performing lines of business and reinvestment of funds to enhance the corporation's risk-reward performance. The portfolio approach to financial management also involves mergers, acquisitions, divestitures, the formation of mutual life insurance holding companies, demutualizations, and the extensive use of strategic alliances and outsourcing. Due to consolidation across the insurance, banking, mutual fund, and securities industries, today's financial officers must be aware of a wide variety of regulatory, accounting, and financial reporting systems, as well as the key financial drivers for mutual funds, securities firms, and commercial banks, the report says. The 117-page report also considers the unique financial management challenges posed by international activities, from the management of foreign exchange to the risk management of securities transactions in foreign markets, and the CFO's need to know how technology can contribute to efficient financial management and analysis and effective network communication. Stephen W. Forbes, Ph.D., FLMI, Senior Vice President of Research at LOMA, was project leader for this report. He interviewed many senior level industry executives who provided examples of effective financial management practices in today's environment. This report has valuable ideas for executives from both functional and line management areas of life insurance and financial services organizations who want to develop and maintain effective financial management processes. Companies can use the report as a catalyst for discussion in strategic planning sessions. For more details on the topics covered, see the Table of Contents. Financial Management in the Life Insurance Industry
costs $125 for employees of
LOMA member companies and $375 for nonmembers. To purchase it, access LOMA's Research Report Order Form, print it out, fill it in, and fax it
to us at 770-984-6417. You can also call 1-800-ASK-LOMA (Press 3) or 770-984-3784; or
e-mail your order to orders@loma.org. |
|
