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Jp Kruger - One of the best experts on this subject based on the ideXlab platform.
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a study of strategic intelligence as a strategic management tool in the long term Insurance Industry in south africa
European Business Review, 2011Co-Authors: René Pellissier, Jp KrugerAbstract:Purpose – The purpose of this paper is to explore the extent to which strategic intelligence is utilised within the South African long‐term Insurance Industry and whether it could be used to identify opportunities or threats within the global environment to remain competitive, create greater innovation, and corporate advantage.Design/methodology/approach – The approach of this paper is to obtain the qualitative views and opinions of strategic decision makers, on an executive managerial level within the South African long‐term Insurance Industry, on their organizations' use of strategic intelligence.Findings – There are marked differences in the conformity and usage of strategic intelligence and its components between the organizations surveyed, with a measurable difference between large and small organizations, however, it is generally viewed that the use of a strategic intelligence framework could greatly enhance decision making.Research limitations/implications – Data collection was limited to the 82 lo...
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understanding the use of strategic intelligence as a strategic management tool in the long term Insurance Industry in south africa
SA Journal of Information Management, 2011Co-Authors: René Pellissier, Jp KrugerAbstract:The purpose of this research paper was to explore the extent to which strategic intelligence is utilised within the South African long-term Insurance Industry and whether it could be used to identify opportunities or threats within the global environment to remain competitive, create greater innovation, and corporate advantage. The paper obtained the qualitative views and opinions of strategic decision makers, on an executive managerial level within the South African long-term Insurance Industry, on their organisations use of strategic intelligence. It was found that there are marked differences in the conformity and usage of strategic intelligence and its components between the organisations surveyed, with a measurable difference between large and small organisations. It is, however, generally viewed that the use of a strategic intelligence framework could greatly enhance decision-making. Data collection for the research undertaken was limited to the 82 long-term Insurance companies, which were registered with the South African Financial Services Board. More specifically the focus was on the organisations listed on the Johannesburg Securities Exchange within the Life Assurance sector, within which a final response rate of 36.1% was achieved, including the 100% response rate from the six listed organisations. By understanding the extent to which strategic intelligence is utilised in the South African longtermInsurance Industry, and the benefits or problems that are experienced by implementing and using strategic intelligence as an input to the strategic management process we can comprehend the value that strategic intelligence adds in the decision making process. The originality of this work concludes in the identification and utilisation of the most important factors of a strategic intelligence framework that will greatly enhance global corporate decisionmakingand result in competitive advantage and constant innovation within the South African business environment.
René Pellissier - One of the best experts on this subject based on the ideXlab platform.
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a study of strategic intelligence as a strategic management tool in the long term Insurance Industry in south africa
European Business Review, 2011Co-Authors: René Pellissier, Jp KrugerAbstract:Purpose – The purpose of this paper is to explore the extent to which strategic intelligence is utilised within the South African long‐term Insurance Industry and whether it could be used to identify opportunities or threats within the global environment to remain competitive, create greater innovation, and corporate advantage.Design/methodology/approach – The approach of this paper is to obtain the qualitative views and opinions of strategic decision makers, on an executive managerial level within the South African long‐term Insurance Industry, on their organizations' use of strategic intelligence.Findings – There are marked differences in the conformity and usage of strategic intelligence and its components between the organizations surveyed, with a measurable difference between large and small organizations, however, it is generally viewed that the use of a strategic intelligence framework could greatly enhance decision making.Research limitations/implications – Data collection was limited to the 82 lo...
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understanding the use of strategic intelligence as a strategic management tool in the long term Insurance Industry in south africa
SA Journal of Information Management, 2011Co-Authors: René Pellissier, Jp KrugerAbstract:The purpose of this research paper was to explore the extent to which strategic intelligence is utilised within the South African long-term Insurance Industry and whether it could be used to identify opportunities or threats within the global environment to remain competitive, create greater innovation, and corporate advantage. The paper obtained the qualitative views and opinions of strategic decision makers, on an executive managerial level within the South African long-term Insurance Industry, on their organisations use of strategic intelligence. It was found that there are marked differences in the conformity and usage of strategic intelligence and its components between the organisations surveyed, with a measurable difference between large and small organisations. It is, however, generally viewed that the use of a strategic intelligence framework could greatly enhance decision-making. Data collection for the research undertaken was limited to the 82 long-term Insurance companies, which were registered with the South African Financial Services Board. More specifically the focus was on the organisations listed on the Johannesburg Securities Exchange within the Life Assurance sector, within which a final response rate of 36.1% was achieved, including the 100% response rate from the six listed organisations. By understanding the extent to which strategic intelligence is utilised in the South African longtermInsurance Industry, and the benefits or problems that are experienced by implementing and using strategic intelligence as an input to the strategic management process we can comprehend the value that strategic intelligence adds in the decision making process. The originality of this work concludes in the identification and utilisation of the most important factors of a strategic intelligence framework that will greatly enhance global corporate decisionmakingand result in competitive advantage and constant innovation within the South African business environment.
