CHAPTER 5 - Industry and Marketplace
- 5.1 The Industry
5.1.1 Definition of the Industry
In the context of commercial trade, insurance is further defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for consideration, payment, in the form of a risk premium. The insurance premium develops at an actuarily-determined rate. This rate is a factor used to determine the amount of premium to charge for a certain limit, and type, of insurance on the scarce resource. The premium can further be viewed as a guaranteed, known, relatively small financial loss to the insured, paid to the insurer, in exchange for the insurer's promise to compensate the insured in the case of a loss to the insured resource. The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insured will be indemnified.
- The shape of the industry for insurance in Malaysia is in the growing stage. Nowadays consumers are more concerned about their health and money saving for future. Consumers tend to find better insurance to satisfy their needs. Many companies are starting to invent or produce new type of insurance policies to fullfill the consumer’s demand. Due to the high demand of consumer, the market sales of product are increasing too.
- Great Eastern Life Assurance expects the country’s gross domestic product to grow five per cent on 2011. Projects under the Economic Transformation Programme (ETP) which will involve strong infrastructure spending will drive domestic demand and fuel Malaysia’s economic growth.
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The market of Great Eastern insurance is currently in an intensive competition; there are a lot of existing product in the market, which are competing each other both directly and indirectly. To survive the competition, Great Eastern have become more innovative than ever to fight for more sales share in the market.
- Positive
- Negative
More competition in the market leads to more effort in innovation, thus boosting the growth of the industry.
More competition in the market leads to more loss in profit and cost in promotion and advertising
