Information technology is one of the fastest growing components of the costs of information management and is typically around 10 per cent. Good IT systems improve the productivity of information workers. The information-based economy needs metrics that measure how good a company is at converting those costs of information management into profit. EVA is an established way of expressing the added value the company generates after paying a reasonable rate of interest to its share holders. In order to make meaningful comparisons between companies it is important to use a value for the costs of information management that is in the public domain and not subject to dispute.
Insurance is a highly information-intensive industry.
The Butler Group found that using these metrics, Britannic came out with an IP rating of 0.18, and was ranked 36th overall. Legal and General's IP figure was 0.02, and was ranked 674th. It's clear that IP is a very sensitive indicator. It penalizes companies with high costs and poor returns. Companies which report accounting profits that are less than shareholders could reasonably expect show up as a negative figure.