Munich Reinsurance America, Inc. - Corporate Responsibility - Value-based Management

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Value-based Management

Our management philosophy

We aim to create long-term value on a sustained basis for shareholders, clients and staff. To achieve this goal, we use value-based management systems and measures throughout our organization, both for business with short run-off periods and for long-term commitments.

Management system relates risk to profitability
Our risk strategy provides the framework for all of our business activity and is embedded in our value-based management approach. We assess business activities not only according to their earnings potential, but also relative to the extent of the risks assumed. Only the risk-return relationship reveals whether an activity is adding value from the shareholder’s point of view. Besides value-based parameters, we observe a range of important additional conditions in managing our business. These include rules of local accounting systems, tax aspects, liquidity needs, supervisory parameters, and rating agency requirements.

Strategic and operative planning
An important aspect of our management philosophy is to closely link strategic and operative planning. We do so by presenting our strategies in structured overviews. From these “scorecards,” we derive the relevant performance indicators and responsibilities for four focal areas: “financial,” “market and client,” “process,” and “employee.” 

We clearly assign responsibilities and make the levers for adding value transparent for both management and staff. Our incentive systems for staff at all levels support this clear orientation towards value creation: The higher a staff member or executive is positioned in the management hierarchy, the more strongly their remuneration is based on company performance.

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