Ok, the last several posts have proved to be an arc on the one topic of IEM and IEF, like several linked episodes of a TV show. From start to finish, the arc covers several years, from the start of the project to pick IEM/IEF in 1989, to me changing jobs in 1997. A lot of other things happened, plus I have more on how we used IEF in the first years after we bought it.
A lot of it is better understood in context of the state of the company, which had been struggling. Crown Life was a typical Life and Health company, actually created by an Act of Parliament in 1901. Since them it had grown, entered and sometimes left foreign markets, added investment/pension products. Like a lot of companies in the 30 to 40 years after World War 2, it made money pretty much independently of any specific things management did or changed over the years; the basic business model was still working. So, Crown Life was a pleasant place to work, often referred to as the "Crown Life Country Club". Each president had come up from the Actuary ranks, and there were about 15 levels of management possible between worker and president.
However, the business environment for insurance soured in the 80's. I am not going to recount why, but stuff happens, and profits sank. Crown Life was a stock company with a few primary owners, and they eventually (mid-80's) sacked the last of the old-style presidents and brought in a turn-around guy, Bob Bandeen was his name. He had done the turn-around at CN so his arrival was momentous. After the usual few months of looking around, he started squashing those 15 levels to about five, so almost every day you would have seen some middle manager heading out the door with a box of stuff in his arms and a shocked look on their face. A noted financial writer of the time produced a book about the Canadian Insurance industry of the time, and it had a chapter for each of main companies; the chapter on Crown Life was called The Abattoir(!).
Amazingly, IT/MIS suffered very little, so in a strange way I was in a protected bubble of business as usual; I had to read that book to find out how bad it had been.
But eventually, Bob finished squashing and moved on. Crown Life sort of merged with Extendicare and created an overall company called Crownx (no typo); it was going to use Crowntek as a basis for getting further in IT services as a new business, selling PCs to companies, and other not-well-thought-out-stuff that sucked money from Crown Life and Extendicare until it was abandoned.
That left Crown Life in precarious shape. I had a bit of insight as one thing I worked on was cash flow reporting and investment management, which tried to predict how much actual cash was coming in from premiums and investments, and how much could be reinvested or kept for claims. What was apparent is that the flows were almost always mis-matched and the company was always short of actual cash. My absolute favourite moment was when we sold the head office building on Bloor Street in Toronto to some real estate company and leased it back, to get a cash injection into the company. I still shake my head over that one when I think of it.
I moved on to other stuff (like IEM/IEF) so my direct knowledge of company problems was reduced, and I suppose this and other tricks kept things going for a while, but not a long while. I will return to this topic when the "while period" ended in a future post.