• 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.

  • Pages

  • Copyright 2012

Exciting Change — Joining Lambert, Edwards & Associates

I am pleased to report exciting changes for me (and InsuranceIR LLC).  As of mid-November, my insurance-sector investor relations consulting business has become part of the investor relations and financial communications practice of Lambert, Edwards & Associates.

LE&A was founded in 1998 and has grown for 14 straight years to become one of the Midwest’s largest and most respected public relations and investor relations firms. I am part of the group that offers full-service investor relations and corporate communications services to small-cap and mid-cap public companies nationwide as well as to privately held businesses raising capital or pursuing a liquidity event.  LE&A is based in Michigan and I have relocated to Grand Rapids to work out of their largest office/headquarters.

Joining LE&A expands the resources I can offer to insurance-sector clients and offers me a fabulous team environment in which to work. In turn, I also have the opportunity to help counsel LE&A investor relations clients across many industries.

The plan is to continue blogging on relevant investor relations topics although the blog name is expected to change.  Stay tuned for an update on that subject!

34 Days Left and Just Three Online Comment Letters?

I had the opportunity to listen to a conference call hosted by Sandler O’Neill about the Financial Accounting Standards Board’s insurance contract accounting proposal.  This is a topic that I covered in a blog post on August 28 titled Should IROs Care? – FASB’s newest proposal for insurance contract accounting.

The key takeaway from the Sander call is that investors (the users of financial statements) do not have a favorable view of the proposal. There was strong encouragement for companies and investors to submit comment letters to the FASB on this topic. Comments are due by October 25, 2013.

Should IROs Care? – FASB’s newest proposal for insurance contract accounting

Discussion of changes to insurance contract accounting has been going on for over a decade. With its newest proposal, the Financial Accounting Standards Board is asking for comments on an updated proposal for standards that likely would be effective on January 1, 2018.

That sure does seem very far away.

I think that extended time frame – and the number of times this topic has come up and then been relegated to the back burner – has contributed to a lower profile for this most recent update. Continue reading

Happy New Year

Best wishes to you and yours for 2013.

What IR Practices Horrify You? — Great IR post for Halloween from Steel Rose Communications

First, true best wishes to all along the storm track.  If there is anything I can do that would help in your recovery, please just let me know.

And then a “Happy Halloween” to all via a link to a great post from Steel Rose Communications.  I do not know their team, but want to commend them on an incredibly creative piece that gets at some very important points on investor relations.

What IR Practices Horrify You? Top 6 Scariest Investor Relations Practices | SteelRose Communications.

SNL Seminar: Effective Investor Relations (Atlanta – December 10-11)

Something to look forward to — an executive seminar tailored specifically for bank, insurance and REIT professionals covering Effective Investor Relations hosted by the SNL Center for Financial Education* on Monday and Tuesday, December 10 and 11, in Atlanta. The program for the seminar will be directed by Lynn Casteel and Jeffrey A. Schoenborn, principals of Casteel Schoenborn Investor Relations, who bring significant experience with bank and REIT investor relations. InsuranceIR will offer the insurance-sector IR expertise. (You may recall that Jeff and I teamed up for an SNL webinar in August on Building an Effective Earnings Package.)

I encourage you (or one of your IR team members) to consider joining us in Atlanta for this seminar. Unlike generic IR courses, Effective Investor Relations is designed specifically for our industries. We plan to provide participants the framework and tools to:

  • Develop or enhance a comprehensive IR and shareholder communications plan for their company taking into account the specific challenges of these industries
  • Execute it effectively in compliance with laws, regulations and best practices and
  • Evaluate its effectiveness

Over the two-day seminar, we plan to use case studies, prepared materials and lectures, to share ways to increase investor awareness and understanding of your company and ultimately build an IR program to increase shareholder value and position your company for growth. A quality investor relations program enables a company to positively influence its cost of capital and growth potential by increasing investor awareness of the company, elevating understanding of its strategy and market opportunities, showcasing the strength of its management team, and favorably differentiating the company from peer stocks.

Throughout the course, we plan to offer participants opportunities to break off into small, sector-specific groups working under our sector-specific expertise, making this the most relevant IR training you’ll find.

