Financial_Operations_09302010[1] - Financial Plan...

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Financial Plan Sector/Industry Analysis Insurance sales have been decreasing to stable over the past 4 years. This has led to a reduction in companies offering quality, affordable insurance. Many insurance companies have been forced to decreased their sales force or even close their offices. State Farm, however, made the 2009 and 2010 top 31 and 34 Fortune 500 list for sales. The fact that State Farm can make a Fortune 500 list, even in recessionary times, shows how customer loyalty, a large media marketing campaign, and satisfied customers are critical. A consolation to the fact that although the insurance industry has seen some decreases during this recessionary time, State Farm Insurance, Met Life, Massachusetts Mutual Insurance, and New York Life Insurance all made the Fortune 500 List during 2010. The property-casualty insurance industry is anticipated to a have approximately a 2% increase in pricing for 2011. While this increase is minimal, this will help Community State Farm Insurance to increase overall sales growth. Overall personal property and casualty insurance is also expected to grow, especially as the economy begins to pick up. Community State Farm Insurances’ business sales will probably experience a lesser increase in sales, since the business industry overall will be lagging and not expecting to see increases until 2012. This prediction for the business industry insurance policies may experience even lesser sales growth if the economic environment does not improve. Community State Farm Agency Insurance will see an increase in sales and policy coverage due to the recent wildfires in Colorado. While these wildfires were outside the Englewood area, consumers tend to increase their need and coverage of personal property during catastrophes like those in the outskirts of Denver. Because the wildfire problem has plagued the Denver area many times during the past several years, the media has focused that homeowners need to take precautions to protect themselves from losing their assets from a fire. While removing shrubbery and keeping foliage trimmed and moist are stressed, so is the importance of protecting your assets with proper insurance coverage, as well as completing an inventory of your home and valuables. This type of media coverage will remind the consumer that their home and its contents are valuable and need to be covered by insurance. The coverage also forces the consumer to have a closer (and more than likely higher) valuation of their assets. Currently, State Farm has the largest market share at a rate of 24.22%. Another consideration for Community State Farm Insurance is how insurance claims have increased nationwide recently. While this is a downfall to State Farm Insurance and profitability for the State Farm parent company, the increase in catastrophic situations like wildfires, flooding, and hail damage in the Denver/Englewood area reminds the consumers of the importance of
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This note was uploaded on 03/26/2012 for the course GM600 GM600 taught by Professor Professor during the Fall '10 term at Keller Graduate School of Management.

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Financial_Operations_09302010[1] - Financial Plan...

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