know your customer’s business · by selling to high level economic decision makers, the sales...

Know Your Customer’s BusinessFinancial Services - Insurance

Real financial intelligencechanges the game

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©2007-2015 Aarthun Performance Group

AarthunPerformanceGroup, Ltd.

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www.theprofitspecialist.com©2007-2015 Aarthun Performance Group


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Insurance Clients � Chubb � FM Global � Westfield Insurance � Country Financial � RLI Corporation � Nationwide � Motorists Insurance � Allied Insurance

APG and The Insurance IndustryKnow Your Customer’s Business




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We Know Insurance

The insurance industry is under unprecedented pressure to cut costs, optimize capital, and provide in-creased levels of quality products and improved customer service. As the full implications of financial crisis are realized, insurance companies and the suppliers that provide them solutions must find new ways to compete.

We believe there are six key trends that will drive insurance now and in the future:

� The impact of impending governmental regulation following the financial crisis � Ongoing availability of funding and the cost-of-capital � The lingering impact that high unemployment will have on demand for insurance products � Agent competition in the marketplace � Ratio management in the face of stiffer competition � Earnings pressures

For 25+ years, Aarthun Performance Group, Ltd. has helped blue chip insurance companies compete on a whole new level by installing innovative and profit-centered solutions. We know the industry will change. No other company has more experience or is better equipped to assist you in selling effec-tively through this turbulent and rapidly changing market environment.

We have delivered our customized financial and business simulation for a number of insurance mar-kets including:

� Insurance companies � Personal insurance � Agencies � Commercial insurance

We Get Results

This brochure outlines the types of results we have achieved for our blue chip clients. We have documented and validated millions of dollars of profit impact through the installation of our system. Whether it is growing profitable revenue, improving margins, or calling on higher level decision mak-ers to drive sales productivity, we install systems that get results.

About Aarthun Performance Group, Ltd.

Aarthun Performance Group, Ltd. (APG) develops and customizes high impact, financially oriented, sales and professional/managerial training programs that deliver bottom line results. We are currently working with nearly 200 of the Fortune 500 companies across 30 industries. Our mission is to help our customers create better business people. We are working with financial service industry lead-ers. Through our work we have been able to build an unparalleled expertise in the development and installation of a financial and value selling methodology that helps our clients drive one or more of the key measurements including selling multiple products and services, at higher margins, to higher level economic decision makers.

We have listed below a few of the advantages of working with APG:

� We understand value creation and how to execute profit improvement strategies that get results in financial services.

� We customize our financial and business simulation to your customer’s key financial drivers, which directly align to their corporate strategies.

� We generate greater “connectivity” and understanding of how value is created uniquely for your organization and for your customers (based on economic factors, key metrics like ROA, ROE, and Shareholder Value).

� By customizing your financial simulation and linking value creation to the unique financial drivers of your business, your employees are able to identify, quantify and present value-based solutions built around your company’s financial needs.

� We focus on outcomes and ensure the learning is translated into financial results.

Aarthun Performance Group, Ltd.20329 SH 249, Suite 210

Houston, TX 77070Phone: (281) 580-5705

www.aarthun.com

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The Top Five Best Business Practices

Our insurance industry sales financial literacy and value selling system The Profit Specialist® has been used by industry leaders to enable their salespeople to sell higher and compete on the total economic value they deliver to their customers.

Based on our work with insurance market leaders, we have found that the top five best practices by the best salespeople include:

1. Selling multiple products and services. Your best salespeople sell everything to meet the customer’s needs. We have found that just a 5%

boost in additional services drives significant revenue acceleration, and at a lower cost.

2. Selling higher. By selling to high level economic decision makers, the sales cycle is shortened by as much as 50%

and projects are much larger.

3. Improving competitive win/loss ratio. When salespeople call higher, competition is reduced by 75% (fortunately competitors are stuck at

lower levels).

4. Protecting margins. When salespeople are calling higher and dealing with people who are focused on value - not just

price, they do a better job of protecting pricing and improving margins. We have found that every 1% in pricing protection can mean up to 10% in increased operating profit.

5. Retaining your best customers. All of the prior best practices become the glue to retain your most profitable customers.

Our research shows that financial knowledge is the catalyst for achieving these five best practices. Understanding the economics behind your customer’s business is the only way to align your value with their financial goals.

