SHRM ASSIGNMENT 1

ALLIANZ SWOT ANALYSIS

Submitted to- Prof Dr. Uma warrier

By, Chaitali Deb 13MBA63020 Sec E last year

2013- 2015CMS Business School

Jain University

HISTORYAllianz SE previously known as Allianz AG ,

is a holding company.Leading insurers and financial services

providers worldwide.The service portfolio of the company

comprises property and casualty insurance ,life and health insurance ,banking and asset management.

Headquartered in Munich, Germany and employs 120000 people worldwide.

SWOTSWOT is an acronym for the internal

strengths and Weaknesses of a firm and the environmental Opportunities and Threats facing that firm.

SWOT analysis done for formulation and implementation of the strategies emerged from the matrix .

Need of SWOT Analysis Widely used technique through which managers

create a quick overview of a company’s strategic situation.

Technique is based on the assumption that an effective strategy derives from a sound “fit” between a firm’s internal resources ( strength and weaknesses) and its external situation ( opportunities and threats).

A good fit maximizes a firm’s strengths( human resource, financials) and opportunities ( expansion to different countries) and minimizes its weaknesses( liabilities) and threats ( competitors).

Allianz SWOT AnalysisAllianz SWOT analysis done on the basis of

two variables Location of factors and Type of factorTypes of factor can be broken down into

favorable and unfavorable

Favorable StrengthsLeading provider of insurance servicesStrong asset managementExcellent ratings High solvency ratioRisk management

Unfavorable – WeaknessesWeakening German motor insurance

operationsSub prime exposureSub – optimal combined ratio in some non-

life insurance markets

External - OpportunitiesPossible takeover of Deutsche Postbank AG Blooming Russian insurance sector Attractive Asian pension marketGlobal demand for retirement products

External - Threats Consolidation in the industry Stagnation in the motor market and new

regulation in ItalyMounting insurance fraudsOccurrence of natural disastersHigh attrition rate

Organizations Business strategy

Allianz analyzed its strengths and opportunities and aroused to a strategy

Business strategy – ExpansionExpanded in the Asian market Bajaj Allianz life Insurance Company Limited (BALIC) is a

joint venture between Allianz SE of Germany and India based Bajaj Finserv Limited (recently demerged from Bajaj Auto Limited). BALIC came into being on 12th March 2001. It is characterized by global presence with a local focus and is driven by customer orientation to establish high earning potential and financial strength. The company received IRDA (Insurance Regulatory & Development Authority) Certificate of Registration (R3) No. 116 on 3rd August 2001 to conduct Life Insurance Business in India.

Scope - Expansion in India

HEALTH INSURANCE

Health insurance expenditure in India is roughly 6% of GDP, much higher than most other countries with the same level of economics development. Of that, 4.7% is private and the rest is public. What is often more striking is that 4.5% are out of pocket expenditure (Berman, 1996). There has been an almost total failure of the public health care system in India. This creates an opportunity for the new insurance companies. Thus, private insurance companies will be able to sell health insurance to a vast number of families who would like to have health care cover but do not have it.

PENSION

The pension system in India is in its infancy. There are generally 3 forms of plans: provident funds, gratuities and pensions funds. Most of the pension’s schemes are confined to government employees (and some large companies). The vast majority of workers are in the informal sector. As a result, most workers do not have any retirement benefits to fall back on after retirement. Total assets of all the pensions plans in India most to less than USD 40 billion.

Therefore, there is a huge scope for the development of pension funds in India. The finance minister of India has repeatedly asserted that a Latin American style reform of the privatized pension system in India would be welcome. Given all pros and cons, it is not clear whether such a whole sale privatization would really benefit India are not.

HR strategyRecruitment strategy Man power planningCross cultural trainingWork force diversityLanguage diversityCompensation and benefitsGovernment rules and taxation

Strategic InsightsGlocal strategy – Think globally, act locally Geocentric approach to understand the Indian market well Market share – 4.03 % in Indian insurance sector compared

to LICTotal Assets Under Management – Rs 39,333 croresSolvency Ratio - 559.5%Claim Settlement Ratio NOP - 93.31%Total No. of offices - 1,043Latest Award Won - Bloomberg UTV Award 2011 for the best

utilization of Information Technology to transform businessOur products cater to all the financial needs like - Protection,

Savings, Retirement, Investment & Health for Individuals and Groups

Work cultureDemocratic leadership style Flat organization structureInterpersonal relationship Risk management cultureBest CSR activities – Eco- Friendly

Business performance BALIC is at fourth position amongst the private

life insurers on the basis of new business premium and second in terms of the number of policies issued, for the financial year 2011-12. It wrote new business of Rs. 27.2 billion during financial year 2011-12 compared to Rs.34.7 billion in the previous year. The gross premium written for the financial year 2011-12 was Rs. 74.8 billion, as compared to Rs. 96.1 billion in the previous year, registering a negative growth. Within the private sector, BALIC market share of New Business premium was 8.3% for 2011-12.

Financial strategyRecent budget 2014-2015 FDI reduces from 49% to 26% which is a

boon to Bajaj – AllianzSolvency ratio Challenging work environment

HR InitiativesAttractive Recruitment strategy involves internal

as well as external sources such as Newspaper ads, Campus placements and Referrals

Induction programme Employee engagement activities Weekly review – HR auditImplementation of 3 R’s Respect Recognition and

Retention.Strong Hr database – tracking and monitoring real

time basis.

Retention strategyExit interviewsPsychological motivationsPro - Bono counselingCompliment cornerEvents , indoor and outdoor gamesCompensation strategy – promotions , internal transfer

, better scope , learning, career growth , succession planning, technologically innovative up-to date.

Mediclaim Maternity leaveGlobal career scope

Hofstede Culture Low power distanceMasculinity – medium to low scaleCollectivism Result orientedPerformance driver – Risk taking culture –

enablersAs Europe culture and Asian culture is

somewhat similar so it was a great opportunity for Allianz to venture into Indian market and made a success till date.

THANKS