Synergy in Life Insurance Acquisition

THE SITUATION:

A large bank acquires manufacturer of Life Insurance. The benefit is to extend overall Wealth offerings and acquire customer base and sales group. The Chief Financial Officer and experienced management team from the acquired Insurance company identify additional synergy opportunities based on the new combination. However, even with Board of Directors support, there are challenges. Management’s Capital, Accounting, and Operational policies are tuned for traditional banking business.

THE INTERVENTION:

An Insurance company has high cash in-flow from its policy holders. Given the banks vast Real Estate holdings and Credit Risk appetite, the approach is to shift holdings from short term (cash) to long term assets. A detailed plan is developed. Actions are intiated to identify, invest, and lease back several hundred million dollars in Real Estate. A key benefit is the actuarial impact of the Asset Liability Matching on top of the bank financial metrics. Stephen and the CFO assemble a team of internal and external experts. The office of the Chief Accountant, Appointed Actuary, Tax and Legal team are joined by outside counsel and appraisal professionals. Explanation of the business case, risk profile, and an active communication to management stakeholders is key to remove blockers and gain internal support.

THE RESULT:

While the first transaction is being worked out, word within the bank grows, and increasingly experienced and expert partners join the team. The first transaction is used as a template to replicate the business case several times over. It is unusual to work on a single project and see financial impact in following year financial results. The success of the initiative is gratifying to all involved.

1. Increased Net Income After Taxes (NIAT) / Reduction in Policy Liabilities;
2. Reduction in Interest Rate Volatility; and,
3. Increased Minimum Continuing Capital and Surplus Requirement (MCCSR) ratio.

Following the success of the first two significant transactions, Stephen transitions the “play book”. The remaining internal team replicate and continue this new initiative as a Business As Usual program.        

Derivatives Trading

Situation

This engagement was based on a referral from a colleague. Stephen held a series of phone meetings with the London based Head, Funds Strategy & Global Fund products. The client described the International joint venture for management of funds on behalf of institutional clients. A $30 Million project to implement a new derivatives trading system was stalled. Unknown to the executive at the time, the project team had hit the wall. The subject matter expertise was highly specialised (Derivatives Trading) and staff were dropping everyone. Sick leave, quitting, and asking to be moved. Morale was at an all time low.  

Intervention

First of all, within a few weeks Stephen’s recommendation to temporarily halt project work was accepted. Job postings were developed, previous team members were asked to return, the vendor was asked to bring additional full-time support, and leadership within the project was tweaked. The leadership team was in Toronto, London, Paris, and Luxembourg. Cultural awareness and communication skills were important for re-building team morale. Effectively taking the reins of the project required a hi degree of sensitivity and careful learning on the job. Stephen coached executives in advance of difficult meetings and eventually the differing norms of accountability, styles of communicating issues, and general leadership across the regions became less and less causes of impediments. The turning point was three months in. A built up team created a productive meeting cadence. Developers, testers, and the Executive identified and agreed on the priority work areas. Derivatives Workflow, Reporting, Trade capture, Pricing, and Accounting all had significant gaps or critical issues. Daily team meetings were held. Co-location was intensified, and team recognition events were held every two months. Accountability was still critical to forward progress – gaining everyone’s trust was a daily effort and this also meant that continuing to weed out poor performers or negative influences enabled the overall team to grow stronger and perform better.

Results

Implementing the new system was critical to adding new products to the offerings and retaining existing customers. Based on the original business case, the objective met included:

1. Improved competitive offering relative to BONY, J.P. Morgan and State Street;
2. Improved reliability of pricing; and,
3. Improved straight through processing.

However, the big win for the client was the re-building and assembly of a working team that would also transition to operational support once in production.  

AI Trends in Robotics and Drones: Executive 1-pager

Innovations and Trends

Collaborative Robots (Cobots)

• Work alongside humans, enhancing productivity and safety.
• Perform repetitive and hazardous tasks, allowing human workers to focus on complex activities.
• In 2024, ABB's YuMi cobot series expanded with the introduction of the YuMi Pro, designed for electronics assembly. This cobot features enhanced vision systems and machine learning algorithms for improved adaptability in complex manufacturing environments.

General-Purpose Robots

• Capable of performing a variety of tasks, from domestic chores to industrial operations.
• Boston Dynamics' Atlas humanoid robot showcased significant advancements in 2024, demonstrating the ability to perform a wider range of tasks, including basic construction work and emergency response activities.

