Value Potential

Value potential is the annual improvement in underwriting profit an insurer could capture.

What is the basis for the value potential number?

Value potential is estimated based on your responses to the questionnaire compared to the strategic and operational characteristics of top performing insurers identified in the ACORD Intelligent Growth Study.

The Intelligent Growth Study is a comprehensive analysis of global insurance businesses over the past twenty years including the top 100 U.S. general insurers. Using market share and profitability metrics, insurers in the study were grouped into one of four categories, including those classified as Intelligent Growth companies. These insurers demonstrated significant market share growth and profitability over the 20-year time period. The study then examined the key drivers, strategies and capabilities that companies employed across the insurance value chain to understand how Intelligent Growth companies differ from the other companies in the study.

When assessing the capabilities of companies, three distinct levels of maturity can be identified: leading performers (“Differentiated”), market average performers (“State of Market”), and below average performers (“Vulnerable”). Not surprisingly, a high proportion of the capabilities among the Intelligent Growth companies were characteristic of the Differentiated group.

The value potential of the Vulnerable and State of Market categories represents the financial gain (underwriting profit) associated with improving current capabilities to the level of Differentiated insurers.

The estimator is designed to provide a simplified estimate of which level your organisation maps to and the associated amount of annual profit improvement you could potentially achieve by moving toward the Differentiated level.