Organic growth and shareholder value: A case study of the insurance


Kling, Gerhard, Ghobadian, Abby and O’Regan, Nicholas (2009) Organic growth and shareholder value: A case study of the insurance. International Journal of Research in Marketing, 26, (4), 276-283. (doi:10.1016/j.ijresmar.2009.08.002).

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Description/Abstract

This paper examines organic growth and its impact on shareholder value creation. At a conceptual level, organic and external growth are readily defined; yet, at a practical level, decomposing revenue growth into its constituent elements presents methodological challenges. We develop a method to decompose revenue growth into organic growth, external growth, exchange rate effects, and under- or outperformance. Using extensive data from three insurance companies, AXA, Generali and ING, we analyzed the period from 1995 to 2005. Exchange rate effects were of minor importance, unless companies entered markets at inopportune times. Primarily, the findings indicate that only organic revenue growth enhanced shareholder value. Therefore, managers should focus on marketing as a key driver of organic growth to create value

Item Type: Article
ISSNs: 0167-8116
Keywords: insurance industry, growth strategy, organic growth, revenue growth decomposition
Subjects: H Social Sciences > HG Finance
Divisions: University Structure - Pre August 2011 > School of Management
Faculty of Business and Law > Southampton Management School > Finance
ePrint ID: 165717
Date Deposited: 19 Oct 2010 14:08
Last Modified: 27 Mar 2014 19:18
URI: http://eprints.soton.ac.uk/id/eprint/165717

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