Review

Delivering our Strategy

  • A clear vision which is recognised internally and externally.
  • A robust process for delivery of our vision and a transparent mechanism for measuring progress towards it.
  • Good advancement towards our 2009 vision.

Key performance indicators

At an operational level, we employ key performance indicators to measure performance within each area of focus. We set performance targets and monitor against these on a monthly basis. Our KPI hierarchy is summarised in the table below and other supporting measures are also employed across the different focus areas as referred to in the following sections of this Review. Actual KPI results are also shown in those sections.

Key performance indicators Relevance
Shareholder value
  • Top quartile total shareholder return relative to peer groups.
  • Average cross cycle return on equity >15%.
  • Dividends per share growth.
  • Measures the total value created for shareholders, including cash returns and share price performance.
  • Measures how effectively we use capital.
  • Reflects the cash returned to shareholders.
Underwriting
  • Gross written premium > plan.
  • Combined ratio < plan.
  • Rate movement within 2.5% of plan.
  • Measures Amlin’s gross underwriting income against expectations.
  • Measures Amlin’s underwriting profitability against expectations.
  • Reflects the impact of price changes on Amlin’s expected profitability.
Clients
  • Retention ratio > plan.
  • > 85% of policies contract certain.
  • 90% of claims turned around < 4 days.
  • Indicates the level of customer satisfaction.
  • Indicates quality of service provided to customer.
  • Key driver of customer satisfaction.
Risk management
  • Incurred claims ratio within 5% variance from expectation.
  • Realistic disaster scenarios remain within risk appetite.
  • Incurred ratios are a measure of variability of plan against actuarial best estimate.
  • RDS modelling and clear risk appetite principles control risk exposure.
People
  • Staff turnover < 15%.
  • Senior underwriter turnover < 10%.
  • Average years insurance experience of senior underwriters > 15 years.
  • Training expenditure targeted at 3% of salary costs.
  • Measures staff motivation and retention of expertise.
  • Measures senior underwriter motivation and retention of expertise.
  • Shows depth and experience of underwriting resource.
  • Measures the extent of personal and professional development.
Financial management
  • Return on equity within 5% of plan.
  • Cash and investments at least double shareholders’ equity.
  • Measures how effectively we use capital.
  • Reflects profitable trading, liquidity and the ability to pay large claims quickly.

Operational objectives

Each year we set shorter term objectives to support our strategic ambitions. Objectives are identified through a detailed planning process across business and operational areas. We track progress against these objectives on a quarterly basis through our Operational Management Group. Progress achieved against 2007 objectives and objectives set for 2008 are detailed in the relevant 'business focus' sections of this Review.