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Strategy Analytic Templates
3
In order to provide clarity around the universe of analytic templates, we have structured
them to demonstrate the inter-...
All template content is for illustrative purposes only.
Strategy Analytic Templates
Analysis Content
A industry structure ...
9
Mortgage Debt Outstanding in the U.S. Is Growing Steadily
4,024
4,365
4,755
5,239
$3,851
1996 1997 1998 1999 2000
Debt O...
12
Overview of Origination Players
1Wa Mu has acquired the mortgage operations of Fleet and PNC in 2001, making it the lar...
15
Overview of Servicing Players
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Rank
Top 15 Servicers for 2000
Wells
Chase
Bank of Am...
18
How Money Is Made along the Mortgage Value Chain
Origination Servicing Securitization Investors
• Application and credi...
21
Mortgage Industry in the Midst of a Consolidation Wave
1Using 2000 market share and including all consolidation activit...
24
Product Offerings Are Expanding To Better Fit Borrower
Needs
Standard Products Still Majority of Market
Mortgage
Produc...
27
Location Profile: Richmond, VA Richmond, VA MSA
BAC Location Details
Local Address: 8011 VILLA PARK DR
Available Seats:...
30
Corporate Overview - General
Sources: Company web sites, Thomson Financial, Hoover’s
Stock Information:
<Company Name> ...
33
Product Overview
LAH vs. P&C Premiums 2002
Top Product Lines – 2000 - 2002 Premiums
<Company Name> Mutual
P&C
46%
P&C
L...
36
<Company Name> Financial buys Provident Mutual for $1.56B
8/8/2001—The Financial Times
NFS announced plans to acquire r...
All template content is for illustrative purposes only.
Strategy Analytic Templates
Analysis Content
Trends shown can desc...
42
Product Analysis: Private Passenger Auto Liability and Physical
Damage
Private Auto insurance is the largest product li...
45
Source: Pricing_Discipline_Key Steps Creating Pricing Approachl_FSI.ppt
Private Auto Insurance Ratios
15%
30%
45%
60%
7...
48
Company G
• Insert text here
Company F
• Insert text here
Company E
• Insert text here
Company C
• Insert text here
Com...
51
The P&C Insurance Market Is Changing
Observation
Since 2001, low interest rates have fueled booms in
both auto and home...
54
Online P&C Researchers Are The Best Prospects
Online researchers are
less likely to apply . . .
Younger, higher-income
...
57
Client Specific: Operations
Understanding and improving operations is a core consulting function and includes many wide...
All template content is for illustrative purposes only.
Strategy Analytic Templates
Analysis Content
An executive profile ...
All template content is for illustrative purposes only.
Strategy Analytic Templates
Analysis Content
A financial benchmark...
Strategy Analytic Templates
All template content is for illustrative purposes only.
Analysis Content
A comprehensive analy...
69
Supply Side analysis evaluates industry structure and company position in the market, as
well as product trends, existi...
72
M&A Activity in Insurance
Recent deal statistics show varying levels of M&A activity within the four major
sectors …
Th...
75
Internal M&A Drivers in Insurance
There are a variety of strategic end–games of various insurance market strategies. Mu...
78
New and alternative channels have different growth patterns
14.8
13.412.5
11.5
10.4
2.3
3.5
4.9
7.0
9.1
10.70 10.90
11....
81
Existing infrastructure of the country
can pose challenges, but architecture
workarounds need to be made
accordingly
Id...
Strategy Analytic Templates
All template content is for illustrative purposes only.
Category: Client Specific
Template:
An...
Although B of A’s P/E Ratio is now comparable with its
competitors’, there are still areas where analysts maintain
concern...
90
TSR: 1998 - 2004
100
43
38
54
70
58 60
-
20
40
60
80
100
120
1998
1999
2000
2001
2002
2003
2004
Relative TSR
Comparativ...
93
1 Year Asset Growth: 1998 - 2004
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
1998
1999
2000
2001
2002
2003
Cost of Capital: 1998 ...
96
Observations
Technology Production Distribution Marketing Service Total Cost
Cost Breakdown
Year 2004
$ Millions
Cost 1...
1
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Strategy Analytics Templates

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This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here:
http://flevy.com/browse/business-document/strategy-analytics-templates-763


This deck is a collection of best-in-class strategy analytic templates.

The templates have been categorized into the following topics: Supply side, Demand side, Customer, Operation, Supply chain, Strategy, Financial analysis/modeling.

The deck uses analysis templates in the financial services industry for illustration purpose but the slides can be adapted to fit various industries. The slides provide both quantitative and qualitative information including many useful frameworks, tools, checklists, models, diagrams and charts.

It is an ideal reference document for management consultants, business/financial analysts, corporate managers, and MBA students.

