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ACORD Value Creation Studies

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PC_VC_ThumbnailACORD U.S. Property & Casualty Value Creation Study

The U.S. Property & Casualty insurance industry is the largest in the world, representing over 35% of total global premiums. Not surprisingly, as the largest, it’s also very complex, with a large number of firms, different ownership structures, unique products, and multiple regulators. Given the complexity of the market, measuring value creation – much less understanding its drivers and implications – is extremely difficult. The ACORD U.S. P&C Value Creation Study was conducted to get at the essence of sustainable value creation and the characteristics of those who achieved it.

The latest edition of the study, released in December 2022, found that more than half of value-creating insurers did so through investment income alone, depending on this revenue to offset underwriting losses. ACORD focused on Sustainable Value Creators – those who generated excess cash flow through both underwriting and investment – in order to uncover the strategies, tactics, and capabilities that lead to success.

“Increased alignment between strategic intent and capabilities is the key differentiating factor separating sustainable value creators from destroyers," said Bill Pieroni, President and CEO, ACORD. "We are finally seeing the true impact of decades of technology investment on results.”

Life_VC_ThumbnailACORD Global Life Insurance Value Creation Study

The global life insurance industry is notoriously idiosyncratic among not only insurance lines of business, but across all sectors in general. The ACORD Global Life Insurance Value Creation Study leveraged in-depth financial analysis, data-driven research, and interviews with industry leaders to answer three key questions:

  • How have life insurers performed globally?
  • What metrics correlate to shareholder returns?
  • Which strategies and capabilities support high performance?

The study analyzed six years of data spanning 50 companies, 17 countries, over 20 lines of business, and 1/3 of global life NPW. By comparing multiple financial performance metrics and carrier attributes, we were able to highlight critical best-practice capabilities across the value chain.

“When we took a look at all the data, some of the implications were quite surprising,” said ACORD CEO Bill Pieroni. “The study showed that none of the traditional, commonly used financial metrics showed a statistically significant correlation to total shareholder return.” Instead, ACORD’s research found that characteristics such as business mix, M&A activity, and innovation-focused strategies corresponded most closely with successful value creation.