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IAI Actuarial Core Principles · Business Management · Mission, business strategy, teamwork and time management

Bharat Mutual's board states an objective: 'Increase new business premium in the retail segment.' The CEO says it is hard to tell later whether it was achieved. Which change would most directly make it a well-formed SMART objective?

Adding a quantified target and a deadline, such as a 12% rise in retail new business premium by March 2027, makes the objective measurable and time-bound. The original has no measure or date, so success cannot be assessed, which is the defect SMART criteria correct.

  1. AReplace 'retail' with the word 'important' customers
  2. BAdd a quantified amount and a deadline, such as a 12% rise in retail new business premium by March 2027Correct
  3. CRemove any reference to the retail segment so it is broader
  4. DRewrite it as a statement of the company's values
  5. Change it to a long-term aspiration without any date

Explanation

The objective lacks a measure and a time limit, so achievement cannot be judged. Adding a specific percentage and a date makes it measurable and time-bound. Broadening it or turning it into values or aspiration removes measurability.

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