Case Memo 3, Proposition : Allianz Should Continue Substantial Investments In Micro Insurance – Case Study Example
Allianz Should Continue Substantial Investments In Micro Insurance Allianz Should Continue Substantial Investments In Micro Insurance
Allianz is a German based insurance company that seeking to address communities devastated by various disasters in the globe by offering different micro insurance product to communities affected and help in reconstruction work, this new market venture is not expected to generate profit in short-term, but it aim to introduce a product that will help to unlock the market in the long run. With partnership with other organization, this product have been introduced to some region like Tamil Nanu and Indonesia with a target of 3.5 million client by 2009 despite the obstacles that hinder penetration in the market and product awareness among potential targeted client.
Allianz group it is mainly concerned with large pool of people who are often stricken by different disasters, which implicate, their financial situation negatively yet most of them live under $2 per day, this micro insurance product, will help the affected while at the same time exploring potential market for the for an insurance company.
This micro insurance product is being introduced to a fragile environment that is quite crucial since very many claims can evolve due to an incident of disaster like in the case of cyclone Nisha which resulted to 16000 claims.
Though the Allianz Company is well established still it has to find ways of making this venture be profit viable considering the high cost of running a business in such market. Allianz group is likely to face competition from other local and global companies.
The target customer of these products are poor majority who lack awareness of importance of insurance cover thus they are likely to disregard the product hence the products have to be packed in such a way it attracts and benefit targeted population.
Allianz company size and its strong establishment in many countries put it in an advantageous position, which can aid, implementation of various strategies of exploring and venturing into this market, however, Allianz may experience some difficulty mainly due to lack of critical knowledge about the emerging market.
Allianz partnership with a global organization that are well established in local communities put Allianz in an advantage edge since it will help the company to solidify its presence in the target market and also enjoy logistic support while partnering with other organization, despite the fact that it likely to face a threat from local growing companies and global companies that would be interested in established market.
Allianz may follow this alternative which may help to capture the target market strongly and address client needs; Through providing various comprehensive insurance product that address different people according to their needs, give high priority to insurance saving product. This is because by providing various comprehensive products that address client comprehensive need that result from disaster event is more attractive to locals, however, this product may limit verities of product that a company can offer and hence limit returns from a variety of product. Also considering target customer level of awareness and insurance cover knowledge at the moment insurance package is likely to be more attractive to them (World Business Council for Sustainable Development, 2009).
Allianz Company has to create awareness campaigns of insurance product it offers and focus on penetrating to target market. This is because it is only when potential client are empowered with knowledge in regard to the importance of insurance cover they can buy the product. Also, Allianz has to penetrate to possible market extensively and cement their relationship before other companies start venturing on same (World Business Council for Sustainable Development, 2009).
World Business Council for Sustainable Development,(2009). Case study: Reducing the risks of the poor through micro insurance