Corporate Planning - An Approach for an Emerging Company

A major property-casualty insurance group recently created a separate profit center for personal lines, thereby signaling a new emphasis on these lines. Since the group had been a carrier with primary emphasis on commercial business, the planning process at the personal lines profit center became similar to that of an emerging company: there was little relevant history available to use in order to plan effectively for a very different future. Because planning at insurance companies is too often separated from field operations -- the very people who must make the plan happen -- we installed a process that is operationally driven. We therefore developed an approach to premium and loss planning which did not rely on a simple projection of last year's results. The major benefit of this planning process is its lack of dependence on historical information and its explanation of current results in terms of specific components of the plan. We offer to share and discuss this approach to personal lines planning.