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Demutualization In The Life Insurance Industry: A Study Of Effectiveness, Lal Chugh, Joseph W. Meador
Demutualization In The Life Insurance Industry: A Study Of Effectiveness, Lal Chugh, Joseph W. Meador
Financial Services Forum Publications
The regulatory and competitive environment in the life insurance industry has changed dramatically in recent years. We investigate the effectiveness of demutualization as a strategic response to the challenges posed by these sweeping changes. The study finds that the demutualized firms generally have implemented a successful strategy based on higher growth, greater profitability, cost effectiveness and shifts in product mix. Also, we find that management takes greater risk in the investment portfolio. In addition, demutualization unlocks value lying dormant in the mutuals’ surplus. The paper concludes that the demutualized firms have generated substantial excess returns over the several market indexes, …
A Primer On Eva For Healthcare Providers, James L. Grant
A Primer On Eva For Healthcare Providers, James L. Grant
Financial Services Forum Publications
The concept of economic profit (EVA) has proved successful in the field of corporate finance since its adoption by several U.S. and International companies over the past 25 years. Unlike accounting earnings, EVA is a measure of a company’s true earnings because it fully “accounts” for the costs of all forms of financing, including debt and equity. In the EVA view, a company is not truly profitable unless it earns a return on capital that bests the opportunity cost of capital. That being said, the question that we address here is how to measure the economic profit of providers in …