{"product_id":"value-and-capital-management-isbn-9781118774632","title":"Value and Capital Management","description":"\u003cb\u003eA value management framework designed specifically for banking and insurance\u003c\/b\u003e  \u003cp\u003e\u003ci\u003eThe Value Management Handbook\u003c\/i\u003e is a comprehensive, practical reference written specifically for bank and insurance valuation and value management. Spelling out how the finance and risk functions add value in their respective spheres, this book presents a framework for measuring – and more importantly, influencing – the value of the firm from the position of the CFO and CRO. Case studies illustrating value-enhancing initiatives are designed to help Heads of Strategy offer CEOs concrete ideas toward creating more value, and discussion of \"hard\" and \"soft\" skills put CFOs and CROs in a position to better influence strategy and operations. The challenge of financial services valuation is addressed in terms of the roles of risk and capital, and business-specific \"value trees\" demonstrate the source of successful value enhancement initiatives.\u003c\/p\u003e \u003cp\u003eWhile most value management resources fail to adequately address the unique role of risk and capital in banks, insurance, and asset management, this book fills the gap by providing concrete, business-specific information that connects management actions and value creation, helping readers to:\u003c\/p\u003e \u003cul\u003e \u003cli\u003eMeasure value accurately for more productive value-based management initiatives and evaluation of growth opportunities\u003c\/li\u003e \u003cli\u003eApply a quantitative, risk-adjusted value management framework reconciled with the way financial services shares are valued by the market\u003c\/li\u003e \u003cli\u003eDevelop a value set specific to the industry to inspire initiatives that increase the firm's value\u003c\/li\u003e \u003cli\u003eStudy the quantitative and qualitative management frameworks that move CFOs and CROs from measurement to management\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003eThe roles of CFO and CRO in financial firms have changed dramatically over the past decade, requiring business savvy and the ability to challenge the CEO. \u003ci\u003eThe Value Management Handbook\u003c\/i\u003e provides the expert guidance that leads CFOs and CROs toward better information, better insight, and better decisions.\u003c\/p\u003e \u003cp\u003eList of Abbreviations xiii\u003c\/p\u003e \u003cp\u003ePreface xvii\u003c\/p\u003e \u003cp\u003eAcknowledgments xix\u003c\/p\u003e \u003cp\u003eAbout the Author xxiii\u003c\/p\u003e \u003cp\u003ePart One\u003c\/p\u003e \u003cp\u003eIntroduction 1\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 1\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhy is Value Management Important? 3\u003c\/p\u003e \u003cp\u003eBetter Information 3\u003c\/p\u003e \u003cp\u003eBetter Insights 6\u003c\/p\u003e \u003cp\u003eBetter Decisions 8\u003c\/p\u003e \u003cp\u003eWhy Shareholder Value? 12\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 2\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eHow do CFOs and CROs Add Value? 15\u003c\/p\u003e \u003cp\u003eThe Evolution of the Corporate Center as “Shareholder Surrogate” 15\u003c\/p\u003e \u003cp\u003eThe Implications for the CFO 20\u003c\/p\u003e \u003cp\u003eThe Implications for the CRO 24\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Two\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBetter Information – Measuring Value 29\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 3\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eRAPMs – The Industry Standard 31\u003c\/p\u003e \u003cp\u003eWhat Makes Financial Services Unique? 31\u003c\/p\u003e \u003cp\u003eWhat do RAPMs do and How? 34\u003c\/p\u003e \u003cp\u003eThe RAPM (R)evolution 37\u003c\/p\u003e \u003cp\u003eThree RAPMs for Three Distinct Purposes 41\u003c\/p\u003e \u003cp\u003eLinking Directly to Shareholder Value 46\u003c\/p\u003e \u003cp\u003eInsurance Example 49\u003c\/p\u003e \u003cp\u003eBanking Example 50\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 4\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eTwo Challenges in Using RAPMs 51\u003c\/p\u003e \u003cp\u003eDo RAPMs Influence Strategy? 51\u003c\/p\u003e \u003cp\u003eDo RAPMs Give the Right Signals? 