See also "Corporate Strategy Design Consulting Report"
/browse/business-document/corporate-strategy-design-consulting-report-778

See also "Strategy Articulation Workbook"
/browse/business-document/strategy-articulation-workbook-774

See also "Pricing Strategy Workshop"
/browse/business-document/pricing-strategy-workshop-764

See also "Pricing Strategy Implementation Toolkit"
/browse/business-document/pricing-strategy-implementation-toolkit-726

See also "Post Acquisition Integration Strategy (Post Merger Integration - PMI)"
/browse/business-document/post-acquisition-integration-strategy-post-merger-integration-pmi-659

Publié dans : Business
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Strategy Analytics Templates

  1. 1. Strategy Analytic Templates
  2. 2. 3 In order to provide clarity around the universe of analytic templates, we have structured them to demonstrate the inter-relationships and linkages from one level to the next Category Topic Analysis Sub-Analysis Template High-level classification of the fundamental issues/questions requiring research and analysis (i.e., Market Specific or Client Specific) Grouping that categorizes research and analysis based on the subject matter (e.g., Supply Side, Customer, Strategy, etc.) Set of focused slides showing a single type of analysis (e.g., Demand Side – Demographics, Strategy – Competitive Positioning, etc.) One or more individual slides showing a single type of analysis with an additional layer of refinement based on a specific criteria (e.g., Customer – Needs – Attribute Assessment or Customer – Needs – Satisfaction, etc.) Individual slides depicting a specific sub-analysis Approach: Structure of Analyses - Definitions This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  3. 3. All template content is for illustrative purposes only. Strategy Analytic Templates Analysis Content A industry structure analysis within FSI will cover data such as: Key market statistics Major Players / Market Share Distribution Channels Consolidation Trends Value Chain(s) Revenue/Cost Drivers Trends Time Line Analysis Description Provides a competitive overview of a selected industry or sector (e.g. retail banking, securities, transaction banking). Template The template covers the following items: Industry: FSI Sector: Banking Topic: Supply SideAnalysis: Industry Structure Category: Market Specific Return to Funnel Page This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  4. 4. 9 Mortgage Debt Outstanding in the U.S. Is Growing Steadily 4,024 4,365 4,755 5,239 $3,851 1996 1997 1998 1999 2000 Debt Outstanding1 $ Billions 1Mortgage debt for 1- to 4-family residences Source: Inside Mortgage Finance CAGR = 8.0%CAGR = 8.0% Do not extract data. All template content is for illustrative purposes only. This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  5. 5. 12 Overview of Origination Players 1Wa Mu has acquired the mortgage operations of Fleet and PNC in 2001, making it the largest total originator and second largest originator. Wa Mu is a thrift 2Countryside is moving towards an integrated lender model after completing the acquisition of Treasury Bank in May 2001 Source: Inside Mortgage Finance; Company Websites 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Rank Top 15 Total Originators for 2000 Wells Fargo Chase Countrywide2 Bank of America Wa Mu1 ABN AMRO Fleet1 PNC1 Cendant HomeSide National City Dime/Nor. Amr. Golden West Citi GMAC Lender Market Share (%) 7.3% 7.3% 5.9% 4.9% 4.8% 2.3% 2.2% 2.1% 2.1% 2.1% 2.1% 2.0% 1.9% 1.9% 1.7% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Rank Top 15 Retail Originators for 2000 Wells Fargo Bank of America Golden West Countrywide2 Cendant Chase Wa Mu1 GMAC National City CTX North American First Horizon Sun Trust Citi Old Kent Lender Market Share (%) 10.3% 5.4% 5.0% 4.6% 4.5% 4.4% 4.4% 3.4% 3.2% 2.1% 1.8% 1.7% 1.4% 1.3% 1.3% Bold = Integrated lender Italics = mortgage bank Do not extract data. All template content is for illustrative purposes only. This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  6. 6. 15 Overview of Servicing Players 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Rank Top 15 Servicers for 2000 Wells Chase Bank of America Countrywide1 HomeSide Wa Mu2 GMAC Fleet2 First Nationwide ABN AMRO Citi3 PNC2 Cendant National City Principal Residential Lender Market Share (%) 8.6% 6.9% 6.4% 5.4% 3.6% 3.6% 3.3% 2.6% 2.1% 2.1% 1.8% 1.8% 1.5% 1.2% 1.1% Bold = Integrated lender Italics = mortgage bank 1Countrywide is moving towards an integrated lender model after completing the acquisition of Treasury Bank in May 2001 2Wa Mu has acquired the mortgage operations of Fleet and PNC in 2001, making it the second largest servicer 3Citi has moved to #9 with acquisition of Associates First Capital in Q4 2000 Source: Inside Mortgage Finance; Company Websites Do not extract data. All template content is for illustrative purposes only. This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  7. 7. 18 How Money Is Made along the Mortgage Value Chain Origination Servicing Securitization Investors • Application and credit report fees – Collected regardless of success of application ($200 – 600) • Origination fees – Collected only if application successful – 1 – 2% of principal • Ancillary fees • Interest on mortgage loans OR difference between buying and selling price of mortgage note • Opportunity to self-securitize loan and sell as MBS • Selling servicing rights • Lenders can sell other services and products, own client relationship • High probability of refinance income • Servicing fees – Fraction (25 – 44 bp) of outstanding principal – Declines over time as loan is paid off • Float income – Servicer collects payments from borrower and earns interest on tax and escrow insurance, and principal and interest before payment to investor • Other fees and ancillary income – Late payment, bounced check – Prepayment/transfer processing fees – Insurance products – Opportunity to sell other products • Guarantee fees for securitizing of mortgage pools – Fees on average 20 basis points • Investments in MBS – Returns higher than cost of capital – Cost of capital of GSE’s very low due to AAA credit rating as a result of GSE status and line of credit with Treasury • Returns on fixed-income investments – Higher returns than T-bills – Almost the same amount of risk • Revenues from trading in MBS – Arbitrage – Bets against interest rate movements Usually collected by mortgage broker Revenues of Key Players Do not extract data. All template content is for illustrative purposes only. This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  8. 