A strategic management paper for Prumerica

• Main Author: Sarinas, Sherry Kathryn A.
• Format: text
• Language: English
• Published: Animo Repository 2001
• Subjects: Insurance companies > Philippines; Prumerica Life Insurance Co
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/3940
• Institution: De La Salle University

This Strategic Management paper aims to study the strategy of The Prumerica Life Insurance Company, Incorporated ( Prumerica ), a wholly-owned subsidiary of The Prudential Insurance Company of America ( POA ). A backgrounder will be presented on Prumerica's mother company to give the reader a better understanding of the company. The focus of this paper, though, is on Prumerica. Data gathered for this paper are based on (1) interviews with company officials and industry professionals, (2) various company materials (2) industry data from industry associations, (3) statistics from various government offices, (4) newspaper articles, (5) research done through the internet, and (5) text books and suggested readings by Professor Fontanilla. Most of the industry data gathered are as of1998 and 1999. Since the 1998 industry data is more comprehensive, it is used more extensively in this paper. Company data available is as of 1999. The assessment of strategy will be done as follows: (1) The company's strategy will be assessed based on the strategic framework presented by Michel Robert in his book Strategy Pure and Simple. It will be based on the following: strategic profile, driving force and areas of excellence (2) To assess the company's strategy based on the current industry and company conditions, the author will use a combination of (1) the approach prescribed by Strickland and Thompson in Strategic Management-Concepts and Cases and (2) the approach based on Michel Robert's book (3) The company's strategy will also be assessed based on various trends in the future. This will be done by identifying each trend and by discussing how Prumerica aims to face the challenges of the future using their strategy. The strategy will be assessed in this manner to provide a means for the author to identify gaps in Prumerica's strategy. The recommendations developed by the author will be based on these gaps identified. Prumerica's strategy is expressed as customer-focused needs-based sales and service delivered excellently all the time, every time, through a highly trained, thoroughly professional corps of Life Planners, supported by the most cost-effective home office organization. Using Michel Robert's concept of driving forces, Prumerica's strategy is a sales method-driven strategy whereby the company uses a unique way of selling to customers, that is, through its customer-focused need-based selling. The strategy sounds simple, but how does Prumerica implement this strategy? It starts with recruitment, then with training, and it is supported by a compensation program for its life planners. Will Prumerica's strategy work considering present and future conditions? What changes, if any, will have to be done by the company in order to face the challenges in the industry now and in the future? Based on the assessment, the author aims to prove that {Prumerica's strategy is still valid and is responsive considering present and future conditions. The company has, indeed, formulated a commendable strategy. Yes, there are some adjustments operationally, but the overall corporate strategy is valid and responsive. Thus, to complement the overall corporate strategy, the author recommends the following: (1) Refinement of the recruitment approach to reflect the local Philippine environment to improve quality of recruits and address life planner retention challenges (2) Refinement of the needs-based training programs to fit Filipino informal language practices and personal market traits and needs, and emphasize needs-based sales approach (3) Strengthening of the Sales Management Organization by providing appropriate training to Agency and Sales Managers, and by developing exceptional life planners to become Sales Managers (4) Enhancement of the marketing support program through year-round promotional activities and recognition/rewards program to encourage and motivate Life Planners to attain their sales targets and maintain their morale (5) Enhancement of customer service through continuous development of streamlined new business, underwriting and collection processes (6) Setting up of additional agencies and (7) Development and implementation of new products that emphasize on protection. The author believes that these recommendations will address the issues and challenges identified in the assessment portion.