Actuarial Outpost
 
Go Back   Actuarial Outpost > Actuarial Discussion Forum > General Actuarial
FlashChat Actuarial Discussion Preliminary Exams CAS/SOA Exams Cyberchat Around the World Suggestions


Upload your resume securely at https://www.dwsimpson.com
to be contacted when new jobs meet your skills and objectives.


General Actuarial Non-Specific Actuarial Topics - Before posting a thread, please browse over our other sections to see if there is a better fit, such as Careers - Employment, Actuarial Science Universities Forum or any of our other 100+ forums.

Reply
 
Thread Tools Search this Thread Display Modes
  #1  
Old 07-02-2018, 03:29 PM
DjPim's Avatar
DjPim DjPim is offline
Member
SOA
 
Join Date: Nov 2015
Location: SoCal
Posts: 325
Default Operating Unit vs Business Unit

Hi AO,

Can anyone help me get a good grasp on understanding what Operating Units (OU) and Business Units (BU) are? From what I see in my own company, it seems that BU's are just subsections of OU's. The people in my team are just as confused by the definition and only know the minimum necessary for their own job functions. One person mentioned it is strictly a financial term, and from Google I get answers varying from 'logical group within a company, like an accounting department' to 'separate legal entity', etc.

Thanks in advance
__________________
Quote:
Originally Posted by Dr T Non-Fan View Post
"Cali" SMH.
Reply With Quote
  #2  
Old 07-02-2018, 03:43 PM
tommie frazier tommie frazier is offline
Member
 
Join Date: Aug 2003
Favorite beer: The kind with 2 e's
Posts: 22,922
Default

varies by company
__________________
Removed a dated athletic reference under pressure from a friend. You can still give money to help fund research on neurofibromatosis (nf).

General info at www.ctf.org

Team donation page here.
Reply With Quote
  #3  
Old 07-02-2018, 04:40 PM
JMO's Avatar
JMO JMO is offline
Carol Marler
Non-Actuary
 
Join Date: Sep 2001
Location: Back home again in Indiana
Studying for Nothing actuarial.
Posts: 37,512
Default

Quote:
Originally Posted by tommie frazier View Post
varies by company
So true.
If you have to have a typical rule, operating unit corresponds to the company's org chart.
And business unit corresponds to financial reporting practices.

Both of those will vary by company. . . And Legal entity can cross over both or neither.
__________________
Carol Marler, "Just My Opinion"

Pluto is no longer a planet and I am no longer an actuary. Please take my opinions as non-actuarial.


My latest favorite quotes, updated Apr 5, 2018.

Spoiler:
I should keep these four permanently.
Quote:
Originally Posted by rekrap View Post
JMO is right
Quote:
Originally Posted by campbell View Post
I agree with JMO.
Quote:
Originally Posted by Westley View Post
And def agree w/ JMO.
Quote:
Originally Posted by MG View Post
This. And everything else JMO wrote.
And this all purpose permanent quote:
Quote:
Originally Posted by Dr T Non-Fan View Post
Yup, it is always someone else's fault.
MORE:
All purpose response for careers forum:
Quote:
Originally Posted by DoctorNo View Post
Depends upon the employer and the situation.
Quote:
Originally Posted by Sredni Vashtar View Post
I feel like ERM is 90% buzzwords, and that the underlying agenda is to make sure at least one of your Corporate Officers is not dumb.
Reply With Quote
  #4  
Old 07-02-2018, 07:54 PM
Maphisto's Sidekick's Avatar
Maphisto's Sidekick Maphisto's Sidekick is offline
Member
CAS
 
Join Date: Nov 2001
Location: South Park Genetics Lab
College: Ardnox
Favorite beer: The kind with alcohol
Posts: 2,716
Default

Here is one possible example - a hypothetical large, multi-national P&C/GI insurance operation

Top-Level Corporation = Acme Insurance

Operating Units =
  • Acme Insurance USA
  • Acme Insurance of Canada
  • Acme Insurance of Europe
  • Acme Re

Business Units within Acme Insurance USA =
  • Acme Personal Lines
  • Acme Small Business
  • Acme Specialty Widget Insurance
  • ... et cetera ...

And all of those business units might write in one or more legal entities set up to accommodate tiering (in those states/lines where tiering still cannot be done within a legal entity), for premium tax optimization, to permit different pricing strategies for different channels of business, to facilitate surplus lines, etc.

...but things can vary wildly from company to company.

Generally I think of "operating unit" as being a division of an enterprise grouped together for investor discussion/analysis; whereas "business unit" is a mid-level grouping for internal analysis and planning purposes.

The smaller the enterprise, the less of a difference there will be between the two.
Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off


All times are GMT -4. The time now is 04:40 PM.


Powered by vBulletin®
Copyright ©2000 - 2018, Jelsoft Enterprises Ltd.
*PLEASE NOTE: Posts are not checked for accuracy, and do not
represent the views of the Actuarial Outpost or its sponsors.
Page generated in 0.13680 seconds with 9 queries