A Case Study On College Assurance Plan
Choose agents who lack industry knowledge, come across as uncaring salespeople or can’t provide legal contracts to back their products and services. Competition with Business- Insurance companies and their agents must have a dynamic, competitive and visible online presence.
Insurance buyers want websites that are easy to maneuver, links that provide all the necessary details and message centers that make correspondence quick and simple. Social Media- Social media has changed the way insurance companies market their policies and coverage options and strive to maintain strong reputations with consumers.
Many Insurance agents use Faceable, Twitter and Linked to appeal to customers and spread the word about their products and services. B Political Legal Forces Regulatory and political dispensations of any given national or state government are determined by the orientations of its ideology. These political and legal forces shape the profile of your business environment.
Members of CAP can sue the company because of its inability to pay them back. C. Economic Forces Premiums paid to insurers are invested, poor economic output can offer less return for insurers, hence higher premiums.
Insurers have to take more of a hit in terms of risk themselves. More fraudulent claims occur during times of economic downturn, due to lack of money. Companies failing economically will relocate to other countries and pull out or markets.
This causes less revenue for insurers. Insurance is management of risk; in a down turning economy less businesses are willing or able to take risks. The economic concerns are significant in contributing to the outcome of gross state product revenues. The insurance industry pays high tax rates and invests in various bonds for the state.
The percentage rates make up a great portion to gross state product. D. Technological Forces Insurers should embrace new technologies to differentiate themselves in the Insurance arena. Technology Investment: When it comes to technology insurers have underinvestment historically. Insurers expect to see a continuing increase in technology investment across a large portion of client base. There’s a trend in using technology to sell insurance, and insurers thinking like a consumer service business in how they interact with customers.
There’s a great deal of momentum in using technology to augment or disrupt existing business models. That will require CAP to be much more strategic and collaborative with marketing, sales and other aspects of the business.
Environment A. Government rhea Magmata
Regional Trial Court has given embattled pre-need company College Assurance Plan Philippines a second lease on life. In a resolution dated Novo.
8, the Magmata ROTC granted CAP’s petition for rehabilitation and ordered the Implementation of the firm’s revised recovery plan. Magmata ROTC Judge Cesar Undulant also requested the Securities and Exchange Commission to give CAP a second chance t reviving its business. He emphasized the need to give CAP another chance to re- establish itself for the good of its placeholders. “It is really very difficult to develop and construct, but it is very easy to destroy.
Gillian Khaki N. Thomson Mr.. Raleigh Joseph A. Espanola Mr.
. Silvered H. Bellow Ill C. Customers Soberness’s invention of the traditional educational plan, where the pre-need company guarantees full payment of tuition at the time of maturity has been copied by many pre-need companies. Filipino parents quickly snapped up the educational plans and money rolled in for CAP, which became the number one educational plan provider in the country.
D. Creditors rhea seven trustee banks are led by the Bank of Commerce, which manages ore than 60 percent of the trust fund; the rest are Allied Banking Corp.. Bank of the Philippine Islands, Union Bank of the Philippines, Metropolitan Bank and Trust Co. , Equitable PC Bank, and Philippine Veterans Bank.
E. Communities CAP was banking on the country’s economic growth, as well as former President Marco’s tight regulation of fees of colleges and universities. Every year, college fees Mould go up by only 10 to 15 percent. However, the pre-need industry did not foresee the deregulation of fees in 1992. Just before the Asian financial crisis, from 1990 to 1995, tuition Jumped a whopping 275 percent.
And for 1996 to 2000, the price of education went up by another 26 percent.
CAP’s revenues generated from collections of placeholders were no longer enough to meet the increasing costs of tuition and the higher number of maturing plans. For instance, CAP said that fees at the Atone De Manila SST F. Trade Association 990, but swelled per semester in 2 CAP introduced the traditional educational plan in 1980, appealing to every parent’s dream of being able to send their children to college. It was founded by Unripe A.
Soberness Jar. Together with James Marsh Thomson, Rafael E. Evangelists, Ernest M. Espanola, and Ormolu M. Espanola.