Selling to the Insurance Industry

The insurance industry is demanding, and given the recent economic problems, selling to insurance companies has become even more challenging. We have found that those companies that serve the industry must be able to speak the language of senior level decision makers if they want to be suc-cessful at aligning their solutions with the company’s financial and business priorities. Insurance companies are complex, making it difficult for salespeople to gain a “big picture” view of the insurance company’s challenges, priorities, and overall business strategies. The number one goal of the compa-nies we have worked with has been to gain access to the executive levels and to speak the language of financial return.

We have also helped salespeople by providing them a methodology for identifying all the ways they directly impact an insurance company’s financial success. By quantifying the areas of the business that they can impact, salespeople get to the next level by differentiating on the total value they deliver.

LexisNexis® - Insurance

LexisNexis® is a leading global provider of content-enabled workflow solutions designed specifically for professionals in a variety of markets including insurance. They needed their account managers to understand and be able to articulate all the differ-ent ways their solutions impacted their insurance customer’s business from a financial standpoint. The desire was for them to call at higher levels and truly become known as a business partner. We delivered our Property & Casualty Insurance Industry Simula-tion which enabled their sales team to reach new levels in their customer’s organizations. In addition to selling higher, they were able to improve Lexis-Nexis® margins as well.

Impact: � LexisNexis® was able to help its customers

identify more than $3M in premiums for previ-ously unidentified youthful drivers and identify multiple cross selling opportunities that presented millions in potential revenue growth. They also helped companies in collecting over $5M in subrogation recoveries.

Simulation includes: insurance financial cycle and how to impact net earned premiums, underwriting expenses, claim expenses, and net underwriting performance. Also includes

how to impact Combined Loss and Expense Ratios.

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FM Global - Commercial Insurance

FM Global provides cost-effective property insurance and engineering solutions to protect commercial cli-ents’ operations from fire, natural disasters, and other types of property risk. They work to protect assets and minimize the potential for losses for clients worldwide through a unique combination of engineering, under-writing, and claims. Through hands-on research and deployment of on-the-ground engineers, they ensure their products and services remain the best available and directly support risk management processes and objectives.

To help their account managers better understand how to sell the value of their services, we delivered our Commercial Business Simulation that helped them identify the key operational, financial, and competitive risks they were facing and how FM Global could deliver hard-dollar value.

Impact: � FM Global account managers grew their business over 20% by aligning with their client’s financial

strategy and accessing executive levels that buy more on value. They were able to develop value proposals for their services that reduced client risk by millions of dollars, resulting in long term contracts that created business partnerships with targeted accounts. Client retention soared from 79% to 86% during a two year span.

Country Financial

Country Financial sells property-casualty insurance in both urban and rural markets. They sell resi-dential, farm, automobile, and corporate insurance products.

Focused on how they could do a better job in under-writing of taking rate increases on risks that warrant increases due to the exposure and/or loss history. They identified ways that newly hired underwriters could become more productive earlier. Their Claims department wanted their people to understand how the stratified claims assignment process improved efficiencies and how the technical knowledge and skills of the Claims staff can increase and encourage quicker claim settlements.

Impact: � Country Financial identified more than $8 million

in operating profit in areas such as resource utilization, increased underwriter productivity, and client retention.

6 3

Simulation includes: a commercial business financial cycle including income statement, balance sheet,

working capital, and cash flow analysis.

The Insurance Industry

The property-casualty insurance market is highly competitive, marked by periods of soft premium pricing due to the excess supply of underwriting capacity. This surplus will continue to put pressure on premium pricing. Winning in the market will require financial strength, a high level of claims ser-vice, and a sales force focused on growing the business and improving margins.

In our work with industry leaders, it has been critical that employees in the company, as well as those that sell to the industry, understand the key ratios that drive the business. We have included in our Insurance Business Simulation key measurements like the combined ratio which is a measure of underwriting performance that combines the loss ratio (equal to loss and loss adjustment expenses divided by earned premiums), the expense ratio (derived by dividing underwriting expenses by written premiums) and sometimes the dividend ratio (policyholder dividends divided by earned premiums). A combined ratio of 100% indicates an underwriting profit, while one in excess of 100% indicates an underwriting loss.

Our experience in the industry has centered on helping insurance companies improve their opera-tional efficiencies, as well as helping them increase their revenue growth through a sales approach focused on the value they deliver to their customers.

