According to a research by MarketLine, the global insurance sector is expected to reach $5.1 trillion in 2015. This growth will be mainly driven by the recovery in developed countries like the U.S. The companies within this sector foresee growth opportunities through focusing on products with new insurable risk, international expansions, and regulatory changes. I have analyzed three companies from the industry and observed how they are framing their strategies to gain higher revenue and expand their customer base.
Future growth expectation
Recently, Unum Group (NYSE:UNM) launched its “Group hospital indemnity” product, which will help its customers to be safeguarded from the costs incurred at the time of unexpected health events resulting in hospitalization. This product will be mainly offered to employers who are looking to restructure health care costs incurred on employees. This product makes the employees eligible for a lump-sum benefit when hospitalized due to health issues. Unum Group (NYSE:UNM) will make the product available in Alaska, New Mexico, Florida, and Ohio in July 2013. Based on the success of the new product and the current operations, the company is anticipating a rise in operating earnings of around 6% in 2013; earnings were $887 million in 2012.
Unum Group (NYSE:UNM) bought $95 million worth of shares in the first quarter of 2013. It also has a plan to buy back shares worth $500 million in fiscal year 2013. Unum Group (NYSE:UNM) is optimistic about the repurchase plan, as it generates more than $400 million of free cash flow every year. It has repurchased stocks worth $2.2 billion since 2007. Unum Group (NYSE:UNM) expects to continue its strong performance in 2013 and 2014.
Strategies to attract new customers
While AFLAC Incorporated (NYSE:AFL)’s operations are in the U.S., it claims to insure one out of four households in Japan and is one of the biggest insurers in the Japanese market. The company is expecting a repatriation profit of around $760 million in the 2013 and $1 billion in 2014 from Japan, based on launching new products and targeting its under-penetrated product segment.
AFLAC Incorporated (NYSE:AFL) is planning to launch life policy ‘’GIFT,’’ where it will pay annuities on a monthly basis to the beneficiary from the time of the policy holder’s death or when the person has reached the age of 60. It is targeting the under-penetrated market of ‘’20 to 40 year-olds’’ by introducing low-premium medical products in the second half of 2013. The company is pushing the cross-selling of a lower face-value product, ‘’WAYS,” a hybrid life insurance product, through its 200 consultants. To assure further growth in the sale of the product, the company is planning to increase its consultant count to 600 by 2015.