8. 21 Mortgage Industry in the Midst of a Consolidation Wave 1Using 2000 market share and including all consolidation activity as of 04/30/01 2Top 5 originators are: Wells Fargo, Chase, Countrywide, Bank of America and Washington Mutual 3Includes estimated 1% market share gained through smaller acquisition by top 5 Source: Person X; Inside Mortgage Business; BCG Analysis “I will not be surprised to see the top five controlling 50% of originations in 5 years” — Person X, President, Washington Mutual “I will not be surprised to see the top five controlling 50% of originations in 5 years” — Person X, President, Washington Mutual Aggressive acquisitions by top 5… Originations …has led to increasing industry consolidation. Acquire r Target Date Chase Advanta’s sub-prime lending Q1, 2001 Citibank Associates First Capital Q4, 2000 Wa Mu Alta Residential Mortgage Trust Q1, 2000 Wa Mu Bank United Q1, 2001 Wa Mu PNC Mortgage Q1, 2001 Wa Mu Fleet Mortgage Q2, 2001 Wells Fargo Crossland Mortgage Q2, 2000 Wells Fargo First Union Mortage (parts of servicing portfolio) Q3, 2000 Wells Fargo GE Capital’s origination and servicing Q3, 2000 27.9 28.4 27.6 37.4 32.2 38.5 0 5 10 15 20 25 30 35 40 45 Total Originations Retail Wholesale Market Share of Top 5 Originators (%) 1999 Q1, 2001 Do not extract data. All template content is for illustrative purposes only. This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  9. 9. 24 Product Offerings Are Expanding To Better Fit Borrower Needs Standard Products Still Majority of Market Mortgage Products Year 1970 1980 1990 2001 Fixed-rate Mortgages “Plain Vanilla” Shorter-maturity mortgages Biweekly mortgages Adjustable-rate mortgages Product proliferations • Base interest rate (COFI, LIBOR, treasury) • Frequency of rate adjustment • Graduated payment, growing equity, shared equity, wrap Home equity loans Product differentiation • “Branded” mortgages • Private label Trends Stable, limited number of mortgage products Rapid growth in number of products Overall number of products increasing, but individual players concentrating on smaller set of products Growth of brokers B&C loans “Piggyback” Reverse mortgages Interest only Pledge asset loans Risk-based Do not extract data. All template content is for illustrative purposes only. This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  10. 10. 27 Location Profile: Richmond, VA Richmond, VA MSA BAC Location Details Local Address: 8011 VILLA PARK DR Available Seats: 674 Number of Employees: 905 Key Functions: Consumer Service: Plus, Prime Air Access Airport Name(s) Richard Elelyn Byrd International Newport News/Williamsburg International Largest Area Airport Hub Size Small Major Carriers Represented: Air Tran, American Airlines, Continental Airlines, Delta Air Lines, Northwest Airlines, United Airlines, US Airways Annual Flights 18,600 Average Flight Delay (2004) 21% Direct Flights to Charlotte 24 State Incentives OverviewCommunity HighlightsLocation Details and Air Access • Major Business Facility Job Tax Credit (new or expanding companies receive a corporate income tax credit of $1,000/FTE; credit is taken over 3 years) • Sales & Use Tax Exemption (exemptions include custom computer software, internet access and telecom service) • Enterprise Zone Tax Credit (8 Enterprise Zones around Richmond; 60% of state income tax liability for 10-years, first year is 80%; 25% of employees must reside in a zone) • Enterprise Zone Job Grant (up to $500/job, $1,000 if person resides in EZ, for three consecutive years; maximum is $100,000 per company per year) • New Jobs Training Program (customized recruiting and training; at least 50% of co. revenues from outside of VA) • Governor’s Opportunity Fund (discretionary grant; eligibility depends on size of community, jobs and investment; grant cannot exceed 10% of fund appropriation; limited cases may be raised to $3 million) • Virginia Investment Partnership Fund (discretionary grant for VA employers operating 5+ years, & make large investments; 5 annual payments, cap at $6 million/year) Note: Corporate Income Tax Rate: 6.0% • Key industrial segments include: chemical manufacturing, advanced materials, pharmaceuticals, life sciences, Information Technology & Telecommunications (IT&T), semiconductors, financial services • Home to 10 Fortune 1000 headquarters and eight Fortune 500 headquarters including newly formed Genworth which became independent of GE in 2004 • Other financial services expansions have recently occurred in the mortgage services, health services, and debt collection and customer services in 2004 • Wachovia Securities selected Richmond as it’s headquarters location after merging with Prudential Securities in New Jersey and plans to add approximately 1,000 new jobs in coming years • Low current and historical unemployment rates • Smaller workforce with moderate projected population growth • Higher educational attainment indicators than many areas • Favorable air access to Charlotte • Recent office sector closings may indicate potentially available pool of qualified employees (specifically Capital One’s downsizing of over 3,000 people) • Several other major Financial Services firms are located in the area • Second highest percentage (>10%) of the workforce employed in financial services occupations of all locations evaluated with future growth projected • Industry concentration is the third highest of all evaluated locations and considerably higher than the US average • Highest business climate rating of all evaluated locations • Very low natural disaster risk • Eighth lowest wage index at 7.5% over the lowest cost location