Nationwide

One of the top insurers in the US, Nationwide offers both commercial and personal lines insurance prod-ucts as well as financial services products as part of its portfolio. To help the company identify ways to man-age expenses and help grow the business more profit-ably, we worked with their executives to create their Nationwide Insurance Financial Simulation. Cross functional teams worked together in sharing knowl-edge, understanding the business better, and iden-tifying ideas on how to improve the business. They looked at all areas including risk selection, processing of business, servicing customers and agencies, and overall claims processing and servicing. The teams were challenged to think like executives and identify how to enhance and improve the business.

Impact: � The program significantly impacted employee

engagement and alignment to their profitable growth strategies providing valuable insight linking the employees to the “why’s” behind the strat-egies. Nationwide identified more than $1 million in improved profitability by finding operational improvements and suggesting new ways to work together to write and process business and claims.





Simulation includes: insurance financial cycle and how to impact net earned premiums, underwriting expenses, claim expenses and net underwriting performance. Also

includes how to impact Combined Loss and Expense Ratios.



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Westfield Commercial Insurance

We delivered our Commercial Business Financial Sim-ulation for Westfield’s commercial insurance group to help them understand the ways they deliver financial impact for their customers. We included the areas that Westfield delivers value like conducting a Risk Control Survey (which identified multiple areas of risk) allowing them to provide the proper coverage for each unique business situation.

Westfield helped their customers to manage their risks and lower their overall operating expenses through safety program improvements and other prescreening practices they recommended which reduced exposure.

Impact: � Westfield sales teams were able to identify more

than $9 million in improved profitability for five key customers leading to revenue growth, improved margins, and improved customer renewals.

Westfield Group - The Insurance Business

One of the top agribusiness insurers in the US, Westfield Group also offers commercial and per-sonal property/casualty insurance including auto and homeowners insurance and niche products like fidel-ity and surety bonds.

To help the company identify ways to manage costs, improve margins and grow the business, we imple-mented our Insurance Industry Financial Simulation. Cross-functional teams worked together in sharing knowledge and ideas on how to impact better under-writing and have better risks on the books, as well as settling claims sooner. They wanted to reduce the reserves outstanding for the company which could lead to a favorable development on Loss Reserves. They focused on Loss, Expense, and Combined Ra-tios to improve overall profitability.

Impact: � The Westfield teams identified more than $10 million in improved profitability by finding opera-

tional improvements and they increased premiums by expanding tier pricing in other lines and other states.

The Chubb Corporation

The Chubb Corporations’s overall property-casualty operations are divided into three strategic business units: Personal Lines, Commercial Insurance and Spe-cialty Insurance. They implemented our Insurance Business Simulation to help cross functional teams identify strategies for improving operational efficien-cies. We focused on managing rates, a more disci-plined approach to renewal retention, and improved effectiveness in claims.

We also focused on all departments (underwriting, loss control, OSD, HR, accounting, IT, etc.) to identify efficiencies, thereby reducing redundancies that were increasing overall costs.

Impact: � The Chubb teams generated nearly $14 million

in improved profitability through a reduction in claim vendor expenses, an increase in processing efficiency, an increase in productivity in the Pre-mium Audit/Loss Control Department, and through investment in technology and hardware.

Westfield - Agency

The Westfield Agency Group is represented by more than 1,200 independent agents in 30 states. Westfield sells its products through teams of agents located throughout the country who specialize in specific markets, such as middle market and small business clients. Among commercial clients, small businesses (manufacturers, retail, and contracting operations, among others) make up the majority of Westfield’s customer base.

To help their Westfield employees better serve their Agency Group, they implemented Insurance Agency Financial Simulation, designed to help employees understand their agent’s business so they could help agents drive profitable results for their agency.

Impact: � The underwriters focused their agencies on re-

ducing the number of high cost customers by 10% which were impacting their Loss Ratio by 5%. They also put an emphasis on cross-selling which increased sales by two policies per week per agent. Overall, they were able to document more than $1 million in new policy sales resulting in an average of $150,000 in new commissions.

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Simulation includes: the insurance agency financial cycle including the income statement, balance sheet, cash flow and the key metrics of Return-on-Equity(ROE) and Return-

on-Assets (ROA).





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FM Global - Commercial Insurance

FM Global provides cost-effective property insurance and engineering solutions to protect commercial cli-ents’ operations from fire, natural disasters, and other types of property risk. They work to protect assets and minimize the potential for losses for clients worldwide through a unique combination of engineering, under-writing, and claims. Through hands-on research and deployment of on-the-ground engineers, they ensure their products and services remain the best available and directly support risk management processes and objectives.

