Analyzing the Great Eastern Life Amended PDF

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“GREAT EASTERN LIFE: A MIX OF STRENGTH AND CONSISTENCY”

Great Eastern Life: A Mix of Strength and Consistency

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“GREAT EASTERN LIFE: A MIX OF STRENGTH AND CONSISTENCY”

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Great Eastern Life: A Mix of Strength and Consistency

Contents

Introduction..................................................................................................................................3 PESTEL Analysis.........................................................................................................................4 Political/ Legal........................................................................................................................4 Economic.................................................................................................................................4 Social........................................................................................................................................6 Technological...........................................................................................................................6 Environment...........................................................................................................................7 Porter’s Five Forces Analysis.......................................................................................................7 Competitive Rivalry within an Industry – High..................................................................7 Threat of New Entrants – High................................................................................................8 Threat of Substitute Products or Services – Low.....................................................................8 Bargaining Power of Suppliers – Low.....................................................................................9 Bargaining Power of Customers – High...................................................................................9 Issue Analysis and Recommendations.......................................................................................10 Conclusion..................................................................................................................................11 References:.................................................................................................................................11

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Introduction As of 2016, prime drivers that have determined digitized transformation for the industry of life insurance in Singapore incorporate and are not limited to the stress for the digital transition to ascertain the cost-effectiveness, increased competitive merits, improved consumer engagement with digitalization-savvy clients, and reduced human errors (CISION, 2017). Great Eastern Life, being one of the oldest insurance firms in Asia, is the largest public listed life insurance company in Singapore and Malaysia. This leading life insurance company has been operating with its 24 branch offices until 2005 since it was founded in 1908 (Great Eastern, 2018). Its service network consists of more than 17,000 agents nationwide. Great Eastern Life is the only life insurance company which is listed on the Singapore Exchange (Great Eastern, 2018). As a part of fulfilling the company mission, Great Eastern Life persistently strives for ensuring financial security, assurance of health so as to establish meaningful lives and vivid relationships. Great Eastern Life became a concern of the OCBC group in 2004 (Great Eastern, 2018).The company claims that integrity, initiative, involvement are its core values. Over the years, Great Eastern has won a number of awards such as Singapore Golden Jubilee Business Awards, Human Resources Vendor of the Year. It is also regarded as Singapore’s 7th most valuable brand. The company has S$71.1 billion in assets and around 4 million policyholders (LinkedIn Profile, 2018). They have three successful distribution channels - a tied agency force, bancassurance, and a financial advisory firm, Great Eastern Financial Advisers. Great Eastern Life is one of Singapore’s top 3 insurers in group insurance (Great Eastern, 2018).

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PESTEL Analysis Hi, I'm interested in working on this project. Consider sending a message so that we can discuss the project details exclusively. Thank you. Political/ Legal With a view of overlooking the inconsistency with the existing structure of politics in Singapore with a well-established legislative executing system and stubborn domestic institutional processes and deliberate rhythm in the parliamentary democracy as well as corporate governance, the city state in Singapore enables financial companies to confront a tax rate environment where sheer competition prevails (AHK, 2014). The Monetary Authority of Singapore (MAS) proactively deals with licensing and governing insurance companies in Singapore (MAS, 2016). The MAS has issued Balanced Scorecard (BSC) Framework which ensured rules and regulations in the insurance industry. There are different departments in the MAS to battle money laundering and funding terrorist organizations. The Insurance ACT (CAP 142) is also governed by the MAS, which regulates insurance business, insurers (including reinsurers), insurance intermediaries (agents and brokers) and other related institutions in Singapore. Due to the remarkable attribution of MAS’ guidelines Great Eastern Life needs its workpeople and financial advisers to participate in the compulsory trainings each year so as to get equipped with the essential competence in terms of expertise and knowledge. Economic One of the core reasons why Singapore has been identified as a significant financial hub in the world is that the nation continues to experience its currency stability over the years. Rooted in the stats on TCC (Total Currency in Circulation) from the year 2006 to 2015, the growth has been shown to be persistent throughout the years (MAS, 2016). Therefore, Great Eastern Life becomes constantly able to benefit from the upward trend of nation’s economy. This results in

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increased investment returns for the company in its participatory funds so that it can declare healthy bonuses to the customers. Based on a survey operated by the Globalization Index 2012, Singapore has gained the 2nd position in the list of the most chosen countries for overseas investment and trade (AHK, 2014). Singapore has attained remarkable GDP growth throughout 2016 (Shiao, 2017).