Jacob A Bikker - One of the best experts on this subject based on the ideXlab platform.
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performance of the life Insurance Industry under pressure efficiency competition and consolidation
Risk management and insurance review, 2016Co-Authors: Jacob A BikkerAbstract:A well-performing life Insurance Industry benefits consumers, producers and Insurance firm stockholders alike. Unfavourable market conditions stress the need for life insurers to perform well in order to remain solvent. Using a unique supervisory data set, this paper investigates competition and efficiency in the Dutch life Insurance market by estimating unused scale economies and measuring efficiency-market share dynamics during 1995-2010. Large unused scale economies exist for small and medium-sized life insurers, indicating that further consolidation would reduce costs. Over time average scale economies decrease but substantial differences between small and large insurers remain. A direct measure of competition confirms that competitive pressures are at a lower level than in other markets. We do not observe any impact of increased competition from banks, the so-called investment policy crisis or the credit crisis, apart from lower returns in 2008. Investigation of product submarkets reveals that competition is higher on the collective policy market, while the opposite is true for the unit-linked market, where the role of intermediary agents is largest.
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restructuring of the dutch nonlife Insurance Industry consolidation organizational form and focus
Journal of Risk and Insurance, 2011Co-Authors: Jacob A Bikker, Janko GorterAbstract:ABSTRACT Since the deregulation of the European Insurance market in 1994, Dutch nonlife Insurance firms have sized up and increased their focus. Concurrently, the stock organizational form has become increasingly dominant. This article investigates these 1995-2005 trends from a cost-efficiency perspective. We observe substantial economies of scale that are even larger for smaller firms. In line with the efficient structure hypothesis, both stocks and mutuals are found to have comparative cost advantages. Supporting the strategic focus hypothesis, we find that more specialized insurers have lower costs. Thick frontier efficiency estimates point to large cost X-inefficiencies that have moderately decreased over time. INTRODUCTION During the past few decades, the financial services Industry in Europe has changed dramatically, due in part to the European Union's (EU) financial services deregulation. In 1994, the Third Generation Insurance Directive (TGID) deregulated the European Insurance market significantly. Since then, European Insurance firms have been allowed to operate across national boundaries to encourage foreign competition. They are now also free to develop new products and to set prices at their discretion. The principal goal of deregulation in general and the EU's Single Market Program in particular is to improve market efficiency and enhance consumer choice through increased competition. (1) In formerly highly regulated European countries, deregulation meant a distinct break with the past. A prime example is Germany, where prices used to be regulated for the entire Industry, enabling the most inefficient providers to remain in the market. (2) By contrast, in traditionally more liberal countries, like the Netherlands and the United Kingdom, the regime change had limited direct impact. The TGID transmitted a regulatory model similar to that of the Netherlands across Europe, fostering a level playing field, except where solvency regulation was concerned. Even so, the structure of the Dutch Insurance Industry has changed considerably in recent years. Between 1995 and 2005, the number of firms dropped by more than 20 percent, and average firm size increased by almost 100 percent in real terms. Interestingly, this market consolidation did not lead to widespread conglomeration of the Industry. On the contrary, the market share of focused Dutch nonlife insurers--monolines active in one line of business only--actually increased during these years. At the same time, though relatively few demutualizations (i.e., mutual firms converting to stock charter) occurred, the market share of mutuals dropped substantially. This article investigates the restructuring of the Dutch nonlife Insurance Industry from a cost-efficiency point of view. The objective of the TGID suggests that efficiency considerations played a pivotal role in restructuring. Consolidation can improve the X-efficiency of an Industry if it entails X-inefficient firms leaving the market, either via withdrawals or via mergers and acquisitions. In a consolidating market environment, X-efficiency may also improve because incumbent managers perceive the threat of a hostile takeover as higher, encouraging them to increase their effort and take up internal slack. Obviously, consolidation also has the potential to enhance scale efficiency when firms operate under increasing returns to scale. Organizational form is hypothesized to affect cost-efficiency mainly via comparative advantages of stocks and mutuals in dealing with agency costs. While the stock ownership form is more appropriate in controlling owner-manager conflicts, mutual ownership helps mitigate conflicts between owners and policyholders. Besides differences in dealing with agency problems, stocks have an advantage in their superior access to capital. The efficient structure hypothesis predicts that mutuals and stocks are sorted into market segments where their respective comparative advantages materialize. …
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Competition and efficiency in the Dutch life Insurance Industry
Applied Economics, 2008Co-Authors: Jacob A Bikker, Michiel Van LeuvensteijnAbstract:The lack of available prices in the Dutch life Insurance Industry makes competition an elusive concept that defies direct observation. Therefore, this article investigates competition by analysing several factors which may affect the competitive nature of a market and various indirect measurement approaches. After discussing various supply and demand factors which may constitute a so-called tight oligopoly, we establish the existence of scale economies and the importance of cost X-inefficiency, since severe competition would force firms to exploit available scale economies and to reduce X-inefficiencies. Both scale economies and X-inefficiencies turn out to be substantial, although more or less comparable to those found for insurers in other countries and to other financial institutions. Further, we apply the Boone indicator, a novel approach to measuring the effects of competition. This indicator points to limited competition in comparison to other sectors in the Netherlands. Further investigations of submarkets should reveal where policy measures in order to promote competition might be appropriate.