To help their account managers better understand how to sell the value of their services, we delivered our Commercial Business Simulation that helped them identify the key operational, financial, and competitive risks they were facing and how FM Global could deliver hard-dollar value.

Impact: � FM Global account managers grew their business over 20% by aligning with their client’s financial

strategy and accessing executive levels that buy more on value. They were able to develop value proposals for their services that reduced client risk by millions of dollars, resulting in long term contracts that created business partnerships with targeted accounts. Client retention soared from 79% to 86% during a two year span.

Country Financial

Country Financial sells property-casualty insurance in both urban and rural markets. They sell resi-dential, farm, automobile, and corporate insurance products.

Focused on how they could do a better job in under-writing of taking rate increases on risks that warrant increases due to the exposure and/or loss history. They identified ways that newly hired underwriters could become more productive earlier. Their Claims department wanted their people to understand how the stratified claims assignment process improved efficiencies and how the technical knowledge and skills of the Claims staff can increase and encourage quicker claim settlements.

Impact: � Country Financial identified more than $8 million

in operating profit in areas such as resource utilization, increased underwriter productivity, and client retention.

6 3



The Insurance Industry

The property-casualty insurance market is highly competitive, marked by periods of soft premium pricing due to the excess supply of underwriting capacity. This surplus will continue to put pressure on premium pricing. Winning in the market will require financial strength, a high level of claims ser-vice, and a sales force focused on growing the business and improving margins.

In our work with industry leaders, it has been critical that employees in the company, as well as those that sell to the industry, understand the key ratios that drive the business. We have included in our Insurance Business Simulation key measurements like the combined ratio which is a measure of underwriting performance that combines the loss ratio (equal to loss and loss adjustment expenses divided by earned premiums), the expense ratio (derived by dividing underwriting expenses by written premiums) and sometimes the dividend ratio (policyholder dividends divided by earned premiums). A combined ratio of 100% indicates an underwriting profit, while one in excess of 100% indicates an underwriting loss.

Our experience in the industry has centered on helping insurance companies improve their opera-tional efficiencies, as well as helping them increase their revenue growth through a sales approach focused on the value they deliver to their customers.

Nationwide

One of the top insurers in the US, Nationwide offers both commercial and personal lines insurance prod-ucts as well as financial services products as part of its portfolio. To help the company identify ways to man-age expenses and help grow the business more profit-ably, we worked with their executives to create their Nationwide Insurance Financial Simulation. Cross functional teams worked together in sharing knowl-edge, understanding the business better, and iden-tifying ideas on how to improve the business. They looked at all areas including risk selection, processing of business, servicing customers and agencies, and overall claims processing and servicing. The teams were challenged to think like executives and identify how to enhance and improve the business.

Impact: � The program significantly impacted employee

engagement and alignment to their profitable growth strategies providing valuable insight linking the employees to the “why’s” behind the strat-egies. Nationwide identified more than $1 million in improved profitability by finding operational improvements and suggesting new ways to work together to write and process business and claims.





Simulation includes: insurance financial cycle and how to impact net earned premiums, underwriting expenses, claim expenses and net underwriting performance. Also

includes how to impact Combined Loss and Expense Ratios.



Powered by



Powered by


The Top Five Best Business Practices

Our insurance industry sales financial literacy and value selling system The Profit Specialist® has been used by industry leaders to enable their salespeople to sell higher and compete on the total economic value they deliver to their customers.

Based on our work with insurance market leaders, we have found that the top five best practices by the best salespeople include:

1. Selling multiple products and services. Your best salespeople sell everything to meet the customer’s needs. We have found that just a 5%

boost in additional services drives significant revenue acceleration, and at a lower cost.

2. Selling higher. By selling to high level economic decision makers, the sales cycle is shortened by as much as 50%

and projects are much larger.

3. Improving competitive win/loss ratio. When salespeople call higher, competition is reduced by 75% (fortunately competitors are stuck at

lower levels).

4. Protecting margins. When salespeople are calling higher and dealing with people who are focused on value - not just

price, they do a better job of protecting pricing and improving margins. We have found that every 1% in pricing protection can mean up to 10% in increased operating profit.

5. Retaining your best customers. All of the prior best practices become the glue to retain your most profitable customers.

