CAIB 4 Ch 1 Planning - PDF

CAIB 4: Chapter 1 Planning CAIB 2  CAIB 2 Section 1 Planning  The Challenge for Insurance Brokers in a Burgeoning Economy Insurance brokers New competition Inadequate planning face increa...

CAIB 4: Chapter 1 Planning CAIB 2  CAIB 2 Section 1 Planning  The Challenge for Insurance Brokers in a Burgeoning Economy Insurance brokers New competition Inadequate planning face increased from non-traditional as a key contributor intensity and diversity players entering the to company failure in a growing economy insurance market CAIB 2 Opportunities for Insurance Brokerages The outlook for insurance brokerages remains positive Every brokerage, regardless of size, can find profitable opportunities Unique advantages for small brokerages: location convenience, personal relationships, flexibility in responding to local needs CAIB 2  Key strategies for brokerage success: Innovate Be price competitive The Essentials Manage risks effectively Attract and retain the right for Brokerage employees Market to the right segments Success Formulate intelligent business strategies Plan for the future Focus on profitability CAIB 2  Top-down vs. bottom-up approaches in planning Planning Top-down: Management sets the Approaches mission, strategies, and objectives in the Bottom-up: Management sets broad Insurance strategies, business units develop specific objectives and activities Brokerage Advantages and disadvantages to both approaches CAIB 2  A combination of top-down and bottom-up is ideal The Open communication throughout the process Importance of Combining Joint development between Both management and business units Approaches Encouraging dialogue at all planning stages CAIB 2  Characteristics of an Effective Plan – Simplicity SIMPLICITY AS A CRITICAL A SIMPLE PLAN IS EASY TO PLANS SHOULD BE EXECUTABLE REDUCING RESISTANCE TO CHARACTERISTIC OF A PLAN UNDERSTAND AND WITHOUT INTENSIVE EMPLOYEE CHANGE THROUGH SIMPLICITY COMMUNICATE TRAINING CAIB 2 Characteristics of an Effective Plan – Practicality, Severability, Flexibility Severability: Flexibility Practicality Plans should be broken Plans should allow for Plans must be realistic down into separate, modifications based on and achievable identifiable parts for changing business units circumstances CAIB 2 Planning for Success: Key Takeaways Combining top-down and bottom-up approaches leads to better planning Open communication ensures alignment and buy-in Plans must be simple, practical, severable, and flexible to succeed CAIB 2  Introduction to Strategic Planning Strategic planning defines the brokerage's future direction. Long-term (3-5 years) roadmap for decision- making. Addresses business risks and uncertainty. Provides structure for allocating resources effectively. Key components: vision, mission, strategies, objectives, and goals. CAIB 2 Purpose of Strategic Planning Prepare for risks Assess future and uncertainties impact of current in the business decisions. environment. Consider Determine the alternative actions brokerage’s based on changing purpose and conditions. expected results. CAIB 2 Steps in Strategic Planning Scanning the external Analyzing the internal Conducting a SWOT Defining corporate Developing environment. environment. analysis. focus. strategies, objectives, and goals. CAIB 2  1 2 3 Scanning the External Examine factors outside the brokerage. Identify threats and opportunities. Focus on distant (economy, government actions, social forces) and Environment near (clients, competitors, market segments) environments. CAIB 2  Analyzing the Internal Environment Evaluate Assess Understand Evaluate internal Assess operational Understand how strengths and effectiveness, the brokerage weaknesses. human resources, compares to financial health, competitors. and product lines. CAIB 2 SWOT Analysis Strengths, Weaknesses, Opportunities, and Threats analysis. Match internal capabilities with external opportunities and threats. Provides insight into areas of growth and critical concerns. CAIB 2 Defining a Corporate Focus Establish vision, value, and Answer: Who are we? What is our Focus should remain fixed over mission statements. purpose? time, providing direction in a changing world. CAIB 2 Vision Statements What does the future look like for the brokerage? What target are we aiming for? Example: “Protection of assets by protecting what is near and dear to our clients.” CAIB 2 Value Statements What values guide the business? Are these values fixed and long-term? Example: "We seek and encourage innovative solutions to problems that deliver results for our clients." CAIB 2 Mission Statements What is the brokerage’s purpose? Example: “To be recognized as a leader in promoting long-term quality relationships with clients and insurer partners.” CAIB 2 Developing Strategies Strategies support Strategies guide Long-term ‘battle the mission and the creation of plan’ for achieving help allocate objectives and the mission. resources. goals. CAIB 2 Developing Objectives Objectives refine the strategies. There may be multiple objectives for each strategy. Objectives guide the actions needed to achieve strategic goals. CAIB 2 Setting Goals Goals express in specific terms They must be: specific, Goals finalize the strategic what the objectives state. measurable, action-oriented, planning process. realistic, and timely. (S-M-A-R-T) CAIB 2  Clearly state what is to be accomplished. Goal Characteristics: Specific Employees should understand exactly what is expected of them. CAIB 2 Goal Characteristics: Measurable The goal must be measurable to track progress. Allows for assessment of success or failure. CAIB 2 Goal Characteristics: Action-Oriented Goals should clearly indicate what actions are expected. Example: “Increase revenue by 15%.” CAIB 2 Goal Characteristics: Realistic Goals must be achievable. Unrealistic goals can demotivate employees. Goal Characteristics: Timely Goals should have a clear Helps keep progress on track. timeline for completion. CAIB 2  The importance of controlling implementation. Controlling Implementation Program. Implementation Two major tools for effective control: Progress Report. CAIB 2  Linking Budgets as essential tools for implementation. Budgets to Strategies, Aligning the budget with strategic goals. Objectives, and Goals The potential pitfalls of disconnected budgeting. CAIB 2  Motivating for Implementation THE ROLE OF EMPLOYEE ALIGNING INDIVIDUAL GOALS OVERCOMING CHALLENGES OF MOTIVATION IN WITH ORGANIZATIONAL EMPLOYEE DISENGAGEMENT. IMPLEMENTATION. OBJECTIVES. CAIB 2  Key Factors in Successful Plan Implementation The role of The relationship leadership in Continuous review between strategy fostering alignment and adaptation. and execution. and accountability. CAIB 2