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ters. One way of analyzing these drivers is by developing a Competitive Matrix which evaluates the insurer's performance with respect to its competitors on certain parameters such as:

Financials: To understand the current financial position, a life insurer can compare its growth in revenues and operating margins to that of its competitors. To get a better understanding of how the Competitive Matrix works, we selected a sample of five insurance companies and plotted them based on the growth in revenues and operating margin from 2005 to 2007. Our analysis revealed the following:

Looking at the competitive matrix in Figure 20, Great Eastern and AXA are positioned well in the market with high operating margin and high revenue growth and should deploy strategies to sustain their position. On the other hand, Prudential which has negative growth in revenues and also has low operating margins should deploy strategies to reduce costs and improve revenues.

Other parameters include -
Sales - By plotting operating margins to the number of policies sold per year on the competitive matrix, a life insurer (with respect to its competitors), can determine the effectiveness of its cross and up selling strategies. The higher the operating margins the higher are the costs in acquiring new customers which are not off-set by revenues generated from cross and up selling to existing customers.

Products and services - By plotting product line offerings to the customer satisfaction index on the competitive matrix, an insurer can identify the level of customer satisfaction for each product line with respect to that offered by its competitors. As most insurers offer similar products and service offerings, an insurer will be able to identify those products that are not profitable as compared to similar products offered by its competitors. To understand the reason for low satisfaction, the insurer can conduct a survey to obtain feedback from customers of the low ranked product and then improve the product and service offering.

Customers - Insurers need to understand their most valuable current and potential customer base before offering any new products or services to them. Insurers can use the competitive matrix to understand their current position in terms of customer service and customer profitability as compared to its competitors. The insurer can also evaluate the risk/probability of a customer moving to a competitor and should also evaluate the competitor's customer profile.

Marketing - After profiling the customers, products and markets, insurers can evaluate the effectiveness of current touch points. Marketing various products in the market is evaluated by sorting the data in the database systems based on questions such as “Where did you hear about us?” Once the information is collected, the insurer can focus on enhancing the low response channels and further strengthening the ones that have received a high response. Where does the insurer want to be?

This depends primarily on the organization's current propositions and future intentions in the market place, which may evolve from time to time. For instance, Prudential Singapore offers various products (see Figure 21) that meet the following needs of the customer:

It is essential for an insurer to continuously monitor the market place as customer's needs are always changing with the d