Strategic Management of Life Insurance Company Surplus

In today's uncertain business environment, managing a life insurance company requires a much higher caliber of financial management than in the past. A company must be in a position to control its own destiny, rather than having its fate dictated by outside forces. This paper outlines a framework for managing life insurance company surplus. Within this framework, a company can assess the attractiveness of various businesses for capital investment; plan the amount of investment in each business; control the actual amount of capital being used; monitor the return on that capital; and take prompt management action if results deviate significantly from plan. With such a system in place, a life insurance company enhances its ability to achieve its strategic and financial objectives.