I encourage you to visit the SNL website to learn more about the agenda and other details for Effective Investor Relations (and register, if you wish). I would love to see you in Atlanta.

* Full Disclosure: InsuranceIR LLC purchases data services from SNL Financial and participates in their “IR Partner Program.” Under the terms of that program, any company that contracts for services from SNL based on my recommendation receives a credit on their initial bill. InsuranceIR does not receive any cash compensation for referrals. By participating in various marketing activities with SNL, I may receive non-cash benefits, such as higher visibility.

“Don’t Wait” – The Common Conclusion from a Collection of Observations

The four weeks since I participated in the SNL webinar on building an effective earnings package have been busy, both for InsuranceIR and for insurance-sector investor outreach in general.  Insurance-sector investors seem to be opting to travel to more conferences and to engage more frequently in other investor marketing activities; and companies are taking advantage of the heightened interest.

InsuranceIR has been in that mix, assisting clients with investor outreach efforts (among other projects.)  I also have been spending time on my ongoing efforts to stay up-to-speed on the big picture – what investor “thinking” about the sector might mean for insurer investor communications.

I have concluded from what I am hearing and seeing that the primary piece of advice I should offer is this: Don’t Wait.

And by “Don’t Wait,” I mean don’t wait to:

  • Reach out to investors — Investor interest in our sector clearly is growing. Proactive efforts to tap that interest are likely to be more effective than waiting to be discovered. A company that chooses to wait on the sidelines for the “right time” or the “right story” may find itself overlooked or viewed as “hard to follow.”
  • Differentiate your company – I have gotten the distinct impression that insurance-sector investors have begun to look beyond the “safe names.” As encouraging as that news may be, it is simply an opportunity for the smaller names, not a guarantee of interest. Explaining the differentiators that will drive improvements in return on equity for your company is more important than ever.

I draw these recommendations from a variety of sources, including conversations with investors, listening to investor presentations (in person and online) and reviewing research and other reporting, e.g., SNL news stories.

For example:

  • My Observations of Long-term Insurance Investors — In particular, I have been intrigued by the sense that   investors who have long specialized in the insurance sector are “taking a new look” at the less well-known or out-of-favor names.  This bodes well for companies that make themselves available and can offer a compelling response to “What is your key (strategic) differentiator?” These knowledgeable investors are not likely to want a run down of the history of your company’s lines of business, or your assessment of the company’s current valuation vs. relative or historic levels.  Instead, the best approach is to offer a concise and articulate summary of the strategies being implemented to allow your company to achieve its target ROE.
  • And My Observations of “Underweight but Looking” Investors — I also am excited to see investors who have been underweight in the sector in recent periods participating in various forums. This group definitely includes some who know the sector well, but generally these investors are more likely to appreciate management covering some basics of the business. But all investors normally find it easier to listen to those details if they are provided as the support for a compelling strategy, rather than serving as a lengthy introduction to that strategic message.
  • My Sense that More Questions are Probing for “Why Are You Different?” — I am pleased to report that I am hearing a subtle shift in the questions asked at various forums from “Why is your company less risky?” to “What makes your company more unique?” I encourage companies to be prepared to take advantage of open-ended question such as, “If you implement, what will your company look like?”
  • Seeing Various Data that Supports the “Need to Differentiate” Argument — For an investor, understanding individual company performance and a company’s differentiators – strategic or structural – are likely to be the ultimate driver of interest. Case in point — in a report issued yesterday, Bill Wilt of Assured Research laid out a very interesting analysis titled “Regional Insurers at a Crossroads.” The report contrasts the average performance of 15 regional carriers to a broader basket of insurance companies. Whether it is the weaker performance of this regional group, or some other data aggregation, companies need to be certain to help investors distinguish their company — for quantitative or qualitative reasons – to avoid being lumped in with some “average.”

So I Will Say It Again – Just Don’t Wait

Back in March, I was making an argument for differentiating (see the post titled “Mulling AIFA – It Really Is Time to Differentiate!” ).

I would argue that today that there is new urgency for augmenting your company’s communications to help make certain investors have the right information to differentiate your company so they can assess its future potential and valuation.