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br /> * Business Level

* Product/Market level

Planning at the Business Level
Planning at the business level generally involves formulating strategies for identifying a target market and a portfolio of life insurance products tailored to the specific market. Upon analyzing the current scenario of the economy, an insurer can address the question “Where do we focus?”

To further elaborate on how an insurer can plan a long term strategy, let us take a closer look at two current issues in the South East Asian sub-continent.

Asia's Ageing Population: Mr Tan Hak Leh, Deputy President of the Life Insurance Association of Singapore (LIA) mentioned in the 6th Asian Conference on Pensions and Retirement Planning in Singapore that Asia's elderly population will outstrip the rest of the world in the next 40 years. The number of people above 60 years of age is estimated to quadruple by 2050 to 1.2 billion.[33]

Furthermore, a report published in 2008 by the National Population Secretariat of Singapore revealed that the percentage of people over 65 is steadily increasing. Singapore's population is reflected in the graphs below.

Therefore, insurers need to focus on product innovation and sales of retirement and annuity solutions for Singapore's growing ageing population.

Lack of Confidence in Asian Financial Markets: During a recent interview with an executive from a leading European insurer in Singapore, the gentleman mentioned that the Singaporean customer's buying trend of life insurance products post the financial crisis (since 2008) has started to change. According to him, the life insurance industry will observe a substantial increase in the sales of the term policies as compared to other “exotic” life insurance products in the mass customer segment due to the risk averse nature of the customer and lack of confidence in the financial markets. The fact that the average customer has developed a low level of confidence in the financial markets is further supported by a study conducted by HSBC. The study[36] surveyed 3,563 individuals in seven countries and territories in December 2009, namely China, Hong Kong, India, Malaysia, Singapore, South Korea and Taiwan and revealed the following:

As such, the insurer should focus on developing and marketing products that meet the protection requirements such as term life, accident, critical illness, disability etc.

Planning at Product/Market Level
The opportunities identified at the business level are then narrowed down to a particular market or a product. The business level strategy is converted in to an operational level strategy at this level. Product/market level planning involves formulating strategies to efficiently complete the task at a product or market level; for example strategies to launch a new or re-launch and old insurance product. The strategy for a product or a market is driven by a set of questions as mentioned below:

* What is the current position of the insurer?

* Where does the insurer want to be?

* How does the insurer get there?

The above questions are covered more in detail below:

What is the current position of the insurer?
To get a clearer picture of the current positioning with respect to its competition, an insurer can analyze various cost and revenue cen