Increasingly over the last ten years we have seen in Europe the development and use of concepts related to value such as ` shareholder value'', ` value-based analysis'' or ` valuebased management''. At the same time the determination of the cost of capital has become more and more important, given that it is a key element in the valuation process. Executives of our industry, just as in others, should pay a lot of attention to the concepts and not leave them to their CFOs, to the ®nancial analysts or to the investors: business strategy, value creation and cost of capital are intimately related. At the corporate and business unit levels, decision-makers need to assess the value of alternative strategies. New market entries, capital expenditures especially for the insurance industry in communication and information technology, new product introduction or harvesting some businesses are typical examples where value assessment is requested. The same is true when considering restructurings, mergers, acquisitions, divestments, joint ventures, alliances, or use of different ®nancing instruments. The fact that 50 per cent of acquisitions fail to meet their expected targets, that only 17 per cent of transactions result in signi®cant increases in shareholder value, and that 50 per cent of transactions do actually destroy shareholder value, gives an indication of the importance of correct valuation assessment. At the operational level, value-based management (VBM) has proved to be an excellent tool to review, target or benchmark the performance of business operations. Is it not of vital importance to know whether a business or part of it is creating value? A better understanding of what performance variables, the so-called value drivers, actually drive the value of the business, allows management to ®nd solutions in order to correct a poor pro®t-making situation or to impose, at least temporarily, higher ®nancial targets on other parts of the portfolio. Choices and decisions are easier to make and implement if they are supported by some quantitative evidence! It is worth noting that by reducing the value drivers from aggregated amounts like operating margins, down to the business level, in terms of customer segmentation for instance, and further down to the operating level where ef®ciency and effectiveness are monitored, the linkage is made with what has become a new standard in business management, i.e. the Balanced Business Score Card (BSCC). Finally, and this aspect is surely not the least important one, executives need to install a managing value mindset throughout their organizations and to communicate with the shareholders about the value of the business, the shareholders' value. One of the challenges is to develop and implement performance measurement and reward systems, not only for top