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competition and efficiency in the dutch life Insurance Industry
Social Science Research Network, 2005Co-Authors: Jacob A Bikker, Michiel Van LeuvensteijnAbstract:Competition is often an elusive concept that defies direct observation. Competition in the Dutch life Insurance Industry is analysed by comparing different factors which could influence the competitive nature of a market and indirect measurement approaches. The paper start with an investigation of the structure of the market, based on Porter's five factor model. Next, it establishes the possible existence of scale economies and the importance of cost and profit X-inefficiency, as severe competition would force firms to exploit scale economies fully and to reduce X-Inefficiencies. Finally, we apply the Boone indicator, a novel approach to measuring the effects of competition. The paper assembles pieces of evidence that competition in the Dutch life Insurance markets is fairly effective: supplier power is limited, ample entry possibilities and substantial rivalry exist, scale economies and cost X-inefficiencies are substantial but not excessive, low market costs are translated into lower prices, leading to larger market shares for the most efficient companies. On the other hand, competition on this market appears to be less than perfect: consumer power is limited, there are few substitution possibilities for life Insurance policies, profitability is higher than in other countries, profit X-inefficiencies could indicate some use of market power and part of the low marginal cost is retained by firms to raise profits.
Tommaso Valletti - One of the best experts on this subject based on the ideXlab platform.
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firm size distribution testing the independent submarkets model in the italian motor Insurance Industry
International Journal of Industrial Organization, 2006Co-Authors: Luigi Buzzacchi, Tommaso VallettiAbstract:This paper tests the presence of multiple independent submarkets in the Italian motor Insurance Industry. Independence is motivated by administrative boundaries among provinces and by further locational reasons. We find that the independence effects are sufficient to induce a minimum degree of inequality in the size distribution of firms once submarkets are aggregated. These results are fully consistent with the predictions of Sutton (1998). We also show that the degree of skewness in the firms size distribution is related to characteristics such as the population living in an area, its density and the riskiness of a submarket.
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firm size distribution testing the independent submarkets model in the italian motor Insurance Industry
Research Papers in Economics, 1999Co-Authors: Luigi Buzzacchi, Tommaso VallettiAbstract:This Paper tests the presence of multiple independent submarkets in the Italian motor Insurance Industry. Independence is motivated by administrative boundaries among provinces and by further locational reasons. We find that the independence effects are sufficient to induce a minimum degree of inequality in the size distribution of firms once submarkets are aggregated. These results are consistent with the predictions of Sutton (1998). At the submarket level, some degree of inequality can be explained by a model of equilibrium price dispersion based on costly consumer search. Our findings show that Sutton’s limiting approach and one based on a game theoretical analysis of an Industry are good complements when the Industry is made of several independent submarkets.
Pradeep K Chintagunta - One of the best experts on this subject based on the ideXlab platform.
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simultaneous or sequential search strategies in the u s auto Insurance Industry
Marketing Science, 2017Co-Authors: Elisabeth Honka, Pradeep K ChintaguntaAbstract:We study the identification of the search method consumers use when resolving uncertainty in the prices of alternatives. We show that the search method—simultaneous or sequential—is identified with data on consumers’ consideration sets (but not the sequence of searches), prices for the considered alternatives and marketwide price distributions. We show that identification comes from differences in the patterns of actual prices in consumers’ consideration sets across search methods. We also provide a new estimation approach for the sequential search model that uses such data. Using data on consumer shopping behavior in the U.S. auto Insurance Industry that contain information on consideration sets and choices, we find that the pattern of actual prices in consumers’ consideration sets is consistent with consumers searching simultaneously. Via counterfactuals we show that the consideration set and purchase market shares of the largest Insurance companies are overpredicted under the incorrect assumption of se...
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simultaneous or sequential search strategies in the u s auto Insurance Industry
Social Science Research Network, 2016Co-Authors: Elisabeth Honka, Pradeep K ChintaguntaAbstract:We study the identification of the search method consumers use when resolving uncertainty in the prices of alternatives. We show that the search method -- simultaneous or sequential -- is identified with data on consumers' consideration sets (but not the sequence of searches), prices for the considered alternatives and market-wide price distributions are observed. We show that identification comes from differences in the patterns of actual prices in consumers' consideration sets across search methods. We also provide a new estimation approach for the sequential search model that uses such data. Using data on consumer shopping behavior in the U.S. auto Insurance Industry that contains information on consideration sets and choices, we find that the pattern of actual prices in consumers' consideration sets is consistent with consumers searching simultaneously. Via counterfactuals we show that the consideration set and purchase market shares of the largest Insurance companies are overpredicted under the incorrect assumption of sequential search. As the search method affects consumers' consideration sets, which in turn influence brand choices, understanding the nature of consumer search and its implications for consideration and choice is important from a managerial perspective.