Pacific Life Case Study
Agility and Risk Management at Pacific Life:
Optimizing Business Unit Autonomy
Case summary
Intro
* Pacific Life (PL) holds its culture as central to 139 years in business. * 5 strengths: (a) Risk management; (b) Customer service culture (both distributor and customer levels); (c) Team orientation (different expertise combined); (d) Continuity of operations and company identity; and (e) Integrity (providing value to clients). * Need to balance business unit autonomy with central control. * Original standpoint was business unit autonomy with decentralisation allowing for business units to be nimble. IT made this possible. * Business unit autonomy complicated risk management at an enterprise level as need infrastructure and system that is complimentary, consistent and not duplicative or conflicting. Thus the necessary balance between autonomy and centralisation. * Enterprise-wide projects such as info security, business continuity planning and document management should be centrally coordinated for efficiency sake. * PL needed to address tradeoffs between business unit autonomy and corporate risk management through enterprise initiatives that would increase standardisation across PL. IT was central to those changes.
Pacific Life Background * PL provided life insurance products, annuities and mutual funds, and offered a variety of investment products and services to individuals, business and pension plans. * PL grew organically and through mergers/acquisitions. * Only 20-50% of the assets of principal competitors, but still the largest California-based insurance company.
Designing Business Unit Autonomy * PL had 5 independent divisions: (a) Life Insurance and Investments (original business over 100 yrs old); (b) Annuities and Mutual Funds Division (est 1994); (c) Real estate division; (d) Corporate division; (e) Investment Management. * Few synergies between divisions so
Optimizing Business Unit Autonomy
Case summary
Intro
* Pacific Life (PL) holds its culture as central to 139 years in business. * 5 strengths: (a) Risk management; (b) Customer service culture (both distributor and customer levels); (c) Team orientation (different expertise combined); (d) Continuity of operations and company identity; and (e) Integrity (providing value to clients). * Need to balance business unit autonomy with central control. * Original standpoint was business unit autonomy with decentralisation allowing for business units to be nimble. IT made this possible. * Business unit autonomy complicated risk management at an enterprise level as need infrastructure and system that is complimentary, consistent and not duplicative or conflicting. Thus the necessary balance between autonomy and centralisation. * Enterprise-wide projects such as info security, business continuity planning and document management should be centrally coordinated for efficiency sake. * PL needed to address tradeoffs between business unit autonomy and corporate risk management through enterprise initiatives that would increase standardisation across PL. IT was central to those changes.
Pacific Life Background * PL provided life insurance products, annuities and mutual funds, and offered a variety of investment products and services to individuals, business and pension plans. * PL grew organically and through mergers/acquisitions. * Only 20-50% of the assets of principal competitors, but still the largest California-based insurance company.
Designing Business Unit Autonomy * PL had 5 independent divisions: (a) Life Insurance and Investments (original business over 100 yrs old); (b) Annuities and Mutual Funds Division (est 1994); (c) Real estate division; (d) Corporate division; (e) Investment Management. * Few synergies between divisions so