Our research shows that financial knowledge is the catalyst for achieving these five best practices. Understanding the economics behind your customer’s business is the only way to align your value with their financial goals.

Selling to the Insurance Industry

The insurance industry is demanding, and given the recent economic problems, selling to insurance companies has become even more challenging. We have found that those companies that serve the industry must be able to speak the language of senior level decision makers if they want to be suc-cessful at aligning their solutions with the company’s financial and business priorities. Insurance companies are complex, making it difficult for salespeople to gain a “big picture” view of the insurance company’s challenges, priorities, and overall business strategies. The number one goal of the compa-nies we have worked with has been to gain access to the executive levels and to speak the language of financial return.

We have also helped salespeople by providing them a methodology for identifying all the ways they directly impact an insurance company’s financial success. By quantifying the areas of the business that they can impact, salespeople get to the next level by differentiating on the total value they deliver.

LexisNexis® - Insurance

LexisNexis® is a leading global provider of content-enabled workflow solutions designed specifically for professionals in a variety of markets including insurance. They needed their account managers to understand and be able to articulate all the differ-ent ways their solutions impacted their insurance customer’s business from a financial standpoint. The desire was for them to call at higher levels and truly become known as a business partner. We delivered our Property & Casualty Insurance Industry Simula-tion which enabled their sales team to reach new levels in their customer’s organizations. In addition to selling higher, they were able to improve Lexis-Nexis® margins as well.

Impact: � LexisNexis® was able to help its customers

identify more than $3M in premiums for previ-ously unidentified youthful drivers and identify multiple cross selling opportunities that presented millions in potential revenue growth. They also helped companies in collecting over $5M in subrogation recoveries.



2 7





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We Know Insurance

The insurance industry is under unprecedented pressure to cut costs, optimize capital, and provide in-creased levels of quality products and improved customer service. As the full implications of financial crisis are realized, insurance companies and the suppliers that provide them solutions must find new ways to compete.

We believe there are six key trends that will drive insurance now and in the future:

� The impact of impending governmental regulation following the financial crisis � Ongoing availability of funding and the cost-of-capital � The lingering impact that high unemployment will have on demand for insurance products � Agent competition in the marketplace � Ratio management in the face of stiffer competition � Earnings pressures

For 25+ years, Aarthun Performance Group, Ltd. has helped blue chip insurance companies compete on a whole new level by installing innovative and profit-centered solutions. We know the industry will change. No other company has more experience or is better equipped to assist you in selling effec-tively through this turbulent and rapidly changing market environment.

We have delivered our customized financial and business simulation for a number of insurance mar-kets including:

� Insurance companies � Personal insurance � Agencies � Commercial insurance

We Get Results

This brochure outlines the types of results we have achieved for our blue chip clients. We have documented and validated millions of dollars of profit impact through the installation of our system. Whether it is growing profitable revenue, improving margins, or calling on higher level decision mak-ers to drive sales productivity, we install systems that get results.

About Aarthun Performance Group, Ltd.

Aarthun Performance Group, Ltd. (APG) develops and customizes high impact, financially oriented, sales and professional/managerial training programs that deliver bottom line results. We are currently working with nearly 200 of the Fortune 500 companies across 30 industries. Our mission is to help our customers create better business people. We are working with financial service industry lead-ers. Through our work we have been able to build an unparalleled expertise in the development and installation of a financial and value selling methodology that helps our clients drive one or more of the key measurements including selling multiple products and services, at higher margins, to higher level economic decision makers.

We have listed below a few of the advantages of working with APG:

� We understand value creation and how to execute profit improvement strategies that get results in financial services.

� We customize our financial and business simulation to your customer’s key financial drivers, which directly align to their corporate strategies.

� We generate greater “connectivity” and understanding of how value is created uniquely for your organization and for your customers (based on economic factors, key metrics like ROA, ROE, and Shareholder Value).

� By customizing your financial simulation and linking value creation to the unique financial drivers of your business, your employees are able to identify, quantify and present value-based solutions built around your company’s financial needs.

� We focus on outcomes and ensure the learning is translated into financial results.

Aarthun Performance Group, Ltd.20329 SH 249, Suite 210

Houston, TX 77070Phone: (281) 580-5705

www.aarthun.com

8 1



Know Your Customer’s BusinessFinancial Services - Insurance

Real financial intelligencechanges the game

Powered by

COMMERCIALAGENCY

know your customer’s business · by selling to high level economic decision makers, the sales...

Documents