Aveneu Park, Starling, Australia

Three amount of trust of policyholders and

Three
benefits for European-based insurer of entering a joint venture with
a Chinese insurer would be.

1:
Expanding Globally.

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Keeping
your business local can limit your potential for profit. Expanding
your company internationally naturally provides opportunities for
Rapid growth. Joint venture with Chinese insurer will give
European-based insurer an opportunity to expand its business
globally. By entering in new market with
Chinese insurer can boost revenues.

2:
Building upon a Solid Reputation.

An
international venture will bring a good reputation to a company. When
company is able to expand the visibility of its brand expands with
it. The approach of remaining stable but never standing still will
earn high amount of trust of policyholders and shareholders. The
company with internationally expanded business enjoys better rating
among others.

3:
More Profitable And Advantageous Interest Rate.

An
insurer may wish to escape the economic pressure of writing business
in the stressful environment of the Euro zone by looking at
progressive, expanding economies in other part of the world.
Internationally expanded business face less competition because a
reputation of brand that sells well internationally will deflate
local-level competition. International markets mean a greater global
market shares that drives away the pressure of competition. Insurer
can right suitable businesses on better terms and rates.

Part
(B)

By
expanding your business globally there is always a risk of investment
failure.
There are certain risk involves like.

Political
Risk.

With
the emergence of new markets, insurer also face increased volatility
due to the uncertainty created by changes in government and the
political system. The
political environment in china can be different than the domestic
political environment. Not all countries let
companies do business freely or on company’s on terms. Companies
might have to face some restrictions or interference.

Cultural
Risk.

One
of the potential problems of expanding into other countries is
overcoming the cultural barriers. There is an
assumption that different cultures require different insurance
solutions: without question, insurer will need to adapt current
policy wordings and methodology to react to and fit in with these
different lifestyles and outlooks. Failure to do so could prove
disastrous in terms of finances and reputation. (CII M-80
Underwriting Practice 2017-2018 Study Text P-3/23) Before
entering in global market, it is important to do some market research
so that you can minimize this risk.

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