A corporate strategy for Philam Life

Date of Publication

2005

Document Type

Oral Comprehensive Exam

Degree Name

Master of Business Administration

College

Ramon V. Del Rosario College of Business

Department/Unit

Decision Sciences and Innovation

Abstract/Summary

The Financial Services Industry is seeing a gradual consolidation of its activities as Banks, Life Insurance Companies, Asset Management Companies, Stock and Mutual companies,and Pre-Need Companies are now converging together in order to offer a one-stop shop of investment products to its customers. The walls which used to separate banking, insurance and securities trading or even pre-need have slowly disappeared giving rise to the fast changing distribution landscape. Every company right now wants to maximize their sales, sell not only just one type of product, but also all types of products available where possible.

Life Insurance firms in particular, are starting to consolidate after a period of Liberalization that began in 1992 saw twenty (20) foreign insurance companies flocked the country when the government in 1992 tore down the barriers to entry of foreign players into the local market. Eleven (11) of the Twenty new foreign entrants have since shut down, merged with other firms, or sold out to surviving firms, citing their inability to meet their profit objectives due to the intense competitive environment. At the same time, competition is intensifying among the more established players in the Insurance sector. Companies like Sun Life are gaining market share through its successful implementation of its focused strategy in capturing the Chinese Market.

Consolidation within the industry gave rise to a new trend in bancassurance, where alliances are formed between a banks and insurance companies to give each other access to their customer bases. Several firms have capitalized on the opportunity to sell life insurance products through this fast growing sales channel. The most successful among the companies, which has taken advantage of this channel is Philippine AXA, an affiliate of the Metrobank Group, which saw its growth at a staggering 60% increase in Premium Income.

In the light of the intense competitive environment, Philamlife needs to strengthen its position as the market leader by enhancing its competitive advantage of superior distribution network through investments in other forms of channels that would cater to an expanded market potential. With a population of about 80 million that growns by over 2% every year, and a market penetration of only 12% of the population, there is still a significant opportunity for growth for the company.

This paper entitled A Corporate Strategy for Philamlife Insurance is written to address the emerging trends in the competitive environment of the Life Insurance Industry which may threaten the market leadership position of the company. The writer first conducted a macroenvironmental scan to be able to get a sense of the situation where the Company was operating in. Then, Porter's five forces was applied to analyze the structural determinants in the Life Insurance Industry. Next, the writer used the Threat, Opportunities, Weakness and Strengths (TOWS) analysis to get a better internal profile of the company.

The future strategic positioning of Philamlife will be focused on expanding its market share by capturing selected target markets and by selling more innovative and specialized product offerings through various distribution channels available.

Abstract Format

html

Format

Print

Accession Number

OCE1208

Shelf Location

Archives, The Learning Commons, 12F Henry Sy Sr. Hall

Physical Description

159, 7 unnumbered leaves ; 28 cm.

This document is currently not available here.

Share

COinS