Singapore GDP Growth Rate 14 12 10 8 GDP Growth Rate 6 4 2 0 -2 15 20 -4

Q3

15 20

Q4

16 20

Q1 2

6 01

Q2 2

6 01

Q3

Source: Trading Economics, 2018

2

6 01

Q4

17 20

Q1 2

7 01

Q2 2

7 01

Q3

17 20

Q4

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Money Supply in Singapore: 2017 585000 580000 575000 570000 SGD in Million

565000 560000 555000 550000 y y ch ar ar ar ru nu M a b J Fe

Ap

ril

ay M

Ju

ne

Ju

ly

r r r st er be mbe mbe gu mb o u t e A ce ve Oc pt De No Se

Source: Trading Economics, 2018 Social Singapore is a typical South-East Asian country socially. Singaporean people still hold traditional family values. But the younger generation still has the tendency to follow western cultures. Singaporean people are hard workers. They work hard to earn money not just for their fundamental needs but also for enjoying life. Their tendency to live well has increased the nation’s productivity and has placed Singapore at one of the top positions in the world economy. Singapore is also the 7th least corrupt country in the world (Salleh, 2017). Singaporean people also have a good command over English, which helps attracting global customers. Technological The 21st century has been blessed with smart technologies including the Internet. In the past, in order for becoming a policy holder, individual had to apply using hardcopies and then wait for the approval for the commencement of the insured product. As soon as the technology improved, people became able to make use of paperless software to purchase and submit policy applications

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through PCs, Laptops, or Smartphone. Developmental programs as well as speech of financial advisors can be executed through instant telecommunications and video conferencing. Great Eastern Life has implemented the latest and the most sophisticated information technology for both customers and its employees to execute things faster and make the whole process remain flawless. It has added a new dimension to the company’s conventional business. Environment At one point, Singapore was among those countries which had the highest level of industrial carbon dioxide emissions. But the government worked hard to maintain the air quality and a business-friendly environment. The government also urged companies to go green. Most of the processes in insurance companies are now paperless. This creates a good public image for a company. Great Eastern Life has collaborated with the OCBC Bank to support environmental sustainability (Great Eastern, 2018). Over 1,500kg of debris was collected by teams and their families at the coastal clean-up of PasirRis beach (Great Eastern, 2018). Porter’s Five Forces Analysis Competitive Rivalry within an Industry – High Rivalry among the industry is very high. As Singapore has become a financial hub in Asia, the number of financial institutes and organizations has risen up. This is also true in the insurance industry. There are many insurance companies in Singapore which are competing with the Great Eastern Life for example, Prudential, AIA, AXA, NTUC Income and many more. The rivalry is mainly based on affordable premium, price competition, satisfying customer service and stable business scale. Great Eastern Life provides quality advice based on individual needs, clear details of products as well as the risks and benefits, comprehensive product and services to meet

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financial insurance at different stages of life. They are also a leader in bancassurance. Because of their exceptional service Great Eastern Life has become a trusted name in the insurance industry. Threat of New Entrants – High The industry’s profitability will be affected by each and every entry of novel competitors into the marketplace. Despite the fact that in order for being able to avail insurance license, capitals are required to be heavier and regulations are also massive in Singapore, friendly financial environment and associative conditions for founding multinational companies for businesses allow new entrants to become effortless to get started with commercial and business activities in this nation. For example, AXA and China Life have inaugurate their businesses in Singapore insurance market in 2016 with very little or no resistance. Great Eastern Life is likely to encounter numerous challenges in the forthcoming days due to facing excessive new entrants that will soon turn into becoming its ultimate competitors. Threat of Substitute Products or Services – Low Alternative services or products in the industry doubtlessly make the company attain profitability. Because of the increased medical diagnostic opportunity and the trend of conveying healthy lifestyle in Singapore, people are growingly becoming able to be more aware of ailments such as cancers and chronic diseases. This leads to generating awareness of being safeguarded from the unforeseen situations. As a leading player in the marketplace, Great Eastern Life has introduced a wide variety of services and products to fulfill customer needs and demands. Therefore, the alternative of Great Eastern Life in the industry is pretty low at the moment and will be expectedly low in the future as well.

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Bargaining Power of Suppliers – Low There are suppliers in Great Easter Life who are mainly of two kinds such as manpower supply and reinsurance supply. Transitioning the risk to re-insurer companies is a known means of leveraging and managing own risks of insurance companies. Highly amounted products, sold to individuals might become too risky for the company but, re-insurer can help Great Eastern Life diversify the risk by selling a risk protection. Nevertheless, the company does not tend to diversify risks because of not relying much on re-insurers due to its low demand; therefore, the suppliers’ bargaining power thus becomes low. Great Eastern Life has consistently strived for setting up and managing developmental and training programs for its employees in order to ensure that new people will join the company steadily, and on the other hand, existing workpeople will remain contented with their progresses. By means of managing these, Great Eastern Life has continued to stay on top of the most peer companies in the nation using its relatively greater advantage in the labor market in Singapore. For these reasons, there is not excessive bargaining power available for the manpower supplier. Bargaining Power of Customers – High There are extensively growing numbers of licensed insurers in Singapore which is why; numberless insurance products are available in the marketplace allowing consumers to select their preferred company and products (Simconblog.com, 2015). Customers are capable of choosing the right product because of using the Internet, which also enables them to analyze difference between features, offers, investment returns, and premiums. Therefore, Great Eastern Life is confronting a fierce competition in the marketplace in Singapore. On the other hand, people are seeking for competitive advantages as they also consider the premiums as investments- there are lots of things to be managed by a insurer to handle a customer showing

