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Strategy evaluation and control
9222 Mahesh Ghuge
9225 Hemant Gurav
9233 Sameer Mahajan
9238 Amit Mundhe9270 Nitin Tandure
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Introduction
Definition
strategic evaluation and control can be defined as the
process
of determining the effectiveness of given strategy in
achieving
the organizational objectives and taking corrective
measureswhenever required.
Strategic evaluation operates at two levels
strategic level
operational level
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Jobless Insurance Industry: Process View
ProductPlanning
Business
Analysis and
Technical design
Policy Pricing
Policy
Wording
Policy relatedforms
Designing
Direct salesand
promotion
Marketing
activities
Outbound/inb
ound telesales
Advertising
Supportactivities such
as agent
compensation,
performance
tracking of
agents and
sales force,
training etc
Voice support
to agents and
policyholders
Payroll
Processing
Portfolioanalysis
Agency
Management
Field
Underwriting
Reinsurance
Investment
Functions
Claims
Registering
Claims
evaluation,
examination
and litigation
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Categorization of Processes
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Management Control System
Expense Centers and Cost Centers
- Product Planning
-Promotional Activities
- Business analysis and Technical Design
- Voice Support to agents and Policyholders
- Payroll Processing- Claims Processing
- Administrative Activities
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Revenue Centers
- Investment Division
- Sales Division- Field Underwriting
- Portfolio Management
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PERFORMANCE CONTROLE PROCESS
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PERFORMANCEPARAMETERS
FINANCIAL
PROFIT
NET PREMIUMEARNED
PROFIT FROMUNDERWRITINGACTIVITIES
INVESTMENT
INVESTMENT INCOMPANYS
ASSETS
INVESTMENTSMADE OUTSIDE
NON FINANCIAL
INTERNAL EXTERNAL
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Profit performance includes the profits measured inmonetary
terms. It is the difference between the
revenues and expenses. Apart from the expenses at theunit,
company head office and divisional office expenseson behalf of a
branch are included to motivate thebranch mangers to cover their
share of their expenses atrespective higher levels.
Profit performance includes the profits measured inmonetary
terms. It is the difference between the
revenues and expenses. Apart from the expenses at theunit,
company head office and divisional office expenseson behalf of a
branch are included to motivate thebranch mangers to cover their
share of their expenses atrespective higher levels.
PROFITPERFOMANCE
Investment performance can take two different forms.
One the return on assets employed in the businessother than
cash, and two, return on the investmentoperations of the surplus of
cash at various levelsearned on operations.
Investment performance can take two different forms.
One the return on assets employed in the businessother than
cash, and two, return on the investmentoperations of the surplus of
cash at various levelsearned on operations.
INVESTMENTPERFORMANCE
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Growth in number of policiesMarket share
Customer Satisfaction
Growth in Number ofbranches
Average Number of policiesper agent
Growth in number of policiesMarket share
Customer Satisfaction
Growth in Number ofbranches
Average Number of policiesper agent
E
X
T
E
R
NA
L
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Speed in processingproposals
Dealing with Drop outs
Timely Reminders
Market Research
Employees MoraleEmployee and Agent training
Speed in processingproposals
Dealing with Drop outs
Timely Reminders
Market Research
Employees MoraleEmployee and Agent training
I
NT
E
R
NA
L
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OTHER PARAMETERS
Employee and agents Training
Number of employees and agents trained
Number of employees trained in advanced accountingmethods and
modern software
Number of employees trained in market research andanalysis
Number of employees trained for branch and
divisionmanagement
Actuaries and assessors training and development
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Research and Development
Changes in the business and Individual risks
Analysis of market
Statistical research on various issues affecting
thesocio-economic system
Competitors strategies Regulatory influences
New Policies for Growing industries
OTHER PARAMETERS cntd
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Operational Efficiencies
Speed in processing proposal forms
Average time taken in -settling claims
Number of dropouts
Number of reintegration cases
Number of new branches established per year
Cost efficiency in reinsurance Number of repudiation cases in
court
Number of cases challenged in court and failed
OTHER PARAMETERS cntd
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FINANCIAL CUSTOMERS
LEARNING
AND
GROTH
INTERNAL
BUSINESS
PROCESS
BALANCED SCORECARD
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Total revenue
Profit rate
ROI
% cost reduction
FI I
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Customer satisfaction rate
% cross sellingNew customer acquisitionrate
Customer retention rate
CUSTOMER
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Implementation rate ofplans
Mean time to re-skilling per employee
Investment rate in IT
systems
LEARNINGAND
GROWTH
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Service error rate
Number of newproducts
Response rate
Customercomplaints rate
INTERNAL
BUSINESS
PROCESS
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FINANCIAL PERSPECTIVE
STRATEGIC OBJECTIVES PERFORMANCE
MEASURES
Improve return to shareholders Economic earnings, ROE
Improve growth of business Revenue growth, market shares
Improve operating efficiency Operating costs/Revenue,
operational yield
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RISK MANAGEMENT PERSPECTIVE
STRATEGIC OBJECTIVES PERFORMANCE
MEASURES
Periodic Control and Risk Self
Assessment
Progress report, Risk reduction
rate
Reduce transaction risk Number of execution errors
Monitor aggregate risks Value at risk (VAR)
Balance risk and performance Risk adjusted performance
measure (RAPM)
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CUSTOMER PERSPECTIVE
STRATEGIC OBJECTIVES PERFORMANCE
MEASURES
Improve market share Percent of market, Growth in
revenuesMaximize customer satisfaction Number of
complaints/Total
orders
Obtain new clients Number of new clients, Rate of new
products
Introduction
Retain clients Number of repeat orders,
Retention rate
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INTERNAL PROCESS PERSPECTIVE
STRATEGIC OBJECTIVES PERFORMANCE
MEASURES
Best execution Time to execution
Efficient execution Cost per transaction, # of
orders executed outside
accepted parameters
Provide optimal mix ofproducts
Revenue per product vs budget
Appropriate information
processing
No. of processing errors,
Downtime
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