DisadvantagesAdvantagesArea Map BAC Location Details Local Address: 8011 VILLA PARK DR Available Seats: 674 Number of Employees: 905 Key Functions: Consumer Service: Plus, Prime Air Access Airport Name(s) Richard Elelyn Byrd International Newport News/Williamsburg International Largest Area Airport Hub Size Small Major Carriers Represented: Air Tran, American Airlines, Continental Airlines, Delta Air Lines, Northwest Airlines, United Airlines, US Airways Annual Flights 18,600 Average Flight Delay (2004) 21% Direct Flights to Charlotte 24 State Incentives OverviewCommunity HighlightsLocation Details and Air Access • Major Business Facility Job Tax Credit (new or expanding companies receive a corporate income tax credit of $1,000/FTE; credit is taken over 3 years) • Sales & Use Tax Exemption (exemptions include custom computer software, internet access and telecom service) • Enterprise Zone Tax Credit (8 Enterprise Zones around Richmond; 60% of state income tax liability for 10-years, first year is 80%; 25% of employees must reside in a zone) • Enterprise Zone Job Grant (up to $500/job, $1,000 if person resides in EZ, for three consecutive years; maximum is $100,000 per company per year) • New Jobs Training Program (customized recruiting and training; at least 50% of co. revenues from outside of VA) • Governor’s Opportunity Fund (discretionary grant; eligibility depends on size of community, jobs and investment; grant cannot exceed 10% of fund appropriation; limited cases may be raised to $3 million) • Virginia Investment Partnership Fund (discretionary grant for VA employers operating 5+ years, & make large investments; 5 annual payments, cap at $6 million/year) Note: Corporate Income Tax Rate: 6.0% • Key industrial segments include: chemical manufacturing, advanced materials, pharmaceuticals, life sciences, Information Technology & Telecommunications (IT&T), semiconductors, financial services • Home to 10 Fortune 1000 headquarters and eight Fortune 500 headquarters including newly formed Genworth which became independent of GE in 2004 • Other financial services expansions have recently occurred in the mortgage services, health services, and debt collection and customer services in 2004 • Wachovia Securities selected Richmond as it’s headquarters location after merging with Prudential Securities in New Jersey and plans to add approximately 1,000 new jobs in coming years • Low current and historical unemployment rates • Smaller workforce with moderate projected population growth • Higher educational attainment indicators than many areas • Favorable air access to Charlotte • Recent office sector closings may indicate potentially available pool of qualified employees (specifically Capital One’s downsizing of over 3,000 people) • Several other major Financial Services firms are located in the area • Second highest percentage (>10%) of the workforce employed in financial services occupations of all locations evaluated with future growth projected • Industry concentration is the third highest of all evaluated locations and considerably higher than the US average • Highest business climate rating of all evaluated locations • Very low natural disaster risk • Eighth lowest wage index at 7.5% over the lowest cost location DisadvantagesAdvantagesArea Map BAC Location Do not extract data. All template content is for illustrative purposes only. This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  11. 11. 30 Corporate Overview - General Sources: Company web sites, Thomson Financial, Hoover’s Stock Information: <Company Name> (Parent): N/A (Mutual) <Company Name> Financial: Stock Symbol: NFS Exchange: New York Rankings: Fortune 500: #111 P&C rank (by NPW): #7 LAH rank (by NPW): #3 Top Competitors (Hoover’s): AIG Prudential State Farm Company Description: <Company Name> is one of the largest insurance and financial services companies in the U.S., offering property & casualty, life and health and asset management products. The Property & Casualty division (CP&C) operates as <Company Name> Mutual Insurance, while the Life and Health division (LAH) operates as <Company Name> Financial, a publicly traded company 63% owned by <Company Name>. Gartmore Group is <Company Name>’s asset management arm. The company sells its products through such affiliates as Farmland Insurance, Gates McDonald, Scottsdale Insurance, and asset manager Gartmore. Focusing on personal and small business lines in the US, <Company Name> is buying specialty auto insurer THI from Prudential. <Company Name> Financial also bought Provident Mutual Life Insurance (now <Company Name> Provident); the acquisition made the company the fourth-largest US provider of variable life insurance. Although <Company Name> Financial and its Strategic Investments segment underperformed in 2002, the company swung to a net profit, helped in part by improved underwriting results by its insurance subsidiaries. Organizational Overview <Company Name> <Company Name> Financial (NFS) LAH ‘02 NPW $12.6B LAH 2002 NPW $12.6B <Company Name> Mutual Insurance Co <Company Name> Mutual Fire Insurance Co P&C ‘02 NPW $10.9B P&C 2002 NPW $10.9B* Columbus, OH 30,000 Primarily Annuities (even split between Personal and Group) Primarily Personal (Auto & Home) Columbus, OH Columbus, OH *: Does not include subsidiaries with DPW<$1B This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  12. 12. 33 Product Overview LAH vs. P&C Premiums 2002 Top Product Lines – 2000 - 2002 Premiums <Company Name> Mutual P&C 46% P&C LAH 54% <Company Name> Mutual <Company Name> Mutual Fire <Company Name> Life Insurance Sources: Thomson Financial Top Product Lines – 2000 - 2002 Premiums Top Product Lines – 2000 - 2002 Premiums Ordinary Life 10% Ordinary Annuities 34% A&H Other 0% Group Life 1% Group Annuities 55% <Company Name> Mutual FireP&C <Company Name> MutualLAH 125 180 197 3118 3300 3482 637 754 813 0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 2000 2001 2002 Commercial Personal Auto Personal Home Personal Home 4% Personal Auto 78% Commercial 18% 1072 1102 1218 1002 1115 1291 338 346 411 0 500 1000 1500 2000 2500 3000 3500 2000 2001 2002 Commercial Personal Auto Personal Home Personal Home 42% Personal Auto 44% Commercial 14% 2002 2002 2002 A&H Other Group Annuities Group Life Ordinary Annuities Ordinary Life 1695 1433 1260 81 4177 4308 8191 6870 0 2000 4000 6000 8000 10000 12000 14000 16000 2000 2001 2002 This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  13. 