There is a need for the intermediaries to maintain efficient operations that could delivery value offering to the clients in order to compete with the direct sales team of the providers. Solutions has to maintain a substantial portfolio with its provider network and maintain its partnership in order to ensure provider cooperation. Solutions is constantly reviewing and enhancing its processes and systems in order to maintain its target operational cost. EFE Matrix Table 4.5. EFE Matrix of Solutions Opportunities Source Importance Weight (0% to 100%) Responsiveness Rating Weighted Score (1 to 4) O1 Increase GDP growth drives more businesses which are the primary purchasors of insurance. Macro Economic 10% 1 0.10 O2 Large presence of SMEs (Around 32,000 in NCR / 73,500 Philippines) that could be captured even without global affiliations Macro Economic, Market Analysis 15% 1 0.15 O3 Increased activity of Global Players (EB consultants and brokers) means increase in demand for broker services locally. 5 Forces, Market Analysis 10% 2 0.20 O4 Increase in perceived value of employee benefits as HR acquiring and retention tool Market Analysis, Value Chain 15% 4 0.60 O5 Fast growing BPO segment and improving status of the manufacturing industry Market Analysis 5% 2 0.10 Threats Importance Weight (0% to 100%) Responsiveness Rating Weighted Score (1 to 4) T1 Market leaders undercutting commissions would drive commission rates down 5 Forces, Market Analysis 15% 4 0.60 T2 Increased Consolidation of Multinational Clients 5 Forces, Market Analysis 20% 1 0.20 T3 Increased activity of Provider direct sales force competes with intermediaries. Value Chain, 5 Forces 10% 3 0.30 Total 100% 2.25 Solutions is moderately responsive (with a rating of 2.25) to the opportunities and threats posed by the market environment. Perhaps, its strongest weapons are its consultants who are experts in their fields as well as its continuing activities to standardize operations for easier
Solutions sales growth is not as high compared to key competitors despite it being the most profitable. As shown in the market analysis, Solutions' revenue growth is lagging as the market is already growing by 17% compounded in the last 5 years. Further analysis of Solutions client portfolio reveals that revenues from one group of companies (global) comprise around 30% of its current sales. The situation is similar in the past which makes the revenue stream volatile due to high concentration risk. This is shown in the growth of net income over the years. Possible Strategy or Action. Solutions should invest heavily in the development of its business development (marketing and sales) team in order to develop new market which is not vulnerable to global appointments. This new market (most probably the local industries) would be medium to large sized local companies. Penetration of such markets should dilute the concentration risk of the current client portfolio of Solutions. Internal Factor Evaluation (IFE) Strength Ratings and Importance Weight S1. Good Servicing reputation; Weight – 15%; Rating - 4 This is one of the highest in weight. This is a core competency in the service industry most especially for business where after sales service is active and contact with the clients has lasting effect and meaning during after sales. This is a major strength of Solutions as it is reputed to have strong service oriented processes and people. Base on both providers and clients’ feedback, Solutions is one of the broker firms (if not only) who is able to administer the plan effectively and really adds on value in terms of servicing the needs of the clients in collaboration with the providers. Value-added services that are visible to the clients and providers include audit of all documents, materials and agreements from both providers and clients. It also include technical advice on policy provisions, negotiation with the providers for difficult claims and policy terms and conditions. There was even one MNC client of Solutions which was able to convince global to retain a local broker because of Solutions servicing capabilities.
WO7. Consider merger and/or acquisition with a local broker with strong NEB portfolio, which also affiliated with top global broker, e.g. Winebrenner and Inigo affiliated with Willis (3rd global), or Philinsure afiliated with Peter Gallagher (W4, W5, O3) W08. Consider setting up a sales branch in Central Luzon and/or in the South where a lot of economic zones are being developed (Clark, Subic, Laguna or Cavite, Cebu, Bacolod, Davao) or consider merger and/or acquisition with a local broker firm with presence in these cities. (W6, O1) Weakness – Threat Strategies (W.T. Strategies) Weakness Threats W1: Under-utilized international alliances W2: Absent institutional relationship W3: Weak support team for business development and no formal marketing plan / activities W4: Limited Range of services W5: Risky customer portfolio mix W6. Limited geographical scope T1: A lot of brokers especially the Market Leaders are