Competitors Other firms offering educational plans adjusted their products and offered fixed ‘alee plans, or those that have a pre-determined value come maturity time. Yet, CAP continued to offer traditional educational plans for 10 more years, or up to 2002. Industry players say the Subpoenas, well-regarded as consummate marketing people, saw the 10 years as an opportunity to sell more plans, and thus positioned themselves as the best alternative among all other educational plans. They strengthened their position as the market leader in the educational plan business. H.
Employees/ Labor Unions Plan holders are up in arms over the failure of a pre-need company to give them their hard-earned money. Surprisingly, the company’s employees are now behind them in their struggle. Employees of College Assurance Plan are preparing for protests over a series of retrenchments, violation of their collective bargaining l. Suppliers rhea College Assurance Plan is the second largest pre-need company in the country. From 1980 to 2003, CAP had a total of 780,603 apart from 37421 placeholders fully served by CAP. About 81 ,029 are currently being served.
More importantly, 382,483 placeholders are fully paid but had not yet availed themselves of their benefits as of end-2003. These plans will mature in the next few years. However, there are still 164,000 placeholders who are actively paying their plans. Ninety-one percent of these existing placeholders are holding on to traditional plans. I.
Shareholders Apart from the Soberness family, other major shareholders of CAP include the rooms family, Jose A. R. Benison Ill, Rocketed Management, Ormolu Expands, Rafael Evangelists, Coronado Masque, Rerun Realty, Ernest Espanola, and Melcher Morale. Porters Five Forces Model of Competition Opportunities Threats rhea intensity of rivalry among the competing players in the industry Most Outstanding pre-need company Model Taxpayer Many strategies of other company through advertising establishments. Bargaining err of Consumers Incoming college student, working individuals, senior citizens and physical handicapped person – Bargaining Power of Suppliers Threats from new entrants and entry barriers Many pre-need companies existing have their own variety or strategies in terms of social responsibility Low initial capital investment threats from product substitute
Industry Analysis External Factors Night Rating Knighted score Comments Manpower 1.
This is the most important because they will be the one to innovate or improve of their product and services. Money Opportunity to put their trust funds in safe and profitable investments. And it is also Important. Environment 4. 0 Vow should know your place if it is safe to calamities.
Method 3. 0 This is not as important as others and I rate them not as high. Environment Kook should know your competitors in your areas. Core Values Educational equity High achievement for all Ensuring every child succeeds Constant learning Mutual responsibility 5. SOOT Manta Strengths rhea company being the first to offer the pre-need educational plans in the Philippines has the capacity and experience required to be engaged in this business.
Money CAP Inc. As of 2002 has trust fund assets in the amount of PA. 49 billion. Method rhea company toweled a business model which cap tallied on the n deed to Filipino parents to provide their children with tertiary or college education. Insaneness Diversification and expansion.
Investment of its funds to unrelated business Capitalized on its track record and continued to offer pre-need educational plans and other insurance products.
Environment Ninth the passage of the Educational Act of 1992 deregulating tuition fees, the company faces skyrocketing college costs. Ninth a pool of talented and experienced employees the company has the capacity and chance to improve and expand their products and services. Money Opportunity to put their trust funds in safe and profitable investments. Manpower Capacity to invest in new formation technology. Recent calamities and greater uncertainties.
Trained and contemptibleness of the company could be subject to “pirating” from rival firms offering better compensation and benefits.
Money Financial crisis and economic downturns. New and stricter regulations from the SEC and Insurance Commission. Environment Competing or rival firms 7. Strategic Problem College Assurance Plan, Inc. Is currently facing Liquidity problems resulting to their inability to cover its liabilities and obligations to their plan holders.
Strategic Alternatives with 3 Criteria
- To increase liquidity by selling company assets
- To increase company’s capital through the issuance of shares and new investors
- To reorganize the business through retrenchment
- To close down the business
In making decisions, the group considers the following criteria: Competitive advantage of CAP Financial Condition of the Company Market demand of the Company’s products and services 10.
Recommendations rhea group recommends alternative number 1 which is for the company to sell some of its assets to have the needed liquidity to settle its current liabilities and obligations. The group also recommends that the company should recognize its business operations to cut cost and improve profitability and efficiency.