Supply Of Substitute Is Low Within The Insurance Market As A Whole

the selected market only if those consumers that have some knowledge of the insurance products.

The threat that substitute products pose to an industry's profitability depends on the relative price-to-performance ratios of the different types of products or services to which customers can turn to satisfy the same basic need. The threat of

Branding will create an image of the product and advertisement persuades the customer to purchase the insurance policy. Cigna will use a pricing decision which is aimed at affirming a marketing segment. “Marketing segment is to divide a market by strategy directed at gaining a major portion of sales to a subgroup in a category, rather than a more limited one.” Different market structures are mostly compared by the number of competing firms and the extent of entry barriers. A perfect competition organization has no entry barriers with a lot of different firms. This means it has a larger number of competitors than expected; each firm will have a smaller amount of the market share. The right competition structure has no single firm that will controls neither the market nor its pricing. Another important aspect of a prefect competition structure would be that another firm would sell the same exact product. Keep in mind that new insurance companies can come and go as they please, because there are no barriers for new firms to enter the market.

Deutsche Allgemeinversicherung (DAV) is one of the world’s largest insurance companies. The success of the company has been contributed to its product offerings and “an excellent group of insurance managers” (case page 2). The company provides superior “traditional insurance management” and excellent customer service. However, the company began to face stiff competition not only from larger competitors but also from smaller insurance firms that are able to provide customized service to each individual client. To keep its current position in the market DAV has decided to concentrate on quality of customer service which it sees as a core competency. The

A fundamental transformation is being observed in the field of healthcare industry as it moved from volume based business to value based business. With increasing demands from consumers for better healthcare quality, plans and increased care, healthcare providers are expected to provide better outcomes. The cost dynamics of health care industry is changing globally, which is driven mainly by longer life expectancy, pervasiveness of chronic illness and infectious disease. New market entrants, new medical approaches have made the things more complicated. All these challenges in the industry open the way for analytics work to expand more. Here in this document, we would like to mainly focus on the following aspects to understand the use of analytics in day to day industry operations.

Insurance is an arrangement by which a company gives customers financial protection against loss or harm such as theft and illness in return for premium payments. One of the most important ways that external economic factors are affecting insurance industries is by experiencing a slow pattern in the economy. Insurance companies are affected by lower sales and lower rates of returns on their investments. Companies have to sell certain products for which they have the commitment and the

The AA recently revealed that insurers are instead using factors other than gender to provide premiums for their customers. Insurers are analysing the correlation between a range of different characteristics and the likelihood of policyholders being liable in personal injury claims and motor vehicle accident claims - such as age, occupation, type of vehicle, experience and postcode - to determine the premiums each customer should be offered.

As discussed the product of choice creates an opportunity for the consumer to submit a claim online hassle free. It is being designed to help the consumer submit their claims without having to wait on the phone for hours. This product is designed to help the consumers submit their claim without the hassle of being transferred from one representative to the next. The consumers of Allstate’s new product would be those that have insurance with the company, i.e. any type of policy holder that would require an insurance claim. Factors that would play a huge role within this type of organization would be the competition. Many insurance carriers seek the business of their competitors. They go after all types of people, persuading them to change their minds and even offering other services that the current insurance provider may not be able to meet. That is a major influence within the organization. Sometimes price can play a very huge role too. If the price of the insurance is lower and has more to offer it may be that business may be lost. Ensuring that the product is effective within the organization and for the consumer is key.

The healthcare landscape and provision of healthcare has undergone significant transformation over the past decade(s) in response to healthcare reforms, policy agendas, advancing technologies, and shifting consumer needs. Although a vast number of Americans still struggle without health insurance, the opportunities opened up in the healthcare marketplace through health reforms have led to an influx of patients seeking care, in turn, creating a disparity between primary care supply and demand. Recognizing that today’s consumers often seek care from sources other than traditional or conventional health care options such as the doctor’s office, many health systems have evolved to meet this demand as seen through the growing array of health care

Buying auto insurance is not something that people look forward to doing. It is not a fun or exciting activity, but rather a serious necessity. The act of shopping for car insurance can be difficult and confusing. Having to compare all the different insurance companies’ quotes and trying to find a plan that works best for you and that you can afford can be frustrating and is usually time consuming. Progressive, a home and auto insurance company set out to humanize insurance and make buying insurance a simpler, more enjoyable process. In 2008 Progressive started a new TV-ad campaign centered around the “Superstore”. Showcased were clean, simple and open market places where people could go buy insurance and get the help they needed from the knowledgeable and helpful staff like Flo.

Personal auto insurance represented approximately 90% of our total Personal Lines net premiums written for each of the last three years. Volume potential is driven by our price competitiveness, brand recognition, service quality, and the actions of our competitors, among other factors. See “Competitive Factors” on page 4 of this report for further discussion.

The company chosen for this case paper is Aflac, Inc. They are a life and health insurance company that markets supplemental insurance for individuals. Company insurance policies include cancer insurance, hospital intensive care, home healthcare, accident, and disability insurance. Products are marketed mainly at the worksite on a payroll-deduction basis. The company has a dominant position in cancer insurance in Japan and a growing insurance business in the US. – Merrill-Lynch Company Summary

In order for a company to establish the correct balance between their risk-retention and risk-transfer they must first complete a risk-retention analysis. This analysis allows an organization to establish their maximum level of risk retention. This is accomplished through a combination of the traditional analysis of principles based on investment and decision, along with pricing according to the insurance industry. The results of this analysis show the cost-effectiveness and trade-off of savings on premiums versus the increased risk of a higher retention level. Now that the company has successfully established the basic parameters of being self-insured ,with assistance from their actuary, "an individual that specializes in the measurement and management of risk"(www.soa.org) and their commercial insurance broker; the most cost-effective type of risk retention must be established. Commercial insurance companies often dictate clients that are self-insured as to what type of risk-retention the company will assume. This occurs because once the self-insured clients maximum limits have been reached it is at this point the commercial insurance company assumes responsibility for any remaining amount of a claim. There are several types of strategies of risk-retention that companies can assume when self-insured that fall within the established boundaries of the commercial insurance market. Each self-insured company has its own unique risk-retention capacity specific to their

The difference, I believe, or distinct capability of my company is and has been the customer service. Customers for generations were will willing to pay a few extra dollars annually for the peace of mind, great customer service, and loyalty that their parents and grandparents received from my company. I believe this current and future generation of drivers, renters, homeowners and investors are not as interested in that customer loyalty and personal service, especially at a higher cost. This group constitutes a new phenomenon of shoppers consistently re-evaluating their insurance and financial coverages for lower premiums and switching carriers frequently. Additionally, the typical neighborly availability and customer service of agents and brokers are replaced by computer-generated customer contact through text, social media, and tweets.

Are our policies competitive with other insurers in the market?- D&O insurers are facing very intense competition and are under pressure to ensure that they can differentiate themselves from the rest of the market. “The market has become saturated with insurers offering cover and there is ample market capacity for insureds to shop around.” (CII study text on Liability insurances, 2016). The market capacity means buyers of this type of cover can expect broad terms and conditions at attractive prices. The policies we are currently offering may be uncompetitive in terms of premium and cover offered in comparison to the rest of the market.