undercutting commissions would drive commission rates down T2: Increased consolidation of multinational clients. T3: Increased activity of provider direct sales force competes with intermediaries. W.T. Strategies WT1. Create “global” packages through existing and/or new international networks, and look at potential for supporting Philippine multinationals (e.g. RFM, Unilab, etc.) within the region with a alliance offering. (W1, T2) WT2. Revisit relationship with providers and consider partnership in creating certain products targeted for particular market segments, particularly local SMEs and High Net Worth Individuals. (W2, W5, T3) WT3. Develop a strong business development team which will revisit current product pricing strategy to align with current offering levels at an institution business development level. Focus on providing more value added components into the product mix and unbundling service offerings. (W3, W4, T1) WT4. Consider merger and/or acquisition with a local broker with strong NEB portfolio, which also affiliated with top global broker, e.g. Winebrenner and Iñigo affiliated with Willis (3rd global), or Philinsure affiliated with Peter Gallagher. (W4, W5, T2)
Action / Program Who When 1) Complete standardization of all operational areas for faster ramp up time. Ops Head 1Q 2014 2) Review and consider simplifying authority matrix for different groups aligned with product / service areas to allow specialization (ie. breaking sales function from fullfillment function). Ops Head 1Q 2015 3) Coordinate with Business Dev't regarding backroom capacity requirements aligned with sales targets to ensure compliance with SLAs. Ops Head 4Q 2014 - 2016 Finance, Accounting and Admin. Action / Program Who When 1) Allocate budget for sales and marketing expense including incentives. Finance Head 4Q 2013 2) Allocate budget for capex to cover IT system development and upgrade. Finance Head 4Q 2013 3) Create a cash management system to ensure cash flow is managed by coordinating with Business Dev't and Operations regarding revenue and expense timings and also to plan placement in various investment vehicles to maximize interest income. Accounting Head 4Q 2013 IT Support Action / Program Who When 1) Improve / upgrade Sales recording/reporting system to be able to generate reports on Sales and Collection targets and if possible Prospect penetration. Eventually upgrade information management capabilities from reporting to analytics. IT Head (in coordination with all Unit Heads) 1Q 2014 2) Create a web tool that will support marketing activities focusing on ease of data gathering, online FAQs and customer feedback. Create facilities for customer IT Head 2Q 2014
2018) Measure: Revenue from New Business from New Accounts over Total Revenue 10% and above 5% to below 10% Below 5% 10% D = Bus. Dev’t A = Bus. Dev’t and Operations C = Management I = Finance 2. Target net profit margin of 15%-20% p.a. Measure: Net Profit Margin 15% and Up 10% to below 15% Below 10% 15% to 20% D = Management A = Operations C = Finance I = Bus. Dev’t 2014-2018 (Check Quarterly) Customer Perspective Objective Key Performance Index or Measure Target Resp. When Meet Target Warning Below Target D = Driver A = Accountable C = Consulted I = Informed 1. Maintain Market Share in the next 5 years Measure: Market Share 2.2% and Up 2% to below 2.2% Below 2% 2.2% D = Bus. Dev’t A = Operations C & I = Management 2018 (Check Annually) 2. Penetrate SME industry. Design packages specific to this market. Measure: % of revenues from SME over total client portfolio 10% and Up 5% to below 10% Below 5% 10% D = Management A = Operations C = Finance I = Bus. Dev’t 2018 (Check Quarterly) 3. Grow current portfolio through designing products for cross-selling and upselling. Measure: Cross-selling & Upselling rate (additional revenue / previous year’s revenue ) 1% and Up 0.5% to below 1% Below 0.5% 1% D = Bus. Dev’t A = Operations C = Management I = Finance 2018 (Check Quarterly) 4. Improve client retention rate to 98%.Increase customer confidence in our advice. Measure: Retention rate (revenue from renewals (exclusive of organic growth) / previous year’s revenue) 98% and Up 90% to below 98% Below 90% 98% D = Operations A = Operations C = Bus. Dev’t and Mgt. I = Finance 2015 (Check Quarterly) Measure: Customer Satisfaction Rate (0 to 4 rating) 3 and above 2 to below 3 Below 2 3 (through annual survey) D = Operations A = Operations C = Bus. Dev’t and Mgt 2014 (Check Annually)