55\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 5\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eValuing Financial Services – The Theory 71\u003c\/p\u003e \u003cp\u003eWhat Determines Share Value? Market Multiples, RoE and Growth 71\u003c\/p\u003e \u003cp\u003eBut What Determines Market Multiples? 73\u003c\/p\u003e \u003cp\u003eWhy a Market-Consistent Approach? 77\u003c\/p\u003e \u003cp\u003eValue: Where it Comes from and How to Create More of it 80\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 6\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eValuing Financial Services – The Evidence 85\u003c\/p\u003e \u003cp\u003eEvidence from the Insurance Industry 85\u003c\/p\u003e \u003cp\u003eEvidence from Banking 96\u003c\/p\u003e \u003cp\u003eIs it Just me or are Others Thinking the Same Thing? 98\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 7\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eMarket-Consistent Valuation for Insurers 101\u003c\/p\u003e \u003cp\u003eIntroduction to Fair Valuation for Insurers 101\u003c\/p\u003e \u003cp\u003eCalculating Traditional Embedded Value 104\u003c\/p\u003e \u003cp\u003eEuropean Embedded Value 106\u003c\/p\u003e \u003cp\u003eMarket Consistent Embedded Value (MCEV) 109\u003c\/p\u003e \u003cp\u003eHow is MCEV Calculated in Practice? 115\u003c\/p\u003e \u003cp\u003eFrom MCEV to MVBS 120\u003c\/p\u003e \u003cp\u003eFinal Comments: Whither MCEV? 122\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Three\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBetter Insights – Managing Value 125\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 8\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eProperty and Casualty Insurance 127\u003c\/p\u003e \u003cp\u003eHistory and Economic Rationale 127\u003c\/p\u003e \u003cp\u003eFrom Principles to Rules of the Game 133\u003c\/p\u003e \u003cp\u003eFrom Rules to the Valuation of PC Businesses 135\u003c\/p\u003e \u003cp\u003ePC KPIs: Understanding and Managing Value 140\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 9\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eLife and Health Insurance 151\u003c\/p\u003e \u003cp\u003eHistory and Economic Rationale 151\u003c\/p\u003e \u003cp\u003eFrom Principles to “Rules of the Game” 163\u003c\/p\u003e \u003cp\u003eLH Valuation 167\u003c\/p\u003e \u003cp\u003eUnderstanding Value Creation: Capital Intensity and Financial Risk Taking 171\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 10\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBanking 189\u003c\/p\u003e \u003cp\u003eHistory 189\u003c\/p\u003e \u003cp\u003eProducts 195\u003c\/p\u003e \u003cp\u003eEconomic Rationale 197\u003c\/p\u003e \u003cp\u003eFrom Principles to “Rules of the Game” 199\u003c\/p\u003e \u003cp\u003eFrom “Rules” to Value 201\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 11\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eAchieving Profitable Growth 211\u003c\/p\u003e \u003cp\u003eRules of the Game and KPIs 211\u003c\/p\u003e \u003cp\u003eManagement Actions – Three Horizons of Growth 217\u003c\/p\u003e \u003cp\u003eHorizon 1 – Increasing Sales Productivity 218\u003c\/p\u003e \u003cp\u003eHorizon 1 – Going Multi-channel 221\u003c\/p\u003e \u003cp\u003eHorizon 1 – Getting More out of Existing Customers; cross sell, big data and customer loyalty 224\u003c\/p\u003e \u003cp\u003eHorizon 1 – Managing the Customer Portfolio Skew 228\u003c\/p\u003e \u003cp\u003eHorizon 2 – Anticipating Mega-trends 230\u003c\/p\u003e \u003cp\u003eHorizon 2 – Exploiting Adjacencies 232\u003c\/p\u003e \u003cp\u003eHorizon 2 – Transformational and Bolt-on Acquisitions 234\u003c\/p\u003e \u003cp\u003eHorizon 3 – Creative Disruptions 238\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 12\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eAchieving Operating Efficiency 241\u003c\/p\u003e \u003cp\u003eThe Importance of Operating Efficiency 242\u003c\/p\u003e \u003cp\u003eRules of the Game 248\u003c\/p\u003e \u003cp\u003ePay Less: Optimize Procurement 249\u003c\/p\u003e \u003cp\u003ePay Less: From Business Process Redesign to Outsourcing 250\u003c\/p\u003e \u003cp\u003eUse Less, But More Effectively: Digitize and Automate 253\u003c\/p\u003e \u003cp\u003eUse Less, But More Effectively: Re-engineer the Product Portfolio 254\u003c\/p\u003e \u003cp\u003eUse Less, But More Effectively: Managing Acquisition Expenses 257\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Four\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBetter Decisions – Capital, Balance Sheet and Risk Management 261\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 