Value-based Management of Financial Institutions
Tom Wilson, Ph.D.; Dr. Johannes Jaspersen
Although the benefits of insurance may be obvious to the policy holder when the earth shakes or the wind blows, how insurance companies and banks create value for shareholders is often times less transparent. Similar to an industrial corporation, banks and insurers need to focus on securing profitable growth opportunities and achieving cost efficiency. However, financial institutions are different from industrial corporations in three important ways: the products we sell involve risk, implying that our “cost of goods sold” only becomes clear over time; we create value for shareholders and our customers by underwriting and managing that risk; and, finally, the risk as well as regulatory and rating agency considerations play a key role in defining our capital structure. These differences make financial institutions inherently more complex, a situation which is not helped by traditional accounting rules.
This course focuses on how to manage financial institutions for value with a deeper focus on insurance. During the course of the seminar, a valuation framework including key value drivers will be developed for insurance and banking businesses. In addition, generic management actions or “rules of the game” will be developed for creating value through profitable growth, cost efficiency, underwriting excellence and capital efficiency. In this context, the role of balance sheet management, risk management and strategic planning will be discussed.
In the middle of the Semester, seminar participants will be asked to present an outside-in valuation of an actual insurance company based on public information. At the end of the Semester, seminar participants will be asked to present a strategic plan to “management” on how the company can increase its value. The both presentations will be made to industry executives who will evaluate the conclusions and provide feedback.
- The number of participants is restricted.
- To apply for this course, please send an e-Mail (including name, student-ID number and a current transcript of your grades) to Dr. Johannes Jaspersen.
- Application Deadline: April 4th 2016
- The list of participants will be announced on the notice board of the INRIVER no later than April 8th.
- The seminar is held in English.
- Contact: Dr. Johannes Jaspersen
- Period: April 15th until July 1st 2016
|April 15th||10:00am - 11:30am||Introduction||Room 307, Schackstr. 4|
|April 18th||8:30am - 10:00am||Value, risk and capital||Room 307, Schackstr. 4|
|April 25th||8:30am - 10:00am||From RAPMs to value||Room 307, Schackstr. 4|
|April 29th||8:30am - 10:00am||Focus on PC||Room 004, Kaulbachstr. 45|
|May 2nd||8:30am - 10:00am||Focus on LH||Room 307, Schackstr. 4|
|May 6th||8:00am - 9:30am||Valuation & questions||Room 307, Schackstr. 4|
|May 9th||8:30am - 12:30pm||First Presentation: Outside-in Valuation||Room 307, Schackstr. 4|
|May 30th||8:30am - 10:00am||Capital allocation & strategy||Room 307, Schackstr. 4|
|June 3rd||8:00am - 9:30am||Balance Sheet Management (1)||Room 307, Schackstr. 4|
|June 6th||8:00am - 9:30am||Balance Sheet Management (2)||Room 307, Schackstr. 4|
|June 20th||8:30am - 10:00am||Risk Management (1)||Room 307, Schackstr. 4|
|June 24th||8:30am - 10:00am||Risk Management (2)||Room 307, Schackstr. 4|
|June 27th||8:30am - 10:00am||Other drivers of value||Room 307, Schackstr. 4|
|July 4th||8:30am - 12:30pm||Second Presentation: Corporate Strategy||Room 307, Schackstr. 4|
- The grade for the seminar is based on two parts of a group presentation and on a written assignment consisting of the slides, the outside-in valuation (.xlsx) and a written guide to the valuation file.
- Presentations will be evaluated based on the content, structure, appearance, and quality of the group presentation delivery, as well as the group’s ability to answer questions following the presentation.
- 6 ECTS, MSc PStO 2015 (Business Administration)
- For further information, please refer to the syllabus.