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

Gerhard Kling, Abby Ghobadian, Nicholas O'Regan

Research output: Contribution to journalArticlepeer-review

11 Citations (Scopus)


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.

Original languageEnglish
Pages (from-to)276-283
Number of pages8
JournalInternational Journal of Research in Marketing
Issue number4
Early online date14 Sept 2009
Publication statusPublished - Dec 2009

Bibliographical note

We thank the editor, Donald Lehmann, the area editor and the two reviewers for their valuable comments, which helped to improve our paper considerably. We also thank David Boughey for his comments.


  • insurance industry
  • growth strategy
  • organic growth
  • revenue growth
  • decomposition


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