European Insurer Value Analysis 2021, conducted by ACORD and Alchemy Crew – a ground-breaking study of the financial performance of 40 leading European-head quartered insurers, together representing more than €1.2tn in annual revenue. 

The five year average performance was 7.5% cash flow return on invested capital, with top-quartile performers returning 16.9% and bottom quartile 4%. 

Key Learning Points from the study are:-

• Be ruthless with the new investment business case – is business value well defined? Who is the sponsor? What is the return on investment? Does the business case still stand under stress tests?
• Re-evaluate investments on a regular basis – don’t be afraid to halt projects which become obsolete or don’t deliver the original value. The pounds and euros can be used better elsewhere.
• Deploy ‘state of the markets’ technology, such as best of breed – ‘bleeding edge’ might not deliver the returns.
• Buy not build – with rapid technological innovation across insurance and financial services, someone would have most likely already solved the problem you are facing – the solution might lay in banking, payments, or even government work, but it most certainly exists already.
• Find the right partner to deliver – you would benefit from their resources, know how and lessons learned elsewhere.

With 12% points between the bottom and top quartiles measuring cash flow return on capital employed seems only right to take heed of these tips and read the full report.