• Why Investor Relations?

    For more than 40 years, the CFA Institute has advocated for efficient capital markets that are ethical, transparent, and provide investor protections. One of the Institute’s guiding principles states: “Investors need complete, accurate, timely and transparent information from securities issuers.”

  • Why InsuranceIR?

    Insurance companies face unique challenges when communicating with investors and InsuranceIR is uniquely suited to help with industry-specific support.

    The primary purpose of this blog is to offer specific ideas on how insurance companies can achieve that objective.

    The supporting pages offer information on InsuranceIR's capabilities and how firm principal Heather J. Wietzel can help your company improve your investor communications.

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  • Copyright 2012

Be Forthright to Counter Prevailing Mood

My trips to New York and Chicago over the past two weeks included visits with four industry sell-side analysts (thanks to each for their time).

I also attended Cagney Network’s 2010 Insurance Round Table along with buy-side investors and others with industry or consulting roles.

As I look through my notes, I see only one common theme — uncertainty.

Regardless of background, no one seems to have confidence in the economic outlook.  Those in the financial markets seem the least optimistic.  For the property casualty insurance industry, most see intermittent positives in some business lines. With a few interesting exceptions, most also see some event that dramatically reduces capital as the only way to end the current soft market.  (And no one seriously wants an event of that magnitude because of the human cost!)

Realistically, there are only a handful of companies that might be able to individually reverse the current mood.  I see many of the remainder very tempted to “fly below the radar” until the mood changes.

My advice — don’t.  There is no advantage in letting your company become one more source of uncertainty, even if the going is tough.   Better communications isn’t a way to mask weak performance. But better communications can be used strategically to reduce uncertainty and to bolster management credibility, arguably a company’s most important intangible asset. For those reasons, I recommend that companies:

  • Become more transparent – Give new insights into your long-term business strategies and decision-making
  • Add to your disclosures – Provide more detail (and data) on the drivers of your current results and sources of future opportunity
  • Make management more available – Let more investors hear directly from your leaders
  • Share your vision – Help investors see how the company might perform under best-case and worst-case scenarios and how it is differentiated in the market

One Response

  1. […] Holding Our Breath? Posted on August 23, 2010 by Heather J. Wietzel Second quarter went by in a flash. And from what I’ve seen, insurance companies did a credible job of minimizing surprises (an important component of managing uncertainty). […]

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