User talk:Ericov

ABC Insurance Company

HK- how to survive

Situation

Individual life: Whole life, universal life, variable life, term General insurance, Group life and medical MPF, Savings & investment products 650 staff

Strengths

Reputation: AA+ S&P Established from 1970 - experience Market share: major and leading player Largest provider in pension market Professional staff Diversified products

Weakness

Without foreign support Limited distribution channels Low market share in life insurance

Opportunities

Aging population Increasing public awareness Good economic situation Huge market for small and medium sized companies Easy to recruit and train staff

Threats

Severe competition GI- property- decline

Strategies

Maintain position in pension market and reputation Develop new channels to reach small and medium sized companies Design tailor-made products for small and medium sized companies Promote high quality staff training

China – How to establish

Situation

3 representative offices (Beijing, Shanghai, Guangzhou), 6 staff

Strengths

Minimal cultural and language difference Can send HK staff there Utilized the knowledge acquired by representative staff Low labor cost Enough supply of university graduates

Weakness

Little experience Limited channels for new entry

Opportunities

Large population Growing economy Low penetration rate

Threats

Market dominated by few players Corruption Low awareness Poor infrastructure in less advanced cities Low economic freedom – choice limited Unpredictable government policies Only people in coastal area are affluent

Strategies

Training in HK (Mandarin) and China Recruitment in universities Search for a partner for joint venture Set up office in Beijing, Shanghai, Guangzhou Look for other cities in 5 years Launch marketing campaign

Regional – where to expand

1. Singapore

Situation

Well-developed market economy

Strengths

Little cultural and language difference Reputation (S&P AA+) recognized

Weakness

Little experience High initial costs (labor, rent, training, marketing) Hard to recruit new staff

Opportunities

Aging population Little entry barriers Advantages for new entry High economic freedom Stable and consistent government Established infrastructure, law and regulations

Threats

Low return in investment Stricter underwriting, pricing, investment strategies Keen competition Saturated market

Strategies

Set up office, recruit local staff Focus on pension Gain foothold in market share in 3 years Compete also in life and general insurance market after 3 years Look for ways to cut costs by then

2. India

Situation

Developing fast growing economy FDI limit to be raised to 49%

Strengths

English-speaking environment Low labor cost Enough supply of university graduates

Weakness

Little experience and knowledge Small network Huge capital required High training cost

Opportunities

Large population Growing economy Low penetration rate High return on equity

Threats

Most people have low income Cultural difference Low economic freedom Corruption Poor infrastructure State-owned companies dominating Short-term loss Political instability

Strategies

Buy a minor stake of an Indian insurer Increase the stake when the limit is gradually lifted Cooperate with partner, provide with professionals and technology, and use their network Provide much cheaper product for the poor population, mainly life Develop general insurance product for firms and the affluence

3. Australia

Situation

Well-developed market economy

Strengths

English-speaking environment Reputation (S&P AA+) recognized

Weakness

Little experience High initial costs (labor, rent, training, marketing) Hard to recruit new staff Small network

Opportunities

New market of small-scale insurance service Little entry barriers High economic freedom Stable and consistent government Established infrastructure, law and regulations Favorable taxation

Threats

Keen competition Saturated market Cultural difference High labor costs

Strategies

Can be last of all expansions, after Singapore and India Acquire local insurer when there is enough capital Develop “financial supermarkets” first, providing quick, cheap and simple services

General strategies:

Employee exchange program Language training Outsource services to China, India Ensure high quality of services and establish reputation over the region Look for local partners for cooperation, merger or acquisition