By protecting its policyholders through careful risk evaluation and prudent investment strategies, New York Life continually proves to be “the company you keep.” And by utilizing a case study researched by two School of Business professors, students learned firsthand how the largest mutual insurance company in the United States used “quality tilt” investment strategies and independent thinking to emerge from the most recent financial crisis relatively unscathed.
Mary Michel, Ph.D., assistant professor of accounting, and Janet Rovenpor, Ph.D., professor and chair of the management and marketing department, recently wrote the case, “New York Life: Adjusting the Investment Portfolio to Market Conditions,” which was published in the Case Research Journal, a prestigious and leading academic journal for business and related cases in North America. As a result, this case has become a resource for not only Jaspers but also students at colleges around the country.
As part of an extra credit opportunity for finance students taking the Investments (FIN 308) course, authors Rovenpor and Michel offered a New York Life case exercise this fall, held in the College’s finance lab. The exercise was also offered last fall.
“We’re trying to tell students, ‘how do you think outside the box? How do you look at a situation and not just assume what happened in the past is going to happen?,’” Michel explains.
The students compared New York Life with competitors MetLife and Prudential, in terms of investment strategies, management decisions, financial statements, and the conflicts of having shareholders versus policyholders. They learned that New York Life stresses the importance of its customers and promises to be a responsible company that makes prudent investments for long-term success, ensuring they are able to meet their obligations to policyholders now and in the future, and withstand financial crisis. While most companies were investing in risky securities, hoping for big returns, New York Life saw the bigger picture, pulled out of such investments, and concentrated on placing new cash flows into fixed income products.
From the students’ perspective, the case exercise offered an invaluable, real-world educational experience.
“Working as an intern for New York Life allowed me to experience the culture of the company and how exactly they might carry out their core values of financial strength, integrity and humanity,” says Antonietta Lodato ’14. “I was interested in taking a look at the case on investment decisions before and during the financial crisis because it helps me understand exactly how they put forth these core values through the numbers they reported on their financial statements.”