What Are The Advantages And Disadvantages Of OIC?

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A competitive oligopoly market structure is actually a mixture of the competitive market and oligopolistic market. Hence, it has a mixture of the advantages and disadvantages of both market structures.

From the customer’s perspective, the major advantage for a competitive oligopoly market is that there are fewer chances for insurance companies to be able to exploit the customer. This is mainly because most insurance companies in this market structure offer homogeneous products and the customer can easily and freely move from one insurance company to the other if prices increase. This applies of the life insurance market that OIC operates in whereby there are several insurance companies that sell homogeneous policies.

From an
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As we saw before, this is mainly due to the substantial entry barriers – financial and regulatory - that make it very difficult for new insurance companies to come to the UAE market.
The bargaining power of buyers should not have a significant impact on OIC when it comes to individual life insurance products, however, with corporate life insurance policies becoming a significant part of many organizations’ employee benefits packages, the bargaining power of large employers could represent a relative threat to OIC especially that group life insurance policies are term life policies and purchased by large employers after going through an annual tender process that can exert pressure on prices.
The threat of substitutes could represent the most significant threat for OIC. With the presence of many other insurance companies that sell homogeneous life insurance products, customers have a wide range of options to choose from and the cost of switch is considerably low. Moreover, with many insurers in the UAE launching online policy purchasing portals it is highly important for OIC to invest in such application to be able to maintain their competitive

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