13\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCorporate Strategy and Capital Allocation 263\u003c\/p\u003e \u003cp\u003eCorporate Strategy, Capital Allocation and Performance Management 263\u003c\/p\u003e \u003cp\u003eCapital Allocation: The Capital Budget, from Sources to Uses of Capital 265\u003c\/p\u003e \u003cp\u003eCapital Allocation: Optimizing the Corporate Portfolio 273\u003c\/p\u003e \u003cp\u003eCapital Allocation: Aligning Financial Resources within Constraints 278\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 14\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eStrategic Planning and Performance Management 285\u003c\/p\u003e \u003cp\u003eWhat is Strategic Planning? 285\u003c\/p\u003e \u003cp\u003eWhy does Strategic Planning Fail and What can be done About it? 295\u003c\/p\u003e \u003cp\u003eCorporate Strategy 302\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 15\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBalance Sheet Management 311\u003c\/p\u003e \u003cp\u003eBalance Sheet Management Activities 311\u003c\/p\u003e \u003cp\u003eThe Asset\/Liability Committee (ALCO) Mandate and Agenda 314\u003c\/p\u003e \u003cp\u003eThe Asset\/Liability Management (ALM) Unit 323\u003c\/p\u003e \u003cp\u003eThe Insurer ALM-Investment Value Chain 330\u003c\/p\u003e \u003cp\u003eThe Treasury Function 339\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 16\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Economics of Asset\/Liability Management 345\u003c\/p\u003e \u003cp\u003eThe Role of ALM Earnings 345\u003c\/p\u003e \u003cp\u003eThe Risks: Some Spectacular ALM Failures 349\u003c\/p\u003e \u003cp\u003eThe Returns: Are Shareholders Willing to Pay a Premium or a Discount? 361\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 17\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Practical Aspects of Asset\/Liability Management 371\u003c\/p\u003e \u003cp\u003eALM Performance and Risk Measures 372\u003c\/p\u003e \u003cp\u003eCalculating Funds Transfer Prices (FTPs) 385\u003c\/p\u003e \u003cp\u003eMeasuring Alpha 406\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 18\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCash and Liquidity Management 413\u003c\/p\u003e \u003cp\u003eManaging Funding Liquidity Risk 413\u003c\/p\u003e \u003cp\u003eWhat Happens if it Goes Wrong? 416\u003c\/p\u003e \u003cp\u003eMeasuring Funding Liquidity Risk 420\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 19\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eManaging the Capital and Funding Structure 431\u003c\/p\u003e \u003cp\u003eCapital Funding Management 431\u003c\/p\u003e \u003cp\u003eDetermining the Optimal Capital Structure 436\u003c\/p\u003e \u003cp\u003eThe Empirical Reality: What Determines Capital Structure? 446\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 20\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eRisk Management 451\u003c\/p\u003e \u003cp\u003eEnterprise Risk Management 451\u003c\/p\u003e \u003cp\u003eTaking the Right Decisions 460\u003c\/p\u003e \u003cp\u003eThe Role of Culture 463\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 21\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eRisk Governance and Organization 477\u003c\/p\u003e \u003cp\u003eRisk Governance Principles 477\u003c\/p\u003e \u003cp\u003eRole of the Board and Management 478\u003c\/p\u003e \u003cp\u003eThree-Line-of-Defense Model 480\u003c\/p\u003e \u003cp\u003eThe Risk Function 484\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 22\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eRisk Identification and Evaluation 491\u003c\/p\u003e \u003cp\u003eFrom Risk Identification to Evaluation 491\u003c\/p\u003e \u003cp\u003eData-Driven Approaches 497\u003c\/p\u003e \u003cp\u003eEvaluation-Based Approaches 499\u003c\/p\u003e \u003cp\u003eBuilding a Resilient Organization 507\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 23\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eRisk Underwriting – Strategy and Governance 513\u003c\/p\u003e \u003cp\u003eUnderwriting Context 513\u003c\/p\u003e \u003cp\u003eUnderwriting Strategy 518\u003c\/p\u003e \u003cp\u003eUnderwriting Governance 522\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 24\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eRisk Underwriting – Technical Tools 527\u003c\/p\u003e \u003cp\u003eRetail Segment: “Scoring” Models 527\u003c\/p\u003e \u003cp\u003eCommercial Lines: Leveraging Expert Judgment 535\u003c\/p\u003e \u003cp\u003eUnderwriting Structured Solutions 541\u003c\/p\u003e \u003cp\u003eUnderwriting Controls, Validation and Learning 542\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 25\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eRisk Underwriting – From Technical Pricing to Value Maximization 549\u003c\/p\u003e \u003cp\u003eTechnical Production Cost: RAPM Pricing 549\u003c\/p\u003e \u003cp\u003eFrom Technical Pricing to Optimal Price 558\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 26\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eManaging Operational and Reputational Risks 571\u003c\/p\u003e \u003cp\u003eDefining Operational Risk 571\u003c\/p\u003e \u003cp\u003eManaging Operational Risk 581\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter\u003c\/b\u003e 27\u003c\/p\u003e \u003cp\u003eRisk and Limit Controlling 589\u003c\/p\u003e \u003cp\u003eRisk Reporting 589\u003c\/p\u003e \u003cp\u003eAn Effective Risk Limit Framework 601\u003c\/p\u003e \u003cp\u003eFinal Thoughts on Risk and Limit Reporting 606\u003c\/p\u003e \u003cp\u003eAppendices Appendix A: Market Multiple Approaches 609\u003c\/p\u003e \u003cp\u003eAppendix B: Derivation of Steady-State Valuation Multiples 613\u003c\/p\u003e \u003cp\u003eAppendix C: Valuing Banks and Insurers: The Link Between Value and New Business and Investment RAPM 621\u003c\/p\u003e \u003cp\u003eAppendix D: Beyond Debt and Equity 629\u003c\/p\u003e \u003cp\u003eGlossary 641\u003c\/p\u003e \u003cp\u003eReferences 653\u003c\/p\u003e \u003cp\u003eIndex 675\u003c\/p\u003e \u003cp\u003e\u003cb\u003eTHOMAS C. WILSON\u003c\/b\u003e is the chief risk officer for Allianz Group, where he is responsible for global risk controlling and risk management policies and guidelines. He has spent nearly 30 years working in finance and risk for such companies as UBS, McKinsey \u0026amp; Company, Swiss Reinsurance, Oliver Wyman \u0026amp; Company, and ING.\u003c\/p\u003e  \u003cp\u003e\u003ci\u003eValue and Capital Management\u003c\/i\u003e shows CFOs and CROs at banks and insurance companies how to add value to their organizations through better information, better insight, and better decisions.\u003c\/p\u003e \u003cp\u003eThis cutting-edge guide empowers the newly evolved roles of today’s financial and risk officers in financial services firms by providing them with a savvy framework for linking management actions to shareholder value creation. In connecting theory to practice, the book very clearly spells out how the finance and risk functions add value in their respective spheres of influence. The book includes concrete ideas for increasing their value add within the context of the individual business, as well as the corporate portfolio. Insightful “value trees” tailored to banking and insurance give CFOs and CROs an advantage when challenging CEOs and allow CEOs to understand their businesses through a “finance and risk lens”, illuminating the role of risk and capital in delivering sustainable operating profits and growth. Practical balance sheet and capital management frameworks, including the Capital Budget, reinforce corporate strategy by determining which businesses to grow, which to harvest and which to fix or exit. Master the complexities of risk and capital in your firm’s value by: \u003c\/p\u003e\u003cul\u003e\n\u003cli\u003eApplying a quantitative, risk-adjusted value management framework reconciled with the way financial services shares are valued by the market to optimize business strategy and the corporate portfolio\u003c\/li\u003e \u003cli\u003eIdentifying segment specific capabilities and “rules of the game” that increase the firm’s value\u003c\/li\u003e \u003cli\u003eDeveloping the capital allocation, balance sheet man- agement and risk management capabilities needed to execute the strategies and move CFOs and CROs from measurement to management\u003c\/li\u003e\n\u003c\/ul\u003e \u003cp\u003eGenerating shareholder returns and satisfying customers by assuming risk is part science and part art, which is why banking and insurance executives need the holistic guidance written just for them in \u003ci\u003eValue and Capital Management.\u003c\/i\u003e\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47990444556517,"sku":"NP9781118774632","price":136.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9781118774632.jpg?v=1761787855","url":"https:\/\/k12savings.com\/es\/products\/value-and-capital-management-isbn-9781118774632","provider":"K12savings","version":"1.0","type":"link"}