13. 36 <Company Name> Financial buys Provident Mutual for $1.56B 8/8/2001—The Financial Times NFS announced plans to acquire rival Provident Mutual in a deal valued at $1.56B Recent News Articles <Company Name> Varies Menu 4/16//2003—American Banker NFS released a new fixed life product into the bank channel NFS had made its name in bank life insurance sales with variable universal life products, but now <Company Name> has launched a fixed product NFS Informed of Verdict in Monumental Life Litigation 2/24/2003—PR Newswire NFS reported that a verdict was reached against its subsidiary, <Company Name> Retirement Solutions (NRS), awarding Monumental Life $28M Monumental claimed that NRS has breached its contractual relationship when NRS modified its business model effectively ending the use of a field sales force to serve the public sector marketplace NRS will appeal the decision <Company Name> Variable Annuity Strategy 1/6/2003—American Banker NFS is adopting a variable annuity strategy that includes a group of customized products and tools that enable registered representatives to choose subaccounts for their clients The tools are web-based and are intended to help reps more easily explain the difference among annuity investment options and to pick the most appropriate investment options for their clients The new lineup and web tools are to be offered through registered reps in banks, broker-dealer firms, <Company Name> agents, and brokerage firms Unifying <Company Name>’s IT Operations 10/1//2002—Insurance Networking Person X is CIO of NFS, reports directly to the CEO, W.G. Jurgenson, and oversees 5,000 IT staff members His mission is to create a collaborative IT environment, maximize ROI on technology investments, and deliver value-added services With the rapid increase in the number of companies under the NFS umbrella, Person X has faced a significant challenge A three-part IT strategy has been created for the organization Strengthen the company’s core IT capabilities Analyze the multiple, relatively autonomous lines of business that sell different products in different distribution channels to be sure that sound business technology strategy supports the efforts to differentiate products in the marketplace Leverage and share IT capabilities across the various companies to reduce expenses or find new revenue or growth opportunities <Company Name> Mutual Deal Boosts Asset Management 6/25//2002—Life Insurance International <Company Name> Mutual is to buy the money management unit of its majority owned life insurer, NFS, for $340M The deal is designed to bring together <Company Name> Mutual’s asset management operations and allow NFS to focus on the sale, rather than the management of investment products This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  14. 14. All template content is for illustrative purposes only. Strategy Analytic Templates Analysis Content Trends shown can describe developments regarding Clients / Competitors Markets / Industries Products Technology Information can cut across various dimensions e.g., Adoption Rates Usage Behaviors / Patterns FTE’s Price Number of Offices Revenues Time period Analysis Description A timeline of developments and major events for a particular industry, commodity, or company. Template The template covers the following items: Industry: FSI Sector: Neutral Topic: Supply Side Analysis: Emerging Technologies and Innovations - Trend Analysis Category: Market Specific Return to Funnel Page This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  15. 15. 42 Product Analysis: Private Passenger Auto Liability and Physical Damage Private Auto insurance is the largest product line within the Property & Casualty industry – accounting for nearly 40% of the entire market. Slow growth is driving new strategies to capture market share Trends Auto insurance is a mature product. The number of licensed drivers in the US is growing slowly1. Analysts forecast growth for the auto insurance market at about 2%. In order to grow premiums, insurers will have to fight for market share. Insurers are attempting this using a number of strategies: Heavy price competition – Progressive and GEICO are leading the way with price-focused marketing pitches. Recently, Allstate began mentioning price in their advertisements for the first time Move to Direct Distribution – Given the relative simplicity of auto insurance and the lower costs associated with direct channels such as Internet and phone, insurers are investing heavily in their direct distribution capabilities (Example: GEICO) Multi-Tiered Rate Plans – Insurers are using advanced analytics to further segment customers to better price policies. Additionally, analytics are being used to determine a customer’s propensity to purchase additional products (Example: Progressive) Concierge Services – In a move to own the entire customer experience and improve customer retention efficiency, insurers are developing full service claims centers that assist customers in filing claims quickly, getting car repairs and facilitating car rentals (Example: Progressive, Safeco) Key Product Metrics 2001 2002 2003 Private passenger auto liability Net Written Premiums ($millions) $89,286. 4 $89,286. 4 $89,286. 4 Growth Rate (5 Year CAGR) 6.4% 6.4% 6.4% Product Profit Margin (6.2%) (6.2%) (6.2%) Loss Ratio 94.8% 94.8% 94.8% Expense Ratio 11.4% 11.4% 11.4% Combined Ratio 106.3% 106.3% 106.3% Losses Incurred ($millions) $97,708. 1 $97,708. 1 $97,708. 1 Average commission per car1 $56.15 $56.15 $56.15 Private passenger auto physical damage Net Written Premiums ($millions) $62,017. 3 $62,017. 3 $62,017. 3 Growth Rate (5 Year CAGR) 4.1% 4.1% 4.1% Product Profit Margin 29.0% 29.0% 29.0% Loss Ratio 58.5% 58.5% 58.5% Expense Ratio 12.0% 12.0% 12.0% Combined Ratio 70.6% 70.6% 70.6% Losses Incurred ($millions) $44,927. 