UNLEASHING MASS MARKET: PROPOSED BUSINESS STRATEGY FOR DIGITAL INSURANCE COMPANY TO TAP THE UNTAPPED MARKET SEGMENT - AN EMPIRICAL STUDY OF MILLENNIALS AND GENERATION Z

• Main Author: Erwina, Dhea
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/77436
• Institution: Institut Teknologi Bandung

The insurance industry is currently facing various challenges, including fierce competition, changing customer expectations, and disruptive technological advancements. To overcome these challenges successfully, insurance companies need to adopt innovative approaches in product development and digitally transform its business. By doing so, they can cater to the evolving needs of customers, adapt to market changes, and provide enhanced value to their clients. In the specific context of Indonesia, insurance companies are confronted with the significant obstacle of low insurance penetration, which has remained stagnant over the past five years from 2017 to 2021 (AAJI, 2022). Additionally, insurance literacy and inclusion rates are alarmingly low, standing at only 19.40% and 13.15% respectively, well below the national averages of 38.03% and 76.19% (OJK, 2019). Despite DELI being the fourth-largest asset among insurance companies in Indonesia, it has not been the preferred choice for Indonesian customers when purchasing insurance products, as indicated by Statista data published in 2022. As a result, DELI's limited range of insurance products fails to meet the needs of the broader mass market, which constitutes a significant portion of the Indonesian population. This missed opportunity to tap into a vast customer base has hindered the company's market share and competitive standing. To address this issue and capitalize on the untapped mass market segment, this research analyzes both the internal and external factors of DELI to formulate effective business strategies, particularly focusing on digital insurance products. The external environment is analyzed using various tools, including PESTEL analysis, Porter's 5 forces competitor analysis, and consumer analysis. The consumer analysis involves collecting data through questionnaires distributed to Millennials and Generation Z, who are potential target markets. The data analysis, using multiple linear regression, measures the influence of perceived innovation, perceived value, and perceived price on purchase intention. Furthermore, the internal analysis utilizes a resource-based view and VRIO framework to assess DELI's resources and identify key factors essential for achieving superior firm performance and gaining a competitive advantage. The results of both internal and external analyses are then used to formulate a SWOT analysis, which serves as the foundation for the TOWS matrix to propose seven alternative strategies by the author. Among these strategies, DELI should prioritize the development of innovative and tailored insurance products, actively target, and tap into untapped market segments, and carefully manage commission costs to establish a sustainable business model. SMART target analysis is employed to ensure these strategies align with DELI's specific business goals.