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the company performance, marketing promotions, service efficiency, and many others. Customers tend to look for substitute options as long as they are not convinced; and they can change mind instantaneously as soon as they find any shortcoming in products, company, or their life plans, therefore, the customers’ bargaining power always seems to be high. Issue Analysis and Recommendations To avail numbers of business advantages, Great Eastern Life has been merged with OCBC, unlike NTUC Income (a leading competitor of Great Eastern Life in the Market). There is an additional imperative for the company to continue to ensure one-stop service with the correlation of OCBC. Great Eastern Life can hire more people to do the work and decrease the burden from the workers. In Great Eastern Life, the management matters a lot. Managers have high control over their employees. There is a hierarchy of work positions. The superiors exercise a lot of control over their subordinates. In this era, this practice has become outdated. They should not have so much power over their subordinates. To increase productivity and freedom of the employees, Great Eastern should implement ROWE (Results Only Work Environment). By this way, employees can leave as soon as they are done completing their assigned job. Great Eastern can utilize time and manpower by following this process. This will also increase job satisfaction. Great Eastern Life has a solid managerial structure. But there are many senior managers around. So it is hard for young employees to get promoted. Because of senior managers the company is a bit conservative and slow. The company has fallen behind from becoming a trend-setter in the insurance company. Great Eastern Life should not underestimate its young employees. The company should look after its young employees and brainstorm them for new ideas and projects. The company should nurture its young recruits and train them from time to time. The young

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recruits should have a shot at improving the company. Life Insurance Association (LIA) Singapore revised their policies of recruiting dissociative agents, and started brainstorming on issuing reviewed guidelines to its members (Companies) in upcoming days (Tan, 2017).

Great Eastern Life should address its problem from the root. Top management is generally sheltered from how ugly things are at the ground. Top managers don’t get to look at problems at the lowest levels. This is a harmful practice. This can lead a company to crumble overnight. Managers should be on the ground to address problems from the lowest level to the topmost level. There will not be any improvement if problems are not addressed at the root. They should be on the ground doing field work to assess problems with the employees and solve them. Conclusion

To conclude, Great Eastern Life has been the right fit for availing the accreditation as a highly valued company within the prevalent circumstance in Singapore, in terms of its financial strength and capabilities. From the above depiction, there have been strong notions that the company can adequately implement its existing business reputation and treasures. Health awareness and the literacy rate in Singaporean populace allow the company to grow fast in the marketplace and perform with services as per commitments. Because of availing technology-savvy, educated, and dynamic consumers the company keeps effortlessly delivering its best by utilizing its potential efficiency, leaving all its contestants behind. References:

1. AHK. (2014). Singapore – Finance & Insurance Industry (pp. 1-4). AHK.

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2. CISION NEWS SITE. (2017). Life Insurance Industry Outlook in Singapore. Prnewswire.com. Retrieved 24 January 2018, from https://www.prnewswire.com/news-releases/life-insurance-industry-outlook-insingapore-300496668.html 3. LinkedIn. (2018). Great Eastern Life Singapore. LinkedIn.com. Retrieved 24 January 2018, from https://www.linkedin.com/company/great-eastern-singapore/ 4. MAS.gov. (2016). Singapore as a Global Insurance Marketplace. Mas.gov.sg. Retrieved 11 January 2018, from http://www.mas.gov.sg/news-andpublications/speeches-and-monetary-policy-statements/speeches/2013/singapore-asa-global-insurance-marketplace.aspx 5. PESTLE Analysis of Singapore. (2018). PESTLE Analysis. Retrieved 11 January 2018, from http://pestleanalysis.com/pestle-analysis-of-singapore/ 6. SALLEH, N. (2017). Singapore climbs to 7th on global least-corrupt index. The Straits Times. Retrieved 11 January 2018, from http://www.straitstimes.com/singapore/singapore-climbs-to-7th-on-global-leastcorrupt-index 7. Shiao, V. (2017). Singapore economy grows 5.2% in Q3, fastest in nearly 4 years; 2017 forecast raised to 3-3.5%. The Straits Times. Retrieved 11 January 2018, from http://www.straitstimes.com/business/economy/singapore-economy-grows-52-in-q3beating-expectations-2017-forecast-raised 8. SIMCON Blog. (2015). Insurance Industry Analysis. SIMCON Blog. Retrieved 11 January 2018, from https://simconblog.wordpress.com/2015/08/19/insuranceindustry-analysis/

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9. TAN, L. (2018). Insurance body planning new guidelines on agent recruitment. The Straits Times. Retrieved 17 January 2018, from http://www.straitstimes.com/business/insurance-body-planning-new-guides-on-agentrecruitment 10. Trading Economics. (2018). Singapore GDP Growth Rate | 1975-2018 | Dat...