2 $44,927. 2 $44,927. 2 Average commission per car2 $36.58 $36.58 $36.58 Source: Highline Financials & XYZ Analysis Source: iii.org 1 Average auto liability revenue ($449.18) X Ind. Agent Commission (12.5%) = $56.15 2 Average auto physical damage revenue ($292.67) X Ind. Agent Commission (12.5%) = $36.58 This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  16. 16. 45 Source: Pricing_Discipline_Key Steps Creating Pricing Approachl_FSI.ppt Private Auto Insurance Ratios 15% 30% 45% 60% 75% Loss Ratio Product Profit Margin Growth Rate Expense Ratio = Range of findings = Company = Median Private Auto Insurance Financials 20 40 60 80 100 Losses Incurred Net Written Premiums Observations Expense Ratio (BN$) Do not extract data. All template content is for illustrative purposes only. Financial Variable Benchmarks This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  17. 17. 48 Company G • Insert text here Company F • Insert text here Company E • Insert text here Company C • Insert text here Company D • Insert text here Company B • Insert text here Company A • Insert text here 200X Product Assessment - Select Competitors Company Home Owner Life Private Passenger Liability Private Passenger Liability Observations / Implications / Key Findings Client • Insert text here Source: Annual Reports, Company Press Releases This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  18. 18. 51 The P&C Insurance Market Is Changing Observation Since 2001, low interest rates have fueled booms in both auto and home purchases. As a result of this activity, the number of consumers applying for auto and homeowner's insurance has risen dramatically This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  19. 19. 54 Online P&C Researchers Are The Best Prospects Online researchers are less likely to apply . . . Younger, higher-income consumers who browse P&C products online are not as committed to purchasing as offline P&C researchers are. Less than half of online P&C researchers ultimately apply, compared with more than 60% of offline researchers. . . . but more likely to apply online Of those online researchers who do apply, about half apply over the Internet. This makes them very attractive prospects to insurers because it's far less expensive to close a policy online than it is in person or over the phone This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  20. 20. 57 Client Specific: Operations Understanding and improving operations is a core consulting function and includes many wide- ranging types of analyses. At a higher level, the operation analyses can be grouped into the following groups: Corporate Overview Process Improvement Capabilities Assessment Controls Organization Analysis Asset Management Enterprise Cost Reduction Outsourcing Analyses Contact Centers Merger Integration Benchmarking • TBD • TBD • Capabilities by dimension across competition • Executive Position • Education / prior work experience • News Articles published • FSI Sector Financial Data • TBD • TBD • TBD • Survey / Plans for IT Outsourcing • Survey / Plans for Consulting services • TBD • TBD Sub-AnalysesScope Broad Narrow • Trends • Volume • Key Facts and Figures • News / Thought Pieces • Civic Organizations / Board of directors Return to Structure and Analysis Page This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  21. 21. All template content is for illustrative purposes only. Strategy Analytic Templates Analysis Content An executive profile will normally include: Position Tenure Prior Work Experience Number of Organizations News Articles Thought Pieces Education Civic Organizations Board of Directors Analysis Description Profiles of major executives detailing their tenure with a company, major accomplishments, news, and previous work experience. Template The template covers the following items: Industry: Neutral Sector: Neutral Topic: Operations Analysis: Organizational Analysis – Executive Profile Category: Client-specific Return to Funnel Page This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  22. 22. All template content is for illustrative purposes only. Strategy Analytic Templates Analysis Content A financial benchmarking analysis within FSI will most likely cover data such as: Banking Financial Data Efficiency Ratio Net Interest Income Loan Loss Provision Net Non-Interest Income Loan Loss Reserves Insurance Financial Data Net Investment Income Realized Gains/Losses Benefits, & Adjustments Deferred Policy Acquisition Costs Policy Liabilities Securities Financial Data EBIT Market Capitalization PE Ratio Return on Assets Return on Equity In addition, key findings or interesting facts may be added as appropriate Analysis Description A comparison of publicly available financial variables across industry participants that provide comparable ratios and data points at the corporate level. For a financial benchmarking, the financial variables can either be industry neutral or specific. Template The template covers the following items: Industry: FSI Sector: Banking Topic: OperationsAnalysis: Benchmarking Category: Client-specific Return to Funnel Page This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  23. 23. Strategy Analytic Templates All template content is for illustrative purposes only. Analysis Content A comprehensive analysis will ideally include: Plans for IT Outsourcing: New application development work Individual applications besides ERP Desktops Distributed server environment Mainframe operations Portfolio of applications Telecom network Database and storage ERP application IT Infrastructure Plans for Consulting services: IT strategy consulting Web site design Architecture planning Business process design Application development or implementation Analysis Description A survey of banks’ and insurers’ spending plans for IT outsourcing and consulting services. Template The template covers the following items: Industry: FSI Sector: Neutral Topic: OperationsAnalysis: Outsourcing Category: Client Specific Return to Funnel Page This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  24. 