Donna Blank has led finance operations since joining NFP in 2008. The New York-based company provides benefits, insurance and wealth management services to companies and high-net-worth individuals. NFP, with $982 million in 2010 revenue, has weathered the economic hardships of the last two years to emerge with a new reporting structure that reflects the company’s strategy going forward.

T&R: One of the recent initiatives at NFP has been a change in reporting structure. Why was that an important move?
Blank: The financial crisis for us coincided with a time when the company was becoming more mature. NFP is a relatively young company, started in 1999. So the way we responded to the crisis, in addition to reducing our leverage and disposing of non-performing assets, was to change strategy from being a consolidator of small brokerage firms to a much more client-centric business. We reorganized into three operating segments. One segment focuses on the corporate client, the middle market executives who want to buy corporate benefits for their employees. The next is the Individual Client Group. This group includes the business that had been the genesis of NFP, the life insurance business with a focus on high-net-worth individuals. There is sometimes crossover between the executives served in the Corporate Client Group who also, as individuals, want to buy life insurance. And then we have a new segment, which had always been part of the business, our broker-dealer and registered investment adviser. This business, called the Advisor Services Group, was initially developed as a utility for the rest of our business, but we decided it had really reached the stage where it needed to be on its own and start building scale by itself.

So given that change in the focus and the strategy of the business, it made sense to show the financials separately for each of those business lines. The goal that I focused on, in particular, was to have financials that provided a clear road map for understanding the underlying economics of the business, especially given the change in the strategy. We adopted some new metrics that were similar to those used by peer companies. We adopted adjusted EBITDA, which had not been something that we had ever used before but that other insurance brokers reported. This metric seemed like a good way to start translating the company for the market. It provides insight into our relative size, as well as the kind of margins that we have in the business.

T&R: Did you need to restructure the finance operation to capture this?
Blank We needed to rethink some of our processes and get much better at allocations of shared spending. We thought about our expense base and where shared service expenses belonged by segment. Because the first segment disclosure we had was for the first quarter 2010, the process of revamping the 10-Q was almost like doing a 10-K again. We had to give much more disclosure than we would ordinarily in a quarterly document. We had to rethink how we were describing the business, which was really a team effort. Finance had much more interaction with the business in putting that together than it had in the past, so to that extent there was a change. It was really a team effort with finance, legal, the business side, everybody thinking about the clearest way to describe the company and its operations.

T&R: How did investors react to the changes?
Blank: Investors definitely have liked the change. It had been challenging to try to explain trends in the business when we weren’t providing a separate P&L for our different kinds of businesses. The margins and the whole expense structure look very different between the different segments. The new reporting format really gave us the ability to start explaining those differences. The equity analysts have all adopted and, I think, like the new disclosure. It’s a bit of a challenge to get them to change their models, but we are plugging away at that effort. It makes the company that much easier to understand once you break apart the different businesses.

T&R: It’s not always easy for finance to work with legal and other departments. How did you manage that process?
Blank: I think all the parties recognized the importance of this change and the roles they had to play. We had one lead from legal and one lead from accounting who together really spearheaded the effort. People were engaged. We got the word out fairly early. We got people to understand the importance of the changes. Everybody was enthusiastic about it because they understood the advantage that explaining the business along segment lines would provide. It was not necessarily a fun experience, but a good outcome.

T&R: What’s ahead for NFP?
Blank: We’re feeling that we are well-positioned for this kind of unpredictable economy. Our biggest business, the Corporate Client Group, has shown a lot of resiliency and stability in the face of the economic challenges and some growth in 2010, hopefully leading to growth in the future. All of our businesses, in fact, showed revenue growth in 2010. The most volatile part of our business, life insurance, has been the most affected with the downturn. Now that there is more clarity on estate taxes, at least for a short period of time, we are hoping to see some activity there. When businesses are volatile on the downside, I think there is opportunity on the upside, although you can’t bank on it.

For our newest segment, the broker-dealer, we are recruiting externally and building that business from just a utility within the company, to being a bigger independent broker-dealer, recruiting outside advisers and growing the margins and revenues with scale.