The MLP Group employs comprehensive planning and control systems. We use benchmark analyses to compare internal quantitative and qualitative data on the performance of our busi- ness with key market figures published. Based on these developments, we then derive actions for our corporate management. We also continually monitor developments in the competitive environment.
Corporate management
Earnings before interest and tax at the Group level (EBIT) and total revenue (sales revenue) rep- resent the central control parameters at MLP for overall business development in the individual business segments. Since our consulting firm operates largely without the need for borrowed capital and has low capital intensity, we are able to concentrate on these control parameters in our forecasts. We require profitable growth and sustainable development of earnings in order to achieve our objective of increasing company value. For the holding segment, we focus exclu- sively on EBIT as the key controlling figure.
Revenue per consultant (productivity), revenue per client and assets under management repre- sent further KPIs. Added to this is the number of clients and consultants.
Through the uniform management of strategic, operating and sales controlling, as well as the concepts of reporting and analysis in one department, we achieve a high degree of transparency and quality of control-specific ratios.
The objective of our corporate management is for all consultants and employees to actively support MLP’s strategic goals and pledge to meet our service commitment. Our established central, strategic control instrument is the so-called “ISA” (Integrated Strategic Agenda). Using this tool, Group objectives are broken down to company level and then to individual division level. This ensures end-to-end incorporation of all organisational units and integration into the planning and management process.
The ISA grants all business segments the opportunity to get actively involved in the planning of objevtives. This promotes motivation among everyone involved and increases planning quality throughout the organisation. At the end of the obligatory ISA process (applied consistently throughout the Group), the degree of achieving the objectives is measured for each single unit. ISA provides the Executive Board with a high degree of transparency in the value-added process.
Controlling provides daily reporting on the new contracts signed and registered at the branch offices in all fields of business, as well as qualitative KPIs. The current figures are compared both against the projected figures and the actual figures from the previous year. A continuous flow of information is key here. This is achieved by employees working in sales controlling providing management with information in the form of weekly and monthly reports. These reports are then used in decision-making processes and are an important instrument for the continuous monitoring of our business success.
In addition to this, regional developments in the sales regions form the focus of analysis in quar- terly meetings. The aim here is to grant everyone involved – from the Executive Board, through divisional board members, all the way down to the individual offices – a uniform presentation of the success achieved in sales.
EBIT and sales revenue as top key performance indicators
High degree of transparency
Comprehensive sales controlling
All other subsidiaries also submit monthly reporting, in which all key value drivers are presented. To permanently monitor and control costs with the greatest possible accuracy within the scope of our efforts to further increase efficiency, cost centre representatives have been appointed for each business segment.
Risk management is permanently anchored in MLP’s corporate management strategy. The mem- bers of the Executive Board, general managers of the Group companies and division leaders are responsible for detecting and classifying risks as quickly as possible. Among other things, the focus here is on determining whether our reaction to trends and market changes are appropriate and fast enough. Since the division leaders are responsible for the ISA as well as for the costs, this allows us to establish a practical link between risk management and operating controlling. The Executive Board receives regular risk reports on the Group’s risk-bearing ability and risk burden. Our streamlined company organisation and short decision-making chains help the Executive Board to react quickly when necessary. You can find further information on this in the chapter entitled “Risk and disclosure report”.
Key figures and early indicators used by corporate controlling
We regularly use simulation scenarios to be able to assess the success of our business. Alongside the control parameters already mentioned, an important indicator in this regard is the “brokered new business” KPI in the various business segments. Brokered new business forms the basis of our revenue from commission and fees and, at the same time, shows how well our operating business is performing in the current year.
The relevant key figures for the individual business segments are:
1. Old-age provision: New business with life, pension and occupational disability insurance policies
2. Health insurance: Monthly health insurance premium commitment per client 3. Non-life insurance: Annual insurance premium commitment per client 4. Loans and mortgages: Loan amount
Assets under management are also included under wealth management, representing the sum of cash inflows and outflows, as well as the performance.
Our objective here is first to win over the best consultants in the industry to our business model and then keep them loyal to our company in the long term – for the benefit of our clients. We therefore also continually monitor our turnover rate and aim at an annual staff-turnover among our self-employed consultants of a maximum of between 12% and 15%. Our high-grade qualifi- cation and further training programme, as well as the comprehensive support provided to our consultants by Head Office have proven important factors for winning consultants and keeping them loyal to the company. This support was further extended in the reporting year thanks to the new MLPdialog GmbH service centre.
Following a successful pilot phase, MLP was also one of the first financial services providers to successfully launch a feedback system for clients at consultant and office level in 2013 with the so-called Client Navigator.
You can find detailed information on this in the chapter entitled “Goals and strategies”.
Risk management: Important management and control element
Consultant turnover remains at a low level
Indicator of client satisfaction introduced