24. 69 Supply Side analysis evaluates industry structure and company position in the market, as well as product trends, existing product and services, and innovations. Sub-Analyses • TBD Sourcing Supplier Analysis Analyses Customer & Channel • TBD • TBD Client Specific: Supply Chain Scope Broad Narrow Return to Structure and Analysis Page This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  25. 25. 72 M&A Activity in Insurance Recent deal statistics show varying levels of M&A activity within the four major sectors … This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  26. 26. 75 Internal M&A Drivers in Insurance There are a variety of strategic end–games of various insurance market strategies. Multiple, complimentary end–game strategies are possible. Focus on core competencies Unique product or service Market share gain within specific product and/or geographic market Business line expertise Strategic focus will be around building superior market leadership within a specific product and/or demographic Strategic focus will be around achieving operational efficiencies across product and/or geography Geographic reach Efficient cost structure Product breadth Diversification of business lines Expansion into new markets Boost to operating results Increased market share within core business Elimination of under–performing lines Potentially more attractive longer–term acquisition target Improved cost structure, particularly in technology Greater price control through scale economies Global branding Increased earnings stability, particularly in downturn periods StrategyM&ADriversDestination Strategic focus will be around building a perception of superior value and quality to employers and distributors Market/consumer awareness Distribution preference Pricing benefits Cross–selling capabilities Value added products and servicing Global branding Enhanced price control Increased wallet share Life time value relationships with consumers Strategic focus will be around gaining true multiple channel access Geographic reach Distribution preference Pricing benefits Cross–selling capabilities Expansion into new markets Global distribution Enhanced price control Increased wallet share Specialization Scale Brand Distribution Unum acquired Provident–Paul Revere to further its dominance in disability market Lincoln National bought life ops from Aetna and CIGNA, sold P&C and reinsurance American General acquired numerous small targets to broaden and deepen its product portfolio Travelers bought Citibank Aegon bought Transamerica Conseco bought Green Tree Financial AIG acquired SunAmerica & American General to increase out its global reach, gain life & annuities scale, & generate cross–selling opportunities ING bought ReliaStar and Aetna Financial Services AXA acquired Acquired Guardian Royal, Royale Belge and UAP Hartford bought Fortis’ life operations to acquire 3,000 financial planners MetLife bought GenAmerica Royal Bank of Canada bought Liberty Life’s distribution network AJ Gallagher uses multiple agency acquisitions as ongoing strategy Cases This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  27. 27. 78 New and alternative channels have different growth patterns 14.8 13.412.5 11.5 10.4 2.3 3.5 4.9 7.0 9.1 10.70 10.90 11.20 10.90 12.90 2000 2001 2002 2003 2004 Channel Transaction Growth 2000 – 2004 Billions of Transactions Trans- actions (CAGR = 9.4%) (CAGR = 39.2%) (CAGR = 4.9%) Channel 1 Channel 2 Channel 3 Transactions ObservationsObservationsObservations • Insert text here• Insert text here This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  28. 28. 81 Existing infrastructure of the country can pose challenges, but architecture workarounds need to be made accordingly Identification of key areas where the business needed to be expanded and finding the best suitable option of connecting to those locations Technology must keep pace with business growth The vendor selected was ICICI- Infotech (India) Implementation of a hub and spoke architecture A design with a mix of VSAT, leased- lines, radio-links and ISDN were selected because of infrastructure variations across the country Systems were very centric to the branch ATMs were stand alone catering only to the city branch Customer data was not available to other branches Duplication of backend services and procedures Challenges and Lessons Learned SuccessesVendor and SolutionIssue Case StudiesCase Studies With the centralization of data all applications are controlled, modified and administered from one location Network-enabled bank to shift from traditional banking to virtual banking All backend applications run from a centrally located data centre thereby eliminating duplication of processes Clients have access to anytime- anywhere banking Challenges were faced in porting the data warehousing cube from the 32- to 64-bit environment Multi-vendor coordination was critical as a number of hardware vendors were involved in implementing the data warehousing solution Data quality was a major issue when converting the system onto Silverlake Training of the Bank staff Testing was one of the crucial activities that required a lot of management and attention Distributed systems; relatively high operational risk Customer loss and inability to attract new customers; lost business opportunities Inability to increase fee based income Unable to compete with other banks based on convenience and service delivery Inability to quickly respond to market changes Solution supports all savings, term- deposits and all loan products for all businesses Integrated GL and multi-currency support and integrated CIF Consolidated financial reporting Integrated with all e-delivery channels Integration with data warehouse Integration with web based branch teller system Integrated Islamic banking support Customers unhappy with increasing costs associated with roll-out of new technologies The technology used was Barclays proprietary banking system (ORBIT) Lack of public confidence Lack of speed and efficiency in banking operations Low profits Improved customer confidence, increase in profits, increase