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The managerial discretion hypothesis implies that life insurance CEOs choose discounted cash-flow-based performance measures since they are better associated with their management control structure. The U.K. Insurance Industry's financial management incorporates discounted cash-flow and value-based methodologies for decision-making in its financial plan. In the U.K. Insurance Industry's traditional accounting-based measures and value-based measures such as EVA and EV utilize well-established accounting concepts of income, while some rely on closer approximations to abnormal economic income. The utilization of the managerial discounted cash-flow and accounting principles in the U.K. Life Insurance Industry showcased exceptional performance in corporate governance. Some corporate governance involves competition and regulatory changes which reduce the power of contracting-related variables associated with managerial choice over performance measurement, ownership, marketing, and accounting control structures.

This article is relevant to the class by teaching us students the value and importance of corporate valuations, value-based management, and corporate governance and the implementation of it into our business practices. Through the various measures of corporate valuations and value management, we as students can gain insights into free cash flow, rate of return, discounted cash-flow analysis, return on investment, and cost of capital in our different majors which we can apply to real-world situations. Additionally, this article gives us knowledge about utilizing financial statements through financial planning and forecasting financial statements and the importance of these statements.