Internal Processes Perspective Objective Key Performance Index or Measure Target Resp. When Meet Target Warning Below Target D = Driver A = Accountable C = Consulted I = Informed 1. Intensify brand building efforts Measure: Number of PR Events inc. seminars and Ad campaigns in a year 12 and above 6 to below 12 Below 6 12 (at least once a month) (Adjust based on sales target) D = Bus. Dev’t A = Bus. Dev’t C = Management I = Finance 2014-2018 (Check quarterly) 2. Increase targeted marketing efforts Measure: Number of new products/packages launched in a year 2 and Up 1 0 2 and up D = Bus. Dev’t A = Bus. Dev’t C = Management and Operations I = Finance 2014-2018 Measure: Number of qualified leads from PR events / Close Rate 120 and above / 10% MLE, 5% Small 100 to below 120 / Less than 10%/5% Below 100 / Less than 10%/5% 120 (Closure rate may be adjusted depending on size of closed accounts) D = Bus. Dev’t A = Bus. Dev’t C = Management I = Management 2014 (Check monthly; with yearly adjustments) 3. Develop and strengthen partnerships with allied industries and providers to provide features for customers Measure: Number of MOAs signed with allied partners 5 and above 1 to 4 0 5 D = Bus. Dev’t A = Bus. Dev’t C = Management I = Management 2014-2018 (Check monthly) 4. Improve SLA, Service Delivery quality and response time Measure: SLA hit rate (i.e. %age TAT SLAs are achieved) 99% and Up 90% to below 99% Below 90% 99% D = Operations A = Operations C = Bus. Dev’t and Mgt. 2014-2018 (Check Quarterly) Measure: Mean response time for customer concerns Within 24 hours Above 24 hours to 48 hours Above 48 hours With 24 hours D = Operations A = Operations C = Bus. Dev’t and Mgt. 2014-2018 (Check quarterly) Measure: Number of Customer complaints per Month 1 and below D = Operations 2014-2018
1 and below 2 to 4 Above 4 A = Operations C = Bus. Dev’t and Mgt. (Check monthly) Learning and Growth Perspective Objective Key Performance Index or Measure Target Resp. When Meet Target Warning Below Target D = Driver A = Accountable C = Consulted I = Informed 1. Increase capacity: Improve competencies by developing and growing high-level consultants and their range of expertise and developing the business development team Measure: Ave. Length of Promotion of key employees 2 – 3 years and below more than 3 to 5 years More than 5 years 2 to 3 years D = HR A = Operations C = Management 2014-2018 Measure: Number of man-hours for employee training per employee per year 100 hours and above 75 hrs. to below 100 hrs. Below 75 hours 100 hours and above D = HR A = Operations C/I = Management 2014-2018 (re-evaluate quarterly) Measure: Number of accounts per consultant 10 and below 11 to 20 20 and above 10 and below D = Management A = Operations C/I = Bus. Dev’t / HR 2014-2018 Measure: Number of accounts per account officer 5 and below 6 to 10 Above 10 5 and below (to be adjusted based on size and complexity of accounts) D = Operations A = Operations C/I = Mgt / HR / BD 2014 – 2018 Measure: Number of suggestions from employee 1 idea per week 1 idea per month Below 1 idea per month 1 idea per week D = Management A = Operations C = Finance I = Bus. Dev’t 2014-2018 Measure: Over-all employee satisfaction (0 to 4 rating) 3 and above 2 to below 3 Below 2 3 and above (through annual survey) Measure: System on-time completion rate (in terms of % on-time achievement) 90 to 100% 75 to 90% Below 75% 90 to 100% on-time achievement of milestones D = Operations A = IT C = Management I = Finance 2014-2018
Table 10.4. Affiliations of Top Brokers Ranking Company Affiliation Reach Remarks ALL EB 1 2 Marsh Philippines, Inc. Marsh & McLennan Global player Merged with Mercer Consulting, Number 1 Global (Based on 2012 Revenues) 2 1 HSBC Insurance Brokers (Phils.), Inc. HSBC Bank Captured market 3 4 Aon Philippines Inc. (Ayala Aon) AON Hewitt Global player Number 2 Global (Based on 2012 Revenues) 4 7 BDO Insurance Brokers, Inc. BDO Bank Local Captured market 5 3 Citicorp Fin. Services & Ins. Brokerage Phils. Citibank N.A. Global affiliation Captured market 6 9 Anchor Insurance Brokers San Miguel Corp. Local Captured market 7 6 Gotauco Del Rosario Ins. Brokers, Inc. International Benefits Network, Assurex Global, Globex International Global network Institutional relationships 8 * Lockton Phils. Lockton Global Global network Captured market 9 11 Unicon Insurance Brokers Corporation JG Summit Group Local Captured market 10 8 Jardine Lloyd Thompson Ins. Brokers, Inc. Jardine Lloyd Global player JLT Group - #7 global 11 * Intertrade Insurance Brokers Westcourt General Insurance Brokers Asia and Pacific Based in Australia 12 5 Solutions Insurance Brokers, Inc. RNA Regional Alliance and Abelica Global Regional and Global Affiliation with RNA is more NEB / Abelica is for consulting 13 18 Philpacific Ins. Brokers & Managers, Inc. (Philinsure) Wells Fargo Global Broker Network and Arthur Gallagher Global network With regional offices (Manila, Cebu, Davao); With reinsurance license Gallagher - #4 global Wells Fargo - #5 Global 15 10 Accette Insurance Brokers, Inc. (Howden) Howden Broking Group Global player Local player acquired by global player 16 12 Lacson & Lacson Insurance Brokers, Inc. Worldwide Broker Network Global network 17 13 Winebrenner & Inigo Insurance Associates, Inc Willis Group Global network with Captured market Number 3 Global (Based on 2012 Revenues) 18 14 Taishan Insurance Brokers (Phils.), Inc. Kuok Group Regional affiliation with Captured Market * 15 Ra Roco Insurance Brokers, Inc. None Local Ranking based on Total Premiums placed in 2011 (IC Report, 2011) * not part of top 20