Autonomous Drones

• Equipped with advanced sensors and AI algorithms for navigation and task performance.
• Applications include agricultural monitoring, disaster response, package delivery, and infrastructure inspection.
• Amazon's Prime Air drone delivery service expanded to several major U.S. cities in 2024, utilizing AI for route optimization and obstacle avoidance in urban environments.

Drone Swarms

• Multiple drones operating in coordination to complete tasks efficiently.
• The U.S. Department of Defense successfully tested a large-scale drone swarm for reconnaissance missions in 2024, using advanced AI algorithms for coordination and decision-making.

Opportunities

Automation of Tasks

• Increased efficiency and reduced operational costs.
• Drones for aerial surveys and inspections save time and resources.
• In 2024, Shell implemented autonomous robots for offshore oil rig inspections, reducing human exposure to hazardous environments.

Data Collection and Analysis

• AI-powered robots and drones gather vast amounts of data for valuable insights.
• Improves decision-making, product development, and customer experiences.
• John Deere's autonomous tractors, equipped with AI-powered sensors, collected and analyzed soil health data across millions of acres in 2024, providing farmers with actionable insights to optimize crop yields.

Robotics-as-a-Service (RaaS)

• Enables companies to use advanced robotics without significant upfront investments.
• Facilitates adoption by small and medium-sized enterprises.
• Fetch Robotics expanded its RaaS offerings in 2024, introducing a new line of warehouse robots that small and medium-sized e-commerce businesses could lease on a per-use basis, significantly reducing upfront costs.

Issues

Regulatory Frameworks

• Need for robust regulations to ensure safety, privacy, and security.
• Concerns about air traffic management and privacy violations with widespread drone use.
• In December 2023, the European Union introduced the "AI Act," provisionally agreeing to regulate the development, deployment, and use of AI-powered robots and drones across member states.

Workforce Displacement

• Risk of job displacement in industries reliant on manual labor.
• Necessity for upskilling the workforce to transition smoothly to an automated environment.
• A 2020 report by the World Economic Forum estimated that robotics and AI would displace millions of jobs globally by 2025, highlighting the need for large-scale reskilling initiatives.

#AI #robotics #drones #trends #1pager #integrationprofessionals

https://IntegrationProfessionals.com

AI Trends in Compute: Executive 1-pager

Innovations and Trends

Data Centres

• Traditional data centers, built for cloud-scale operations, are not sufficient for generative AI models. The demand for processing power is skyrocketing, necessitating liquid cooling infrastructure, larger and taller racks, and upgraded electrical distribution systems.

Quantum Computing:

• Nations like the US and China are competing to be the first to achieve a usable quantum computer. Quantum computing promises to revolutionize fields like cryptography, drug discovery, and scientific simulations by solving problems too complex for classical computers.

AI-Driven Chip Design

• Leading technology companies are using AI to optimize chip design, tackling issues of cost, speed, and power efficiency. This approach could disrupt the semiconductor market, giving innovators a competitive edge and fostering advancements in AI-dependent sectors.

Opportunities

Data Centres

• Companies that invest early in AI-optimized data centers gain a competitive advantage due to the rising demand for high-performance computing environments and limited data center space.

Quantum Computing

• Companies investing in quantum-resistant cryptography and quantum machine learning could excel in data security and drug discovery, leading to competitive advantages and new business opportunities.

AI-Optimized Chips

• As AI spreads in enterprise applications, businesses can modify their software and operating systems to support AI-optimized chips and mobile devices. This could enable more powerful and efficient AI-driven solutions across various industries.

Issues

Data Centres

• Resource constraints, particularly the availability of GPUs, data center space, and AI expertise. The transition to high-density AI data centers requires costly and complex infrastructure adjustments, posing financial and logistical challenges for operators.

Talent Shortage

• The global semiconductor industry faces a shortage of skilled workers, hindering onshoring initiatives and the development of advanced computing technologies. Addressing this talent gap through workforce development programs and immigration reforms is crucial.

Geopolitical Tensions

• The race for technological supremacy, particularly in quantum computing and semiconductors, fuels geopolitical tensions and protectionist policies. This could stifle global collaboration, leading to a potential "tech cold war" and hampering progress in these critical fields.

#AI #compute #trends #1pager #integrationprofessionals

https://IntegrationProfessionals.com