in speed Magnetic Ink Character Recognition (MICR) was popular with customers and greatly improved payment/settlements The introduction of ATMs, along with completely doing away with manual banking processes, completely turned around customer services at Barclays bank as the traditional long counter queues disappeared and a good portion of new customers signed up with the bank Case Studies ICICI Bank India Bank Rakyat Indonesia Barclays Bank Ghana BRI selected the Silverlake (Malaysia) solution including the following components: – The Core Banking Solutions (Deposits, Remittances, General Ledger, Loans and Term Deposits), Silverlake Middleware System (Delivery Services Processor), Branch Teller System, MIS and Central Bank Reporting (Data Warehouse implementation), and Trade Finance – Two versions of the Branch Teller System were selected: the client-server version and the Web version This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  29. 29. Strategy Analytic Templates All template content is for illustrative purposes only. Category: Client Specific Template: Analysis Content A comprehensive analysis will ideally include: Business Overview Company Financials Competitive Assessment Market Trends Recent News Analyst Reports Financial Projections Analysis Description Assessment of P/E ratio benchmarks across industry. Industry: FSI Sector: Banking Template The template covers the following items: Valuations Return to Funnel Page Topic: Financial Analysis / Modeling This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  30. 30. Although B of A’s P/E Ratio is now comparable with its competitors’, there are still areas where analysts maintain concerns that limit their target prices Issue International Operations 4 “B of A has pared back its exposure in emerging markets post the 1998 merger. It has also pared back its GCIB group in Europe previously, but has been building it again recently. These changes in respective strategies and the improvement in the global economy will require B of A to redefine its international strategy for the long term.” (Source: JPMC North American Equity Research 8 July 04) 4 Due to its proximity to the 10% regulatory deposit cap, industry sources indicate the need for B of A to do deals involving other businesses or countries. Asset managers, broker-dealers and insurance companies have all been listed as possible acquisition targets. Sources say that there is potential for the company to make a foray into international markets such as England, France or Germany. 4 However, many analysts believe that the stock would likely come under pressure if B of A announced a large acquisition as investors would want to see the Fleet deal integrated as well as evidence of stand-alone growth and the ability to leverage the franchise rather than simply do deals and cut costs Details 4 Concerns over lack of international strategy 4 Concerns of over-reliance on domestic market Concern Sources: Deutsche Bank Global Equity Research, 14 October 04; A.G. Edwards Equity Research Report, 7 October 04; JPMC North American Equity Research, 8 July 04; UBS Global Equity Research, 22 September 2004; Expense Management Ability to grow core businesses 4 “We have long had concerns about the company’s GCIB unit (16% of revenues and 13% of earnings)” and one of the main reasons is that “managing expenses consistently has been a perennial challenge [for B of A]. We believe under the new leadership of Al de Molina, this unit may experience far more financial discipline.” (Source: Deutsche Bank Global Equity Research 14 October 04) 4 Saturation of consumer and commercial markets and changing market conditions have some analysts worried about Bank of America’s ability to grow organically. 4 Company calculations put consumer and commercial banking as the biggest revenue drivers, accounting for about 68% of standalone earnings. 4 After the Fleet merger, B of A is just shy of 10% of the U.S. deposit market, and regulators will not allow any bank to grow beyond that through acquisitions. 4 Managing expenses has been a perennial challenge for GCIB 4 Saturation of consumer and commercial markets This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  31. 31. 90 TSR: 1998 - 2004 100 43 38 54 70 58 60 - 20 40 60 80 100 120 1998 1999 2000 2001 2002 2003 2004 Relative TSR Comparative TSR Relative to the Market: 1998 - 2004 0.0 20.0 40.0 60.0 80.0 100.0 120.0 1998 1999 2000 2001 2002 2003 2004 BOFA S&P 500 Observations Observations This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  32. 32. 93 1 Year Asset Growth: 1998 - 2004 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 1998 1999 2000 2001 2002 2003 Cost of Capital: 1998 - 2004 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 1998 1999 2000 2001 2002 2003 2004 Total Assets 1998 - 2004 ($BN) $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 1998 1999 2000 2001 2002 2003 2004 Capital Observations This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  33. 33. 96 Observations Technology Production Distribution Marketing Service Total Cost Cost Breakdown Year 2004 $ Millions Cost 1 Cost 2 Cost 3 Cost 4 Cost 5 Cost 6 Cost 7 Cost 8 Cost 9 Cost 10 Cost 11 Cost 12 Elements of Business System Cost Illustrative This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/strategy-analytics-templates-763
  34. 34. 1 Flevy (www.flevy.com) is the marketplace for premium documents. These documents can range from Business Frameworks to Financial Models to PowerPoint Templates. Flevy was founded under the principle that companies waste a lot of time and money recreating the same foundational business documents. Our vision is for Flevy to become a comprehensive knowledge base of business documents. All organizations, from startups to large enterprises, can use Flevy— whether it's to jumpstart projects, to find reference or comparison materials, or just to learn. Contact Us Please contact us with any questions you may have about our company. • General Inquiries support@flevy.com • Media/PR press@flevy.com • Billing billing@flevy.com

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